The Dialectics of Globalization: Regional Responses to World Economic Processes: Asia, Europe, and Latin America in Comparative Perspective

By Menno Vellinga | Go to book overview

9
Globalization and Regionalization
in Central America

Helmut Nuhn

Central America consists of a number of small states with internal economic, social, and political structures that have been heavily influenced by their extreme dependence of a limited range of agrarian export products -- mostly bananas and coffee. Their integration into the world economy was brought about by coffee exports to Europe from the mid-nineteenth century onwards. Coffee exports still account for one-quarter of the foreign trade income of the region. The establishment of extensive banana plantations before the end of the last century caused a new export boom. After the major restructuring of banana production, banana exports still account for one-fifth of the total trade income. In some Central American countries these exports are the major source of foreign currency income. After the Second World War, new agrarian products opened additional opportunities for economic growth. These new exports included cotton, important after the Suez crisis in 1956 eliminated Egypt as an exporter, cane sugar after Cuban sugar quotas on the U.S. market were cancelled, and beef products in response to the needs of the rapidly growing fast-food industry in the United States.

Although the Central American nations have similar foreign trade patterns, their socioeconomic and sociopolitical structures show considerable variation. In Costa Rica the coffee industry has been based on family businesses, a major factor behind the development of a political democracy in that country. In Guatemala, on the other hand, the domination by large-scale companies employing indigenous labor has contributed to the prevalence of authoritarian structures. In Honduras, with an economy heavily relying on banana exports, decisionmaking was

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