Central America and the U.S.A.

Report Outline
New Focus from Canal Debate
History of U.S. Involvement
Economic and Political Prospects
Special Focus

New Focus from Canal Debate

Region's Relations With the United States

The recently concluded Senate debate on the Panama Canal treaties has drawn unaccustomed American attention to what may be the least known region in Latin America. The countries of Central America and Panama, which link the North and South American continents, have been a true backwater in American eyes for more than a century. Alternatively labeled “banana republics” and “two-bit dictatorships,” the Central American nations have presented a classic panorama of political stagnation and economic underdevelopment since winning their independence from Spain in 1821. To Americans in general, Central America has seemed remote, unimportant and vaguely troublesome.

The view from north of the border is deceptive. The United States, both through its government and its private citizens and business, has been more deeply involved in Central America, and for a longer time, than in any other part of the hemisphere, with the possible exception of Mexico and Cuba. In Panama at the turn of the century, the United States built a vital waterway linking the Atlantic and Pacific Oceans and thereby entwined itself for the next 75 years in the destiny of a republic it helped create.

U.S. investment in and trade with Central America have been dominant in the region's economy since the latter half of the 19th century. At various times, American citizens have led free-booting private armies on rampages through Central America and once even installed an American as president of Nicaragua. Within recent memory, the U.S. government has covertly helped overthrow an anti-American government in Guatemala and has used that country and Nicaragua as a staging ground for a CIA-backed invasion of Cuba.