More than twenty five years after gaining freedom, Guyana retained the clear imprint of its colonial past. Sighted by Columbus during his third voyage, the area was virtually ignored by later Spanish explorers and conquistadors. The first European settlers were the Dutch, who accomplished a trading post in 1616. The native Carib and Awarak peoples were killed by disease or conflict over the land or forced into the interior. The Dutch, realizing the agricultural potential of the swampy coast, drained the land with a network of dikes and canals. In the 1700s, the three Dutch colonies in present-day Guyana grew and prospered with plantation economies based on sugarcane and slave labor. Increasing number of British settlers were also drawn to the area in the second half of the eighteenth century. Dutch rule ended in 1814 when the colonies were awarded to Britain following the Napoleonic wars.

Ideology played a large part in the newly independent nation's approach to economic development. The initial selection of a Marxist-Leninist economic system was motivated by a desire to break with the capitalist past. But authoritarian rule by one dominant political personality and continued ethnic tension undermined the crafting of a coherent or pragmatic development strategy. Independent Guyana's history under its first prime minister, Forbes Burnham, is one of political confrontation and long economic decline. Desmond Hoyte's tenure appeared to represent a departure from the economic and authoritarian policies of his predecessor, but in 1991 it was unclear if the historical patterns of personal political dominance and ethnic tension could be changed.