What effects does U.S. led coups have on the economy of the targeted country? - Charles Hartwell
The rise of the United States as a global superpower could be seen as early on as the late 18th century. Since the beginning of their declaration for independence in 1776, the United States was able to withstand the rule of the almighty world superpower of Great Britain. After the American Revolutionary War it could easily be observed that the U.S. was hungry for more land and further expansion with their idea of Manifest Destiny. The U.S. remained determined to become a world power until it eventually came into fruition after World War 2. For the duration of the war it was the United States and the Soviet Union allied together on the side of the Allies. Both sides contributed greatly to the group of European nations attempting to resist the expansion Nazi Germany. However when the war ended in 1945, it appeared as if it was the U.S. and the U.S.S.R. staring down upon the rubble of what was once Europe. Soon their charity turned to greed as both sides saw the helplessness of their allies and struck at the opportunity to economically assist them in return for their country to rebuild in their political vision, being either Communism or Democracy. This was the first taste the United States got for intervening in foreign affairs, and after this they couldn’t get enough. They began interfering in practically every inhabited continent over the next half century with the assistance of their own Central Intelligence Agency, and the help of a callous attitude. The United States specialized in using a covert way of political interference called a coup d'etat, or a coup for short. This method involved illegally seizing or removing the current government in power in a natural looking fashion in order to replace it with a new government that was in their favor. The intervention of the United States certainly led to a variety of unique outcomes, specifically in the economies of the countries. From this interference few nations thrived with the help of the United States with the large majority facing economic turmoil. Iran especially benefited from the United States, as it westernized their economy and made use of its abundant natural oil. However, one could not say the same for countries such as Vietnam and Guatemala who were economically struggling after the U.S. gave them unfavorable leaders to lead their markets. Although the economy of Iran temporarily benefited from U.S. intervention with an increase in domestic production, coups led by the United States tended to have a profoundly negative impact on economies such as Vietnam and Guatemala with stunted economic growth.
A rare example of a U.S. coup being productive for the target country is in Iran in 1953, when the U.S. implemented leader increased their domestic production. Iran had just elected a revolutionary politician as their leader, Mohammad Mossadegh. He believed that Iran should take back control of its most valuable natural resource, oil. However, at the time it was completely controlled by the British operated oil company, the Anglo-Iranian Oil Company, which we now know today as BP (Johnny). The British see that this new leader isn’t in favor of British business, so they threaten a war with Iran if they seize the oil. The British then got in touch with the American C.I.A. who agrees to help overthrow Mossadegh, they agree as the U.S. suspected he was a communist due to his agenda to nationalize their oil. The U.S. funds the C.I.A. to secretly overthrow the government, mostly with bribing politicians to slander Mossadegh, and the manipulation of the people to begin riots in major cities (Johnny). The capital city falls into anarchy, with protests, murders, and even shootings in mosques. Mossadegh’s house is then stormed and he is captured and put through a sham trial where he is found guilty of treason, and is exiled from the country. The former King of Iran who was formerly banned from the country, Mohammad Reza Pahlavi, was then allowed to return back and take over as he followed the U.S. and British agenda.
With Pahlavi in control and being backed by the two most powerful economies in the world, the Iranian economy boomed. New western economic policies helped Iran prioritize their oil sector to its maximum potential. Between the years of 1964 and 1978, Iran's gross domestic product grew at a rate of 13.2 percent per year (Iran). On top of this, the construction, gas, and oil industries expanded by 500 percent during the period under Pahlavi. Economic growth, however, became dependent on oil in the 1970s (Johnny). By 1977, oil revenues had reached 20 billion dollars per year, which was 79 percent of the total government revenues (Iran). Although this was beneficial for the Iranian economy the U.S. exploited the oil industry of Iran for themselves and Britain, and globalized it for themselves. Although not their priority, as a secondary effect, came more jobs and a higher gross domestic product. The United States had no actual intention of assisting the country of Iran, they instead only had themselves and their allies interests at heart, with no regard for the people of Iran. In addition to this westernization of the economy, there was also an influx of western political ideas as well. Specifically, women's participation in the labor force in urban areas increased and the number of women enrolling in higher education grew from 5,000 in 1967 to 74,000 in just eleven years (Iran). Not only did the U.S. change the Iranian economy without the knowledge or consent of the Iranian people, but they also forced their political ideas on them. This notion is extremely hypocritical seeing that the U.S. is a democratic nation who allegedly values the voice of the people. The U.S., although improving the country’s production of oil, forced an unwanted political agenda upon the people which revealed itself during the Iranian Revolution of 1979. Furthermore, a published article in The Manchester Evening News from 1968 recalls a trip that a group of grammar school students took to Iran. They described that while walking along the road that the “oil rigs outnumbered blades of grass” (Kneale). The United States evidently had no interest in improving the country or the wellbeing of the citizens as they had their desires fixated on the abundance of oil in the country. The fact that the students could see more oil rigs than features than blades of grass means that they solely wanted exploitation of the country. Although the U.S. did produce more domestic goods in Iran, they negatively affected the country as a whole when discounting the economy. Overall, although the US’s coup temporarily bettered the Iranian economy by utilizing their abundant resource of oil, they nonconsensually utilized a more western philosophy of an expansionist economy, and integrated progressive western ideas such as integrating women in the workforce nonconsensually.
Although U.S. intervention through coups improved the Iranian economy, the same could not be the same for the Guatemalan economy, where the economy faced drastic stunted growth with the new implementation of the U.S. backed leader. In 1954 Guatemala’s leader, President Arbenz, wanted to take away US monopolies from ruling over the country's economy. He Begins targeting the United Fruit Company, an American multinational fruit company mostly famous for their banana imports to the United States. They also happened to own an extensive plot of land in Guatemala, practically the size of a small country (Elected). Arbenz however, is extremely opposed to an American company having this much reign on land and the economy, so he attempts to take their land and give it to local farmers to support them. The U.S. then intervenes with the C.I.A., claiming that they were stopping the spread of communism, however they were just protecting American business interests (Colonel). The C.I.A first sends weapons from Miami to arm paid Guatemalan rebels, they then make a fake Guatemalan radio station made to sound local, but in reality it’s operated by the C.I.A. and is coming from Florida. The message on the radio station is telling locals that there is an uprising going on within the country, and evidently enough, people begin to panic (Elected). The paid fighters then invade Guatemala and begin bombing military bases. Political friends of Arbenz feel the pressure from the US and turn on him. President Arbenz then steps down and is forced to leave the country. As a last message to his people Arbenz tells them that the US is responsible for all of this because he had interfered with U.S. business, yet nobody believed him (Elected). As his replacement the C.I.A. picks Castillo Armas to be the next president. They also give money to Guatemalan exiles and use them as soldiers to enforce his reign, and he fulfills his destiny as leader and restores the United Fruit Company’s land and they continued to rule the economy.
As President Armas took control of the country, their economy took a turn for the worse. This can be largely attributed to the political instability which occurred after the coup, as the Guatemalan government became reliant on aid from the Eisenhower administration. Armas was simply unable to attract foreign direct investment into his unstable economy. He was also preoccupied with the economic promises of buying U.S. goods to fuel the economy, and by April 1955 the government's foreign exchange reserves had declined from 42 million dollars at the end of 1954 to just 3.4 million dollars (Johnny Harris). Castillo’s regime was facing difficulties borrowing money due to political and economic instability, and faced accusations of being involved in the black market and for being on a route toward bankruptcy. By the end of 1954 the number of unemployed people in the country had risen to 20,000, four times higher than it had been during the latter years of the Árbenz government (Cullather). Labor unions, which had flourished since 1944, were also crushed as Armas allowed the United Fruit Company to take reign again (Cullather). The United States had chosen an unfit leader to operate a country and in return they got an unsuccessful economy. The United States however is fully capable of choosing a good leader for a country, but they only care about their interest and discard the citizens of the country as a whole. It can be seen that the United States had a profoundly negative impact on Guatemala as it experienced stunted economic growth.
Lastly, the United States demonstrated that their intervention through coups stunted economic growth through their overthrow of South Vietnamese President Ngo Dinh Diem in 1963. The United States had hoped that by overthrowing the unpopular Diem, the opposition to the Communist North Vietnam would increase and that they would eventually want to start a war (History). The US orders general Van Minh, a general who opposed Diem, to take over all radio stations and airports. A large group of people then march to the capital to kill president Diem, however he and his brother escape. The general and diem plan to meet a catholic church to hopefully make peace, however the general kills Diem upon arrival (Vietnam). The United States to this day has claimed that this was not part of their plan. In fact it's reported that John F. Kennedy was very distraught about this as he was the first American catholic president to kill the first Vietnamese catholic president. This unique scenario prompted the U.S. to stay in Vietnam, as they now carried the responsibility of killing their president and they could no longer just leave the country to chaos like in coups in the past (Harris).
The U.S. backed leader and former general, Duong Van Minh then took over the country for the remainder of the upcoming Vietnam war, and simultaneously was in charge of The Republic of Vietnam’s economy. The Republic of Vietnam had an open market economy reliant on aid, agriculture, and services from the United States. Its economy stayed stable in the 10 first years, then it faced difficulties due to the escalation of the Vietnam War, which led to unsteady economic growth, high state budget deficits, high inflation, and trade deficits. (Lockie). Whilst being backed by the U.S. the country took in 750 million a year from US aid, and independently produced at best 15 million locally produced merchandise (Lockie). In addition to this, hyperinflation occurred in this period. In 1970, the inflation rate reached up to 36.8%, and in 1973 this rate rose to 44.5% (Riddle). Overall the US’s choice of leadership hurt the Vietnamese people. The U.S. chose an inexperienced general as the leader of The Republic of Vietnam simply because he would back their view, and instead used the rest of the country as a battleground for their proxy war. The choice of U.S. leadership and the overall intervention of the U.S. through a military coup led to the stunted growth of the South Vietnamese economy.
In conclusion, the United States' intervention through coups in various countries had diverse impacts on their economies. While the U.S. coup in Iran temporarily benefited the economy by exploiting its abundant oil resources and implementing western economic policies, it also imposed unwanted political ideas on the Iranian people, which ultimately led to the Iranian Revolution. On the other hand, the U.S.-backed coup in Guatemala resulted in drastic stunted economic growth, with political instability and heavy reliance on U.S. aid contributing to a decline in foreign exchange reserves, increased unemployment, and the crushing of labor unions. Similarly, the overthrow of South Vietnamese President Ngo Dinh Diem by the United States disrupted the country's economy, leading to unsteady growth, high inflation, and trade deficits. These examples highlight the negative consequences of U.S. interventions through coups, with economic outcomes ranging from temporary gains to long-term setbacks. The United States' pursuit of its own interests often disregarded the well-being of the affected countries and their citizens, demonstrating the complex and controversial nature of U.S. involvement in global affairs.