Suriname has faced inflationary challenges in recent years. What success can you highlight in your government's effort to stabilize prices and support economic recovery?
Suriname has faced significant fiscal challenges over the past decades, especially after gaining independence. These challenges, often tied to fiscal mismanagement, quickly escalated into broader economic instability, including inflation. Between 2010 and 2020, our economy experienced a severe fiscal slippage, which led to unsustainable borrowing and inflation. However, with the help of the IMF, we have managed to stabilize the economy. The IMF not only provided financial support but also guided us through essential structural reforms that helped restore fiscal discipline. This support was instrumental in rebuilding international trust in our economy, which had suffered from years of mismanagement.
Despite inflation surging to as high as 60%, we managed to bring it under control through decisive actions such as reducing subsidies, restructuring monetary policies, and putting the national budget in order. These difficult measures, although painful in the short term, were necessary to prevent further economic collapse. Importantly, these measures did not lead to scarcity, and we ensured the most vulnerable populations were protected. This careful balancing act allowed us to reduce inflation significantly while minimizing social impact, demonstrating that with effective governance and planning, difficult economic decisions can lead to long-term positive outcomes.
What opportunities do you see for turning current fiscal challenges into long-term economic strengths for Suriname?
Suriname’s fiscal challenges can be turned into long-term strengths by focusing on sustainable fiscal management. While the oil and gas sector presents short-term opportunities, the key to Suriname’s long-term prosperity lies in careful governance and strategic use of natural resources. In the past, Suriname has been blessed with natural wealth such as bauxite, but these resources were often squandered due to poor governance. The mistake of relying solely on resource extraction for economic growth needs to be avoided. Instead, we must ensure that our wealth is used to create long-term value for future generations, including investing in education, infrastructure, and building strong institutions.
Another critical lesson we’ve learned is that real wealth comes not from resources alone, but from strong institutions and governance. As we move forward, it is crucial to focus on diversifying our economy. We must focus on sectors like agriculture, renewable energy, and infrastructure, while ensuring that we don’t fall into the trap of relying too heavily on one sector. By managing our resources carefully and investing in long-term growth areas, we can avoid repeating past mistakes and ensure that Suriname benefits from sustainable economic growth that serves future generations.
What reforms are being introduced to modernize Suriname's tax system, and what are you doing in order for more of the population to be paying taxes?
A key reform we’re implementing is shifting the tax burden away from income taxes and focusing on business assets and consumption. This shift allows us to target sectors previously outside the formal economy, such as the informal sector, which has been a significant part of Suriname’s economy. The goal is to expand the tax base and ensure that all sectors contribute to the economy. Early results have been promising, with a significant increase in tax revenue due to the broader tax base. This reform not only helps us raise more funds but also ensures that the tax system is more inclusive and better able to support the country’s fiscal needs.
In addition to the changes in tax structure, we’re also investing in strengthening the institutions that collect and enforce taxes. Over the years, our tax and customs offices have been weakened due to fiscal mismanagement, so part of this reform involves rebuilding their capacity. This investment in institutional strength is critical to the reform’s success, as it ensures that taxes are collected fairly and effectively. At the same time, we are focused on ensuring that the system is transparent and that the public sees tangible benefits from their contributions. This will help foster greater trust in the tax system and encourage more people to participate, ultimately making our economy more sustainable.
How does the government prioritize investment in sectors such as education, infrastructure, health, and what measurable outcomes will be expected from these allocations?
When prioritizing investments in sectors like education, health, and infrastructure, we focus on improving the lives of Suriname’s people. We’ve learned from past studies, such as those by the World Bank and IDB, that it’s not just the amount of money spent, but how it is targeted that makes a real difference. For instance, better targeting of resources can significantly reduce poverty. The studies found that by focusing investments on vulnerable groups like large households and the elderly, we can reduce poverty from 17.5% to as low as 2.5%. This approach has reshaped how we plan our social investments, ensuring they’re more efficient and effective in achieving meaningful outcomes.
We are applying this targeted approach to all sectors, including education, health, and infrastructure. In education, the goal is to increase access to quality schooling while ensuring sustainable funding. In healthcare, we are focused on ensuring that spending remains within reasonable limits to avoid unsustainable costs. Similarly, in infrastructure, we aim to make long-term improvements that enhance the quality of life for Surinamese citizens. Ultimately, the goal is to ensure that all investments contribute to lasting improvements in people’s lives, focusing on outcomes that reduce poverty and promote sustainable development.
What progress has been made in restructuring Suriname's national debt, and how do you plan to balance debt repayment with funding essential services and development projects?
Restructuring Suriname’s national debt was a critical step in stabilizing our economy. In 2020, our debt had reached unsustainable levels, and we realized that external assistance was necessary to manage the crisis. Initially, we considered working with the Dutch, given past experience, but we ultimately turned to the IMF, which provided both financial support and a structured plan for fiscal recovery. This collaboration was crucial, as the IMF helped us restructure our debt, renegotiate terms, and create a framework for improving our fiscal outlook. Through this process, we’ve managed to reduce our debt-to-GDP ratio from 148% to 122%, with a target of bringing it down further to around 92%.
While progress has been made, the challenge now is to balance debt repayment with the continued funding of essential services. We cannot afford to let debt repayment stifle investment in critical sectors like education, healthcare, and infrastructure. We are committed to ensuring that as we reduce our debt, we also maintain essential services that are vital for Suriname’s long-term growth. Maintaining this balance is key to achieving sustainable fiscal health while ensuring the well-being of the population. Our focus remains on reducing debt responsibly while investing in the country’s future.
Are there any ongoing negotiations or collaborations with other international institutions to support debt reduction efforts?
Suriname continuously engages with a range of international institutions to support our economic recovery, but we’ve learned that effective collaboration often comes from a smaller, more focused group of partners who truly understand our specific situation. Currently, we maintain strong relationships with the IMF, World Bank, and IDB, all of whom have been instrumental in our debt restructuring efforts. These institutions have not only supported debt relief but also provided us with the tools necessary to improve governance and fiscal management. Their support has been crucial in helping us navigate the complexities of debt reduction while maintaining a path toward sustainable economic growth.
However, Suriname’s strategy has evolved to avoid taking on too many loans or working with too many creditors at once. The lesson from our past experiences is that focusing on strategic partnerships with institutions that offer meaningful, long-term support is more efficient than spreading resources thin. Our priority is to use debt strategically and ensure that we have the capacity to implement reforms, strengthen governance, and make smart investments. Suriname’s development will rely on these strong partnerships and clear strategies for using external support effectively to achieve sustainable growth.
What role do foreign investments play in your strategy for sustainable economic growth, and what specific opportunities does Suriname offer to those potential investors?
Foreign investment plays a pivotal role in Suriname’s long-term strategy for economic growth. While we are focused on expanding the oil and gas sector, we recognize the importance of diversifying the economy. Sectors such as agriculture, renewable energy, and infrastructure offer significant growth potential. For instance, Suriname’s fertile land provides opportunities for agricultural expansion, with the potential to increase exports of tropical crops. Additionally, the renewable energy sector is underdeveloped and presents a unique opportunity for foreign investors to help Suriname build a more sustainable future.
What we offer investors is not only a market for their products but also a stable, transparent business environment. Over the years, we have made significant strides in improving governance and building trust, which makes Suriname a more attractive destination for investment. Investors who align with Suriname’s vision for long-term growth will find opportunities not only in resource extraction but also in sustainable sectors that can drive future prosperity. We are committed to creating a favorable investment climate, ensuring that foreign investments contribute to Suriname’s sustainable development while also benefiting investors with solid returns in key sectors.
A final message to Newsweek readers, considering Suriname as a potential investment or tourism destination, what would you tell them?
We want to be a tourism destination but without commercializing our culture. Culture is part of our way of life. We're proud of being the safest place in the Caribbean and of our multi-ethnic society, where people from different backgrounds live harmoniously. We also value our forest, one of the greenest countries on the globe, and the carbon credits that come with it.
Suriname offers diverse culture, cuisine, and natural beauty. However, our people aspire to the wealth seen in other parts of the world. We must learn to respect and cherish what we already have. Macroeconomic stability is key, but it must benefit everyone. People need to see the tangible results of sacrifices made—improved purchasing power, lower inflation, and access to basic services like education and healthcare. Creating an inclusive society is fundamental to our future, not only in Suriname but globally.
