Banana republic

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Banana republic is a pejorative term for a country that is politically unstable, dependent on limited agriculture (e.g. bananas), and ruled by a small, self-elected, wealthy, and corrupt clique.^[1] The first known use of the term banana republic was by American author O. Henry in his 1904 book of linked short stories, Cabbages and Kings. The book is based on Henry's 1896-97 stay in the Honduras, while hiding from federal authorities for embezzlement in the United States.^[2] The term was originally invented as a very direct reference to a "servile dictatorship" which abetted (or directly supported in return for kickbacks) the exploitation of large-scale plantation agriculture (usually banana cultivation).^[1]

[edit] Background

The main history of the introduction of bananas into the European market is vital to understanding the concept of a banana republic. Bananas were introduced into the European market in 1870 by the captain of The Telegraph, Lorenzo D. Baker, who initially bought bananas from Central America and sold them in Boston at a 1,000% profit.^[3] While Baker traded bananas between the Caribbean and the United States, it was U.S railroad tycoon Henry Meigs and his nephew Minor C. Keith who started banana plantations, initially along the railway tracks in order to feed their workers, and upon realization of the lucrative profit of bananas sold in the United States, began also to export bananas from their plantation to the American Southeast.^[4] A major factor in the popularity of bananas in the United States was that it was a tropical fruit that was sold at a substantially lower price than even local American fruits such as the apple (in 1913 a dozen bananas sold for a quarter, while the same price could only buy two apples).^[5] The reason exporters were able to profit from such a low price point is because banana companies were able to obtain large areas of land in the Caribbean and Central and South America to grow banana plantations, as well as exploit the local population as a cheap source of labour.^[5] The largest banana company, United Fruit Company (now known as Chiquita Brands International) was the result of a merging between Andrew Preston's Boston Fruit Company and Keith's Tropical Trading and Transport Company in 1899 and became so influential in the banana industry that by the 1930's contributed to between 80 and 90 percent of all banana trade with the United States^[6]. The Standard Fruit Company, now named Dole Food Company, was established in 1924 by the Vaccaro Brothers.

In the Honduras, the United Fruit, the Standard Fruit, and Sam Zemurray's Cuyamel Fruit companies dominated the country's key banana export sector and support sectors such as railways. The United Fruit Company was nicknamed "The Octopus" (El Pulpo) for its willingness to involve itself in politics, sometimes violently. In 1910, Zemurray hired a gang of armed thugs, including Lee Christmas from New Orleans, to stage a coup in the Honduras to obtain beneficial treatment from the new government. Zemurray would 23 years later take over United Fruit in a hostile bid.^[7]

Four decades later, the directors of United Fruit played a role in convincing the Truman and Eisenhower administrations that the government of Colonel Jacobo Arbenz Guzmán in Guatemala was secretly pro-Soviet, thus contributing to the Central Intelligence Agency's decision to assist in overthrowing Arbenz's government in 1954.^[1] Pablo Neruda would later denounce the dominance of foreign-owned banana producers in the politics of several Latin American countries in a poem titled " La United Fruit Co".

[edit] Features of a banana republic

A collusion between the overweening state and certain favored monopolistic concerns, whereby the profits can be privatized and the debts socialized.

Devalued paper currency in the international community.

Kleptocracy -- those in positions of influence use their time in office to maximize their own gains, always ensuring that any shortfall is made up by those unfortunates whose daily life involves earning money rather than making it.

There must be no principle of accountability within the government so that the political corruption by which the banana republic operates is left unchecked. The members of the national legislature will be (a) largely for sale and (b) consulted only for ceremonial and rubber-stamp purposes some time after all the truly important decisions have already been made elsewhere.

...a money class fleeces the banking system while the very trunk of the national tree is permitted to rot and crash...

—Christopher Hitchens^[8]

[edit] Political unrest

[edit] Argentina

Argentina has spent the past 50 years manically see-sawing from bust to boom and bust again, from properly elected governments to military coups and banana republic dictatorships.

—John Carlin^[9]

On December 19, 2001, President Fernando de la Rúa signed his resignation. Thereafter, the country has had a succession of five presidents and declared the default of its foreign debt in an atmosphere of extreme economic, social, and political unrest.^[10]

Ramón Castillo – Vice President of Argentina from 1938-1940, who assumed the position thanks to long-running electoral fraud, acted as president from 1940-42 until forced to resign by a military junta led by General Arturo Rawson and General Pedro Pablo Ramírez. The coup had, according to TIME, some of the characteristics of a revolt within a banana republic, and it was in response to Castillo's isolationist foreign policy which had resulted in a decline in political power among Latin America.^[11]

[edit] Guatemala

Guatemala suffers from the regional legacy of the "banana republic": the inequitable distribution of land and wealth, uneven development, and the dependence on a few export crops for its economy mainstay. The poor distribution of land is the single most important factor to explain the poverty and quality of life in Guatemala. Nearly 90% of the farms are too small to provide adequate subsistence, while 2% of the farms use up 65% of the land. A succession of military juntas dominated during the Guatemalan Civil War, until a new constitution was passed and Vinicio Cerezo was elected and took office in 1986 followed by Jorge Serrano Elías in 1991.^[12]

[edit] Honduras

The Honduras has a long history of political unrest largely due to the competition between powerful banana companies such as United Fruit and Cuyamel for control over land and labour. In 1911 Sam Zemurray, owner of the Cuyamel Banana Company recruited a boatload of mercenaries, led by General Lee Christmas to engage in a coup d'etat to depose Honduran liberal president Miguel R. Dávila.^[13] The reason behind the coup d'etat was because United Fruit was on close terms with the existing Honduran government as United fixed U.S loans for the government in exchange for a virtual marketing monopoly of bananas.^[6] Thus in order for Cuyamel to compete with United in Honduras, Zemurray replaced Miguel Davilla with former president Manuel Bonilla.^[14]

On June 28, 2009, President Manuel Zelaya was ousted in a military coup for having forged ahead with a national referendum that, if passed, would have allowed him to revise the constitution and serve a second presidential term. The military and the National Congress had opposed the referendum, which also had been declared illegal by the Supreme Court. Later that day, after the military flew Zelaya to Costa Rica, the National Congress voted him out of office and elected congressional leader Roberto Micheletti as acting president. It was the first military coup in Central America since the end of the Cold War.^[15]

Its internal struggles and enormous foreign debt – over $4 billion – have precluded Honduras as field for capital investment thereby reinforcing its status as a banana republic.^[16]

[edit] United States & Central America

The United States campaigned against the European Union's policy of importing bananas from former colonies in the Eastern Caribbean at the behest of Carl Lidner – the CEO of Chiquita. The European Union had given the Caribbean banana producers preferential treatment through a quota system that mandated a fixed number of bananas be imported from its former colonies while ignoring the cheaper banana crops from Central America (controlled by US marketing companies like Chiquita). The United States pursued its case through the World Trade Organization winning the claim, as it is illegal to place quotas on an import from one region.

The International Confederation of Free Trade Unions explains:

Central American bananas are produced on large 'industrial' scale plantations employing large numbers of relatively poorly paid workers. Few workers have been able to win recognition for their unions in the face of the deep hostility of the companies, governments, the military and in some countries para-military gangsters.

Through the support of corporations that propagate the financial empowerment of the elite and impoverishment of the working class in Central America, the United States has produced a political state of affairs in Central America indicative of a banana republic. Corporate interests (such as those of Chiquita CEO, Carl Lidner) have driven United States politics and kleptocratic foreign policy that has financially elevated the ruling class and impaired the workers in Central America.^[17]

[edit] Modern usage

[edit] Australia

On 14 May 1986, the then Treasurer of Australia, Paul Keating, remarked during a radio interview with John Laws that Australia risked becoming a banana republic, [after the bush man comes] referring to the size of the foreign debt relative to GDP.^[18].

[edit] Bolivia

Gustavo Guzmán, the Bolivian ambassador to Washington, said: "The U.S. embassy is historically used to calling the shots in Bolivia, violating our sovereignty, treating us like a banana republic." He claimed that the US was openly supporting autonomy-seeking Santa Cruz politicians including the mayor Percy Fernandez and the prefect Rubén Costas. In August 2008, US Ambassador Philip Goldberg, met with Costas in Bolivia. Immediately after the visit, Costas assumed power, declared that the Santa Cruz Department was autonomous and ordered the take-over of national government offices. The visit to Santa Cruz was the trigger for Goldberg's expulsion, with Gustavo Guzman being expelled in retaliation.^[19]

[edit] European Union

In February 2005, the Foundation for a Free Information Infrastructure (FFII) stated the concern that the European Union has become a banana republic in a press conference. This is mostly due to the European Council of Ministers ignoring the requests by several parliaments and member states to reopen the Council discussions on the current software patents directive, in violation of its own Rules of Procedure.^[20]

[edit] Italy

The Italian businessman Gianni Agnelli (now deceased) said in April 2001: "We are not a banana republic!"^[21] criticizing the representation of Italian voters and political system given by part of the foreign press while reporting the decision of Silvio Berlusconi to run for the second time for Prime Minister.

[edit] Montenegro

For almost 20 years, since the collapse of Yugoslavia, Montenegro has been lead by one man, Milo Đukanović, as both President or Prime Minister. Montenegro has a reputation as a country involved in organized crime. Đukanović was accused by Italian prosecutors for organized crime, tobacco smuggling, money laundering, and contacts with Italian Mafia, but he could not be processed because of his presidential immunity. When Montenegrin politicians were asked where Đukanović's money comes from, they replied "from banana trade", which led to the countries nickname, "Banana Republic".

[edit] South Africa

On 28 January 2009, the Inkatha Freedom Party suggested that South Africa could be on the way to becoming a banana republic status if Muzi Mkhize was appointed to replace former National Prosecuting Authority head Vusi Pikoli.^[22] Mkhize is a member of Jacob Zuma's legal team. Zuma is facing multiple charges of corruption. Then on 3 March 2009, in a speech to the South African Press Association, Bantu Holomisa, of the opposition party United Democratic Movement, warned that the ruling African National Congress (ANC) is allowing South Africa to become a banana republic by "rushing laws through Parliament, undermining democratic institutions and releasing criminals convicted of serious crimes simply because they are aligned to the ruling clique."^[23]

ANC breakaway party, Congress of the People (COPE) said recently that dropping the charges against Zuma would add weight to perceptions that South Africa is becoming a "banana republic" The charges were dropped on Monday 6 April 2009.^[24]

[edit] United Kingdom

In 2005, Judge Richard Mawrey in the United Kingdom quashed the election results of two local councils after it was proven that there was widespread fraud and vote-rigging during the election. In response to the administration's assertion that the Postal Voting system was functioning properly he said, "Anybody who has sat through the case I have just tried and listened to evidence of electoral fraud that would disgrace a banana republic would find this statement surprising".^[25]

In September 2007, Confederation of British Industry President, Richard Lambert, slammed the government and City authorities, blaming them for the Northern Rock crisis, claiming the run on the bank was "something that happens in a banana republic".

In October 2009, The prominent media lawyer Mark Stephens said: "This sort of assault on democratic privileges is what you would expect to see in a banana republic." with respect to the Carter-Ruck claim that the Parliamentary debate on the Trafigura toxic waste dumping in the Ivory Coast was "sub judice".

[edit] United States of America

In April 2009, Missouri Republican US Senator Kit Bond likened Barack Obama's administration to a banana republic if they proceed to hold public trials on the issue of torture, giving the term banana republic a bimodal definition in the context of the ongoing US torture investigations.^[26]

In May 2009, Paul Krugman, columnist for The New York Times, referred to the state government of California as a banana republic. He was commenting on the state's tax system, in which taxes cannot be raised even in an emergency without a two-thirds majority. The state constitution requires that the budget be balanced, denying it the ability to borrow, while gerrymandering has turned many districts in California into safely conservative or safely liberal districts, crowding out moderate political voices in both political parties, and making a two-thirds majority consensus very difficult to achieve.

In August 2009, New Hampshire Republican Senator Judd Gregg, a one-time Obama Cabinet pick, stated that the United States is on its way to becoming a banana republic within ten years, criticizing such programs as the Car Allowance Rebate System (Cash for Clunkers) for allegedly placing unfair tax burdens on future generations.^[27]

In August 2009, Warren Buffett, chief executive of Berkshire Hathaway, used the term to refer to the risk of losing financial credibility posed by the high fiscal deficit being piled up by the U.S government.^[28]

On October 22, 2009, Senator Judd Gregg, ranking Republican on the Senate Budget Committee, says that the U.S. economy faces a future as a "banana republic" if current federal fiscal policies continue. "Congress works for the next election, not for the next generation."

[edit] See also

• Absurdistan
• Kangaroo court

[edit] References

[edit] External links

• From Arbenz to Zelaya: Chiquita in Latin America - video report by Democracy Now!
• Cabbages and Kings - O. Henry novel which coined the term