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DIÁLOGOS. REVISTA ELECTRÓNICA
DE HISTORIA
Escuela de Historia. Universidad de Costa Rica
People Need More Than Just Bananas: A look at dependency theory
through the history of the Zona Sur of Costa Rica. Jonathan Warner
Comité Editorial:
Director de la Revista Dr. Juan José Marín Hernández jmarin@fcs.ucr.ac.cr
Miembros del Consejo Editorial: Dr. Ronny Viales, Dr. Guillermo Carvajal, MSc.
Francisco Enríquez, Msc. Bernal Rivas y MSc. Ana María Botey
Miembros del Consejo Asesor Internacional: Dr. José Cal Montoya, Universidad de San
Carlos de Guatemala; Dr. Juan Manuel Palacio, Universidad Nacional de San Martín y
Dr. Eduardo Rey, Universidad de Santiago de Compostela, España
Editor Técnico
MSc. Anthony Goebel Mc Dermott goebel@racsa.co.cr
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Palabras claves:
Teoría de la Dependencia, inversión extranjera, desarrollo socioeconómico, Zona Sur,
Costa Rica
Key words:
Dependency Theory, foreign investment, socioeconomic development, Zona Sur, Costa
Rica
Fecha de recepción: 1 de julio 2007 - Fecha de aceptación: 30 de agosto 2007
Resumen
El artículo analiza algunos de los componentes centrales de la Teoría de la Dependencia y
cómo, a pesar de que ésta ha probado ser insuficiente para explicar el subdesarrollo en
América Latina, algunos de sus supuestos, especialmente los referentes a las
consecuencias sociales y económicas derivadas de la inversión extranjera, no pueden ser
ignorados. Al centrar su atención en la región de Golfito, en la Zona Sur costarricense, el
trabajo procura dimensionar el estado de dependencia creado a partir del control
económico y social ejercido por la United Fruit Company, y la forma en que el impacto
socioeconómico generado a partir de la retirada de la compañía, incidió en la incapacidad
ulterior de la región para desarrollarse de forma autónoma.
Abstract
This article evaluates several core elements of the dependency theory, although proved
insufficient for justifying Latin American underdevelopment, some of its scenarios,
especially those related to the social and economic consequences arising from foreign
investment cannot be disregarded. Focused on the port of Golfito, in the southern coastal
region of Costa Rica, this work intends to reveal the state of dependency created as of the
social and economic control exerted by the United Fruit Company, and the way in which
the socioeconomic impact, generated by the company’s withdrawal, negatively affected
the region’s future autonomous development.
Jonathan Warner.
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People Need More Than Just Bananas: A look at dependency theory
through the history of the Zona Sur of Costa Rica
Jonathan Warner
Introduction
The introduction of dependency theory in the 1960’s dramatically altered perceptions of
Latin American-foreign relations, and became the dominant paradigm in Latin American
thought for the next twenty years. Dependistas (early proponents of the dependency
theory) argued that the poverty of third-world countries was not caused by internal
factors, but rather by their incorporation within the world economic system.
Underdeveloped states provided a destination for the excess capital of dominant countries
such as the United States, both crippling local economic development and creating a state
of dependency. This radical new theory proposed that Latin American underdevelopment
was not the fault of individual nations, but rather the consequence of American and
European economic expansion. The dependency theory’s politically-charged tenants
subsequently came under attack from various scholars who questioned the Marxist
undertones of the dependistas, as well as claiming the theory was too simplistic and
deterministic in nature
Ultimately the critics prevailed and dependency theory collapsed under its own weight.
However, certain aspects of the theory cannot be ignored. Although dependency theory
has proved too simplistic to provide a complete explanation of a lack of economic
development, this paper argues that many of its central insights into the dangers of
foreign investment can, in many cases, still hold for true for local economies. Focusing
on the region of Golfito in the Zona Sur of Costa Rica, this paper will demonstrate how
the United Fruit Company took complete economic and social control of this region,
stifling its own internal economy and creating a state of dependency. When the
Company then abandoned the Zona Sur after fifty years of economic and social
domination, the region proved incapable of sustaining its economy.
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Dependency Theory and its Critics
To understand the evolution of the dependency theory and its subsequent criticism, an
examination of the early dependistas is pertinent. According to the first dependista,
Andre Gunder Frank, developed nations such as the United States expanded their
capitalist markets into satellite states, crippling the local economies while the dominant
state gobbled up the surplus wealth.
1
Frank argued that this economic model could be
found throughout Latin America and represented the sole cause of economic
underdevelopment. Frank adopted a clear Marxist stance, declaring that only through
revolution could Latin America become economically independent. De Santos followed
Frank’s dependency model, arguing that the bulk of dependency occurred only after the
Second World War, when huge multi-national corporations heavily invested in Latin
America.
2
De Santos viewed this “new” form of dependency to be based primarily on the
importation of technology from the dominant economy that the native states could not
duplicate. The role of the Latin American economies was to supply the more developed
country with raw materials.. The last of the major dependistas, Cardoso, proposed that
foreign capital developed within a host nation which compromised local and state capital,
leaving the dominated state in disarray.
3
While the three dependistas developed unique
ideas on the causes of state dependency, each agreed dependency proved the impetus of
underdevelopment.
4
The radical theories proposed by the dependistas aroused much criticism within the
academic community, starting with Raul Fernández and José Ocampo. Fernández and
Ocampo believed that dependency theory was a revision of Marxism, “which
[resurrected]…an ancient polemic among Marxists and [brought] to the forefront the
1
Andre Gunder Frank, “Dependence Is Dead, Long Live Dependence and the Class Struggle: An Answer
to Critics” Latin American Perspectives, Vol. 1,1: 1974.
2
Theotonio Dos Santos, “The Structure of Dependence” The American Economic Review, Vol. 60, 2: 1970.
3
Fernando Cardoso “Impedimentos estructurales e institucionales para el desarrollo” Revista Mexicana de
Sociología. Vol. 32, 6: 1970.
4
The author is admittedly not an economist and the description of each economic theory is in its most
simplistic form. For a more detailed and thorough analyses of each theory, see: Ronald Chilcote,
“Dependency: A Critical Synthesis of the Literature” Latin American Perspectives, Vol 1, 1: 1974.
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necessity for a theoretical basis of the Latin American revolution.”
5
They also argued
that dependency theory was too simplistic in nature and did not explain relevant internal
factors as causes for underdevelopment. Finally, they stressed that Latin America was
under a form of economic imperialism from the United States, not dependency, and that
economic imperialism represented the greatest threat to Latin American stability.
Richard Bath and Dilmus James expanded on these criticisms and argued that
dependency theory awkwardly combined political and economic elements and stressed
the need to keep the two disciplines separate.
6
In this sense, the dependistas bit off more
than they could chew. In addition, Bath and James declared that Frank’s Marxist theory
elicited an overly emotional response, and questioned the validity of Frank’s proposed
Latin American class-consciousness necessary to make a social revolution possible.
Another major criticism leveled against dependency theory, brought forth originally by
Agustin Cueva, was that the theory absolved Latin America of all blame for its poor
economic standing in the world hierarchy.
7
Internal factors influencing development,
such as corrupt government, mismanaged funds, poor economic choices were ignored; all
blame for Latin America’s underdevelopment was placed squarely on the shoulders of the
United States and Europe. Cueva claimed that such a radical theory would ultimately do
more harm than good for Latin America. These critics of dependency theory were indeed
correct to claim the theory could not fully explain underdevelopment of entire Latin
American nations. However, a closer examination of the Zona Sur of Costa Rica reveals
that some of the basic tenants of the theory can apply to localized regions.
Dependency Theory and the History of the United Fruit Company in Costa Rica
Dependency theory cannot be applied to all regions of Costa Rica due to the country’s
unique history and standing within Latin America. Since the early post-colonial period,
5
Raul Fernandez and Jose Ocampo, “The Latin American Revolution: A Theory of Imperialism, Not
Dependence” Latin American Perspectives, Vol 1,1: 1974.
6
Richard Bath and Dilmus James, “Dependency Analysis of Latin America: Some Criticisms, Some
Suggestions” Latin American Research Review, Vol. 11, 3: 1976.
7
Agustin Cueva, “Problems and Perspectives of Dependency Theory” Latin American Perspectives, Vol 3.
4: 1976.
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Costa Rica has enjoyed a relatively peaceful democratic history as a direct result of the
relationship between local coffee growers and rural elites. Local farmers controlled the
majority of coffee production while the elites dominated coffee processing and shipping.
This created a peaceful symbiotic relationship amongst the two social classes, leading to
a stable democratic government as elites were not able to wield undue influence over the
poorer farmers. When the banana companies attempted to exert their economic might in
Central America in the early twentieth century, Costa Rica’s stable economy and
peaceful government proved strong enough to stave off complete assimilation. Thus,
Costa Rica avoided the fate of its neighbors such as Honduras and Nicaragua and never
became a full-fledged “banana republic”.
8
However, the United Fruit Company did develop strongholds in certain regions of
Costa Rica in the late nineteenth century, most notably on the Caribbean side of the
country in Limón. Costa Rica, attempting to create more transportation opportunities for
coffee across the country, signed a contract with Minor Kieth in 1871 to build a railroad
connecting San José to the port of Limón. In 1882, the Costa Rican government
defaulted on its payments, and in 1884 gave Keith 324,000 hectares of tax-free land along
the railroad plus free use of the train route for 99 years. When construction of the
railroad finished in 1890, the flow of passengers was insufficient to cover Keith’s debt.
However, since by this time the banana market had grown substantially, Keith decided to
concentrate all efforts on the shipment of bananas. In 1899, Keith merged his company
with the rival Boston Fruit Company and created the United Fruit Company (which will
be referred to as the Company in the paper). Within the next thirty years the Company
dominated the entire banana market not just in Costa Rica but also in all of Central
America and by 1930 it had absorbed more than 20 rival firms and became the single
8
The issue of Costa Rica exceptionalism is an interesting paper topic in and of itself. The coffee
production only helped stave off the power of the banana companies in the early twentieth century. Later
on in its history, due to a number of remarkable politicians and fortuitous events, such as the only armed
civil war in Costa Rica’s history in 1948, the country emerged from the 1950’s and 60’s as the most stable
country in Latin America, a distinction it still owns today. For a greater look at why coffee was able to
produce a stable government, see: Jeffery Paige, Coffee and Power: Revolution and the Rise of Democracy
in Central America (Harvard University Press, 1997); Bruce Wilson, Costa Rica: Politics, Economics, and
Democracy (Lynne Rienner Publishers, 1998); Leonard Bird, Costa Rica: The Unarmed Democracy
(Shepard, 1984.)
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largest employer in Central America.
9
Thus, although the Company controlled much of
of Central America, it dominated only one section of Costa Rica. While the rest of the
country continued its economic growth, the Atlantic region of Costa Rica remained under
the strict economic control of the Company. The Company decided to leave the Atlantic
region in the 1930’s because of a steady decrease in the fertility of the land and an
increase in the prevalence of disease.
10
In 1930 the Company signed a new contract with the government that opened the doors
for its move to the Zona Sur, allowing it to take up railroad lines, abandon fincas
(plantations), and cease all production in the Atlantic Zone. The Company now turned its
attention to the acquisition of fertile land in the southern area of Costa Rica. In 1934, the
Company signed a contract with the government of Costa Rica allowing it to select 3,000
hectareas of land in the Zona Sur. The land acquisitions in the region continued with the
powerful foreign Company either buying out all competition or freezing the shipping
capabilities of local growers. The Company signed its final contract with the Government
in 1938 that gave the Company almost complete control of all agricultural and exporting
services in the Zona Sur of Costa Rica. The contract stated the Company had to construct
two public docks as well as construct a public-use hospital. In return for fulfilling these
obligations, the Company received permission to construct railroads anywhere in the
region, as well as permission to continue with the plantation and cultivation of bananas in
the area. At the termination of the contract in 1988 or whenever the Company saw fit,
the dock and the railroads were to be handed over to the Government free of charge.
11
For the next 45 years following the signing of the 1938 contract, the Company’s official
head of operations was located in the Zona Sur, and by the end of 1938 it held 118,000
hectares of land. The Company further increased its amount of land through 1955 to a
total of 202,345 hectares, or 10% of all cultivated land.
12
This acquisition came at the
9
Steve Striffler, ed., Banana Wars (Duke University Press, 2003).
10
Ronny José Viales Hurtado, Después del Enclave (Editorial de la Universidad de Costa Rica, 1998).
11
Aspa, Desarrollo (33)
12
In 1930, while the company was engaged in moving its operations to the Zona Sur of Costa Rica, it was
also dealing with monopoly problems in the US courts. As a result, the United Fruit Company changed the
name of its company in Costa Rica to the Compañía Bananera de Costa Rica (CBCR), the name under
which the Company operated in the Zona Sur.
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expense of private growers; by 1942 only 6.08% of all land devoted to bananas remained
in the hands of private growers in the Zona Sur.
13
The national government was all too willing to sell lands in the Zona Sur. At the time,
most of the area was unused, uncultivated, and sparsely populated. By selling the lands,
Costa Rica not only received much needed revenue but also a hospital, a functional port,
and working railroad for free. The national government also expected that the newly
founded banana plantations would provide thousands of jobs for Costa Ricans. Because
of these consideration, the national government ceded control of virtually all arable lands
in the region to the Company. As a consequence, the Company was able to establish a
monopoly on all areas of banana production, from growing, to packaging, to shipping.
What more, the Company owned all the railroads and trains which transported the
bananas from different regions of the Zona Sur to the city of Golfito, where the bananas
were then exported on Company boats to the American markets.
14
No local growers
could thrive because they could not afford to compete with the huge multinational
corporation. Soon, all growers were either bought out or eliminated. Thus from the very
beginning, the Company controlled all aspects of production within the region. Because
the economy was solely based on the giant company, the area’s economic success was
tied to the Company’s fortunes.
Golfito in the 70’s
Golfito served as the headquarters for operations in the entire Zona Sur during the middle
1970’s to the early 1980’s, as well as the main port through which the Company exported
bananas to various markets around the world. As a result, Golfito was transformed into a
bustling port city, prompting a steady influx of people into the area. Unlike other cities in
Costa Rica where the local municipality was in charge of local city conditions, the United
Fruit took responsibility for all street repair, garbage collection, and sanitary functions.
13
Ana Luisa Cerdas Albertazzi, El Sugimiento del Enclave Bananero en el Pacifico Sur, 28 vols., Revista
De Historia (Univiseridad de Costa Rica, 1993).
14
Aspa, Desarrollo (43)
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The fact that the managers and company heads also resided in Golfito led to the city
being relatively clean and well run. For example, while the Company remained in the
control of the city, the streets were well-maintained and potholes were quickly fixed.
Also, the Company took great care to ensure the overall cleanliness of the region,
maintaining regular garbage collection, such that all agreed that the city was largely free
of litter. As attested by various citizens of Golfito who lived in the town during that
particular era, Golfito was a city muy preciosa.
15
As in the other cities and towns controlled by the Company, the layout of Golfito was
arranged hierarchically, with the town divided into three different zones or
neighborhoods. Located on the far southern end of town were the homes of the banana
workers and their families, the zona gris, named after the grey paint used to paint the
houses both inside and out. Adjacent to the workers’ neighborhood stood the zona
amarilla, also named after the houses’ color (yellow), which accommodated mainly work
bosses and foremen. Finally, in the far northern end of town, located on a hill surrounded
by the mountains, was the zona americana, named for the high percentage of American
bosses and managers who lived in the zone.
The houses in the zona gris and the zona amarilla were constructed from hardwood and
roofed with zinc. For single workers with no family, communal houses with a large
central room housed from ten to twelve men. Each house was furnished by the
Company, complete with sink, cots, tables and chairs and a telephone connected to
loacalized phone system. Whenever any fixture of the house failed (light bulbs, the
plumbing, etc) the Company would be called. Within hours a repairman would appear
and the problem would be solved. Even though the houses may not have been the most
aesthetically pleasing, they provided adequate housing complete with reliable water,
electricity, and repairs.
15
J.S.M., interview by author. Golfito, Costa Rica, 19 March 2006; G.G.G., interview by author. Golfito,
Costa Rica, 1 March 2006; X.G.G., interview by author. Golfito, Costa Rica, 1 March 2006; J.G., interview
by author, Golfito, Costa Rica, 3 March, 2006; V.H.L., interview by author. Golfito Costa Rica, 19 March
2006; M.F.P., interview by author. Golfito, Costa Rica, 13 April, 2006; D.S.P., interview by author.
Golfito, Costa Rica, 13 April, 2006.
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Every worker received a stipend for a days work, usually a minimal amount of about 18
colones ($2.10) daily.
16
However, since all the living expenses were provided by the
Company, the majority of the worker’s salary could be spent freely. The zona gris and
the zona amarilla had specific stores or markets where various goods could be purchased
such as food, work clothes, boots, cigarettes or alcohol. The Company also organized
various sporting teams and events in which the workers could either participate in the
local soccer team or spend their free time attending the games. The Company thus not
only controlled the economy of the region but also the society as well. Workers were
reliant on United Fruit for food, water and shelter. The banana workers were not given
pensions, as were other Costa Ricans during the 1950’s. In every way, the region and its
inhabitants were solely in the pocket of the Company.
Besides controlling the wellbeing of the region’s inhabitants, the nature of the banana
plantations made it difficult for other local businesses to succeed. The American
managers of the Company, wanting to bring pieces of home with them, imported
everything from house materials to furniture—no local merchandize was used.
Employees were forced to buy goods and other materials from the company store,
essentially eliminating the market for outside businesses. In this way, United Fruit
controlled not just its workers but also the whole entire region. No outside business
could survive without the help of the Company, and if it succeeded, so too did the people.
The opposite, unfortunately, also proved true and when the Company slowly ceased
operations in the region in the early 1980’s, the region could not sustain itself in the
absence of an indigenous economy.
The end of the United Fruit Company in the region
Starting in the late 1970’s, the Company started scaling back its production of bananas in
the region and switched to the production of African palms. By 1979, only 6,786
hectares of a total of approximately 24,000 hectares were dedicated to the cultivation of
16
The exact salary differential between different jobs could not be found. The number was taken out of
various interviews with different workers.
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bananas, with the remainder now devoted to the growing of African palms.
17
As a result,
the workforce in the region slowly diminished, for African palm plantations needed only
a tenth of the workers compared with banana plantations.
18
(This considerable difference
in the labor cost of production was a significant factor favoring the transition from
bananas to palms, illustrating the desire for maximum profit) It soon became clear that
the Company intended to greatly scale down operations in the region, if not cease them
entirely.
Other signs of an imminent withdrawal were evident in 1983, when local sports clubs and
organizations, founded and run by the Company, experienced numerous financial and
logistical problems that forced them to disband, as the Company decided to stop
providing support to the teams.
19
In June of 1984 managers declared the teams could still
use its lawnmowers, but that the Company would no longer employ workers to cut the
field. 1984 proved to be a chaotic year for the citizens of Golfito as it became
increasingly apparent that the Company had decided to entirely abandon the area. In
January, all train services to Laurel were stopped, a move that greatly affected the
shipment of goods from private fincas in the area not associated with the Company.
20
Problems with the pump that supplied water to houses outside Golfito also began in
February, as the repairs ceased.
21
In March matters further deteriorated for the people of
Golfito, as the Company stopped paying for water services to the houses, forcing the
local Municipality to assume responsibility for this service.
22
A few months later, the residents of Golfito testified to the local municipal council about
various problems with the houses, as well as other local infrastructure. The road, no
longer repaired, had become nearly impassable by car and dangerous to pedestrians. The
discontinuation of refuse services quickly resulted in an accumulation of trash, and a very
disagreeable odor now pervaded the neighborhood. Other problems included broken
17
Aspa, Desarrollo (72)
18
Even though the Company dedicated twice as much land to the cultivation of African palm in 1979, the
Company employed only 2,623 workers in African palm while employing 6,423 to the cultivation of
bananas.
19
Actas, 13 Sept. 83: 3.
20
Actas, 10 Jan. 84: 22.
21
Actas, 21 Feb. 84: 2
22
Actas, 6 Mar. 84: 2
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sanitary pipes that spewed sewage onto the streets, and insufficient flow of the potable
water pipes that supplied basic community needs. Worse yet, the new tariffs on water and
electricity forced the residents to pay for these inadequate services. Since the majority of
these people had no jobs and were therefore unable to pay for such services, the
Company handed the bill to the local government, or municipality.
23
The municipality,
unaccustomed to managing basic services such as water and trash collection, proved
inadequate to these new responsibilities. As a result, over the course of 1984 and 1985,
the city of Golfito became dirty and disorganized. Finally, in 1984 the Company decided
to convert all remaining banana fields to the cultivation of African palm, a moved which,
combined with a reduction in the total number of hectares in agricultural production,
lowered the total number of workers in the region to 500.
24
On January 15
th
, 1984 two Company managers, Richard Charles Johnson Miller and Raúl
Romero Alvarado, met with Danilo Jiménez Veiga, Minister of the President, to discuss
the Company’s standing in the Zona Sur. At the meeting, Miller and Alvarado
announced that starting on October 24
th
, 1984, the Company would cease all activity in
the Zona Sur, citing a list of several reasons for the move. First, the overall market for
bananas had become saturated over the past several years, causing the market price to fall
and profits to shrink. Second, other Latin American countries, such as Ecuador, had
eliminated taxes on the exporting of bananas from local ports, leaving the Company in a
disadvantageous situation in Costa Rica. Third, the price of petroleum had risen such that
transporting the bananas across the Panama Canal had become too costly (this factor did
not affect the production of bananas in the Atlantic Region of the country). Fourth, the
land conditions in the Division of Golfito, which for the past years have been worsening
due to the depletion of nutrients and disease, caused a fall in production and profits.
Fifth, the prolonged (72 day) illegal strike by the workers in Golfito caused significant
economic damages to the company. Finally, the Miller and Alvarado stated that before
they made this decision, they had first consulted with their lawyers, who stated that the
23
Actas 15 June 84: 4
24
Aspa, Desarrollo (62)
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termination of production in the Zona Sur did not constitute a breach in the state contract
of 1938.
25
In the subsequent governmental negotiations, the Company sold 1700 hectareas of land
and the associated infrastructure, including packing buildings, tractors, trailers, and all
the administration and housing facilities to the Government. Also, the Government
agreed that the Company had the right to exercise the option of buying any bananas
produced in Costa Rica. In accordance with the contract of 1938, the Company handed
over to the government free of charge the principal rail line of Southern Railway, and the
dock of Golfito. The Company donated to Costa Rica the use of all water and sewer
systems, as well as varies buildings located in Golfito. In return, however, the Company
maintained ownership of all other rail lines not located on government property, as well
as the irrigation system located on all non-government lands in Palmar. The Company
also explicitly stated that it reserved the right to remove said rail lines and irrigation
systems from the land however and whenever the company desired. In regards to the
houses in all three zones of Golfito, the homes were sold in a way that would yield
maximum profit.
26
A closer examination of the facts reveals that the Company had perhaps exaggerated the
problems of continuing production in the Zona Sur. Even after drastically reducing lands
devoted to bananas in favor of African palm, the Company still managed to export an
impressive number of bananas. In 1979, the Zona Sur proved to be the second most
productive area of banana cultivation in the country, next to Pococí. Combined with all
the area of banana plantations that the Company owned, the land produced 25.53%
(13,589,264 boxes exported) and represented 26.6% of all cultivated land. In respect to
the Company’s problem with its workers and the high number of strikes, it appeared to
have been slowly reducing the work force in Golfito ever since 1974. In that year, there
25
The preceding was found in a document entitled El Finiquito in the Municipality of Golfito. The
document was a summary of the negotiations between the United Fruit Company and the national
government and included detailed information pertaining to what Costa Rica received and for what price.
26
El Finiquito
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were 6,493 workers under contract for the cultivation of Golfito. By the year 1983, only
3,500 remained, a reduction of 44% of the total work force.
27
Accordng to Garnier,
28
the Company actually ceased operations in the Zona Sur primarily
because of the upcoming renegotiations of the governmental contract of 1938, which
needed to be renewed in 1988. Evidence in support of this hypothesis comes from the
fact that even after the Company officially abandoned operations in the Zona Sur and
sold the 1,700 hectares of land to the government, the region still proved lucrative.
Palma Tica, then a subsidiary of the Company, continued with the production of the
African palm. In 1989, Palma Rica maintained 7,000 hectares devoted to the cultivation
of African Palm, 4,406 hectares of which were formerly devoted to bananas. Thus, while
the region may not have yielded maximum profits, the continued agricultural value of the
area was obvious and the primary basis for the Company’s decision seemed to be higher
production costs. This important fact looms large over the subsequent years of poverty in
the Zona Sur, for once the profits of the region declined, the United Fruit Company
headed off to “greener” pastures. The negative impact on region cannot be understated,
for the large foreign company had no obligations to Costa Rica. The United Fruit
Company was able to leave on its own terms, keeping and selling what it wanted. Even
though the large multinational corporation could not impose itself on Costa Rica as a
whole, it could take advantage of an economically weak region of the country, something
smaller, local businesses could not do.
Evaluating Golfito after the Company moved: a regional look
The situation in Golfito as the banana operations wound down was nothing short of
chaotic. In compliance with the governmental agreement of 1984, the Company finally
decided to sell the houses in Golfito directly to the workers. In the zona gris, workers
could buy the houses for 25 thousand colones ($561), in the zona amarilla 50 thousand
($1122), and finally in the zona americana, 100 thousand ($2245).
29
Unfortunately, these
27
Leonardo Garnier, Gladys González and Jorge Cornkcik. “Costa Rica: la vicistiudes de una política
bananera nacional” in Cambio y continuidad en la economía bananera (FLASCO, 1988).
28
Garnier, Costa Rica: la vicistiudes de una política bananera nacional (102).
29
J.S.M., interview; J.G., interview;V.H.L., interview; G.H.S., interview; A.S.O., interview. The author
remains skeptical of these prices, as they appear extraordinarily high, especially for the time. Since the
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prices were far beyond the ability of most to pay. According to various interviews and
testaments, the housing situation still remained confusing, as no one knew for sure who
exactly owned or had the deed to which house. Groups of squatters came and took over
various houses, refusing entrance to those families who claimed to have rightful
ownership of the house. This housing situation fueled the chaotic fires spreading
throughout Golfito.
People who had worked for the Company for as many as thirty years were suddenly left
jobless without other real employment opportunities. To make matters worse, the
majority of employees received no pension. Because salaries had been at a subsistence
level leaving little opportunity for saving, people were left without economic resources.
In response to this situation, most former employees and their families left Golfito and
migrated to other areas of Costa Rica. Some went San Jose or Guanacaste, and still
others followed the Company back to Limon. In April of 1985, the council of Golfito
publicly recognized this ongoing mass migration, and acknowledged the difficulties that
this demographic shift posed to any chance of economic recovery.
30
To say those who stayed in the Zona Sur and Golfito found themselves in economic
hardship would be an understatement—jobs in the area remained scarce and many were
unable to obtain work. Immediately following the Company’s exodus, approximately
250 to 300 workers attempted to earn a living by fishing. However, this proved to be an
unsuccessful strategy for most, and after a few years only around 60 to 80 fishermen
remained.
31
Others migrated across the Gulf from Golfito to Puerto Jiménez in search of
gold, which indeed could be found in the area. The municipality of Puerto Jiménez asked
that the council of Golfito discourage this migration across the gulf, as the influx of new
workers in Golfito led to many social problems.
32
For the women in the area, some felt
that prostitution represented the only viable option with girls as young as twelve
participating. As a result, in the year immediately following the Company’s move, the
numbers were taken form interviews, perhaps the workers changed the prices to fit the current exchange
rate, which would seem to make more sense, for then the houses would have be sold at $50, $100, and
$200, respectively.
30
Actas, 15 April 85: 45.
31
M.F.P., interview.
32
Actas, 18 July 85: 16.
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incidence of venereal diseases in the area skyrocketed.
33
Alcoholism and drug use also
became rampant in the town, as people sought ways to ease their pain. As many citizens
of Golfito attested, the year of 1985 was one of hardship. These events graphically
illustrate how dependent the region was on the Company. After fifty years of Company
reliance for the economic and social wellbeing of the region, the citizens were suddenly
required to be self-sufficient. However, since no kind of internal economic or social
development could take place in the shadow of Company dominance, the region fell into
disarray once this shadow was removed.
Initial interactions between Municipal and National Governments
The local economy and inhabitants were not the only ones left dependent. So too was the
local municipality, who for forty years relied on the Company to maintain all working
infrastructure in the region and now proved incapable of handling such tasks on their
own. As a result, the local government turned to the national government for help. The
national government, however, unused to helping a region that for so long leaned on
outsiders for everything, were unable to offer help. What followed was a classic story of
dependency, where a region so imbedded in the economic system of a foreign company
was forced into sole reliance on that one company for economic help, thus inhibiting
indigenous growth. Once stripped of the foreign resources, the region proved unable to
survive on its own.
As it soon became obvious that the Company planned to abandon banana operations in
the Zona Sur of Costa Rica, the Municipality of Golfito attempted to contact the National
Government of Costa Rica for help. Throughout the turbulent years of 1984 and 1985,
council members (members of local government, or municipality, which will be referred
to as the Council from now on) continually pleaded with the national government to send
any sort of help to the region, and each time the municipality was met with a limited
response. Finally, late in 1984 the frustrations of the Council reached a boiling point, and
33
Actas, 18 July 85: 22.
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it openly accused the national government of ignoring the Zona Sur, stating “that the
President of the Republic, due to a lack of responsibility towards the problems faced by
Golfito, has thirty days in which to conduct a forum concerning the Zona Sur.”
34
What
more, the Council also issued a warning, saying that the young people of Golfito were
willing and ready to strike against the national government if no help arrived.
35
The national government finally responded when on January 26, 1984 the First Vice-
President of the Republic, Alberto Fait Lizano, arrived in Golfito to address the questions
and concerns of the council members.
36
However, this meeting was fruitless as it
became clear that the national government was unable to financially assist the
impoverished region. It was not until November 27, 1984, that the Council of Golfito
received the official news that the Company had ceased operations in the area. In a
somber meeting, the Council discussed holding a massive city council meeting in order to
explain the situation to the citizens of Golfito, who undoubtedly already had discovered
the information for themselves. Once again, they implored the national government of
Costa Rica for help in the region.
37
In early December of 1984, the national government
invited certain members of the Golfito Municipal Council to a meeting at the Presidential
House in San Jose to discuss the state of negotiations between the Company and the
government. At the meeting, led by Danilo Jiménez Veiga, Minister of the President, the
national government finally admitted to the council members that in reality they had no
viable plan that could help the citizens of the Zona Sur.
Meanwhile, the reality of the Company’s departure from the region continued to intrude
on these efforts and occupied an increasing proportion of the Council’s attention. On
May 7, 1985 the Company officially handed over responsibility for trash collection and
maintenance of water systems to the Municipality of Golfito, which signaled the end of
the Company’s involvement with the Municipality. As a practical consequence, all
34
Actas, 10 Dec. 83: 12, Translation by author
35
Ibid.
36
It is important to keep in mind that this statement is indeed true, as Costa Rica, along with nearly every
other country in Central and South America during the 80’s, experienced country-wide depression. In fact,
In 1981, Costa Rica earned the dubious distinction of being the first of many Latin American countries to
fault on their international debt payments during the 80’s.
37
Actas, 27 Nov. 84: 15.
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people living in Company housing now had to pay for water, electricity and trash
collection. This move also posed a number of problems for the Municipal Government,
who up until this time had little previous experience with handling such services. As a
result, the Council once again asked the national government to send experts in order to
assess the problem and give advice, requests that were, as usual, ignored.
38
It became evident that the magnitude of the challenges far outstripped the resources or
experiences available to the Municipal Council, which renewed its appeals to the
National Government. In July, the Council, frustrated with the lack of help received form
the government, wrote an article entitled “What will Golfito eat?”, which documented the
various hardships occurring at the time. The Council stressed that the promises of help
made by the national government had not been fulfilled, and as a result the people of
Golfito remained anguished. Finally, the council members once again demanded that the
government provide practical assistance to devise solutions to the problems facing
Golfito.
39
Throughout the course of 1985, the Council repeatedly discussed potential
sources for new jobs, the consensus being that fishing and a duty free zone would provide
the most job opportunities. However, little real progress was made, and the economic
situation continued to deteriorate.
The inability of the national government to help the local municipality and people of
Golfito should not be viewed as intrinsic national problems, but rather as reflecting the
state of dependency created in the region by the United Fruit Company. At the time of
the Company’s departure, Costa Rica, like all of Latin America, was experiencing
numerous financial problems due to a world economic crisis. The national government,
not accustomed to allocating funds to a region that had been under the strict control of the
Company, could not afford to spend more money to help the region. (In fact, after the
economic crises subsided, the national government did indeed attempt to enact
agricultural measures to help the region, but, unfortunately still met failure due mainly to
inexperience. This will be discusses later on in the paper.) Thus, even though the
national government was not economically dependent on the Company, it was unable to
38
Actas, 7 May 85: 12.
39
Actas, 18 June 85: 27.
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help a dependent region in disarray. The dependency of the Zona Sur not only affected
its own ability to form an internal functional economy, but also hindered the ability of the
national government to help as well.
It was now apparent that neither the Company nor the national government would
provide succor for the people of Golfito, so the Municipal Council turned its attention
away from these external sources to focus upon what it could do to help its citizens. The
creation of jobs remained of primary concern. In January of 1985, the Municipal Council
investigated the possibility of building a pipeline from the Zona Sur to Limon using
investment funds supplied by a French company. A representative from the Empresa de
Oleoductos Costarricenses explained that such a pipeline would provide an estimated
3,500 jobs for the citizens of the Zona Sur.
40
A few weeks later the Council received a
telegram from Luis Monge, President of Costa Rica, in which the President informed the
council that such a pipeline could not be constructed as it would pass through many
important biological reserves.
41
Thus, the first attempt to solve the job crises in Golfito
by the Municipality had failed.
The Council next solicited the national government’s help to designate a duty free zone in
Golfito, explaining that the infrastructure left behind by the Company proved an excellent
place to house such a duty free zone, and that in Golfito there already existed ample
hotels for Costa Ricans who might shop there.
42
Throughout the course of the year, the
Council believed the creation of a duty free zone in Golfito to be the most viable option,
and possible construction plans were discussed.
43
The Council also attempted to promote
the fishing industry and believed that the creation of new docks in Golfito could greatly
benefit the fishing industry in.
44
However, a lack of resources, boats and inexperience
doomed this effort.
40
Actas, 4 Jan. 85: 1.
41
Actas, 15 Jan. 85: 4.
42
Actas, 15 Jan. 85: 22.
43
Actas. 5 June. 85: 1; Actas, 20 de June. 85: 13. Also, for the next four years the municipality asked for
the government to open up a duty free zone, which the government finally did in 1989. This will be
addressed later in the paper.
44
Actas, 12 Feb. 85: 22.
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It is interesting to note that not once did the local municipality propose bananas as a
viable source of income. This was due to the Company’s continued control of the most
fertile lands, which by this time were fully converted to the growth of African palms.
Another reason was that simply the local government and its inhabitants did not possess
the infrastructure, capital, or the knowledge needed to run a large-scale banana
plantation. The Company controlled all the railroads, and the rails that were not taken up
by the Company were still under its control. More importantly, the famous “Great White
Fleet” of the United Fruit Company no longer provided its services for international
shipping. Thus, even if the region solved the problems of transporting bananas to the
ports, it still had not means of shipping them internationally. The inability of any local
growers and producers of bananas to thrive due to the policies enforced by the Company
during its time in the region left the Zona Sur unable to provide for itself agriculturally
and economically after the Company left.
Agricultural Programs that Failed
The national government in the early 1990’s did fund some agricultural programs in the
region, but due mainly to inexperience, these endeavors failed. The national government
did decided to devote a portion of the 1700 hectares purchased in Palmar to the
cultivation of cacao. With the help of the National Bank of Costa Rica the national
government purchased seed and equipment which it distributed to the various work
groups or cooperatives formed to carry out the project. However, this particular venture
suffered numerous problems with faulty seed, poor management, and insufficient funds,
and as a result the government terminated the project in the late 1980’s. The next
agricultural government-funded project in the area encouraged the cultivation of bananas
by individual growers. In Palma Sur and surrounding regions, the government set up no
less then six cooperatives of banana growers, but like the experience with cacao
production, the cultivation of bananas failed because of poor financial management and
faulty equipment. As a result, the National Bank, which had financed the project with
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loans to both the government and the workers, took control of most of the lands
surrounding Palmar Sur.
In 2002 the national government helped fund the latest agricultural project in the Zona
Sur, supporting a cooperative of plantain growers. This cooperative (which was still
running at the time the paper was written) consists of 105 associations and upwards of
400 different workers. The government provides money for equipment, seeds, and
general upkeep, while co-op sells plantains directly to Del Monte, which ships the
plantains directly to the United States market. However, the managers of the co-op are
concerned about the long-term viability of this enterprise given the experiences with the
prior two projects—they are afraid that a lack of funds and a bureaucracy unused to
dealing with these types of agricultural projects will lead to the Coop’s downfall.
45
The only major government-funded project that helped Golfito was the creation of the
duty free store founded in 1989.
46
The duty free zone did help the Golfito some with the
creation of jobs in the stories for the residents of Golfito. However, ultimately the duty
free zone only provided modest help for the residents of Golfito, as all the merchants
were from San Jose or outside of Costa Rica. Therefore, the majority of the money
generated by the duty free zone flowed to San Jose or even out of the country. The only
revenue created which stayed in the Golfito was the money generated by providing
services to the Costa Rican citizens that came down to Golfito for a day to buy
refrigerators or other major appliances, and the few employees that were hired from the
local area to staff the stores. The perception by the residents of Golfito today is that the
duty free zone provides minimal benefit for the region.
The national government faced the same problems as the Municipality in its attempt to
provide economic resources to the region, and had no previous experience in dealing with
large banana, or in this case, plantain plantations. Therefore, the government allocated
45
The preceding information was taken form two interviews done with members of the current government
funded coop in Palmar Sur. One, A.S.I., worked main office of SURCOOP as manager of human
resources. That interview was realized April 19, 2006 in Palmar Sur by the author. The other interviewee,
S.O.R., worked at the Coop’s vivero stations as head of operations. That interview was realized April 20,
2006 in Palmar Sur, Finca 5 by the author.
46
The same duty free zone which the Council asked for in 1985. It took the government four years to
implement the project, even though it assured the Council numerous times that a law was on the way to
help speed up the creation.
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insufficient funds towards the region and seemed unable to operate the plantation. What
more, the problem of shipping was not solved, for even though the plantains are grown in
Costa Rica, the shipping company was not local. All the plantains are bought by the Dole
Fruit Company who then transports them to the US for sales. Thus, the money does not
stay in the country but falls in the hands of foreign companies once more. The inability
of local companies to grow under the company again forced Costa Rica to turn elsewhere
for economic help.
Golfito today
Many of the same problems presented by the departure of the Company over 20 years
ago still persist. Alcoholism and drug use remain prevalent, with crack cocaine now
being the drug of choice. Pachucos (drunks) can always be found at night in the local
bars, drinking late into the night and representing a source of real concern for the local
inhabitants. As one local citizen attested:
Before, when the Company was here, there were no problems with drugs. Now, it’s
terrible, all the people selling and doing crack. Some people, you know what they do?
They break up pieces of glass and put them in sausages and give them to dogs! It kills
them! I protect my dogs, I don’t want someone to kill them.
47
Thievery, although not rampant, still occurs almost daily. Prostitutes can still be found
walking around the streets, and there is still a thriving, though very clandestine, red light
district. Tourism has been of minimal help to the region, as the majority of tourists who
visit the region tend to use Golfito only as a stopping point to take the ferry across the
golf to Puerto Jiménez. Ultimately, many people who remained in the community found
some employment, either in the hospital, at the duty free zone, in a hotel, or at another
47
D.S.P., interview, transcribed and translated by author.
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local small business.
48
However, unemployment is still high, and at night the homeless
can be found sleeping on the streets on park benches.
So what is the legacy of the Company’s involvement in Golfito? Many locals hold a
nostalgic view of Golfito in the time of Company dominance, with almost everyone
interviewed stating that Golfito was much better off when the Company was there.
However, this local perspective may not reflect the actual balance of benefit and
detriment to the overall well being of Costa Rica and its citizens. The often ruthless
tactics employed by the Company to obtain vast tracts of land in Zona Sur were no doubt
exploitative of a great many Costa Ricans. There is also little doubt that the decisions
made by the Company were in its own best interests, rather than those of the people of
Costa Rica. Although the Company did provide jobs and other economic development,
the profits generated by its activities flowed not to Costa Rica, but back to American
shareholders.
Conclusions
While Golfito today remains impoverished, the rest of Costa Rica has faired much better.
Costa Rica enjoys a unique standing in Central and Latin America, due its stable, self
sufficient economy and well run democratic government. The nation has received much
praise from the international community with its progressive views towards welfare,
education and personal rights, as well as its stance as an unarmed country. Indeed, Costa
Rica bears the commonly used description “The Sweden of Latin America” with pride.
While the country does experience problems of poverty, it is nowhere near as severe as
the plight of its Central American neighbors like Nicaragua and Honduras. The Zona
Sur, however, is the notable exception. Residents from San Jose express their distaste for
the impoverished region and some go as far to state that the Zona Sur is not part of Costa
Rica. Inhabitants of Golfito echo this claim and often feel ignored or left out of the
48
Also in Golfito, there is branch of the Universidad de Costa Rica that has an emphasis mainly in biology.
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relative prosperity of Costa Rica. While the reason for the unbalance may seem
simplistic, the evidence is irrefutable: the legacy United Fruit Company.
Dependency theory no longer enjoys its status as the dominant discourse in Latin
American studies. The controversial theory possessed to many intrinsic holes, and it
ultimately proved unable to explain why the majority of Latin American nations either
failed to develop or suffered from major underdevelopment. Still, the experience of the
Zona Sur after the Company abandoned the area shows that the basic concept of
dependency theory can still hold true for specific regions. The United Fruit Company
held a virtual monopoly over the region by owning all the agricultural lands, controlling
transportation and packaging of bananas, and possessing the only means of shipping the
products to outside markets. What more, the overbearing tactics of the Company
prohibited the development of the local businesses, and also prevented the local and
national government to gain experience in dealing with the region. Thus, when the
Company suddenly ceased banana operations in the region, not only were the local
inhabitants reduced to poverty, but also the local and national governments were unable
to provide the help needed by the region. While basic internal problems did contribute to
the failure of economic expansion in the form of mismanagement and insufficient funds
after United Fruit left, these factors were greatly overshadowed and indeed caused by the
Company’s controlling nature. Costa Rica as a whole did not suffer at the hands of the
United Fruit Company, but unfortunately, the Zona Sur did. The still impoverished
region of Costa Rica serves as a reminder that foreign investment, especially when
dominate in a localized region, can ultimately prove harmful.
