Price of bananas
President Reagan is proposing an economic aid program for Central America amounting to $8 billion over a five-year period. This sounds like a lot of money. But let us first get it into perspective. (For this article I am taking my statistics from the current edition of ''The World in Figures,'' published by The Economist magazine.)
The total population of the five countries of Central America to be included in the program (Nicaragua, the sixth, is not to be aided) is 19.2 million. The average amount of aid for one year would be $1.6 billion. That is roughly $80 per person.
For comparative purposes the Reagan administration's proposed aid to Israel for fiscal 1984 is $2.48 billion. The Jewish population of Israel is about 3.2 million. This works out at $775 per person. US aid to Egypt is at the rate of $ 64 per person.
So the Central American program would amount on a per capita basis to about one-tenth of what the US does every year for Israel, but more than for Egypt. There is a question whether an average of $80 per Central American (omitting Nicaragua) over a five-year period would be enough to achieve the declared purpose, which is to rescue the area from the danger of communism.
The answer will depend largely on whether during the five years of the proposed experiment progress is made toward giving the people of those countries a democratic equivalent of what the Cuban variety of communism offers them.
Nicaragua is the model for Cuban communism. It has divided up the big estates , giving the campesinos (local farm workers) a share in ownership and a larger share in farm income. It launched a campaign against illiteracy and has improved medical facilities for the rural and urban poor.
Costa Rica is the most prosperous, and least endangered, of the Central American countries. It has a net per capita income of $1,658. Next most prosperous is Panama, at $1,200 per person. The per capita figures for the others are Guatemala, $850; El Salvador, $760; and Honduras, $549. A comparable figure for US per capital income is $9,637.
Costa Rica is different from the others. Its population is 80 percent of European stock. It is largely literate, with good health services and relatively general land distribution. It is not a country largely dominated, as is El Salvador, by large landholdings in few hands. The old Spanish hacienda system tends to prevail in all but Costa Rica.
Central American countries have long been trading heavily with the US. For every one the US is the first and largest supplier of manufactured goods and the principal market. Honduras, for example, sells 57 percent of its exports to the US (mostly coffee and bananas) and takes in return 42 percent of its imports. Coffee and bananas are the main exports for all of them except Panama, which has developed an oil refining industry. Its oil exports equal its coffee exports.
The terms of trade between the US and Central America have sustained a small landholding class in considerable affluence. Many of them enjoy alternate homes in Florida. But the social and economic systems combined with the prices paid for the product have not been enough to sustain generalized affluence. The majority of the people live in poverty.
The normal habitation except for Costa Rica is a thatched hut with earthen floor. Plumbing, electricity, and education are for landowners, not peasants. In health matters El Salvador has, for example, one hospital bed for every 617 people. Costa Rica has one for every 289. The US has one for every 159.
Land, literacy, and health for the masses have been in short supply in the countries of Central America. Communism offers all three. The President's special commission on Central America proposes that the US launch a program which, in broad terms, would propose to outdo the communists.
It can be done. But what it really amounts to is saying that we in the US have not been paying enough for our bananas, or caring enough about how the money we do pay is distributed.