Economic and societal effects of structural adjustment in Guyana

Abstract

Already one of the most impoverished countries in the world, Guyana’s economy is experiencing a downward spiral under IMF and World Bank structural adjustment programs (SAPs), which ironically, were designed to boost the economy. This claim is analyzed with respect to three of Guyana’s most important industries: logging, mining and sugar.However, while SAPs have been a major force in influencing Guyana’s recent development path, the nation’s colonial inheritance must also be considered. Specifically, this legacy set the conditions under which Guyana’s two major political parties, the People’s Progressive Party (PPP) and the People’s National Congress (PNC), both claiming to be adherents to socialism, came to power. Their policies and actions, influenced by the colonial inheritance, eventually led to Guyana’s adoption of austerity measures designed by the international financial institutions (IFIs). This analysis therefore begins with an examination of the rise of these two dominant political parties, the role of colonialism in their emergence and the impact their actions and policies have had in laying the foundations for SAPs. It then turns to examining specifically the effects of SAPs on three major areas of the economy, logging, mining and sugar. This study is significant because it draws attention to the problems associated with SAPs. While structural adjustment has become a widely accepted form of financial assistance over the past two decades, upon closer examination, its negative effects far outweigh the positive ones. Therefore, SAPs should be better tailored to the specifics of Guyana’s economy.