Impact Of Coffee On The Economy

Coffee the Great Miracle There is a product that has allowed Central American countries to develop and grow. That product is coffee, it has had a major effect on the economy of central american countries. It has affected the lives of many of the citizens that live on these countries, and it has led to the modernization of these nations. Those who grew coffee and had plantations had all the power it managed to make a new kind of ruling elite. Coffee has propelled these countries from being some of the poorest in the world to being some of the most progressive in the world. This agricultural product allowed Central American countries to enter the world market affecting their economy, affected the lives of the lower class citizens, made new ruling
They were able to modernize themselves and move forward. “Costa Rica, one of the region's poorest states at end of colonial era”(Coffee in Nicaragua 26). Costa Rica benefited a lot from coffee because it allowed it to progress from one of the poorest states to one of the most progressive. They did this by promoting coffee and making moves to enter the world market. In order to transport coffee these countries needed to modernize, they built new roads, railroads, and new ports all for the transportation of coffee. The roads that were built are hard surfaced and they are helpful because they can be used by people other than the coffee growers. The railroads were also useful for the transportation of coffee, of course the governments had to pay for them to be built. The coffee plantation owners would strong arm them to get them built if they wanted their business. The most used type of transportation was the ports, so getting them built was very important mostly by the pacific. The ports of the pacific were used more than the ones in the Caribbean. “ the first railroads, telephones, and other communications were constructed in the country”(The liberal republic 16). These three thing helped modernize these central American countries by bringing in income. In Nicaragua coffee accounted for at least 9 percent of total exports. That state was a big help in promoting coffee and foreign
Coffee elites success with coffee gave it the economic power to dominate the rest of the economy. In el Salvador “ the domestic banking industry was entirely based on coffee wealth”(coffee in El Salvador 10). This shows that even the banking system was based on the production of coffee, the leading banks were also controlled by the coffee families until there were finally nationalized in 1980. The families were so rich and powerful that they controlled banks and with that they could decide who would get loans. There is a comparison that the coffee elites came to rival the industrial fortunes in the develop world. The elites were divided between the producers and the mill owners, the mill owners who processed the coffee actually had control of the export trade. This was due to the fact that many coffee producers did not own mills and therefore sold their coffee to those who did. That meant that the mill owners actually had more power than the producers because the producers did not have any way to process the coffee. There was one group that represented all of the coffee elites it was called Asociación Salvadoreña de Cafe or ASCAFE for short. This group was so powerful that it was a virtual state within a state(Coffee in El Salvador). ASCAFE had total control of the coffee economy and Banco Hipotecario. As stated in Weak Foundations by Hector Lindo-Fuentes “