We shall consider any attempt by European powers to oppress or control . . . the free states of the Americas as an act unfriendly to the United States." President James Monroe spoke these famous words in 1823, which later became known as the Monroe Doctrine. They were meant to end European control over Latin America, but ironically ushered in an era of United States control and hegemony in the Western hemisphere that continues to this day. Since this moment in history, the United States practiced a form of imperialism in the region, not the kind of overt colonization that European powers had practiced, but a more subtle, perhaps covert, form of hegemony. Like the European powers, though, the U.S. has aimed for economic control.

At the turn of the century, the U.S. focused on the new and important Panama Canal. Later, the realities of the Cold War led the U.S. to try to control, often by force, the politics of its southern neighbors: Nicaragua, Guatemala, and Cuba, visible even to this day with the embargo. But Monroe is dead, the Cold War is over, and the U.S. is slowly losing its tight grip in the Canal Zone. In these new economic times, the World Bank watches over the global economy and free world trade is the way to bring prosperity to all nations in the hemisphere. However, it is precisely in this economic climate that the United States ruthlessly continues to practice economic imperialism in Latin America and is poised to dictate even greater control in the next century.

Costa Rica (the "Rich Coast") is a small, peaceful country in Central America, located between two unstable countries, Nicaragua to its north and Panama to its south. Costa Rica has thus far avoided the violence and extreme poverty that has plagued the region and maintained its friendly relationship with the United States. Yet in such a harmless and small country, the United States has managed to assert its economic dominance. As the leader of the major international financial institutions, the U.S. has dictated economic policies of Costa Rica since the debt crisis of the 1980s. Furthermore, the U.S. has exploited Costa Rica's natural and human resources for its own economic gain, while passing a minuscule portion of the benefits to Costa Rica. And with the free trade regime just around the corner, Costa Rica is threatened to be tied even more closely to an economy that offers her little.

Like many other countries in Latin America, the basis of contemporary U.S control of the Costa Rican economy is in the import substitution policies of the 1960s and 1970s. In these years, Costa Rica began industrializing in an attempt to lessen its dependency on industrial imports. This policy, however, was both costly and counterproductive . It impeded economic development past the raw products stage. The country borrowed huge sums of money and imported foreign capital in order to start the industrialization process. As a result of this borrowing, however, the plan backfired. Huge trade and budget deficits arose which were remedied by encouraging even more exports of raw agricultural products. However, Costa Rica's dependency on agricultural commodities, which had little value compared to the expensive finished product, to fuel the economy was precisely the situation it was trying to overcome through industrialization.

Through these programs, the government would reduce spending and increase revenue and thus be able to repay their debts. However, Costa Rica continued struggling just to keep up with interest payments, never actually touching the debt itself.

Another central tenet of the structural adjustment programs was eliminating price supports or artificially high government set prices. The theory was that if price supports are abandoned and prices were allowed to fall to "natural" economic levels, farmers would rationally respond to the changes and all would be better with the newly gained efficiency. However, the engineers of the plan failed to recognize that 60 percent of basic crop producers, such as corn, beans, and rice, were subsistence farmers and thus unresponsive to changes in prices. Large producers, who produced more that 70 percent of basic grains, did cut back on production because of the fall in prices. Thus, Costa Rica had to begin importing basic grains for the first time in her history. The country lost self-sufficiency and the ability to feed her own people. Costa Rica lost that round of the structural adjustment war.

Furthermore, reduced access to low interest credit has caused many farmers in this town to be unable to make a living anymore from farming. Some are forced to move to the crowded cities in search of work and take on a lifestyle they know nothing about and in which they are uncomfortable. Farmers in Cañaza are not optimistic about the future of the small-scale farmer; they believe that politics and economics will eventually lead to the disappearance of their way of life.

Another example of the U.S. economic influence in Costa Rica is the policy "recommendations" of the United States Agency for International Development (USAID) in the 1980s. USAID promoted a program called Agricultura de Cambio (Agriculture of Change), which aimed to diversify the economy, maintain basic grain production, stimulate traditional exports, and improve the economic status of small and large farmers. The program focused on promoting non-traditional exports (NTEs), ranging from macadamia nuts to ornamental plants, as the means to export diversification. The program failed for many reasons: production levels never reached expectations, markets fluctuated more than anticipated, and the lack of technical assistance for these unknown crops caused a high percentage of the products to fall below export standards. Furthermore, credit assistance steadily decreased after the first couple of years until it was too costly and risky for the farmers to continue with the endeavor.

The NTE program caused much dependence on the United States, in terms of credit, technical assistance, and access to the U.S. markets. This sector of the economy was not in the hands of Costa Rica, and in fact, was not even Costa Rica's idea. It was a program conceived by USAID, which pressured the government into complying, in order to assure that the U.S. would retain control of the newly diversified Costa Rican economy. Unfortunately, there was nothing new about the program; it still focused on primary agricultural exports. And once USAID saw the program was failing, the agency pulled out and left the Costa Rican farmers who had followed to fend for themselves.

Another example of the U.S. economic influence in Costa Rica is the policy "recommendations" of the United States Agency for International Development (USAID) in the 1980s. USAID promoted a program called Agricultura de Cambio (Agriculture of Change), which aimed to diversify the economy, maintain basic grain production, stimulate traditional exports, and improve the economic status of small and large farmers. The program focused on promoting non-traditional exports (NTEs), ranging from macadamia nuts to ornamental plants, as the means to export diversification. The program failed for many reasons: production levels never reached expectations, markets fluctuated more than anticipated, and the lack of technical assistance for these unknown crops caused a high percentage of the products to fall below export standards. Furthermore, credit assistance steadily decreased after the first couple of years until it was too costly and risky for the farmers to continue with the endeavor.

Another program of USAID was called PL480, which aimed to make basic grain production in Costa Rica more efficient. The program allowed Costa Rica to import basic grains produced in the United States at a special reduced price with the caveat that the government could not stimulate local production of basic grains through such means as subsidies or credit assistance. This program hurt small-scale farmers, adding to the undermining of Costa Rican self-sufficiency and the growing dependence on the United States.

The Biologically Rich Coast United States economic dominance in Costa Rica is closely linked to the use of natural resources for economic gain. Much of the land in the country is owned by the U.S. companies, such as Chiquita Brands, Del Monte, and Dole which grow primarily bananas and pineapples. In the Atlantic lowlands, bananas as far as the eye can see are sprayed with pesticides by low flying airplanes. These multinational agricultural companies reap huge profits from the land while U.S. consumers enjoy the products. But these companies give little back to Costa Ricans. Banana workers in the town of Puerto Viejo de Sarrapiquí claim that many plantations do not provide basic protection from dangerous agrochemicals, and virtually all ban unions to the point of blacklisting anyone suspected of union activity. The land is used solely for U.S. profit. And it is taken away from many small-scale farmers who desperately need land to survive but find themselves powerless under the pressure of huge landowners.

The U.S. also taps Costa Rican natural resources through the discovery of pharmaceutical products. Until recently, U.S. pharmaceutical companies were allowed to develop biological material from Costa Rica into new products without compensating the government or the local people. In 1991, the non-governmental organization INBio (National Institute of Biodiversity) was created, on the recommendation of the Costa Rican government, to protect Costa Rica's biodiversity. In addition to an impressive cataloguing effort, INBio represents Costa Rica in contracts with pharmaceutical companies that are interested in biological prospecting.

For instance, INBio currently has an agreement with Merck, a U.S. pharmaceutical company, in which Merck pays approximately $1 million ($900,000 to INBio and $100,000 to the Ministry of Natural Resources) for two years of unrestrained use of Cocas National Park in an attempt to discover new marketable drugs. This amount is quite small when compared to the potential billions of dollars profit that can be earned from just one new successful drug. In addition, the contract stipulates that Costa Rica will receive half of royalties (usually 2 to 5 percent of profits) and none of the patents if a drug is developed and marketed.

This situation is only slightly better than the previous one. Although the U.S. company does now pay for the use of natural resources, it is still allowed to use them for their own economic gain and for the consumption of U.S. consumers. What's more, these drugs will undoubtedly be modeled according to the needs of U.S. customers. Unfortunately, Costa Ricans have not received any knowledge or training in the technology necessary to use their natural resources for their benefit.

United States economic dominance in Costa Rica, and the rest of Latin America, appears to be gaining strength with the globalization of trade through the General Agreement on Tariffs and Trade (GATT). Trade with the U.S. is already extremely important for the Costa Rican economy. In 1988, 44 percent of exports went to the U.S., mostly low-cost agricultural commodities, and 39 percent of imports came from the U.S., mostly higher priced industrial products. With the passage of the Uruguay Round of GATT, Costa Rica will become even more dependent on trade with developed nations because import controls, tariffs, quotas, export taxes, and price supports, all the things which Costa Rica could use to retain self-sufficiency, will be eliminated.

food exports, even in times of critical shortages, since export restrictions of any kind are contrary to free trade. Put simply, Costa Rica may not be able to assure the health of its own people.

Furthermore, Codex Alimentarius, an "independent" commission with much influence from the developed nations, especially business interests from the United States, will oversee and interpret the process of deregulation mandated by GATT. What all this means for a small developing country like Costa Rica is that she will be unable to protect herself from transnational corporations, who will gain even more power with GATT. Farmers in the country will be threatened because they cannot be assured of a domestic market, and they will be pressured to sell land to more "efficient" (read larger) producers. Costa Rica will lose its ability to obtain self-sufficiency and will become even more dependent on the developed world, especially the United States.

Sovereignty is defined as the capacity of a nation state, represented by its legitimate authority, to claim territorial, political, economic and ideological independence. According to this definition, Costa Rica has no sovereignty because it cannot make economic decisions independently. Costa Rica is an example of a developing country with no control of its economic destiny. Instead, the control is in the hands of the developed world, particularly the United States, in whose best interest it is to keep Costa Rica always developing, not into an industrialized state, but into an economic dependent.

History cannot be reversed, but the U.S. can surely correct some of its past mistakes. Perhaps it can start by using its influence in the World Bank to lessen the harshness of the loan restructuring. The U.S. can also recommend economic programs that work toward improvement of Latin American living standards. However, correcting past mistakes requires the United States to make a major ideological shift; first, admit that it has impeded Latin American economic development and second, commit to helping these nations overcome the economic obstacles that it has constructed.

Ms. Reznik, SM'97, is an economics and international studies major at Yale College. She studied in Costa Rica last fall.