El Neoliberalismo

The Liberal Reform and the Emergence of the Banana Industry in Honduras:
A Research Paper for a Senior Year Economics Class
at the Mesoamericana Bilingual School
 
Siguatepeque, Comayagua
January 2010
 
by Alejandra Diaz
Honduras, known as the last banana republic, is located in the heart of Central America. During the 1900s, Honduras became one of the most important bananaexporters in the world. During that time, life in Honduras revolved around the bananas. Even today fifty percent of Honduran exports revolve around the banana business. The multi-national banana companies have established and still maintain effective monopolies over the Honduran banana export trade. Honduras accounts for 6.8% of the world export of bananas, sharing the same percentage with the DominicanRepublic. (1)
To understand how Honduras became a banana republic we must look into its history, digging to reach the insides of its Liberal Reform in 1876. The Liberal Reform was an economic model that introduced Honduras into the apogee of capitalism after the Industrial Revolution.
The period of Liberal Reform in Honduras began between 1876 and 1883 began under the leadership of PresidentMarco Aurelio Soto and his secretary-general Ramon Rosa. This Liberal Reform was based on a series of public works projects, and therefore the reorganization of the state apparatus was crucial. This Liberal Reform took shape in 1871 as a consequence of Guatemala’s revolution which shook the political structure of Central America. (A liberal revolution had exploded in Guatemala and overthrew theconservatives headed by Rafael Carrera. With the triumph of the liberals, Miguel Garcia Granados took the presidency. The Liberal Reform in Guatemala was injected with Morazán’s ideal and legacy, and irrevocably this economic and social convulsion spread over the isthmus, first to El Salvador and later to Honduras.)
At the time it was obvious that political and economic revolution wasimminent. Honduras was suffering a period of anarchy also called the Conservative Restoration. Honduras couldn’t integrate with the worldwide political and economic order of that time because the country was politically unstable and on its economy antiquated with a subsistence facet based on production destined for mere national consumption rather than export.
Before describing the changes inHonduras caused by the Liberal Reform, it will be useful to describe briefly the conditions presented by the economic powers of the time, the U.S.A. and Europe. The leading countries had experienced an accelerated capitalist dynamism through the Industrial Revolution, which required leading industrialists to secure sources of materials that were not produced in their own countries, which materials wereneeded to elaborate the products transformed industrially. These primary materials could be supplied by countries with specific climate conditions. Honduran climate and fertile lands were perfect for producing these primary materials, and therefore the country was ripe for investment.
    The developed countries, eager to obtain their necessary primary-sector goods ,which were indispensable fortheir production, started to invest capital in Latin America, and in that way this region was incorporated definitely into the capitalist sphere as the suppliers of raw materials. The Liberal Reform was of transcendental importance in Honduran history and it consolidated the basis for the modification of the old structures inherited during the colonial period. The Liberal reform intended to useexports to pay for development. But export would generate profits for investors not for the State. (2)
     In 1880, Soto`s government sought for more investments, and a concession was approved for the Rosario Mining Company to operate in Honduras. After a series of concessions the doors for the banana industry were opened also. Liberal Reform left great changes, and to some extent great...