History of Central America

Based on Countryaah article, Central America is the southernmost part of North America, extending from Tehuantepec-owned southern Mexico to Panama’s border with Colombia. Prior to the Spanish conquest in the 16th century, the area was inhabited by American indigenous peoples, including Mayans. The indigenous population was gradually reduced. In the 1600s, the Spaniards received competition from the British as a colonial power in the area, which led to war in the years 1739-1748. In the early 1800s, the Spanish colonies liberated themselves and became independent republics. In 1850, the United States and the United Kingdom entered into an agreement (the Clayton-Bulwer Treaty)), which meant that neither country could colonize areas in Central America. This led to the British withdrawing and only retaining Belize (who became independent first in 1981).

The Hieroglyphic Stairway

“The Hieroglyphic Stairway” in Temple 26 of Copan, located in western Honduras. This is the longest Mayan inscription found.

Throughout the 19th century, several of the Central American republics began large-scale production of coffee and bananas for export, and several liberal economic reforms were implemented. The United States occupied Nicaragua militarily during the period 1912–1933 and made sure to keep conservative governments in power. This led to the emergence of a guerrilla movement, and eventually trade unions and communist parties emerged throughout Central America. In the context of the economic depression of the 1930s, several repressive regimes came to power, and many of the countries were ruled by dictators.

In the post- World War II US policy towards Central America has also been characterized by direct military interference to prevent revolutionary tendencies in the area. Cuba initiated socialist revolution in 1959, and in several other countries revolutionary movements arose, which in turn led to civil wars and political crises. Peace and democratization processes began in the late 1980s, but crime, poverty and natural disasters have created problems for many of the Central American countries.

Central American republics

Pre-colonial times

Until the Spanish conquest, the highlands of Guatemala and El Salvador as well as the lowlands of Yucatán and Honduras were densely populated by the Mayans, who had a highly developed culture compared to the peoples of the rest of Central America. The Mayans had since 1500 BCE. a developed agriculture mainly based on maize (Maya).

Colonial period

Kristoffer Columbus arrived in Honduras and Costa Rica on his fourth voyage in 1502. The conquest of Central America began in 1513 after Vasco Núñes de Balboa discovered the shortcut to the Pacific Ocean in Panama and with Hernán Cortés ‘ conquest voyage in Mexico from 1519.

Until 1540, the highlands from Guatemala to Costa Rica were placed under the Spanish crown, and Indians, especially from Nicaragua and Costa Rica, were sent to Peru as slaves in mining. In 1548, the Spanish crown created its “audiencia” with its seat in Guatemala, which from 1570 ruled the colony.

The indigenous population, which was significantly reduced in number, was forced by the feudal model to pay taxes and supply free labor. The indigenous people were also exposed to the intrusive Catholic church. Only the jungle areas of northeast Nicaragua and eastern Honduras were spared the Spanish conquest. In Costa Rica, the indigenous people were so modest that there was a shortage of labor. This has been a contributing reason why no major goods have developed here to the same degree as elsewhere in the colony.

In the 1600s, the Spaniards received competition from the British in the area. Pirates and free-trade people under the British flag had subjugated several islands in the Caribbean, where they introduced commercial plantations and gradually occupied parts of Central America that the Spanish did not control. The rivalry between Spain and the United Kingdom led to war in the years 1739-1748. The war significantly weakened economic activities. But Central America never constituted an important area for Spain economically. The UK retained its foothold in eastern Nicaragua (La Mosquitia) and Belize, where they obtained mahogany.

Spain’s military defeat in Europe and the loss of independence in 1808 initiated the collapse of the country as a colonial power. The independence claim in the colonies became impossible to withhold, and on September 15, 1821, Central America became independent in union with Mexico.

The five republics

The union with Mexico was short-lived. In 1823, the five Central American provinces proclaimed a federal republic. The first president of the Republic was Manuel Salvador Arce, Liberal Salvadoran. In Guatemala, above all, the conservative part of the country was in opposition to the other provinces. The federation did not function satisfactorily financially, and in the years 1825-1829 civil war was fought between the liberals and the conservatives. The liberals won, and their army leader, Honduran Francisco Morazán, was elected president in 1830. The many disputes in 1838 led Nicaragua, later also Costa Rica and Honduras, to leave the union. Morazán was executed in Costa Rica in 1842 after his last attempt to reunite Central America.

Costa Rica and Honduras


In Guatemala, Rafael Carrera led a hard dictatorship from 1840 until his death in 1865, and during his reign, coffee cultivation became dominant. Costa Rica had begun to export coffee as early as the 1830s. In El Salvador, coffee cultivation began in 1846. Honduras focused on mining, while Nicaragua adhered to traditional large-scale mining. Costa Rica’s successful coffee exports to the UK and the British activities on the Caribbean side of Central America caused discontent in the United States. The Monroe Doctrine of 1823 reserved the Latin American markets for the United States, and after 1848 the American expansionist drive began to characterize Central America. The prospects for a channel between the Caribbean and the Pacific played a significant role.

In 1850, the United States and Britain entered into an agreement (the Clayton-Bulwer Treaty ) which meant that neither country could colonize areas in Central America. This led to the British withdrawing and only retaining Belize. In Nicaragua, the conservatives and liberals were in constant conflict, and in 1855 the young planter William Walker of the United States came with his private army to join the liberals. A year later, this adventurer had declared himself President of Nicaragua and was recognized by Washington. The Central American governments allied with Walker and his attempts to gain more power. The war against Walker lasted for one year and stands as a crucial milestone for Central America’s independence. But Walker’s defeat was also the beginning of America’s dominance in Central America.

Liberal reforms

Developments in Central America from the 1870s were characterized by a strong commitment to export products and a strong reduction of the church as a factor of power. The church property and the indigenous community’s common property (ejidos) was privatized. European immigrants bought land and invested in coffee growing. This led to the proletarianization of indigenous peoples, especially in Guatemala and El Salvador.

In Honduras, the silver mines were still being targeted, while the Liberal dictator in Nicaragua, José Santos Zelaya, was forcibly trying to integrate the eastern half of the country that had been the British sphere of influence. Zelaya also came into conflict with the United States in connection with plans to build a canal along the Costa Rica border that would unite the Caribbean with the Pacific Ocean. After the canal became a reality in Panama, the United States intervened militarily in 1909 to sell Zelaya, among other things to prevent European interests from being allowed to build a rival canal in Nicaragua.

In Costa Rica, the liberal reforms under Tomás Guardia Gutiérrez (1870–1882) led to startling social progress. The reason for the liberal reforms in Central America was the desire for increased foreign investment, which should have a clear mark on the economy and politics in the century that followed.

American Minor Cooper Keith completed the construction of the Costa Rica railroad between the capital San José and the port city of Limón in 1878. He then embarked on banana cultivation along the railway line, and in a short time this developed into a lucrative business. In 1899, Keith created the United Fruit Company, and together with the Standard Fruit Company, banana production in Central America and the Caribbean was monopolized. Banana plantations were established throughout the area and labor was sourced from African descent to the Caribbean, especially Jamaica. The banana companies had significant political influence, especially in Honduras, which soon developed into Central America’s “banana republic”.

The dictators

The United States occupied Nicaragua militarily during the period 1912–1933 and made sure to keep conservative governments in power. This led to the first radical guerrilla movement in Central America under the leadership of Augusto César Sandino, who in 1927 insisted on fighting until the occupation troops had left Nicaragua. In the 1920s, several unions were formed, especially among banana workers. The Communist parties in these countries also saw the light of day.

In connection with the depression at the beginning of the 1930s, discontent among the poorest part of the population was more clearly expressed. In response, an extremely repressive state apparatus emerged throughout Central America under the leadership of Jorge Ubico of Guatemala (1931-1944), Maximiliano Hernández Martínez of El Salvador (1931-1944), Tiburcio Carías Andino of Honduras (1933-1948), and Somoza Dynasty in Nicaragua (1936-1979). In Costa Rica, after a long period of electoral and political discontent, he was replaced by the coup of José Figueres Ferrer in 1948. He abolished the army and implemented social democratic reforms that made the country a democratic exception in Central America.

Civil war and revolutionary movements

In the post-war era, US policy towards Central America has also been characterized by direct military interference. In 1954, the United States intervened in Guatemala to oust the radical government of Jacobo Árbenz Guzmán. After the Cuban Revolution of 1959, President John F. Kennedy established the Progress Alliance in 1961, which provided financial support to counter revolutionary trends in Latin America. The United States subsequently also faced significant professionalization of the military apparatus in Central America. Yet, during the 1960s and 1970s, revolutionary movements occurred in Guatemala, El Salvador and Nicaragua. Trade unions and student movements became radicalized, and the apparatus of power hardened in the attempt to defend the status quo.

In an effort to improve the economic situation in the area, the Central American Common Market (CACM) was established in 1960; here, Guatemala and El Salvador were given the role of the most important industrialized countries. Free trade between countries was intended to facilitate economic cooperation, and the countries received significant financial support from the United States. Honduras had little benefit from the scheme, and farmers from the overpopulated El Salvador colonized land in Honduras. This led in 1969 to the so-called “football war” between the two countries, which has since had a bad relationship.

To withstand the activities of guerrilla groups operating across borders, the Central American Defense Council (CONDECA) was established in 1963 between Guatemala, Honduras and Nicaragua. El Salvador joined in 1965. CONDECA entailed expanded military cooperation with the United States. After guerrilla movements began to prevail in Guatemala in the mid-1960s until it was hard-fought by the government of Carlos Arana Osorio, it was from the early 1970s that El Salvador and Nicaragua became the scene of guerrilla rebellions. In El Salvador, this was expressed in the form of class struggle, while a broad opposition led by the Sandinist Front for National Liberation (FSLN) was aimed at Nicaragua’s sole ruler, Anastasio Somoza Debayle. FSLN’s victory in 1979 inspired the guerrillas both in El Salvador and Guatemala. At a coup that same year, moderate officers in El Salvador tried in vain to bring about political reforms, and guerrilla activities increased in strength. In Guatemala, the civil war reached its most intense level in 1980-1981.

Political and economic crisis

With the election of Ronald Reagan as President of the United States in 1980, US policy towards Central America was significantly activated. The Sandinist Revolution in Nicaragua led to considerable military support for Nicaragua’s neighboring countries, and Honduras evolved almost into a US military base. In April 1981, the United States withdrew all support for the reconstruction work in Nicaragua that the Jimmy Carter administration had granted. Instead, the United States sought to defeat the revolution in Nicaragua militarily through substantial support for the contras. The debt crisis, which was particularly pronounced since the early 1980s, made Honduras, El Salvador and Costa Rica dependent on US aid. Thus, these countries became strongly allied with the United States in the attempt to overthrow the Nicaraguan government and counter the guerrillas in El Salvador.

The danger of direct US military intervention was imminent, and with the Vietnam War fresh in memory, opposition to such an opportunity manifested itself in both the United States and Europe. In Latin America, Mexico, Colombia, Venezuela and Panama took the initiative to create the Contadora Group in 1983 to mediate in the conflicts. The Sandinists strengthened their position when they won the Nicaragua elections in 1984. However, the US preferred to intensify its support for the contras and introduced the boycott of Nicaragua in 1985.

In Guatemala, the 1985 election led to the country’s first civilian president of 19 years, Marco Vinicio Cerezo, being elected. Cerezo was among the initiators of drawing up a joint peace plan between the democratically elected presidents of the five Central American countries in 1986. This process was rewarded with the Nobel Peace Prize in 1987 to Costa Rican President Óscar Arias Sánchez, at the same time as prominent US politicians and military in the Iran-Contras scandal.


The collapse of communism in Europe led to the escalation of the Cold War in Central America as well.

The United States went to military invasion of Panama on Christmas 1989. 27,000 American soldiers conducted a raid on General Manuel Antonio Noriega, who was arrested and extradited to the United States. The invasion led to great destruction and little sympathy with the Americans.

In Nicaragua handed sandinistpartiet FSLN government power to the opposition after the elections in February 1990. In El Salvador had the new president from the right party ARENA, Alfredo Cristiani, surprisingly placed considerable emphasis on achieving a peace agreement with the guerrilla FMLN (Farabundo Martí National Liberation Front) for national liberation, while the Oslo Agreement in March 1990 laid the foundation for peace negotiations in Guatemala as well. In Nicaragua, demilitarization led to the army being reduced from about 100,000 to 15,000 soldiers in two years, but the military situation in the country remained unstable for many years to come. In El Salvador, where both the army and the FMLN understood that neither of them would win a military victory, a peace agreement was finally signed in January 1992. Re-integrating the warring from both sides and reconstruction of the lands became a major challenge for both Nicaragua and El Salvador.. In both countries, the former revolutionary military organizations FSLN and FMLN established themselves as important political parties in opposition.

The peace process in Guatemala lasted for several years, but it was also the most protracted and complicated war in Central America and a major tragedy for the Mayan people. World attention was focused on Guatemala when Mayan woman Rigoberta Menchú Tum received the Nobel Peace Prize in 1992, the year that marked the 500th anniversary of the Spanish colonization of Latin America. Only in December 1996, after 36 years of armed conflict, with more than 200,000 killed or “lost”, was the peace treaty signed in Guatemala.


If Central America had left behind the era of military dictatorships and guerrilla activity – and the legal and economic settlement after that era got underway – the countries were still characterized by political polarization. The process of democratization also proved insufficient to overcome the crime, unemployment, poverty gap and other major problems of the transition to the new century. Overall, the money that legal and illegal US emigrants sent home was a more important contribution to the countries’ economy than the new business development projects.

Honduras was among the first countries to receive financial assistance from the United States, against the commitments of a more market liberalist approach to the economy. In 2003, El Salvador, Guatemala, Honduras and Nicaragua signed a Central American Free Trade Agreement – CAFTA – with the United States. In 2004, Nicaragua was among the countries that received 80 percent debt relief from the World Bank, as well as wiped out its old billion-dollar debt to Russia.

But the highlights of economic development in Central America came at a time when an old enemy was striking with renewed vigor – the natural disasters. More frequent and more severe tropical storms led to enormous material destruction, and death tolls that in some cases could bring back memories of a dark past.