Caribbean Islands: Protests against IMF. Is the IMF the only salvation for Barbados?

English-speaking Caribbean countries share colonial pasts, a common sea, developing country status, and often financial difficulties. Financial troubles in this Caribbean sub-region have led Barbados, Belize, Grenada, Jamaica, the Commonwealth of Dominica, the Cooperative Republic of Guyana, and the Republic of Trinidad and Tobago to seek loans from the International Monetary Fund (IMF). Such IMF assistance has been contentious and has resulted in protests in five of these seven small states. Anti-IMF protests in the Anglophone-Caribbean have generally taken the form of workers' strikes, which other marginalized groups in society have joined to vent their frustrations. Anti-IMF protests in the sub-region have also included roadblocks in Jamaica and an attempted coup in Trinidad and Tobago. Regardless of the form protests have taken, they all represented public responses to suffering brought by governments repositioning themselves vis-à-vis citizens in compliance with market-oriented IMF proposals.

Debt and IMF Conditionality

From the 1980s many developing countries began to face rising interest rates on commercial bank loans that they acquired at favorable interest rates during the 1970s. Although not always used efficiently, debts accumulated by English-speaking Caribbean states were mostly used to finance social spending, infrastructure development, and other interventions aimed at bolstering their economies. By the 1980s all of this led to developing countries spending more on debt and imports than they were earning from their exports (balance of payments difficulties) and prompted some Caribbean states to seek loan assistance from the IMF.

Access to IMF help, however, came with conditions. Governments usually were asked to reduce their spending by privatizing state-owned enterprises, by decreasing or stabilizing public sector wage bills, by cutting back on social services spending, and by ending subsidization schemes wherever possible. States were encouraged to abandon interventionism and instead liberalize their economies by promoting private sector-led growth and by allowing markets to direct trade, to determine interest rates, and to set rates of exchange. Additionally, countries were advised to devalue their currencies both to make domestic exports more attractive to importers and to put a brake on the outflow of foreign exchange spent on imports. IMF counsel also led to new taxes being introduced to generate supplementary government revenue. These structural adjustment policies were thought to allow struggling countries to better meet their external obligations. Yet the assumptions on which the IMF's approaches to lending were grounded often led to social dislocation. Currency devaluations did not halt imports in heavily import-reliant countries in the Caribbean, but led to consumer price increases.

What is more, wage decreases and layoffs, decreased government spending, and increased taxation meant that the already poor lower classes faced privation while the middle classes began to experience decline. In essence, people struggled to make less money, or money worth less, go at least as far as it did previously. It is not totally surprising, then, that protests emerged in opposition to IMF prescriptions. However, lurking beneath these more obvious motivations for protesting the demands that states abruptly change their relationships with their societies by metamorphosing from interventionist to minimal should not be separated from the discontent expressed by Caribbean citizens. Hence, anti-austerity protests were also protests against the way in which IMF-led structural adjustment policies pushed Caribbean countries in a neoliberal or market-oriented direction as part of a wider international trend for managing national economies.

IMF protest 2

The Protests

IMF loans to the Caribbean commenced with loans to Jamaica and Guyana in the late 1970s. Jamaica commenced borrowing from the Fund in 1977, received further funding in 1981 and, thereafter, to cover every year between 1984 and 1996. It appears that the fourth lending arrangement with the Fund, though, truly began to burden the country's population. Consequently, in January 1985, following Prime Minister Edward Seaga's announcement of the conditions to be met as part of the 1985 IMF loan agreement, workers shut down virtually all essential services in the country. Especially significant in sparking these protests was the government's decision to increase fuel prices by 20 percent. Citizens signaled their defiance by burning tires in streets across the country and by setting fire to sugar cane fields.

Like Jamaica, Guyana also saw a time lag between its first IMF encounter and anti-IMF protests. Guyana secured its first IMF loan in 1978 and subsequently received loans in 1979 and 1980. However, by 1985 the country was listed ineligible for IMF loans, for failing to implement sufficiently the advised austerity measures and for failing to meet its financial obligations to the Fund. Nonetheless, Guyana regularized its relationship with the IMF after committing to the Fund's lending terms in 1989. It is to this event that citizens responded in protest on April 4, 1989. Workers in the bauxite and sugar industries and employees of the University of Guyana struck in protest over a 70 percent devaluation of the Guyanese dollar in compliance with IMF conditions for the release of funds in 1990. The devaluation, which commenced on March 30, 1989, had the immediate effect of making life in Guyana difficult by increasing consumer prices. Therefore, as in Jamaica, citizens' reactions to devaluations can be linked to price hikes that were precipitated by government attempts to comply with IMF conditions for financial assistance.

Unlike the previously presented countries, Trinidad and Tobago was able to prolong its receipt of IMF loans until the close of the 1980s when it obtained loans in 1989 and 1990. In response to the difficulties that these measures bought, protests emerged in the country on March 6, 1989. Trade unions across Trinidad cooperated to stage a general strike in which workers peacefully demonstrated over the government's decision to decrease civil service salaries by 10 percent. The dislocations that accompanied IMF austerity were further met with opposition between July 18 and August 2, 1990, this time in a more violent form when the country's president along with government Cabinet members were taken hostage in an attempted coup. Although this coup can be viewed more widely as an embodiment of opposition to the administration in power, this protest should not be disentangled from anti-IMF sentiment, especially since those attempting the coup demanded that IMF austerity measures be suspended. As in the previously noted cases, government efforts to meet IMF conditionality directly impacted on citizens' abilities to provide for themselves. However, protests against austerity measures in both Trinidad and Guyana during 1989 and 1990 coincided with the collapse of the Soviet bloc and the apparent bankruptcy of development models that were heavily state interventionist.

Protests in Guyana, Trinidad, and those that followed, therefore, should not be disconnected from the emergence of neoliberal orthodoxy that by the end of the 1980s was transforming the world and taking the Caribbean with it.

Following the Trinidadian experience, protests against public sector wage decreases and concomitant hardships expected to follow also occurred in Barbados during 1992. Although Barbados received its first stand-by loan from the Fund in 1982, it was to the country's second encounter with IMF loans that workers across the country responded. Barbados' structural adjustments comprised employment cuts, wage cuts, and various other measures to decrease public expenditure. Decreasing wage rates without controlling inflation inevitably made life more arduous in Barbados. Furthermore, the Barbadian government attempted to short-circuit the norm of negotiating public sector pay cuts with unions when it went directly to public sector employees to arrange an 8 percent pay cut. These actions combined to propel workers to take to the streets bearing placards on October 24 and November 4–5. In addition, the opposition political party (the Barbados Labour Party) attempted to oust the prime minister (who was also the minister of finance) via a vote of noconfidence in response to popular discontent, and unions attempted to take the Democratic Labour Party government to court over unconstitutionally reducing public sector pay.

Ten years later, protests against IMF prescribed adjustments continued in Dominica. Dominica received IMF loans in 1984, 1986 and, so far for the twenty-first century, in 2002 and 2003. In response to the latter two loans, employees in the country's public sector took to the streets led by the Dominica Public Service Union and with the support of the Opposition United Workers Party, first in September 2002 over a 4 percent stabilization levy imposed by the government on those earning at least $9,000 per year. Subsequently, in February 2003, public sector workers stayed off their jobs to demonstrate over a host of government proposals geared towards decreasing the country's public sector wage bill. The proposed policies included a work furlough that would reduce the number of days public servants worked per month and thus the amount they would earn. The following month public sector employees struck in opposition to a 6 percent reduction in their wages – once more a government initiative to comply with IMF advice.

The foregoing accounts of protests in the English-speaking Caribbean should make it cleat that, no matter the country or the decade, increasing costs of living brought by IMF loan conditions were highly contentious. In each of the countries mentioned, higher commodity prices, lower wage rates, heavier tax burdens, currency devaluations, or some combination of these measures were intimately linked to IMF lending arrangements. Inseparable from these occurrences, too, was a neoliberal shift being thrust on developing countries via the IMF and further supported by the demise of non-market based developmental options. This commonality may further be extended to the non-English speaking Caribbean as protests in the Dominican Republic and the Republic of Haiti demonstrate.

The Dominican Republic saw anti-IMF protests in 1984 following the signature of a loan agreement with the Fund in January 1983. The Fund recommended reductions in public subsidies, a reduction in the supply of money, that market forces determine the value of the Dominican peso, and that a sales tax be introduced. These measures bore heavily on the country's people by increasing food prices to the extent that Dominicans, particularly from the urban poor, rioted in the streets to express their disgust. Almost twenty years later, further strikes befell the Dominican Republic in coincidence with negotiations with the IMF when in November 2003 and then January 2004 Dominicans rallied in the streets supported by citizens groups, unions, and opposition parties. Citizens created roadblocks to protest continual power outages, sharp currency devaluations, and increases in the prices of significant commodities (e.g., fuel and medications). Once more citizens responded to hardships connected to IMF prescriptions for economic recovery.

As for Haiti, the story is much the same. Anti-IMF protests erupted in this country during 1995. Already existing in a turbulent political and economic climate and with experience of IMF austerity measures throughout the 1980s, Haitians launched demonstrations in March, May, and September of 1995 in connection with the signature of an IMF loan agreement that entailed the privatization of state entities and contributed to rising costs of living. These protests were also supported by widespread leafleting in August of 1995 in efforts to raise awareness about the role of the IMF in worsening the plight of Haitians.

Conclusion

This survey of the Caribbean illustrates that Caribbean populations have responded to social dislocations attributed to IMF austerity measures through protest. Decreases in wages, increases in the prices of significant commodities, and currency devaluations have been particularly contentious in both the English-speaking Caribbean and in the non-English speaking Caribbean states of Haiti and the Dominican Republic. Moreover, one can assert that these protests were responses to changes in state-society relations across the region. IMF conditionality sped the retreat of the state from economic activities by reducing states' spending on wages; by decreasing states' funding of social services; and by liberalizing trade, rates of interest, and exchange. In so doing, IMF prescriptions led to unease in societies that faced sudden changes in the ways in which their states related to them. IMF austerity measures signaled a neoliberal turn; a turn towards markets, based on private sector-led growth and away from state-sponsored economic interventions. Consequently, one can further argue that though locally bounded responses to specific difficulties brought through compliance with IMF counsel, Caribbean anti-IMF protests have been reactions to a broader neoliberal shift that commenced in the early 1980s, intensified from 1989 with the demise of a communist option, and that continues to date.

Written by .... Kristina Hinds Harrison

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