Structural adjustment and political reform in Guyana
By Dr Mellissa Ifill
Desmond Hoyte’s accession to the president’s office after the death of Forbes Burnham in August 1985, gave rise to fundamental changes in the political and economic direction of the state by the early 1990s. The Hoyte administration quickly confirmed its desire to institute policy changes in the local economy despite opposition from some influential members within the PNC. Under Hoyte’s stewardship, several strategies and policies were adopted that conflicted with the co-operative socialist ideology that the PNC, under Burnham’s leadership, had espoused. Hoyte and his finance minister announced at several fora, the government’s commitment to a market-oriented development strategy. In addition to verbally underscoring its commitment to economic liberalism, the government also took some practical steps to signal it. First and foremost, it attempted to enhance its relationship with the Western financial community when the government re-established relations with the IMF and the World Bank in 1986.
It is important to view the government’s reversal from a cooperative socialist to liberal market-based strategy within its historical context. Guyana was constrained by a crippling external debt burden, which was exacerbated by the continuous increase of arrears to all its international creditors. The state was unable to generate adequate foreign exchange to service the debt. As a consequence of the state’s uncreditworthiness, it was virtually impossible to acquire any major external financing. The Hoyte administration knew that if it wanted to introduce any economic reform programme, it had to source external funding. The PNC administration was also aware that acquiring financing from international creditors was unlikely until the government of Guyana repaired the relationship that existed between the state and the IMF and the World Bank since international creditors premised their interaction with developing states on them agreeing to structural adjustment arrangements under the guidance of the two international financial and developmental institutions.
Guyana’s structural adjustment programme – the Economic Recovery Programme (ERP), was officially initiated in early 1989 after which, several strategies were implemented between 1989 and 1992. The two principal objectives of the ERP were: (i) sourcing external funding and; (ii) implementing specific economic strategies as a condition for this funding to be continuously secured. Guyana required external funding for balance of payments support, to reschedule the unpaid debt, and to settle the country’s arrears to the IMF, World Bank and the CDB among others. With a history of heavy default, Guyana needed to first satisfy these institutions before she could access additional credit.
The economic recovery programme (ERP) employed a number of policy and operational measures, such as exchange rate devaluation, price deregulation, wage control in the public sector, increased bank rate and privatisation.
Structural adjustment in Guyana was also linked to the concept of governance from the early 1990s. Governance as a concept and political practice gained great credibility in Guyana from: the collapse of the socialist intellectual forerunner the Soviet Union; the unsuccessful outcome of the socialist-oriented state-led development strategy and; the efforts of local activists stridently calling for democratisation.
Tyrone Ferguson noted that in Guyana, several aspects of governance were addressed as part of SAPs including the political, institutional and technical dimensions. Politically, he noted, governance dealt with the manner in which citizens were governed and translated into the implementation of competitive multiparty elections, a growing regard for human rights and an emergent civil society.
Ferguson argued that especially during the 1990-1992 period, “it was with respect to electoral democracy that the interaction between structural adjustment and good governance was most vividly played out in Guyana”.
At the end of 1960, the single most problematic political concern in Guyana was the conduct of elections and its attendant culture of abuse and subterfuge that characterized the political system since that time. By the late 1980s, the PNC administration under Hoyte was forced to address the issue of electoral reform.
There is evidence to suggest that Hoyte was personally committed to reforming the political and electoral climate in Guyana and this was seen as early as 1985 when he made a number of small concessions to opposition parties with respect to overseas and posted ballots. The US State Department Publication of February 19, 1987 entitled “Human Rights in Guyana: An American Assessment” noted that under Hoyte a movement toward political reform and representation had commenced including prohibiting or severely restricting overseas, postal and proxy voting and by increasingly respecting freedom of speech and the right of opposition groups to import newsprint and printing presses.
The GHRA, while noting these improvements, nonetheless opined that they were “a matter of political convenience rather than institutional guarantee” (GHRA, 1990, 1). This suggests that the Hoyte administration’s adoption of an ever increasing number of electoral reforms after 1989 were more as a consequence of a number of factors including: the intensifying campaign locally from opposition groups; the trend internationally towards free democratic elections; and the increasing linkage of the economic recovery plan to competitive elections by both local and international actors.
The local groups (both political and civic) that were campaigning for a sweeping restructuring of the electoral system included the Patriotic Coalition for Democracy (PCD), the Guyana Human Rights Association (GHRA), the independent media – in particular, the Stabroek News, GUARD and a group of prominent citizens representing religious, professional, business and labour organisations.
These local campaigners were given increasing external support after 1989.
Locals and their affiliates abroad initially primarily targeted government and legislative structures in major Western Donor countries (the US, UK and Canada) and the Commonwealth Caribbean. In articulating their dissatisfaction with the prevailing political climate in Guyana, local campaigners reminded the major external actors that there was an indisputable connection between structural adjustment and democratisation. In 1989, the PCD stated that “the IMF and the 8-nation Western Support Group looking into the crucial billion dollar aid for Guyana would do well to insist on democratisation of the society before bringing their aid package on stream. Caricom aid donors and creditors should also adopt this principle fearlessly. It is hardly consistent for the powerful western governments who so loudly proclaim the interconnection between democracy and development to pour vast amounts of their taxpayers’ money into an undemocratic and dictatorial regime which continues to hold power through electoral fraud.”
From the early months in 1990, a large number of external actors (both governmental and nongovernmental) brought their individual and combined influence and pressure to bear on the Hoyte regime to force extensive electoral reform. They all publicly and unmistakably alluded to the connection between SAP and electoral democracy. The most significant and influential pressures emanated from the US authorities and culminated in the US government’s decision to discontinue financial support to the ERP in 1991, and the clear association between its resumption and conducting free and fair elections. The British and Canadian governments followed suit, linking potential aid to the holding of free and fair elections.
It is important to note that explicit support from major Western donor, in particular the US, did not occur until there were explicit statements from the political opposition, in particular Cheddi Jagan, indicating that he had moved away from his radical leftist, anti-capitalist stance and had accepted the principle of laissez-faire in economic affairs.
Dr Jagan’s courting of the West was remarked upon by the PNC in their Stabroek News column on February 10, 1991 entitled “Machiavellian Politics or Desperation?” The PNC noted that Dr Jagan was focusing most of his energies for a local electoral campaign in the US and the Caribbean and had even hired a high profile law firm to remake his image abroad.
Dr Jagan confirmed the modification of his political position in a 1991 interview with Mr Oliver Clarke, Chairman of the Jamaica Gleaner newspaper. Jagan, commenting on his party’s future relationship with the United States reported “I have told the people in Washington that we want the closest relationship with the US”. When questioned about the economic programme he might implement if successful at the polls, he stated that at this period in Guyana’s history, “socialist programmes… are out of the question”.
In effect, political leaders of both government and opposition parties had publicly stated their commitment to liberal capitalist economic policies and pledged to move the state further toward private enterprise, export-oriented development strategies.