1st PM: Dr Eric Williams
Major political & economic changes
In the 1980s, the world underwent major political changes. The African country of Rhodesia became independent and was renamed Zimbabwe; American President Jimmy Carter declared that the United States regarded the Persian Gulf as an area of vital interest; and, in 1989, the Berlin Wall fell, signalling the end of the Cold War.
The two main events of the 1980s in Trinidad and Tobago were also political: the death of People’s National Movement founder Dr Eric Williams and the defeat of that Party, which had been in government for 30 unbroken years, in the 1986 general election. In Tobago, another major political event took place with the re-creation of the Tobago House of Assembly in September, 1980. But the decade as a whole was defined by the economy, which was in a bust cycle from 1983 to 1989 after the oil boom of the 1970s.
On January 25, 1981, speaking at the PNM’s 25th anniversary, Williams declared: “To say that nothing has been done in over 25 years and five general elections suggests that something, at least one thing, does work-PNM’s appeal to the electorate.”
Williams added that he was “confident in the continued support of the Lord God of Hosts who will rule, as He has ruled so often in our 25 years. Great is the PNM and it will continue to prevail.”
Nine weeks later, on March 29, he died after going into a diabetic coma.
On March 30, George Chambers, who was Minister of Agriculture, Lands, and Fisheries, was sworn in as the country’s new and second Prime Minister. Chambers’ appointment by President Ellis Clarke was perceived in some quarters as a race-based decision, since the PNM’s two deputy leaders at the time were both Indo-Trinidadian: Kamaluddin Mohammed and Errol Mahabir.
In November, a general election was held and the Chambers-led PNM won 26 of the 36 seats with 53 per cent of the votes. The Organisation for National Reconstruction, led by former PNM Attorney General Karl Hudson-Phillips, fulfilled Chamber’s prediction of “Not a damn seat for them,” although the ONR received 22 per cent of the votes compared to the United Labour Front’s 15 per cent, which was enough for the latter to get 10 seats. In Tobago the previous year, the THA held its first election and the Democratic Action Congress, led by ANR Robinson, took eight of the 12 seats with 53 per cent of the votes.
The Chambers administration now had to oversee a declining economy, and its message was “Fete over, back to work.” But, as Table 1 shows, the economy was about to enter a deep recession. This was due to a drop in oil prices world-wide. While inflation dropped, as happens when economies stagnate, unemployment rose from 10 per cent at the start of the decade to 22 per cent at the end. The PNM Government tried to maintain its revenues by increasing taxes, with direct taxation climbing from a mere 17 per cent to 37 per cent during this period. In 1982, regulations were passed preventing anyone from leaving the country with more than US$200 without Central Bank approval. In 1983, EC-0 forms were introduced to control foreign exchange for imports, and this led to widespread black market activities and corruption. Several persons, including a well-known PNM financier, were later charged for misuse of the forms, but none was ever convicted.
Former Deputy Central Bank Governor Terrence W Farrell, in his book Central Banking in a Developing Economy, writes: “The financial system was severely traumatised in the 1980s... By 1983, the Bank’s main policy objective had shifted decisively from inflation control to the protection and stabilisation
of the balance of payments”, adding that “confidence in the [financial] sector was badly shaken by the run on International Trust Ltd in August 1983.”
The Central Bank Act and the Financial Institutions (Non-Banking) Act were amended to confer emergency powers on the Central Bank. The Government took control of the Trinidad Co-operative Bank and, in September of 1986, suspended operations of five financial entities. By December, Trade Confirmers Ltd, Commercial Finance Company Ltd, Southwestern Atlantic Investment Trust Company Ltd, and Summit Finance Corporation were closed.
In 1986, Kirpalani’s, a leading retail store whose success had even inspired a calypso with the chorus line “If you can’t run the country, then call in Kirpalani,” went into receivership. The store’s founder, Ram Kirpalani, had died suddenly the year before when his car ran off the road and slammed into the concrete pillar of a flyover. Between 1984 and 1988, 170 companies would suffer the same fate.
But 1986 was also the year that a general election was held and most of
the opposition political parties, including the major groupings of the ULF and the ONR, came together to form the National Alliance for Reconstruction (NAR). DAC leader, ANR Robinson was appointed political leader of the coalition. Already under pressure from the economic downturn, the PNM’s history of corruption, the main point of attack during the campaign, became encapsulated by Desmond Cartey, the MP for Laventille and Minister of Housing and Resettlement, who in response to a heckler during a platform speech said: “Who ent tief in Trinidad? All ah we tief!” This statement, as reported by the late Keith Smith, made headlines in the Trinidad Express.
On December 15, the NAR trounced the PNM, winning 33 seats out of 36. “The NAR spectacularly captured, perhaps even nurtured, the popular mood for change,” writes political analyst Kirk Meighoo in his book Politics in a Half Made Society. Patrick Manning, elected PNM Political Leader two months later, had retained his San Fernando East seat by just 61 votes. Robinson was appointed Prime Minister.
In November, 23-year-old Giselle Laronde was declared Miss World in London, the first time T&T would claim this title. The first President of the Republic, Sir Ellis Clarke came to the end of his term in 1987 and the new President was named as Noor Hassanali.
In January 1987, as the first major exercise of its overwhelming mandate, the NAR oversaw a “National Exercise of Cleaning up the Environment,” which received widespread support from the entire country, save in the three PNM constituencies. The NAR passed its first Budget in that same month, and laid the seeds of discontent by suspending the Cost of Living Allowance. The Robinson administration also cut Government Ministers’ salaries by five per cent.
The coalition did not last very long. In March 1988, ULF leader Basdeo Panday launched the Club 88 group (Caucus of Love, Unity and Brotherhood). Panday, who was Foreign Affairs Minister, had for several months been grumbling in public about certain acts of the Government he disagreed with; this included criticism of Robinson. Matters came to a head on April 29 when Panday moved a no-confidence motion against the Prime Minister. The motion failed and Robinson suspended Panday on May 15.
The unpopularity of the NAR caused by this political fallout was exacerbated by the continuing economic problems. During 1987, Farrell records, the Central Bank was increasingly preoccupied with the foreign exchange reserves, which had fallen to just US$331 million at the end of 1986, representing am import cover ratio of less than three months.
Now governing with a Parliamentary configuration different from that which had brought it victory, the NAR Government in August 1988 devalued the TT dollar from US$1= $3.60 to US$1=$4.25. In that year, the administration was forced to take a decision which was its political kiss of death: it signed a letter of intent with the International Monetary Fund in November, allowing T&T to draw on funds. Reductions in wages and salaries and in transfers to State Enterprises and utilities were the IMF conditionalities, as well as a reduction in number of items subjected to price controls. A survey carried out by UWI economist Ralph Henry in that year found an 18 per cent poverty rate. A 1987 Demographic and Health Survey recorded a population of 1.1 million people, with a 1.6 per cent population growth per year. Sixty per cent of women were married by age 45, with 18 per cent living in common law relationships and 15 per cent having visiting ones.
In 1989, with one in five persons in the labour force unemployed, the Government granted a 10-year lease to the Indian steel company Ispat, to run the unprofitable Iron and Steel Company of Trinidad and Tobago (ISCOTT), which had been planned under the Williams regime as the first step to making T&T an industrialised nation and commissioned in 1981. The national telephone company, TELCO, whose efficiency was encapsulated in the calypso “Telco poops,” was privatised with 49 per cent of its shares sold to Cable & Wireless.
The social effects of the economic downturn can be seen in Table 2. Between 1981 and 1989, crime reports and murders had increased, and marriage rates had dropped.
These were the decade’s closing conditions of discontent, from which the 1990 coup attempt would explode.