Home' Trinidad and Tobago Guardian : June 27th 2013 Contents BG12 NEWS
BUSINESS GUARDIAN www.guardian.co.tt JUNE 2013 • WEEK FOUR
The National Alliance For
Reconstruction (NAR) was the
first party to dislodge the Peo-
ple's National Movement in
post-independence T&T and
it did so on a wave of discon-
tent in an economy in recession.
When the NAR come to power in 1986, the
price of a barrel of oil was US$9.
NAR, an amalgamation of different parties,
campaigned on the slogan of "one love'" and
swept to power with 33 seats, crushing the
PNM. This one-love theme was splashed across
the all newspapers during that time when it
stormed to power.
The new party won the 1986 elections, tak-
ing around 66 per cent of the national vote,
the first time the PNM had failed to win more
than 50 per cent of the vote since 1956.
Arthur NR Robinson, previously leader of
the Democratic Action Congress, became Prime
Minister. The NAR entered government with
broad national support and goodwill, but sup-
port declined as fiscal austerity and neo-liberal
economic policies imposed by the International
Monetary Fund's (IMFs) structural adjustment
programme resulted in increased unemploy-
ment and a ten per cent cut in salaries in the
In April 1987, in his report to the nation,
Robinson painted a grim picture of an empty
treasury with little relief in sight. The 1986
deficit was US$2.8 billion rather than the US$1
billion claimed by the previous government.
Because the deficit had been covered by bor-
rowing from the Central Bank, there were few
financial reserves left. Reserves, which had
been US$3.3 billion in 1981, dropped to less
than US$400 million by the end of 1986.
In 1986, Kirpalani's, a leading retail store---
which had been so successful it 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 Kir-
palani, had died suddenly the year before when
his car ran off the road and slammed into a
concrete pillar along the Beetham Highway.
Like in any other deep recession, many other
businesses in T&T during that time saw their
All the trade unions were involved in the
struggle against the NAR's structural adjust-
ment policies. The first, Unity Body, was the
Joint Trade Union Movement (JTUM), a loose
interim body that came together to unify
labour. It comprised the Council of Progressive
Trade Unions (CPTU) and a few Independent
unions, like the T&T Unified Teachers Asso-
ciation (T&TUTA), the Sugar Workers' Union
and Public Services Association (PSA).
The unions shut down the country in a Day
of Resistance on March 6, 1989.
The struggle was seen as a great success as
the NAR tempered its austerity measures and
the struggles influenced the courts to order
the repayment of wages and cost of living
allowance (COLA) taken away from public
Dr Alvin Hilaire, who is now deputy gov-
ernor at T&T's Central Bank, in a working
paper at the IMF in 2000 entitled, Caribbean
Approaches to Economic Stabilisation, said:
"By the time the oil boom was punctured
in the early 1980s, the country had grown
accustomed to a certain lifestyle and nec-
essary adjustments were delayed.
T&T ran through a very large stock of for-
eign exchange which had been accumulated
during the oil boom. Serious adjustments
only began around the mid-1980s with the
tightening of import and exchange controls
and a devaluation in 1985."
He continued: "The new Government
elected in 1986 embarked on a drastic fiscal
Almost immediately reducing the central
Government wage bill by suspending COLA
and merit pay increases, which was subse-
quently reversed by the Industrial Court as
illegal and later on cutting public sector
wages by ten per cent."
As recent as November 2011, Robinson, at
the Conversations with Prime Ministers series
at the Daaga Auditorium, University of the
West Indies (UWI), said the NAR Govern-
ment's decision to cut public servants' salaries
by ten per cent in order to save jobs, was
one of the measures which created the great-
est "discontent", but it was not responsible
for the July 27, 1990, coup attempt.
In April 2012, speaking at the commission
of enquiry into the coup attempt, Mervyn
Assam, ambassador extraordinary and
plenipotentiary with responsibility for trade
and industry, said the economic policies
which the NAR Government was forced to
implement affected Afro-Trinidadians and
the poor people more than any other group
because the policies were harder on those
in the lower economic rung.
Reliving the NAR's 10%
salary cut, COLA issue
Trade unions and public servants staged solidarity marches in 1987 around the
Red House and through Port-of-Spain during the National Alliance for
Reconstruction's term in office in protest of a ten per cent wage cut and the
suspension of the cost of living allowance.
Then Prime Minister Arthur NR Robinson.
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