Banana Republic is a pejorative term for a small country that is politically unstable, dependent on limited agriculture (e.g., bananas), and ruled by a small, self-elected, wealthy and corrupt clique.Big-business greed killing the banana - Independent, via The New Zealand Herald, Saturday 24 May 2008, Page A19 It is most commonly used for countries in Central America such as El Salvador, Belize, Nicaragua, Honduras, and Guatemala.

In some cases, these nations have kept the government structures that were modeled after the colonial Spanish ruling clique, with a small, largely leisure class on the top,and a large, poorly educated and poorly paid working class of peons, though it might have the (fake) trappings of modernity (such as styling itself a republic with a president etc.)

Frequently the subject of mockery and humour, and usually presided over by a dictatorial military junta that exaggerates its own power and importance—"the epaulettes of a banana republic generalissimo" are proverbially of considerable size, usually portrayed in satire with a pair of mops—a banana republic also typically has large wealth inequities, poor infrastructure, poor schools, a "backward" economy, low capital spending, a reliance on foreign capital and money printing, budget deficits, and a weakening currency. Banana republics are typically also highly prone to revolutions and coups.

Background

The term was originally invented as a very direct reference to a "servile dictatorship" which abetted (or directly supported in return for kickbacks) the exploitation of large-scale plantation agriculture (usually banana). Th term was coined by the American author O. Henry.

It was in Honduras that the United Fruit and Standard Fruit companies dominated the country's key banana export sector and support sectors such as railways. The United Fruit Company was nicknamed "The Octopus" (El Pulpo) for its willingness to involve itself in politics, sometimes violently. In 1910, Sam Zemurray, who 22 years later would take over United Fruit in a hostile bid, hired a gang of armed thugs from New Orleans to help stage a coup in Honduras in order to obtain beneficial treatment from the new government for his own banana-trading company, Cuyamel Fruit. Four decades later, the directors of United Fruit played a role in convincing the Truman and Eisenhower administrations that the government of Colonel Arbenz in Guatemala was secretly pro-Soviet, thus contributing to the CIA's decision to assist in overthrowing Arbenz's government in 1954 (see Operation PBSUCCESS). Pablo Neruda would later denounce the dominance of foreign-owned banana producers in the politics of several Latin American countries in a poem titled "La United Fruit Co".

Modern usage

In modern usage the term has come to be used to describe a generally unstable or "backward" dictatorial regime, especially one where elections are often fraudulent and corruption is rife. By extension, the word is occasionally applied to governments where a strong leader hands out appointments and advantages to friends and supporters, without much consideration for the law. A banana republic can also be used to describe a country where a large part of its economy and politics are controlled by foreign powers or even corporations.