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 According to
Countryaah,
Adams died and was followed by Bernard St. John. The
Democratic Workers Party won the election and Prime Minister
Errol Barrow promised to change the policy towards the
United States, which had otherwise been stable for the past
10 years. Barrow died in 1987 of a heart attack and was
followed by Erskine Sandiford. Two years later, a split in
the Democratic Labor Party led to the formation of a new
opposition group, the National Democratic Party, led by
Richard Heynes.
The continued decline in sugar production and interest
rate increases exacerbated inflation in 1989. The funds used
to reduce the government deficit caused the fear of greater
unemployment to rise and led to widespread strikes. The
industrial sector nevertheless slowed down, foreign exchange
reserves improved, hundreds of Panama companies declared
interest in establishing the island, and an investment
agreement in the tourism sector was signed with Japan.
In an attempt to distance itself from CARICOM
protectionism, Barbados asked for a renegotiation of the
treaty that year. With a view to favoring local agriculture,
the government itself imposed certain restrictions,
especially against the import of vegetables from Guyana.
During the following year, serious discrepancies occurred
between the sugar refiner's owners and the government
regarding sugar prices, while the workers threatened to
strike if their demands were not met. Tourism employed 15%
of the workforce on the island, which in 1988 received more
than 450,000 foreign visitors.
In 1991, the Labor Party was re-elected with 49% of the
votes cast, even though in the election two of the 20 seats
so far lost. The unrest and demonstrations that followed the
government's adoption of an 8% pay cut for civil servants
culminated in a general strike in November. Despite strong
criticism, Sandiford continued in the post of prime
minister.
In 1992, the government borrowed from the IMF $ 64.9
million and the prime minister introduced new public sector
wage cuts and reduced social benefits, raised interest rates
and initiated privatizations in the oil and cement industry.
After two successive finance ministers resigned,
Sandiford also undertook this task at the end of the year,
in an effort to transform the country into a financial
center. The tourism sector experienced a turnaround during
1993. That year, this sector accounted for more than $ 500
million in revenue, equivalent to a third of the country's
gross domestic product.
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