In the late 1970s Suriname's economy continued to stagnate. Unemployment was high, and most of the population had incomes at the minimum subsistence level. On Feb. 25, 1980, after the government's refusal to sanction trade union activity within the armed forces, a group of noncommissioned army officers seized control of the government. The coup was welcomed by most of the population. The National Military Council (Nationale Militaire Raad; NMR), installed after the coup, called on the moderate wing of the PNR to form a Cabinet composed mostly of civilians. After the new Cabinet proclaimed that Suriname would return to democracy in two years, the Dutch government agreed to finance an emergency development program.

After the military coup in 1980, government expenditures rose dramatically, particularly defense spending. The economy, moreover, steadily deteriorated, as a result of the suspension of foreign aid, the stagnation of private foreign investment, and the decline of the export (especially bauxite) sector. The country's domestic affairs continued to be strained, reflecting an uncertain and tense relationship between the military, with de facto power, and the nominal civilian government led by a president. The military leaders, initially without a clear political ideology, began to take a conciliatory approach toward left-wing radical factions close to the NMR, which led to the formation in August 1981 of the Revolutionary Front, headed by Lieutenant Colonel Dési Bouterse. The Front included the Revolutionary People's Party (Revolutionaire Volkspartij; RVP), the PNR, and some of the trade and farm workers' unions.