HISTORY27 - Central America

This article is about the history of Central America, including a discussion of the natural landscape, the pre-Columbian period, the Spanish Conquest, independence from Spain, the short period of united provinces, the establishment of independent republics, the liberal period, the period since World War II, and Central America today.  The article is a follow-on to previous articles on the history of Canada, America, Mesoamerica, and Mexico that I have posted on this blog in the past few weeks.

 

The flag of the United Provinces of Central America, 1823-1841.

Central America is the southernmost region of North America, making up most of the tapering isthmus that separates the Pacific Ocean, from the Caribbean Sea, and comprising the republics of Belize, Guatemala, Honduras, El Salvador, Nicaragua, Costa Rica, and Panama. 

The histories of Guatemala, Honduras, El Salvador, Nicaragua, and Costa Rica are heavily intertwined, so I chose an organization of this article that reflects important time periods in the history of these republics.  The histories of Belize and Panama sometimes took a different path; I elected to include their histories, as appropriate under the same time periods.

My primary resource for this article was “Central America,” by Britannica, supplemented by numerous other online sources.

Natural Landscape

Central America extends in an arc, roughly 1,140 miles long from northwest to the southeast.  At its narrowest point, the isthmus is only 30 miles wide, and there is no location in Central America that is farther than 125 miles from the sea.

 

The topography of Central America.

Humid swamps and lowlands extend along both coasts, but four-fifths of Central America is either hilly or mountainous.  Elevation steadily increases west of the Caribbean-side lowlands, until towards the Pacific coast, plateau highlands culminate in mountain ridges and some 40 volcanic cones, some of which reach elevations of more than 12,000 feet.  The highest point in Central America is the Volcán Tajumulco volcano in Guatemala at 13,845 feet.

Central American volcanoes have erupted many times in history, killing up to thousands of people.  A number of volcanoes are still active.  Earthquakes frequently occur in the region.  The weathered volcanic lavas produce a fertile soil, however, and the highlands of the volcanic zones have consequently become highly productive agricultural zones and areas of dense population.

The climate of Central America is essentially tropical, tempered by proximity to the sea, by elevation, by latitude, and by local topography; so, the climate can vary substantially over short distances. Elevation mitigates the climatic effects of Central America’s tropical latitude so that average temperatures in the highlands are much lower than those in the coastal lowlands.  In general, the Caribbean side receives about twice as much rain as the Pacific region.

Central America’s natural vegetation is varied. Tropical rainforests occupy the eastern lowlands, while evergreen forests cover the lower slopes along the Pacific coast, and pine and oak forests grow at somewhat higher elevations. The Central American forests are relatively sparsely populated with mammals, generously populated with reptiles, and extremely rich in birds and insects.  Monkeys, tree frogs, iguanas, and snakes are abundant.

Pre-Columbian Central America

Before the arrival of Europeans, Central America was home to various nomadic and sedentary cultures, bringing influences from both North and South America. 

There is scant evidence of human life in Central America before 8000 BC.  Primitive human habitation in the region before that date is possible, but civilized society did not emerge until the 2nd millennium BC. Between 4000 and 1000 BC, people of the region made the transition from hunting and foraging to plant cultivation. Pottery in the Parita Bay region of Panama, dating from about 2130 BC, reflected South American cultural influence, which eventually reached as far north as Guatemala and southern Mexico. Mexican influence extended as far south as Nicaragua and Costa Rica.  Central America thus became a meeting ground for Mesoamerican, South American, and Caribbean peoples.  After 1000 BC, organized sedentary farming communities became numerous, and active commerce and communications developed among them.  Corn (maize) was the primary staple food of most Central Americans, accompanied by a wide variety of beans, squash, and other vegetables and fruits.

Mayan Civilization. The Mayans occupied much of the northwestern part of the isthmus, from southeastern Mexico through Belize, Guatemala, El Salvador, Honduras, and into Nicaragua.  In Panama and Costa Rica, South American Chibcha influence was prevalent, while Caribbean cultural patterns penetrated the coastal plain from Panama to Honduras.

The period of Mayan dominance and highest culture occurred from AD 200 - 900.  City-states such as Tikal, Palenque, Copan, and Bonampak were established and prospered in the lowlands of what is now southeastern Mexico, Belize, and central Guatemala.  Tikal had some 3,000 structures, including six temple pyramids (up to 180 feet high) and covered over one square mile, with an estimated population of 100,000.  For unknown reasons, the lowland Maya culture fell into decay after AD 900, but Mayan culture continued to thrive to the south in the Guatemalan highlands.

Mayan greatness resulted not so much from innovation, but from refinement of existing cultural traits, such as an intricate mathematical system, intricate astronomy and calendar systems, hieroglyphic writing on tree-bark paper, realistic art styles in both painting and relief carving, and elaborate stone architecture, including steep-sided pyramids, marbled vaults, and sacred roof comb structures atop their pyramids.

The Mayan world revolved around ceremonial centers; more than 100 sites are known.  Most of these centers consisted of magnificent stone structures:  temple pyramids, astronomical platforms or observatories, palaces, monasteries, baths, plazas, bridges, aqueducts, reservoirs, and ball-courts.

 

Temple of the Great Jaguar in the Mayan city-state of Tikal in today's Guatemala.

The priests were keepers of knowledge and performed their functions within the centers.  Hereditary leaders were in charge of commerce, taxation, justice, and public maintenance.  Craftspeople worked in and around the center complexes: stoneworkers, painters, jewelers, potters, and clothiers, who fashioned decorative cotton-and-feather garments.  Outside the civic center were the farmers, living in one-room pole-and-thatch dwellings. 

Maya religious beliefs were formed on the notion that virtually everything in the world was sacred.  The Maya worshipped many gods including the god of creation, and gods associated with daily life, e.g., sun, rain, etc.  As a part of their religion, the Maya practiced human sacrifice.

Although the Maya were the most advanced pre-Columbian civilization in the hemisphere, they were never unified. Unlike the Aztec Empire in Mesoamerica and Inca Empire in South America, Mayan autonomous city-states remained independent, presaging the political fragmentation that would characterize Central America to the present day.  What unity existed was cultural rather than political.

South American Influence.  The Chibcha people occupied the high valleys surrounding the modern cities of Bogotá and Tunja in Colombia and expanded north into Costa Rica and Panama.  With a population of more than 500,000 by AD 1500, they were notable for being more centralized politically than any other South American people outside the Inca empire.  Numerous small districts, each with its own chief, had been consolidated through conquest and alliance into two major states and several lesser ones, each headed by a hereditary ruler.

Chibcha society was based on an economy featuring intensive agriculture, a variety of crafts, and considerable trade. Weekly markets in the larger villages facilitated the exchange of farm produce, pottery, and cotton cloth; trade with neighboring peoples provided the gold that was used extensively for ornaments and offerings. The use of gold was a prerogative of the upper class, who were also carried in litters and shown great deference. Because leadership was matrilineal, chiefs and religious leaders were succeeded by their sisters’ sons, although land was inherited patrilineally.

The Chibcha religion was dominated by a hereditary, but unorganized priesthood that maintained numerous temples and shrines and held elaborate but infrequent public ceremonies.  Offerings, especially of gold and cloth, were a prominent part of all religious observances, and on special occasions, human sacrifices were made to the sun.

Prior to the arrival of Europeans, Panama was also widely settled by the Chocoan people, centered along the west coast of Columbia and the indigenous Cueva people.

Spanish Conquest (1510-1808)

Rodrigo de Bastidas was first to establish Spain’s claim to the Central American isthmus, sailing along the Caribbean’s Darién coast in today’s eastern Panama in March 1501, but he made no settlement. A year later, Christopher Columbus, on his fourth voyage, sailed down the Caribbean coast from the Yucatan Peninsula to Panama, accumulating much information and a little gold, but again making no settlement.  

Conquest in the South.  In 1509, the King of Spain authorized colonization of the coastal region of Panama and Honduras by Alonso de Ojeda and Diego de Nicuesa.  Both suffered staggering losses from disease, shipwrecks, and hostile natives.  Remnants of these expeditions - under the leadership of Vasco Núñez de Balboa, survived at Santa María la Antigua del Darién, on the Gulf of Urubá near the present-day Panama-Colombia border.  Santa Maria became the first permanent European settlement on the Americas mainland in 1510. Balboa turned the survivors into a disciplined and productive colony.

Crossing the isthmus, Balboa discovered the Pacific Ocean in 1513, and claimed for Spain all the lands it touched.  Balboa cultivated good relations with the indigenous people, made extensive explorations, and found enough gold and pearls to make the Castilla del Oro region, as it was called, the first profitable colony in the New World.  However, the explorations took their toll on the natives of the region, many of whom were wiped out by European diseases.

Vasco Nunez de Balboa founded the first permanent European settlement in Central America in 1510 and crossed the isthmus in 1513 to discover the Pacific Ocean.

 

The Spanish King relieved Balboa with a trusted general, Pedro Arias Dávila (known as Pedrarias), although he allowed Balboa to continue his explorations on the Pacific coast. Pedrarias, however, distrusted the ambitious Balboa and, accusing him of treason, had him beheaded in 1517.  Pedrarias expanded the colony, but was responsible for enslaving and murdering the native population, despite royal orders for more humane treatment.  In 1519, Pedrarias founded Panama City on the Pacific coast and established the capital there in 1524, abandoning the hot, humid Darién coast.

Pedrarias sent a kinsman, Gil González Dávila, to explore northward, and he found an indigenous settlement on the shores of Lake Nicaragua. That same year, Pedrarias sent Francisco Hernández de Córdoba to the region; Córdoba established Spanish settlements at Granada on Lake Nicaragua and León, not far from Lake Managua. But when Córdoba attempted to set up a kingdom independent of Panama, Pedrarias came to Nicaragua himself and put Córdoba to death after a year of civil war.

Pedrarias began building a trans-isthmus portage route, linking Panama City and the Pacific Ocean with Nombre de Dios (later Portobelo) and the Atlantic, making possible the establishment of a trans-Atlantic system of treasure fleets and trade.  It is estimated that of all the gold entering Spain from the New World between 1531 and 1660, 60% was transported by ship from Nombre de Dios/Portobello.

Native resistance delayed the conquest of Costa Rica until 1561, when Juan de Cavallón led a successful colonization expedition there, and he and his men began the permanent Spanish occupation of Costa Rica.  In 1564, Cartago was established as the seat of government in the central valley of Costa Rica, where a small but industrious population developed.

Conquest in the North. While Pedrarias and Córdoba conquered lower Central America, the conqueror of Mexico, Hernán Cortés, looked southward.  In 1524, he sent Cristóbal de Olid by sea to Honduras and Pedro de Alvarado overland to conquer Guatemala.  Olid founded the port of Triunfo de la Cruz, but immediately declared himself independent of Cortés, a common practice among the conquistadors.  Accompanied by a large force of native warriors from central Mexico, and preceded by a smallpox epidemic, Alvarado faced little opposition until he reached Guatemala.  There he allied with the Cakchiquel Maya against the rival Quiché.  Alvarado went on to conquer the Pipil people of El Salvador in the same year, but a bloody rebellion by the Cakchiquel took four more years to quell.

In Honduras, a struggle developed between the forces of Pedrarias and Cortés. The discovery of gold in Honduras made the struggle more intense.  The loyal Alvarado consolidated Cortés’s control over Honduras as well as Guatemala and El Salvador, confronting the forces of Pedrarias, with whom rivalry continued for years.

 

Spanish Conquistador Pedro de Alvarado conquered Guatemala, El Salvador, and Honduras.

Spanish colonization of Mayan territory was sporadic and incomplete because of the inaccessibility of Mayan population centers and villages in the dense jungles.  But the Spanish persisted in the eradication of Mayan culture, stealing or destroying their ceremonial objects and burning their writings.  Disease and forced labor also took their toll.   It would take until 1697 for the Spanish to establish full control of the Maya homelands, which extended from northern Yucatán to Guatemala.  The downfall of the Maya city-state of Tavasal in Guatemala brought an end to the Maya civilization. 

Remote areas, however, especially in northern Guatemala and along the Caribbean coast, remained outside Spanish control throughout the conquest period, eventually allowing Great Britain to colonize the eastern coast of Nicaragua and the Mosquito Coast of Nicaragua (see below).

Kingdom of Guatemala.  Political jurisdiction over Central America under Spanish rule evolved slowly because of the rivalries among conquistadors.  These rivalries led to violence and civil war among Spaniards in the early years of colonial rule and retarded the unification of Central American.  But in 1543, with the Audiencia (region of control) of Santiago de Guatemala, Spain unified most of the isthmus in the Kingdom of Guatemala, including the current republics of Guatemala, Belize, El Salvador, Honduras, Nicaragua, Costa Rica, and the Mexican state of Chiapas.  In 1538, Panama had become part of the Audiencia of Panama that extended deep into South America.

Santiago, in Guatemala became the capital of the Kingdom of Guatemala in 1567, and for a time, was the third largest city in the hemisphere, after Mexico City and Lima, Peru.

Spain encouraged the mining of precious metals, but Central American deposits were thin, and agriculture came to dominate the economy of the colony.  Cacao (the source of cocoa beans), mostly grown on the Pacific coast, was the principal export of the 16th century, but in the 17th century, it declined because of competition from areas with better access to markets.  Indigo eventually replaced it as the principal Central American export.

The colonial social structure comprised two small upper classes, one representing official Spanish administrative and ecclesiastical authority and the other, the Creole (first generation colonists) landholding elite, with a large mass of native or mixed-race rural workers tied to the land.  There were also small numbers of African slaves brought in during the colonial period.  In the cities. there were small middle sectors of artisans, provisioners, and wage laborers, but they did not constitute a true middle class. Nor were the professionals of the cities a middle class, for they were more clearly associated with one or the other of the two upper classes.

Panama.  In Panama, the river and mule trail across the isthmus was the principal economic resource for the commercial and bureaucratic elite that developed there.  As the link between Europe and the rich mines of Peru, Panama was of strategic importance and received considerable military protection against attacks from marauding buccaneers, such as the Welshman Henry Morgan, whose destruction of Panama City caused the Spanish to move the city several miles away and rebuild it in 1671.  

British Conquests.  The penetration of Central America by English traders brought significant foreign commercial, administrative, military, and ideological influences.  The English resorted to smuggling, piracy, and war in their efforts to challenge Spain's monopoly on trade and colonization.

Early in the 17th century, along the eastern coast of Guatemala, English buccaneers began cutting logwood, which was used in the production of a textile dye. English buccaneers began using the coastline as a base from which to attack Spanish ships.  Buccaneers started cutting their own wood in the 1650s and 1660s; however, they did not establish permanent settlements until the late 1710s.  During the winter of 1717-1718 the notorious pirate Blackbeard harassed ships sailing to and from the port of Vera Cruz, Mexico while sailing in the Bay of Honduras. 

Conflict continued between Britain and Spain over the right of the British to cut logwood and to settle in the future republic of Belize. During the 18th century, the Spanish attacked the British settlers whenever the two powers were at war. The Spanish never settled in the region, however, and the British always returned to expand their trade and settlements.

The Treaty of Versailles in 1783, ending the American Revolution, affirmed the boundaries to cut logwood, later extended by the Convention of London in 1786.  But Spanish incursions to defend its rights over the territory continued until a victory was won by British settlers, in the Battle of St. George’s Caye in 1798.  

On the Mosquito Coast of today’s Nicaragua, Spain had failed to have significant influence, leaving the area free to receive settlers from Great Britain.  The first British contacts occurred around 1630 and by the late 1700s, the British had established settlements and plantations to grow export crops and as bases for exploitation of timber resources, especially mahogany.  The region was a British Protectorate from 1638-1787.  In 1787, through diplomatic negotiations, Spain took over the region as Spanish territory, but arguments over territorial rights continued.

Map of Central America showing historic indigenous and Spanish Conquest sites.

 

Spanish Colonization.  By the early 1800s, Spain had centralized authority and reasserted royal control in Central America that had diminished during the previous century.  It also built up the military and promoted agricultural exports, especially of Salvadoran indigo, but also of Costa Rican cacao and tobacco. The emphasis on exports began a trend in Central American economic history that would continue to the present.  Indeed, these reforms not only laid the foundation for much of Central America’s political and economic development in the 19th century, but they also heightened the strong regionalism on the isthmus, as provincial leaders resisted the growing power of the Guatemalan mercantile and bureaucratic establishment.

An earthquake destroyed Santiago de Guatemala in 1773, causing the capital of the Kingdom of Guatemala to be moved to the present site of Guatemala City in 1776.  As the century closed, the growing preference of the Spanish crown for appointment of Spaniards contributed to Creole resentment of royal policy.  At the same time, there emerged in the Guatemalan capital a group of progressive Central Americans who promoted liberal economic and political ideas.

Independence and Federation (1808-1840)

Despite revitalization of the colonial economy and of Spanish military strength in the late 1700s, the French Revolution (1789-99) and subsequent Napoleonic Wars brought disintegration to Spain’s empire in Central America.  (Similar, concurrent independence movements were taking place in Mexico and South America.)

The Kingdom of Guatemala suffered hard times resulting from the disruption of Spanish shipping in wartime.  Combined with locust plagues and competition from other producing areas, this caused a decline in indigo exports during the first two decades of the 19th century. The French invasion of Spain in 1808 increased the difficulties by adding burdensome taxes and demands for “patriotic donations” to support the resistance against the French.

The Spanish made major reforms in Central America in an effort to maintain colonial loyalty and support. The Cádiz constitution of 1812 provided for colonial representation in the Spanish parliament and elections for municipal and provincial offices. 

A strong leadership and military prevented Central Americans from seizing power as had been done in South America.  The government easily put down such attempts in the state of San Salvador, Nicaragua, and Guatemala.  In 1814, after the defeat of Napoleon in Europe, Spain promptly annulled the 1812 constitution. This ungrateful act caused opposition to Spanish rule in Central America to mount.

In 1821, an assembly of Central Americans in Guatemala City composed the Act of Independence of Central America to declare the former kingdom’s independence from Spain, under the name of United Provinces of Central America, effective on 15 September of that year.  Central America then resolved territorial issues with the new republic of Mexico, including the ceding of Chiapas in western Guatemala to Mexico in 1822, and on July 1, 1823, the congress of Central America declared absolute independence from Spain, Mexico, and any other foreign nation.  The Federal Republic of Central America was formed, providing for a federation of Guatemala, San Salvador, Honduras, Nicaragua, and Costa Rica. 

At this time, the ownership of most of the future republic of Belize and the Mosquito Coast of Nicaragua was disputed between Guatemala and Great Britain. 

Panama had declared independence in 1821, and due to its roots in Columbia, Panama chose to join the Republic of Columbia, a federation of northern South American states.

 

The United Provinces of Central America.  Note the territory contested with Great Britain along the Guatemala and Nicaragua Caribbean coasts.

Political difficulties from the outset, and the failure of federal leaders to enforce constitutional provisions, led to the federation’s disintegration. The provincial jealousies and ideological differences that had emerged in the late colonial period had already sown the seeds of Central American disunion. The first presidential election, in 1825, was disputed and began a pattern of civil war and bad faith.  The bloody struggle established animosities between conservatives and liberals throughout the federation that would last well beyond the brief life of the United Provinces.

Nicaragua, Honduras, and Costa Rica seceded from the federation in 1838.  In 1839, Guatemala seceded, and in 1840 El Salvador did the same.

Conservative Republics (c. 1840 - c. 1870)

By 1848, all five former states of the federation had declared themselves sovereign republics.  Although many Central Americans entertained the possibility of reunification, all attempts failed, and conservative rulers in all the states opposed reunification.  The most lasting legacy of this conservative period was the fragmentation of the United Provinces into the five city-state republics.

Meanwhile, since 1798, Great Britain had been increasing its presence in, and control over, the future state of Belize, and in 1862. formally declared the region a British Colony called British Honduras. 

In 1844, the British returned to the Mosquito Coast region of Nicaragua, to declare a second protectorate which lasted until 1860, when English interest in the colony waned, and the territory became a permanent part of Nicaragua.

In Panama, American and French interests became excited about the prospects of constructing railroads and/or canals across the isthmus to quicken trans-oceanic travel.  In 1846, the U.S. and the Columbia-Panama federation signed the Mallarino-Bidlack Treaty, granting the U.S. right of way across the isthmus for a railroad, and most significantly, the power to intervene militarily, ensuring neutrality of the isthmus, and guaranteeing Panama-Columbia sovereignty.

After the beginning of the California Gold Rush of 1848, the U.S. spent seven years constructing a trans-isthmus Panama Railway, completed in 1855, the first transcontinental railroad, from Colón to Panama City.  The end result of the treaty, however, was to give the United States a legal opening in politically and economically influencing the Panama isthmus, which was part of the Columbian federation at the time, but was later to become the independent country of Panama.  The U.S. used troops to suppress separatist uprisings and social disturbances on many occasions, sometimes mistreated locals, causing massive race riots that U.S. Marines eventually put down.

Liberal Period (c. 1870 - c. 1945)

A liberal resurgence throughout Central America began in about 1870.  By 1872, liberals had returned to power in all the states except Nicaragua where it was delayed until 1893.  Liberal domination of Central America from about 1870 through the mid-20th century resulted in anticlerical reform, restricting the power of the Roman Catholic Church, and a strong emphasis on agricultural exports as the key to national modernization.  Coffee became the most important commodity promoted by liberals, and it supported the rise of planter elites in most of the states.  Banana exports, developed in the coastal regions by U.S. fruit companies in collaboration with the liberals, also were important in developing the transportation and communications infrastructure and in bringing Central America more fully into the North Atlantic trading economy.  Despite their liberal political rhetoric, military dictatorships were the characteristic political institution of the period, as the planter elites depended on greater military strength to defend their interests.

In 1909, in Nicaragua, the United States provided political support to conservative-led forces rebelling against the liberal government.  U.S. motives included opposition to a proposed Nicaragua Canal across the isthmus, Nicaragua's potential as a destabilizing influence in the region, and the government’s attempts to regulate foreign access to Nicaraguan natural resources.  U.S. Marines occupied Nicaragua from 1912-1933 to protect U.S. business interests.

Similarly, in Honduras, where the United Fruit Company and Standard Fruit Company dominated the country's key banana export sector and associated land holdings and railways, American troops were inserted in 1903, 1907, 1911, 1912, 1919, 1924 and 1925 to “protect U.S. interests.” The writer O. Henry coined the term "Banana republic" in 1904 to describe Honduras.

British Honduras.  In British Honduras, the forestry industry's control of land and its influence in colonial decision-making slowed the development of agriculture and the diversification of the economy. The British Honduras Company emerged as the predominant landowner, with about half of all the privately held land in the colony.  The new company was the chief force in British Honduras's political economy for over a century.

Despite the prevailing stagnation of the colony's economy during most of the century prior to the 1930s, seeds of change were being sown.  A brief revival in the forestry industry took place early in the 20th century as new demands for forest products came from the United States.  Exports of chicle, a gum taken from the sapodilla tree and used to make chewing gum, propped up the economy from the 1880s.  A short-lived boom in the mahogany trade occurred around 1900 in response to growing demand for the wood in the United States, but the ruthless exploitation of the forests, without any conservation or reforestation, depleted resources.

In the 1930s, exploitative labor conditions and authoritarian colonial and industrial relations began to give way to new labor and political processes and institutions. The introduction of credit unions and cooperatives after 1942, gradually increased the economic and political power of the resident Maya and less affluent people in the country.

Panama. In Panama, Columbia awarded France the rights to build a canal across the isthmus.  Construction began in 1880, but was halted by disease, and financial scandal in 1889. 

In 1902, the U.S. Congress authorized President Roosevelt to spend $40,000,000 to obtain the rights and assets held by the French for building the canal.  The offer stipulated that Colombia concede a strip of territory across the isthmus.  In 1903, a treaty was concluded between the United States and Colombia, but the Colombian senate withheld ratification to secure better terms.  Thereupon, the U.S. government engineered the secession of Panama from Colombia and then reached an agreement (Hay-Bunau-Varilla Treaty) with the new Republic of Panama, by which Panama became a U.S. protectorate and the U.S. government gained exclusive control of the Panama Canal Zone and permission to construct a canal.  The U.S. resumed construction of the canal in 1904, and it was opened in 1914.

 

Panama Canal soon after opening in 1914.

Panama’s new constitution authorized the United States to intervene militarily in Panama in order to quell disturbances.  It also provided for a centralized government headed by a president who had the authority to appoint and dismiss provincial governors.  As had been the case under Colombian government, traditional liberal and conservative parties dominated politics, but personalities and family ties proved more important than ideology in most contests.  Political and economic unrest brought bloodless military interventions by the United States in 1908, 1912, 1918, and 1925.

In 1932, Panama’s president persuaded the U.S. to relinquish its rights of intervention and of seizing lands for canal-related purposes, and the Hay-Bunau-Varilla Treaty was thus modified in 1936 by the Hull-Alfaro Treaty.  In addition, the United States increased the annuity paid for the use of the Canal Zone and agreed to build a trans isthmus highway.

After the Japanese attack on Pearl Harbor, Hawaii, on December 7, 1941, the U.S. occupied canal defense sites, and tens of thousands of U.S. troops were stationed there to guarantee the security of the canal.

The Path to Modern Central America (c. 1945 - present)

By the middle of the 20th century, powerful political and economic leaders associated with the export-led economies promoted by the liberal parties faced strong challenges from the middle- and working-class. This challenge took many different forms, from formation of broader-based political parties to violent revolution, accounting for most of the political crises of the mid- and late 20th century.

Civil Unrest - U.S. Interventions.  A Central American crisis began in the late 1970s, when major civil wars and communist revolutions erupted in most of the countries in Central America, causing it to become the world's most volatile region in terms of socioeconomic change.  This crisis was, in part, a reaction by the lower classes to unjust land tenure, labor coercion, and unequal political representation.  Property in the hands of large corporations gave them much influence over the region and thrust formerly self-sufficient farmers and lower-class workers into hardship.

The United States feared that victories by communist forces would cause Central America to become isolated from the United States if the governments were overthrown and pro-Soviet communist governments were installed in their place.  Throughout the second half of the twentieth century, the United States often intervened in Central American affairs to pursue U.S. interests.  The most significant of these U.S. interventions are summarized in the table below.

 

U.S. Interventions in Central America after World War II.

Country	Time Period	Issues	U.S. Intervention
Nicaragua	1979-early 1990s	Sandinista National Liberation Front overthrew 46-year-long Somoza dictatorship in 1979.	U.S. opposed revolution due to its communist sympathies and support from Castro’s Cuba.  U.S. financially and militarily backed Contra right-wing rebel groups.  Numerous human rights violations and terror tactics.  During Reagan administration, U.S. support banned by Congress, but continued covertly and illegally, culminating in Iran-Contra affair.
El Salvador	late 1970s-early 1990s	Left-wing militia groups rebelled against military government.	U.S. supported military government with over $4B, trained military leaders, and provided arms. Right-wing death squads were most repressive and bloody in Central America; 75-90 thousand people died.
Guatemala	1954-1996	1954 coup against government trying to redistribute lands to peasants. Four decades of civil war pitting government against rebel forces of peasants and indigenous people.	U.S. opposed redistribution of American-owned (fruit companies) land and was fearful of “spread of communism.”  U.S. sanctioned violent coup and provided money and Special Forces to oppose rebellious guerrilla groups.  200,000 people died, disproportionally indigenous people.
Honduras	late 1970s-early 1990s	Honduras poorest country in Central America, increasingly dependent on U.S. aid.	Relatively stable Honduras became key military base for U.S. response to Central America turmoil.  U.S. held large military exercises, trained thousands of Salvadorans, and hosted bases for Nicaraguan Contras.
Costa Rica	late 1970s-early 1990s	Moderate socialist government; maintained relations with U.S. Cold War opponents.	U.S. gave financial support in return for Costa Rican cooperation in supporting Nicaraguan Contras.
Panama	1983-1989    1988-1990	Manuel Noriega regime cooperates with U.S. in anti-Communism efforts.              Domestic political crisis and attack on U.S. embassy.  Noriega indicted in U.S. courts for drug-trafficking.	U.S. used military bases in Panama for counterinsurgency efforts in other Central American countries. U.S. invaded Panama, mid-December 1989-late January 1990, to safeguard U.S. citizen there, combat drug trafficking, and defend democracy and human rights in Panama.  Noriega was deposed.

 

This civil unrest displaced up to 1,000,000 people, including an estimated 500,000 Salvadorans who entered the United States. Tens of thousands of others migrated to the U.S., Mexico, Guatemala, Honduras, and other countries in the region.  

Economy.  From the mid-19th century, Central America’s economy was based on the production of coffee and bananas for export.  Cotton, sugar, and beef were exported in increasing amounts after World War II.  But the activities of the late 1970s into the 1990s: armed conflict, civil wars, high inflation, and poor social conditions, contributed to a deteriorating economy, and most countries had to seek foreign aid from the World Bank or the International Monetary Fund.  

Near the end of the 1990s, the region’s economies rebounded, and the privatization of companies and utilities, along with the spread of free trade, aided growth. By the end of the 20th century, Central America’s governments had attempted to revitalize the economy by fostering the diversification and expansion of nontraditional exports and free-trade zones, and assembly plants (maquiladoras) were established to encourage the expansion and decentralization of manufacturing.  As in Latin America in general, the closing years of the 20^th century saw, in all the Central American states, formally democratic regimes in power, but wrestling with severe economic problems. In the early 21st century, the U.S. Congress ratified the Central America-Dominican Free Trade Agreement to facilitate trade between U.S. and Central American markets.  

Unfortunately, growing diversification in the economies of the region did not provide a more equitable distribution of wealth. Manufacturing was sharply hampered by Central America’s limited mineral and energy resources and by the restricted size of its market.  Much industrial employment was in the form of cottage industries, and artisans outnumbered factory workers. The processing of food, beverages, and tobacco and the making of textiles, clothing, shoes, furniture, and leather were the main industries. Agriculture still employed a larger proportion of workers than any other sector - except in Panama, where services, largely related to the Panama Canal, were of major economic importance.

Although liberals had traditionally favored Central American unification, the strength of local leaders in each of the republics prevented numerous attempts at political reunification from succeeding, even under liberal rule.  Modern manifestations of the continued desire for unification were seen, however, in the formation of the Organization of Central American States in 1951, followed by the formation of the Central American Common Market in 1960, and the Central American Peace Accord of 1987.  While state sovereignty and the strength of the individual city-state leaders remain strongly rooted in the Central American political tradition, there continues to be a strong residue of sympathy for Central American reunification.  

Belize and Panama.  Meanwhile, in British Honduras, by 1961, Britain was willing to let the colony become independent and talks began with Guatemala. In 1973, the colony’s name was changed to Belize, in anticipation of independence.  Finally, in 1981, Belize became an independent country, with a British defense guarantee, and was admitted to the UN.

In Panama, in 1977, the U.S. agreed to transfer the Canal and the 14 U.S. military bases from the U.S. to Panama by 1999.  On December 31, 1999, Panama took over ownership and full control of the Panama Canal.

Panama started the Panama Canal Expansion project in 2007 and completed it in 2016.  The Project doubled the capacity of the Canal by adding a new traffic lane, and increasing the width and depth of the lanes and locks, allowing larger ships to pass.

Central America Today

Geography and Statistics.  Today’s map of Central America below shows geographic boundaries and capital cities.

 

Map of Central America today - with capital cities shown.

The table below summarizes some of the key characteristic of today’s seven Central American countries.  Perhaps the most meaningful data is the International Monetary Fund estimate for 2020 of the economic productivity of each country, using the Gross Domestic Product, based on purchasing power parity, GDP(PPP), that takes into account the relative costs of local goods, services, and inflation rates.  The data presented are based on the international dollar, a standardized unit used by economists, and has been assessed for 187 different countries around the world. The GDP(PPP) world rank is also shown, highlighting the fact that in general, the Central American nations economies are not strong.  It’s not really fair, but for reference, the United States ranks second (to China) in GDP(PPP) at $20.3T.

                                                        Central American countries today.

Country	Independence Year	Size          (Square Miles)	2020 Population	2020              GDP(PPP) (World Rank)	Comment
Costa Rica	1821               (from Spain)	19,700	5M	$90B              (89th)	One of a few sovereign nations with no standing army.
El Salvador	1821               (from Spain)	8,120	6.5M	$52.9B   (104th)	Smallest and most densely populated country in Central America.
Guatemala	1821               (from Spain)	42,000	17.3M	$151B       (76th)	Most people in Central America.
Honduras	1821               (from Spain)	43,400	9.6M	$50.5B   (105th)	Remains one of poorest countries in Western Hemisphere.
Nicaragua	1821             (from Spain)	50,300	6.5M	$33B      (128th)	Largest country in Central America.
Panama	1903               (from Columbia)	29,100	4.2M	$110B       (81st)	Revenue from canal tolls represents significant part of GDP.
Belize	1981              (from Britain)	8,870	408K	$3B        (166th)	Lowest population density in Central America.

 

Miscellaneous.  Spanish is the dominant language of Central America and the official language in six of the countries; English is a common language of much of the Caribbean coast and the official language of Belize.  Many native languages are also spoken throughout the region.

Central America immigration to the United States has greatly increased since 2012 and now includes not just adults seeking work, but also many families and unaccompanied children.  Poverty, violence, lack of economic opportunities, and food insecurity are among the top reasons that migrants cite for traveling to the U.S.  Increasingly, Central American migrants have chosen to travel in larger groups for safety and impact.  Recent migrant caravans have included hundreds or thousands of people.  

Central America has long been a bridge that connects illegal drug producer countries in South America to the consumer nations in the north, principally the United States.  Criminal organizations in Central America purchase cocaine or coca base from producer nations like Colombia and Peru, and oversee the movement of the illicit drugs from production point to market.

Four-fifths of Central America’s population is Roman Catholic.  Most of the remainder is Protestant, though a number of people practice indigenous religions, sometime concurrently with Roman Catholicism.

There are sixteen UNESCO World Heritage Sites in Central America, representing every country.  The sites include islands, ancient ruins, Spanish colonial cities, national parks, and more, like Antigua Guatemala (Spanish-Baroque architecture), Belize Barrier Reef Reserve System, Cocos Island National Park in Costa Rica, and Joya de Cerén Archeological Site in El Salvador.