United Fruit Company in Guatemala - US Invasion For a Bunch of Bananas

Many people are aware of the 'Banana Republics' in the bad old days of Latin America; countries in which international corporations had so much power and influence that the government would be a puppet for foreign corporate interests. In 1954 the United States Army invaded Guatemala after what many believed was a decision made by a United States corporation; a key player behind one of the biggest Banana Republics in Central America.

One of the key culprits in meddling with Latin American government affairs in the first half of the 20th century was United Fruit Company. They were a US corporation founded in 1899 off the back of a railroad venture in Costa Rica. An important part of United Fruit Company's strategy was to gain control of the distribution of banana growing land. It did this through convincing governments that reserve land was needed to protect against the possibility of crop destruction from natural disasters or diseases. Because such huge percentages of land were owned by United Fruit Company, land ownership legislation was often breached and concessions were required from the government. This lead to political involvement, even though United Fruit Company was a foreign corporation operating overseas.

United Fruit Company
The 'Banana Republics' that grew from these situations often saw strong investment in infrastructure from corporations like United Fruit Company. Railroads, ports and transportation systems were put in place, and extensive employment was created. United Fruit Company also established many schools in the countries in which it operated. However, the Company often left vast tracts of land uncultivated and worked hard to block infrastructure development beyond its own operations, establishing its own network as a strong monopoly. Employment under United Fruit Company also wasn't much fun, testament to the extensive and often violent strikes that took place amongst its workforce over issues such as rates of pay and working conditions.

Guatemala
By the 1950's, things were looking promising for Guatemala. The dictator Jorge Ubico had been overthrown in 1944 and two administrations of democratically elected Presidents were leading Guatemala forwards. The President from the second administration, Jacobo Arbenz Guzman, was reforming the country extensively, including the permission of free expression, legalized unions, diverse political parties and basic socioeconomic reforms. One of these was a land reform aimed at reducing the suffering of the rural poor by redistributing unused land. The basis of this reform was that all such land would be purchased by the Government at the same value declared on the owners tax forms. The property could then be sold back to peasant cooperatives at low rates. Arbenz started by setting a strong personal example, selling his own land under the scheme.

Arbenz' land reform was ruffling a few feathers in United Fruit Company boardrooms. Of their 550,000 acres owned in Guatemala, 85% was uncultivated, which meant that the Company would lose a lot of leverage in Guatemala. Through the US Government, United Fruit Company asked for greater compensation than what was being offered by the Guatemalan Government.

The US invasion of Guatemala
In 1954, United Fruit Company's concerns were removed. United States fears of Communism taking root in Central America by a "domino effect" starting from Guatemala had caused the CIA to take action. Colonel Carlos Castillo Armas invaded from Honduras, overthrowing Guzman's administration. His forces were supported by US military troops, and trained, organized and equipped by the CIA through their covert program "PB Success".

Various arguments exist as to the level of involvement of United Fruit Company in the decision made by the US government to sponsor an invasion of a democratically elected government. Some historians point out that the land reforms had led to internal Guatemalan plotting against Arbenz from early 1954, and an overthrowing of the government was inevitable with or without US intervention. However, when you consider that the Director of the CIA at the time of Operation PB Success was Allan Dulles, a former President of United Fruit Company, and a board member at the time, evidence starts to build up in favour of corporate interests manipulating the US Government and international politics.

The aftermath
Following the coup, things went downhill fast for Guatemala. The country was plunged into 40 years of bloody civil war with a death toll up an estimated 150,000 victims. Despite the benefits of the nullified land reforms, things didn't go so well for United Fruit Company either. Stock value and profit margins declined and it was forced to sell off the last of its Guatemalan holdings in 1972.

Nothing changes
This fairly tragic tale of a country on the path to democratic reform thrown back decades by foreign commercial interests sets a cautionary note for the future. It's also fairly sobering to know that things haven't changed as much as we'd like, 60 years after the US invasion of Guatemala. In 2007, a large fruit company, Chiquita Brands International, was fined $25 million for for having paid "protection money" to the AUC, a right wing para-military organization in Colombia who are on the U.S. government's list of terrorist organizations. AUC "protection activities" included assassinating union leaders and threatening independent farmers to sell their land to Chiquita. Currently, Chiquita are being sued for having paid money to the FARC, a left wing group also on the United States' terrorist list for similar services, also in Colombia. Who are Chiquita Brands International? They were created from a renaming in 1984 of United Brands. One of the companies merged in 1970 to form United Brands was...United Fruit Company.

It seems that old habits die hard.