Central America

E

Energy

About half of the electricity of Central America is generated by hydroelectric installations; important dams include those on the Lempa River in El Salvador, the Cajón River in Honduras, and the Corobicí and Arenal rivers in Costa Rica. Most of the rest is produced in plants using petroleum products. A small amount is generated in wood-burning facilities.

F

Transportation

The mountains of Central America present a major obstacle to overland transport, and the only surface transportation artery linking all the countries of the region is a section of the Pan-American Highway. Railroads connect the Caribbean and Pacific coasts in Guatemala, Costa Rica, and Panama. Inland water transportation is of little economic importance, but Central America has several important seaports, such as Puerto Santo Tomás de Castilla and Puerto San José in Guatemala; Puerto Cortés in Honduras; Acajutla in El Salvador; Corinto in Nicaragua; Puerto Limón in Costa Rica; and Bahía las Minas in Panama. The Panama Canal is a major shipping link between the Atlantic and Pacific oceans; Panama took over its operation from the United States in 1999. A crude-petroleum pipeline across western Panama was completed in 1982. Airlines provide transportation among the big cities of Central America and serve some remote mountain communities.

G

Foreign Trade

About half of Central America’s intercontinental trade is with the United States and Canada. Almost all the rest is with Western Europe, Mexico, and countries of South America. Central America’s principal imports are manufactured goods, such as motor vehicles, farm machines, textiles, electrical equipment, processed food, chemicals, and pharmaceuticals. The main Central American exports are basic commodities, which include bananas, coffee, cacao, meat, chicle, cotton, mahogany, balsa, hides and skins, and rubber.

The Central American Common Market (CACM), established in 1960, included all the Central American countries except Panama and Belize. However, several circumstances kept it from achieving its goals of trade liberalization and the establishment of a free-trade area. Among these was the infamous “Soccer War” of 1969 between El Salvador and Honduras, caused in part by CACM rules that favored El Salvador as well as Honduran policies against migrant Salvadoran workers. As a result, CACM trade was affected for more than a decade. Other countries’ internal conflicts also played a role in the disturbance of trade and by 1970, intra-CACM trade was insignificant. Today, Central American countries are facing new tariff barriers as the result of the Caribbean Basin Initiative (1984) and the North American Free Trade Agreement (NAFTA) (1994) and these barriers are preventing them from benefiting from increased global trading patterns.

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V

History

The region between Mexico and Colombia supported a large pre-Columbian population, the most important of whom were the Maya. The Maya civilization originated in the highlands of Guatemala before the 1st millennium bc and reached its greatest flowering between ad 300 and 900 in autonomous city-states in what are now northern Guatemala, Honduras, Belize, and Mexico’s Yucatán Peninsula. Maya unity was cultural rather than political, but the civilization’s influence was widespread. Maya artistic and scientific achievements surpassed those of contemporary Europeans. After 900, however, the Maya civilization declined, and its people came under the influence of Toltec people from Mexico.

Numerous peoples inhabited the remainder of the isthmus and traded with both South and North American tribes, making ancient Central America an archaeological bridge between the Americas. The population of the isthmus on the eve of the Spanish conquest may have been as large as six million, a figure not again achieved until the 20th century.

A

The Colonial Period

Christopher Columbus established Spain’s claim to Central America in 1502, when he sailed along its coast from the Gulf of Honduras to Panama. His reports of great wealth beyond the mountains that ran the length of the heavily populated isthmus stimulated Spanish conquest, which was launched from Hispaniola under Columbus’s son, Diego. The charismatic Vasco Núñez de Balboa founded Spain’s first truly productive colony in America at Darién in 1510, and went on to reach the Pacific Ocean in 1513. His successor, Pedrarias Dávila, who ordered Balboa’s death in 1517, extended the colony considerably, founding Panama City in 1519, from which he initiated the subjugation of Nicaragua and Honduras. The subsequent conquest of Central America became a bloody struggle among Spaniards representing interests in Panama, Hispaniola, and Mexico. Eventually, Pedro de Alvarado, the loyal lieutenant of the conqueror of Mexico, Hernán Cortés, consolidated control over most of the isthmus. The conquerors killed many Native Americans, but the majority died from devastating epidemics of smallpox, plague, dysentery, and influenza, introduced by the Europeans. The Spanish reduced to serfdom those who remained, establishing an agricultural society based on institutions they had brought from Spain. Native American customs and traditions survived, however, because most of the relatively few Spaniards remained in the towns and cities.

Colonial Central America was divided into two jurisdictions. The captaincy general of Guatemala extended from Chiapas (present-day Mexico’s southernmost state) through Costa Rica. Although nominally part of the Viceroyalty of New Spain, it was relatively autonomous. Its capital city, Antigua Guatemala, became a center for bureaucrats, clerics, and the landholding and commercial elite of the colony. The rest of Central America (all of what is present-day Panama), with its important transit route, became attached to New Granada (modern Colombia) in the Viceroyalty of Peru.

Spanish decline during the 17th century permitted increased autonomy for the colonial elite who, with the cooperation of church and state, dominated the oppressed Native American and mestizo (mixed Spanish-Native American heritage) working class. In the 18th century Spain’s Bourbon kings, trying to regenerate the empire, inaugurated reforms that promoted new economic activity, but also challenged the longtime accommodation between the landholding elite and the bureaucracy.

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