Economy of Suriname

The economy of Suriname was largely dependent upon the exports of aluminium oxide and small amounts of aluminium produced from bauxite mined in the country. However, after the departure of Alcoa, the economy depended on the exports of crude oil and gold. Suriname was ranked the 124th safest investment destination in the world in the March 2011 Euromoney Country Risk rankings.[13]

Economy of Suriname
calendar year
Trade organisations
WTO, CARICOM, Unasur, Mercosur (associate)
Statistics
GDP
  • $3.427 billion (nominal, 2018 est.)[1]
  • $8.930 billion (PPP, 2018 est.)[1]
GDP growth
  • 2.6% (2018) 2.3% (2019e)
  • −5.0% (2020f) 3.0% (2021f)[2]
GDP per capita
  • $5,798 (nominal, 2018 est.)[1]
  • $15,111 (PPP, 2018 est.)[1]
GDP by sector
agriculture: 10.4%; industry: 36.6%; services: 52.9% (2012 est.)
22 % (2020) [3]
Population below poverty line
70% (2002 est.)
Labour force
220,600 (2020) [6]
Labour force by occupation
agriculture: 8%; industry: 14%; services: 78% (2004)
Unemployment7.47% (2020) [7]
Main industries
bauxite and gold mining, alumina production; oil, lumbering, food processing, fishing
162nd (below average, 2020)[8]
External
Exports$2.51 billion (2018)
Export goods
Gold, alumina, Wood, crude oil, lumber, shrimp and fish, rice, bananas
Main export partners
Imports$1.84 billion (2018)
Import goods
capital equipment, petroleum, foodstuffs, cotton, consumer goods
Main import partners
$504.3 million (2005 est.)
Public finances
Revenues$826.6 million (2010 est.)
Expenses$939.7 million (2010 est.)
Economic aidNetherlands provided $37 million for project and program assistance, European Development Fund $4 million, Belgium $2 million (2003)
Standard & Poor's:CCC
Outlook: Stable[11]
Moody's:[11]
B1
Outlook: Stable
Fitch:[11]
CCC
Outlook: Highly Vulnerable
Foreign reserves
$647.3 million (2019) [12]
Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars.

Agriculture

In 2018, Suriname produced 273 thousand tons of rice, 125 thousand tons of sugar cane, in addition to smaller productions of other agricultural products, such as banana (48 thousand tons), orange (19 thousand tons) and coconut (14 thousand tons).[14]

Bauxite

The backbone of Suriname's economy is the export of aluminium oxide (alumina) and small amounts of aluminium produced from bauxite mined in the country. In 1999, the aluminium smelter at Paranam was closed[15] and mining at Onverdacht ceased; however, alumina exports accounted for 72% of Suriname's estimated export earnings of US$496.6 million in 2001. Suriname's bauxite deposits have been among the world's richest.

Inexpensive power costs are Suriname's big advantage in the energy-intensive alumina and aluminium business. In the 1960s, the Aluminum Company of America (Alcoa) built the US$150-million Afobaka Dam[16] for the production of hydroelectric energy. This created the Brokopondo Reservoir a 1,560 km2 lake, one of the largest artificial lakes in the world.

West Suriname Plan
Main article: West Suriname Plan

In 1976–1977, a 100 km long single track railway was constructed by Morrison-Knudsen Co. in West Suriname from the bauxite containing Bakhuis Mountains to the town of Apoera on the Corantijn river, to transport bauxite by river to processing plants elsewhere. The construction of this railway was financially funded by the Dutch government's independence/severance payments after November 25, 1975. After completion of this railway and associated facilities, for political and economical reasons it was never actually used and was left to be overgrown by the jungle. Also plans to construct a dam in the Kabalebo River were developed but never fully executed.

In 1984, SURALCO, a subsidiary of Alcoa, formed a joint venture with the (at that time) Royal Dutch Shell-owned Billiton Company, which did not process the bauxite it mined in Suriname. Under this agreement, both companies share risks and profits.

The major mining sites at Moengo and Lelydorp are maturing, and it is now estimated that their reserves will be depleted by 2006. Other proven reserves exist in the east, west, and north of the country sufficient to last until 2045. However, distance and topography make their immediate development costly. In October 2002, Alcoa and BHP Billiton signed a letter of intent as the basis for new joint ventures between the two companies, in which Alcoa will take part for 55% in all bauxite mining activities in West Suriname. The government and the companies are looking into cost-effective ways to develop the new mines. The preeminence of bauxite and Alcoa's continued presence in Suriname is a key element in the U.S.-Suriname economic relationship.

Gold mining

There is one large scale gold mine operating in Suriname. This is the Rosebel Gold Mine. Development of a second large scale mine called the Merian Gold Project was approved by the government of Suriname on June 7, 2013. This mining project would be a partnership of Newmont Mining Corporation and Alcoa World Alumina and Chemicals. Merian is about 60 kilometres (40 mi) south of the town of Moengo on the Marowijne River.[17][18] The government estimates there are another 20,000 small scale operators. Only 115 of these were registered by the government in 2009. The government calls these people porknokkers.[19] Because of unemployment in Suriname, some local people turn to small, illegal gold mining as their source of incomes. Gold mining has caused environmental damages in the country.

Commission for the Ordering of the Gold Mining Sector
Establishment of Ordening Goudsector (OGS)

Commission for the Ordering of the Gold Mining Sector (OGS) was established by the government in 2010.[20][21] OGS is leading the reform effort to develop sustainable and environmentally responsible gold mining practices and transform informal small-scale gold mining into a viable sub-sector of the mining and national economy of Suriname.[22]

Ban on mercury use in small-scale mining

Suriname does not produce chemical mercury and only allows mercury imports with a license. Since the 1990s these licenses were not issued anymore. Moreover, all licenses are used for mercury imports for medical use or research. Therefore, trade and import in mercury is illegal.[23] Mercury is used in the small-scale gold mining because smuggling made mercury available. However people who are caught with mercury in their possession will be judged and/or fined.[24][25][26][27]

Foreign investment

On April 13, 2013, the government reached an agreement with multinational IAMGOLD to increase investment in Suriname.[28][29]

Kaloti Mint House Suriname

On March 1, 2013, Kaloti Mint House Suriname laid its funding stone and is expected to start its refinery production by the first quarter of 2014.[30] Kaloti Mint House will be instrumental in producing "clean gold" in Suriname.[31] Kaloti Mint House have been awarded the ISO 9001:2000 certification for gold and bullion manufacturing and ISO 14001 Environmental Certification. The company is presently applying for ISO 14025 for the Assaying of Gold and Silver. Kaloti will focus on melting and producing gold bars to international standards (999.9 purity) for local and international markets.[32]

Minamata Treaty

In October 2013, the UN wanted to adopt the Minamata Treaty to ban the user of mercury altogether in Suriname.[33][34]

The School of Mining

The Government initiated a training unit within the Ordening Goudsector called the School of Mining.[22] This training unit consists of 14 teachers. The teacher's training started February 2013 and is aimed at preparing them for the fieldwork. The duties of the teachers will be to provide hands-on training on the goldfields to small-scale gold miners. The teachers begin with prospecting and showing the small-scale miners more efficient ways to mine in their areas. Along the way they promote mercury free production methods. The Management of Ordening Goudsector hypothesizes that showing small-scale gold miners the benefits of new production methods will be the incentive itself to start the training programs.

[27]

Entrepreneurial Credit Fund

The Ministry of Finance initiated a credit fund in March 2013 for small and medium scale entrepreneurs. Small-scale miners can become formally verified entrepreneurs as the piece of land will be viewed as a formal "title" by financial institutes. This means the miners will be eligible for credits and thus can acquire credit to upscale their production. A first amount of 35 million SRD (US$10.69 million, as of Monday, Apr 8, 2013, 04:15 PM GMT) is available for credit through the Central Bank.[35]

Mining zones

The Mining Law says that one can only mine with a license from the Government. Ordening Goudsector regulates the concessionaires, how many machine owners there are and what the movements of small-scale miners are.[36] New mining areas are still being issued. However it is important to note that data show that the interesting area to mine, especially for the small-scale miners who look for alluvial gold, is the Greenstone belt. The greenstone runs from Guyana, through Suriname, into French Guyana. This greenstone belt, however, only counts for 15% of the Surinamese surface. At the moment almost all areas in this belt are already given out in concessions.

Foreign aid

After the return to a more or less democratically elected government in 1991, Dutch aid resumed. The Dutch relationship continues to be an important factor in the economy, with the Dutch insisting that Suriname undertake economic reforms and produce specific plans acceptable to the Dutch for projects on which aid funds could be spent. In 2000, however, the Dutch revised the structure of their aid package and signaled to the Surinamese authorities their decision to disburse aid by sectoral priorities as opposed to individual projects. Although the present government is not in favor of this approach, it has identified sectors and is now working on sectoral analyses to present to the Dutch.

After a short respite in 1991–1996, when measures taken in 1993 led to economic stabilization, a relatively stable exchange rate, low inflation, sustainable fiscal policies, and growth, Suriname's economic situation deteriorated from 1996 to the present. This was due in large part to loose fiscal policies of the Wijdenbosch government, which, in the face of lower Dutch development aid, financed its deficit through credit extended by the central bank. As a consequence, the parallel market for foreign exchange soared so that by the end of 1998, the premium of the parallel market rate over the official rate was 85%. Since over 90% of import transactions took place at the parallel rate, inflation took off, with 12-month inflation growing from 0.5% at the end of 1996, to 23% at the end of 1998, and 113% at the end of 1999. The government also instituted a regime of stringent economic controls over prices, the exchange rate, imports, and exports, in an effort to contain the adverse efforts of its economic policies. The cumulative impact of soaring inflation, an unstable exchange rate, and falling real incomes led to a political crisis.

Dutch aid stopped to a large extent after Dési Bouterse was elected president. Aid from China has increased.[37]

Politics

Suriname elected a new government in May 2000, but until it was replaced, the Wijdenbosch government continued its loose fiscal and monetary policies. By the time it left office, the exchange rate in the parallel market had depreciated further, over 10% of GDP had been borrowed to finance the fiscal deficit, and there was a significant monetary overhang in the country. The new government dealt with these problems by devaluing the official exchange rate by 88%, eliminating all other exchange rates except the parallel market rate set by the banks and cambios, raising tariffs on water and electricity, and eliminating the subsidy on gasoline. The new administration also rationalized the extensive list of price controls to 12 basic food items. More important, the government ceased all financing from the central bank. It is attempting to broaden its economic base, establish better contacts with other nations and international financial institutions, and reduce its dependence on Dutch assistance. However, to date the government has yet to implement an investment law or to begin privatization of any of the 110 parastatal, nor has it given much indication that it has developed a comprehensive plan to develop the economy.

Oil
Offshore oil 2020

Oil is a promising sector. Staatsolie, the state-owned oil company, produced 16,200 barrels (2,580 m3) a day in 2012.[38] Staatsolie currently refines 7,350 barrels (1,169 m3) a day at Tout Lui Faut in the District of Wanica and is building more capacity to go to 15,000 barrels (2,400 m3) a day.[39]

Hardwood

Some big companies are getting the hardwood out of the jungle. However, proposals for exploitation of the country's tropical forests and undeveloped regions of the interior traditionally inhabited by indigenous and Maroon communities have raised the concerns of environmentalists and human rights activists both in Suriname and abroad. These opposing parties are not yet strong in Suriname.

Banana

State-owned banana producer Surland closed its doors on April 5, 2002, after its inability to meet payroll expenses for the second month in a row; it is still unclear if Surland will survive this crisis.[40]

It was remodeled as Stichting Behoud Bananen Sector Suriname (SBBS). The rumour was that because of political differences Surland was manipulated in shutting down. The SBBS has made banana profitable for the first time in 20 years.[41]

Other exports

A member of CARICOM, Suriname also exports in small numbers rice, shrimp, timber, bananas, fruits, and vegetables.

Currency

Moreover, in January 2002, the government renegotiated civil servant wages (a significant part of the work force and a significant portion of government expenditure), agreeing to raises as high as 100%. Pending implementation of these wage increases and concerned that the government may be unable to meet these increased expenses, the local currency weakened from Sf 2200 in January 2002 to nearly Sf 2500 in April 2002. On March 26, 2003, the Central Bank of Suriname (CBvS) adjusted the exchange rate of the U.S. dollar. This action resulted in further devaluation of the Surinamese guilder. The official exchange rate of the US$ was SF 2,650 for selling and SF 2,600 for purchasing. With the official exchange rate, the CBvS came closer to the exchange rate on the parallel market which sold the U.S. dollar for SF 3,250.

Before 2004: Surinamese gulden (SRG) = 100 cent, SRD 1 = SRG 1000; coins had extremely low official value and a much higher collector's value; their official value has now been multiplied by 1000: the value in SRD cent is equal to the former value in SRG cent. The same applies for "currency notes" (SRG 1 and 2.50).

Surinamese guilders per US dollar - 2,346.75 (2002), 2,178.5 (2001), 1,322.47 (2000), 859.44 (1999), 401 (1998)
Note: during 1998, the exchange rate splintered into four distinct rates; in January 1999 the government floated the guilder, but subsequently fixed it when the black-market rate plunged; the government then allowed trading within a band of SRG 500 around the official rate

Unlike most currencies in the American continent. This currency does not fluctuate freely according to the market value, its value is set by the central bank. In January 2011, the SRD was set at $1 at SRD 3.25. In November 2015, this was changed to a fixed rate of $1 to 4 SRD and in April 2016 it was further changed to $1 to 7.38. As of September 22, 2020, its value was modified again to be 1 dollar at 14.15 Surinamese dollars.

External Debt & Restructuring

As of February 2021, Suriname's external debt stands at $4 billion USD. Of this amount, the nation is currently seeking to restructure a total of $675 million USD in loans. Suriname has retained French investment bank Lazard to act as its Financial Advisor during the restructuring.[42]

Statistics

The following table shows the main economic indicators in 1990–2017.[43]

Year 1990 1995 2000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
GDP in $
(PPP)		 2.71 Bln. 2.78 Bln. 3.63 Bln. 5.31 Bln. 5.79 Bln. 6.24 Bln. 6.63 Bln. 6.88 Bln. 7.33 Bln. 7.91 Bln. 8.28 Bln. 8.66 Bln. 8.84 Bln. 8.70 Bln. 8.36 Bln. 8.51 Bln.
GDP per capita in $
(PPP)		 6,644 6,348 7,783 10,647 11,476 12,243 12,823 13,130 13,792 14,658 15,282 15,734 15,812 15,334 14,539 14,606
GDP growth
(real)		 −1.5 % 11.3 % −0.1 % 4.9 % 5.8 % 5.1 % 4.1 % 3.0 % 5.2 % 5.8 % 2.7 % 2.9 % 0.3 % −2.6 % −5.1 % 0.0 %
Inflation
(in Percent)		 21.8 % 24.2 % 29.6 % 14.0 % 11.3 % 6.4 % 14.7 % −0.3 % 6.9 % 17.7 % 5.0 % 1.9 % 3.4 % 6.9 % 55.5 % 22.0 %
Debt/GDP
(in Percent)		 78 % 17 % 38 % 29 % 24 % 17 % 16 % 16 % 18 % 20 % 21 % 30 % 26 % 43 % 76 % 72 %
  • Industrial production growth rate: 6.5% (1994 est.)
  • Electricity – production: 1.58 billion kWh (2008)
  • Electricity – production by source:
  • Electricity – consumption: 1.44 billion kWh (2008)
    • exports: 0 kWh (1998)
    • imports: 0 kWh (1998)
  • Agriculture - products: paddy rice, bananas, palm kernels, coconuts, plantains, peanuts; beef, chickens; forest products; shrimp
  • There are no Patent Laws in Suriname.[44]

See also

References
  1. "World Economic Outlook Database, October 2019". IMF.org. International Monetary Fund. Retrieved 26 October 2019.
  2. "Global Economic Prospects, June 2020". openknowledge.worldbank.org. World Bank. p. 86. Retrieved 16 June 2020.
  3. "SRD - Surinamese Dollar". Xe.currency. Retrieved 11 December 2020.
  4. "Human Development Index (HDI)". hdr.undp.org. HDRO (Human Development Report Office) United Nations Development Programme. Retrieved 11 December 2019.
  5. "Inequality-adjusted Human Development Index (IHDI)". hdr.undp.org. HDRO (Human Development Report Office) United Nations Development Programme. Retrieved 11 December 2019.
  6. "Suriname: Labor force". theglobaleconomy. Retrieved 11 December 2020.
  7. "Suriname: Unemployment rate". theglobaleconomy. Retrieved 11 December 2020.
  8. "Ease of Doing Business in Suriname". Doingbusiness.org. Retrieved 2017-01-25.
  9. "Where does Suriname export to? (2018)".
  10. "Where does Suriname import from? (2018)".
  11. Rogers, Simon; Sedghi, Ami (15 April 2011). "How Fitch, Moody's and S&P rate each country's credit rating". The Guardian. Retrieved 28 May 2011.
  12. "Total reserves". World bank. Retrieved 11 Dec 2020.
  13. "Euromoney Country Risk". Euromoney Country Risk. Euromoney Institutional Investor PLC. Retrieved 15 August 2011.
  14. Suriname production in 2018, by FAO
  15. "Alcoa in Surinam". Alcoa. Retrieved 2013-04-21.
  16. "Afobaka Dam: Suriname". National Geospatial-Intelligence Agency, Bethesda, MD, USA. Retrieved 2013-04-21.
  17. "Merian Gold Project, Suriname". Archived from the original on 2013-03-19. Retrieved 2013-05-10.
  18. "Suriname lawmakers approve Newmont gold mining deal". Reuters. June 8, 2013. Retrieved 2013-06-13.
  19. Cairo, Ivan (January 11, 2011). "Suriname government starts structuring gold mining industry". Caribbean News Now. Retrieved 2013-05-10.
  20. "Suriname government starts structuring gold mining industry - Caribbean News Now". Caribbeannewsnow.com. Retrieved 11 June 2015.
  21. "Suriname moves to end chaos in its gold sector". Caribbean Life. Retrieved 11 June 2015.
  22. "The Suriname Small Scale Gold Mining Sector" (PDF). Gov.sr. Archived from the original (PDF) on 24 September 2015. Retrieved 8 November 2017.
  23. "Government Act" (PDF). Gov.sr. Archived from the original (PDF) on 24 September 2015. Retrieved 7 November 2017.
  24. "Starnieuws - US$ 4000 boete voor bezit kwik". Starnieuws.com. Retrieved 11 June 2015.
  25. "NoSpang - Suriname Network Online". Nospang.org. Archived from the original on 13 June 2015. Retrieved 11 June 2015.
  26. "Starnieuws - Nimos zet eerste stap naar uitbanning kwikgebruik". Starnieuws.com. Retrieved 11 June 2015.
  27. "Nimos neemt aanloop uitbanning kwikgebruik - DWTonline.com". Archived from the original on June 15, 2013. Retrieved July 22, 2019.
  28. "IAMGOLD - IAMGOLD definitive agreement with Government of Suriname approved by National Assembly". Iamgold.com. Archived from the original on 13 June 2015. Retrieved 11 June 2015.
  29. "IAMGOLD Corporation - IAMGOLD definitive agreement with Government of Suriname approved by National Assembly". Newswire.ca. Retrieved 11 June 2015.
  30. "Dubai's Kaloti to set up gold refinery in Surinam". Tradearabia.com. Retrieved 11 June 2015.
  31. "Archived copy". Archived from the original on 2013-03-15. Retrieved 2013-04-22.CS1 maint: archived copy as title (link)
  32. "Precious Metal Services & Solutions in Dubai: Kalotico.com". Kalotico.com.
  33. "Minamata Convention Agreed by Nations". Unep.org. Archived from the original on 9 February 2014. Retrieved 11 June 2015.
  34. "Draft text for a global legally binding instrument on mercury" (PDF). Gov.sr. Archived from the original (PDF) on 24 September 2015. Retrieved 7 November 2017.
  35. Super User. "Error 404 - Centrale Bank van Suriname". Retrieved 11 June 2015.
  36. "Archived copy". Archived from the original on 2016-03-13. Retrieved 2013-04-22.CS1 maint: archived copy as title (link)
  37. Simon Romero (April 10, 2011). "With Aid and Migrants, China Expands Its Presence in a South American Nation". The New York Times. Retrieved 25 November 2012.
  38. "Annual Report 2012" (PDF). Staatsolie. Archived from the original (PDF) on December 6, 2013. Retrieved September 10, 2013.
  39. "Company Profile" (PDF). Staatsolie. Archived from the original (PDF) on February 3, 2013. Retrieved September 10, 2013.
  40. "Hét branchemedium voor de AGF-sector". Agf.nl. Retrieved 7 November 2017.
  41. "Archived copy". Archived from the original on 2013-04-11. Retrieved 2013-02-12.CS1 maint: archived copy as title (link)
  42. Suriname taps Lazard to advise on debt restructuring plan, Reuters, October 8, 2020
  43. "Report for Selected Countries and Subjects". Retrieved 2018-09-20.
  44. "Gazetteer - Patents". Billanderson.com.au. Retrieved 7 November 2017.
This article is issued from Wikipedia. The text is licensed under Creative Commons - Attribution - Sharealike. Additional terms may apply for the media files.