Banana republics are enormously influenced by transnational fruit companies — preventing countries — such as Guatemala and Honduras from having control over their own government or economic security (Nguyen, 2011). In doing so, the direct production of bananas in the Central American region and its neighboring countries enables these corporations to predominate nearly all aspects of production, from transportation to labor. This would enforce a country’s economy to find new means of financial stability when banana companies decide to leave the host country, and when it fails to do so, the societies of the host country would eventually deteriorate. From the continuous dependence on these transnational corporations, banana republics encounter a hindering obstacle of poverty and exclusion.
The critical role played by the United States in the agrarian politics of Central America is significant; the interference of corporations in the society of Banana Republics are the “primary cause to the impoverishment of the rural majority and a fundamental obstacle to the development of their societies” (Brockett, 1990). In fact, according to a volume of an International Monetary Fund (IMF) Staff Country Report, in comparison to 2005, in 2009, Nicaragua has achieved “extreme poverty rates approximately five times higher in the rural area than the urban area and general poverty rates approximately doubled in the rural area than those of the urban area” (IMF, 2011). This displays the intensity of the poverty scale and the challenge of reducing these scales especially in the rural area, where banana plantations are predominantly located in.
In this perspective, the poverty rates of the plantation workers who are living on site are up to an extreme – indicating an unpromising future for the plantation laborers of the Central American region. Based on this premise, in reality, only governments and the fruit corporations benefit from banana production.