CENTRAL AMERICA

OVERVIEW

Central America is a small region (covering a geographical area smaller than Texas), predominantly Roman Catholic, democratic, and Spanish speaking. After a period of great turbulence and violence in the 1970s-1980s, the region still struggles with poverty, corruption, gang violence and high homicide rates. Many leave the region annually to migrate to the US.

In Central America, we consider “the five”—Guatemala, El Salvador, Nicaragua, Honduras, and Costa Rica— as a unit. English-speaking Belize (a former British colony) and South American-leaning Panama (once part of Colombia) share less common history with the five. Of the five, Costa Rica is considered to be an exception, enjoying more stability and prosperity than its neighbors, ranking much higher in the Human Development Index (a measure of health, education, and standard of living) and has a tourism based economy, while the other countries are agriculture-based.

The Caribbean is a diverse region with a tourism-based economy. Trinidad and Tobago is the wealthiest nation in the Caribbean, while the poorest, Haiti, is the poorest in the Western Hemisphere and is the only country in the Americas to appear in the UN’s Fragile States Index

INTERNATIONAL ORGANIZATIONS

The Central American Common Market (CACM) is a trade agreement formed in the 1960s promoting economic integration and growth in the region. The formation of CACM paved the way for the economic boom— and later recession— which led to the political unrest of the later 20th century.

The Central American Free Trade Agreement (CAFTA) allows for free trade between the US and most countries of Central America.

The Economic Commission for Latin America and the Caribbean is the regional commission of the United Nations economic development of Latin America.

The Caribbean Community (CARICOM) is a group of twenty countries focused on economic integration and social development in the region.

A BRIEF OVERVIEW OF RECENT HISTORY

BEFORE THE 20TH CENTURY

When the Spanish took over Central America in the 16th century, they decimated the indigenous population in most areas. Only Guatemala retained a large native population; in Costa Rica the native people was almost entirely exterminated.

The resulting population in this region was composed of native Central Americans, Europeans, African slaves, and the mestizo race resulting from intermarriage between these groups.

This racial composition in Central America would go on to play a significant role in its history, as the inequality caused by the continued racism against and exploitation of the indigenous people by the European elite effected its development into a dependency economy (explained below), and set up the circumstances which would eventually lead to the conflicts of the 20th century. (The fact that Costa Rica, which has an almost entirely European population, did not experience the turmoil of its neighbors in the 20th century is testament to this.)

After gaining independence from Spain in the 19th century, Central American countries became coffee producers and formed into dependency economies. Similar to colonized African countries, the Central American countries produced only the most lucrative export crop (coffee), rather than diverse crops to make the region self-sufficient. This system benefited the wealthy elite and foreign investors at the expense of the working poor.

20TH CENTURY

Central American history and Caribbean history in the 20th century is closely entwined with the history of US foreign policy, as the century saw almost continuous US intervention in the region.

SPANISH AMERICAN WAR

It was around the turn of the 20th century that the US began to interfere significantly in Central America and the Caribbean, in order to maintain stability amongst its less-developed neighbors and to protect its economic interests in the region.

The first major US involvement in the region was the Spanish American War at the end of the 19th century. The war began as Cuba’s fight for independence from Spain; American newspapers fueled war fever in the US by sensationalizing Spain’s brutality against the Cubans, and President McKinley was pressured into entering the war. The newly refurbished US Navy defeated Spain handily, and in victory the US acquired Spanish colonies Cuba and Puerto Rico. Cuba was given independence but with US oversight; Puerto Rico became (and remains) a US territory.

ROOSEVELT COROLLARY

After this, US foreign policy pivoted; after centuries of non-interventionism, America now adopted the Roosevelt Corollary to the Monroe Doctrine. This stated that in order to uphold the Monroe Doctrine (that Europe should not intervene in the Americas, nor the US in Europe’s sphere of influence), the US would have to be proactive about maintaining stability in the Americas and act as an international police force. In service of this doctrine, the US went on to intervene in the Dominican Republic and Haiti in order to maintain stability.

DOLLAR DIPLOMACY

In the following decades, the US established significant economic interests in the region. Dollar diplomacy — investing financially in another country in order to gain influence over it — was encouraged, and a huge amount of US investment and business poured into Central America in the early 20th century. The US-based United Fruit Company, for instance, controlled territories and transportation networks across Central America, and became a powerful lobby in the US government. These economic ties to the region encouraged the US to protect its interests by intervening in Central American politics.

Most significant was the US construction of the Panama Canal, an enormous advantage for shipping, which was begun around the turn of the 20th century. In competition with European powers to secure the rights for this coveted project, the US not only aided Panama in breaking free from Colombia in order to make the deal, but also interfered in Nicaraguan politics to ensure that no other countries would be permitted to build a canal elsewhere in Central America. Once the canal was completed in 1914, the US had another huge economic interest to protect in Central America, further incentivizing interference in the region.

GOOD NEIGHBOR POLICY

In the 1930s, the US, crippled by the Great Depression, briefly returned to non-interventionist foreign policy, and with President Franklin D. Roosevelt’s Good Neighbor Policy aimed to improve relations in Latin America.

In the 1940s, many parts of Central America experienced a period of sweeping reforms.

CONTAINING COMMUNISM

After World War II, Cold War US foreign policy followed the Truman Doctrine: to contain communism and prevent the Soviet Union from gaining influence around the world, especially in close-to-home Central America and the Caribbean. In the service of this doctrine, in the 20th century the US intervened in the affairs of Guatemala, Nicaragua, El Salvador, Cuba, Granada, Haiti and the Dominican Republic.

US INTERVENTION IN GUATEMALA

In the 1950s, a Soviet-leaning leftist government took power in Guatemala, and the CIA sponsored a coup to oust the democratically elected President Jacobo Árbenz and replace him with a military dictator. Although containment of communism was the pretext for this intervention, there was also a powerful economic incentive to protect US business interests in the country, as the land reforms that the leftist Guatemalan government was trying to implement were going to cost millions of dollars for the US-based United Fruit Company.

US INTERVENTION IN CUBA

When Marxist revolutionary Fidel Castro took power in Cuba in 1959, the US tried to intervene to oust his government. President John F. Kennedy orchestrated a secret invasion at the Bay of Pigs in 1961. The invasion was a failure, and the revelation of the attempt was an embarrassment to the US. The incident also pushed Cuba to align further with the Soviets.

In 1962, Cuba was embroiled in Cold War tensions again during the Cuban Missile Crisis. The Soviet Union placed missiles in Cuba and the US threatened to use to military force if they did remove them, bringing the world to the brink of nuclear war during the tense few days before an agreement was reached.

ALLIANCE FOR PROGRESS

In the 1960s, in an attempt to improve US – Latin American relations, President Kennedy initiated the Alliance for Progress, then the largest US aid program to the developing world, which supported many infrastructure projects in Latin America.

CIVIL WARS

In the 1960s, the Central American Common Market was formed to spur economic growth and industrialization. The resulting boom and rapid industrialization of the region benefited the elite and foreign investors, but drew wealth away from the working classes and caused enormous wealth inequality and social unrest. It was followed by a sharp recession and debt crisis in the 70s-80s. Calls for political and economic reforms led to violent revolutions and regime changes in Guatemala, El Salvador, and Nicaragua in the 80s-90s, detailed below. (Honduras did not experience as much economic growth and concentration of wealth in the 1960s as its neighbors, and consequently did not experience the extreme levels of unrest and violence which befell the other countries.)

Guatemala suffered from a civil war which raged for 36 years, from 1960-1996, between the government and leftist rebel groups, during which hundreds of thousands of people were killed or forcibly disappeared.

In densely populated El Salvador, land ownership was contained to an oligarchy called “the fourteen families”. Political unrest in the 1970’s led to the violence of the 1980s, with government-sponsored death squads terrorizing the country.

Nicaragua had been ruled by the conservative Somoza regime for four decades, under a series of leaders from the Somoza family, when in 1979 a leftist opposition united by the FLSN, or Sandinistas, took over the government. An anti-revolutionary group called the Contras formed, led by former member of the Somozas’ National Guard.

US President Ronald Reagan wanted to support the anti-Communist Contras, but Congress made supporting the group illegal. In the Iran-Contra scandal unveiled in 1986, it was uncovered that President Reagan’s staff had arranged a covert plan to bypass Congress and secretly fund the Contras. The secret deal, coordinated largely by Oliver North of the National Security Council, involved selling illegal arms to Iran and sending the profits to the Contras.

US INTERVENTION IN THE CARIBBEAN

In the 1980s, the US invaded Grenada after extremists seized power, and maintained control over the island until a US-approved government was elected.

In the 1990s, the US participated in the UN invasion of Haiti in order to restore order after a destabilizing coup.

REGION BY REGION

CENTRAL AMERICA

GUATEMALA

HONDURAS

NICARAGUA

EL SALVADOR

BELIZE

COSTA RICA

PANAMA

After achieving prosperity in the 1960s, Nicaragua suffered economic collapse and is now one of the poorest countries in the Western Hemisphere.

GUATEMALA

Guatemala is the most populous country in Central America, is one of the poorer countries in Latin America and suffers high rates of poverty and inequality.

It is the largest exporter of bananas to North America.

Guatemala was the only region which retained a large native population after the Spanish invasion in the 1500s, and today nearly half of the population is of indigenous descent; a majority from the Maya ethnic group. The country is home to incredible ruins from the ancient Mayan civilization which inhabited the region more than 2000 years ago.

Guatemala suffered from a civil war which raged for 36 years, from 1960-1996, between the government and leftist groups, during which hundreds of thousands were killed or disappeared.

The country has now transitioned from military authoritarian rule to electoral democracy.

HONDURAS

Honduras is one of the poorest, least developed and least industrialized countries in Central America. It has the world’s highest murder rate per capita, suffers from wealth inequality, drug wars, gang violence, and instability.

In 2009, a military coup deposed the President.

EL SALVADOR

A small, densely populated country, El Salvador suffers from gang violence and high murder rates.

BELIZE

The only English-speaking country in Central America, Belize was a former British colony and maintains strong ties with the UK.

COSTA RICA

Costa Rica, the most prosperous, developed, and politically stable country in the region with a high standard of living has long been an exception in Central American history.

While its neighbors experienced violence and civil conflict in 70s-80s, Costa Rica remained stable, and its president was instrumental in forming the peace accords of the other countries’ revolutions.

Today it is a major tourist destination as well as a producer of coffee and bananas.

PANAMA

Strategically located at the bridge between the North and South American continents and Atlantic and Pacific Oceans, Panama is one of the more prosperous and stable countries in Central America.

The Panama Canal, under Panamanian control since 1999, was built by the US in the early 1900s, a huge feat of engineering which cost many lives and revolutionized international shipping by cutting thousands of miles off the journey from Atlantic to Pacific.

Panama’s significant canal expansion project, which added width and depth and increased the capacity of vessels, was finished in 2016.

Today the canal is crucial for international shipping, and the width of the canal dictates the size of shipping vessels.

The US invaded Panama in 1989 to oust military leader Manuel Noriega, accused of helping criminals smuggle drugs into the US.

In 2016, the exposition of the Panama Papers revealed the country to be one of the world’s great tax havens for the wealthy and powerful.

THE CARIBBEAN

INDEPENDENT COUNTRIES

CUBA

BAHAMAS

JAMAICA

HAITI

DOMINICAN REPUBLIC

ST KITTS AND NEVIS

ANTIGUA AND BARBUDA

ST LUCIA

ST VINCENT AND THE GRENADINES

GRENADA

TRINIDAD AND TOBAGO

Most people in the Caribbean are the descendants of African slaves brought over by Europeans to work on the sugar plantations. There was also a large number of Indian indentured servants brought by the English to Trinidad, which still today has a large Hindu population. Though much of the indigenous Caribbean population was killed by the Spanish, there are Caribbean people today with indigenous Taino ancestry.

The Dominican Republic and Haiti are both located on the island of Hispaniola.

Haiti’s geographic location puts it at great risk for natural disasters, compounding the problems of its troubled history.

Cuba, one of the world’s four Communist countries (along with China, Laos, and Vietnam) was only reopened to travel from the US in 2016 after decades of severed diplomatic relations between the two nations since the events of the 1960s.