The Ministry of Finance is currently providing funding for major development projects and fostering investment through the public private partnership formula.
The Ministry of Finance is currently providing funding for major development projects and fostering investment through the public private partnership formula.
Suriname has come a long way in the past decade. Inflation has stabilized and the economy experienced tremendous growth, which peaked about 6% in 2008, and has remained buoyant ever since. Furthermore, investments from both the private and public sectors have supported growth across all sectors of the economy. Could you please give your opinion to our American readers on the state of the economy in Suriname, and what is your evaluation of the objectives achieved up to now?
To start, let me explain that within this Ministry of Finance, one of our main tasks is to handle the Public Finance management. We have to manage the different taxes, the government revenues and also our expenditures. Regarding the budget, the budget cycle, bearing in mind the past year, it’s a process that’s very difficult, because every government has their own wish list and their own projects they want to develop throughout the years. That’s always a very difficult financial process to manage, because you have to seek the revenues so that the government can develop the different programs. In our last budget discussion with the parliament we said that we project an economic growth of 5% to 6%, that’s our goal, and that’s what we are aiming for. That’s a sort of challenge for the Ministry of Finance because that means that we have to try to manage the expenditure of the government within the framework that we can keep that economic growth at 5 – 6%.
On the revenue side, at this moment we are in the process of making some adjustments in our tax system. We already have in place an arrangement with a Dutch company. There seems to be a very professional tax-man in the Netherlands that has a great amount of international experience. He is going to help us and be our advisor in managing our tax system. I think that with our tax system in place, we could manage our economy also, because there are several issues we have to deal with from the past year. Our revenues are decreasing and if you don’t have enough revenue, you can’t boost the rest of the expenditure, etc.
Another important thing is that this government has a few different projects, some people call them major projects, and the President wants these to be implemented within the next five years. This is another challenge for the Ministry of Finance as well, to see how to finance those major projects. Everyone would say that you can finance them with different loans, etc., but that is not that easy because you have a debt ceiling and you have to take that into account, so we have to see how to finance those major projects.
Worthy to mention is that there will be some public-private partnerships. That’s another new instrument we have to introduce in Suriname so that we can help how to boost our economy. But we are optimistic and I think we’ll be successful. I don’t know if after those five years we will achieve all these goals, but we will have gone far. As I already mentioned, we have to look for the financing of all the major projects, we have to build our public-private partnerships, and we have to adjust and strengthen our tax system.
Besides that, another thing we also have to look at is our financial management system; that is very important. Before I was appointed as Minister, I was the PS of this Ministry and I was the one dealing with this, so I have the background and knowledge. We have been dealing with this for several years already.
We need to have a good public finance management system within the government in order to manage our expenditures, our income and our debt - the whole government financial management. I can say that now we have a closer relationship with the Central Bank to coordinate the fiscal – and the monetary policy- and do all those projects that we are now trying to develop. I think it is also good to have an interview with the Governor of the Central Bank because all our goals we have set them together, and he can tell a little bit about the monetary policy, the balance of payment and that sort of thing, but once again, we do have a closer work relationship. As the Ministry of Finance, we have a challenge and we have a good team that is trying to develop all of those things.
Another thing that is very important is that we now want to establish in the Ministry an investment unit. This is a unit that has to deal with all the different investments in Suriname, the current and near future investments. I’ve heard of so many plans, so many other international organizations - be it bilateral or multi lateral - that are trying to do something with Suriname, and I think there has to be a unit that coordinates or monitors those investments. This unit must be a unit that must be set up within this Ministry. I don’t know if you know that before this administration, there was a Ministry called of Planning and Development Cooperation that has been merged within Finance. The employees of the former ministry have the experience with the different projects that were financed by all the different organizations like EU, the Netherlands, IDB, etc. With that team I want to set up the investment unit, and the planning unit as well, also another unit that will manage all those grants that we will be receiving from the investors.
You told us about the major projects that the President wants to prioritize. What kind of projects are they, could you tell us a little bit about that?
They are mostly infrastructural projects. If you speak to the Minister of Public Works he will give you a list of all of these. That’s why they call them major projects, because there are several. To mention one, he wants to build different bridges to connect our country with the neighbors. There are other infrastructural buildings as well: hospitals in different districts, schools, houses, etc. Another major project is a highway flyover. That’s all I can mention at this moment, but there are many.
After the interviews we’ve been having among the key people of Suriname, we know that the aim is to optimize the exploitation of the abundant natural resources as pillar of leverage, in order to diversify the economy in a sustainable way, boosting new sectors, such as tourism, agriculture, telecommunications and banking. What would you highlight as some of Suriname´s main competitive advantages, and in what sectors of the economy do you anticipate good opportunities for foreign investors?
As the Minister of Natural Resources already said, it’s in the mining sector where we are now, in the gold sector. We have different negotiations with the companies that are already here -and another company that will be set up- so the gold sector is definitely one of them, and maybe the bauxite sector. I don’t know exactly the status of the developments in the bauxite sector, but I know the gold sector for sure. Another one we have to look at is our agriculture sector. I am not that experienced in this field, but what I understand that in our neighbors within the CARICOM (I can’t say all other Latin American countries), there is a need for agricultural products, and we are now in the position to supply, so I think we will have some boost also in the agriculture sector. With fertile lands, with the fish, etc., there is a big opportunity.
Another one that may be a potential growing sector is the water sector. There will be a good project in the near future to supply Suriname. We have a lot of water, so I think that’s one of the sectors we have to support. And of course forests, because we have a small population and so many forests here.
Although Suriname has fared well during the economic crisis, its reliance on exports makes it vulnerable to global volatility. What measures are being taken to boost domestic demand and reduce reliance on exports?
Now, in the prospect of finance we are trying to give some incentives to the different local companies, of the local population, because most of them have to import the main inputs, raw materials, etc. We give them some incentives -tax incentives- we call them duty free, so that the producers can that way import those different products.
Concerning the relationship with international institutions such as the Inter American Development Bank, you talked about the Investment Unit that will be set up. Could you please talk a little bit more in depth about this?
The unit will be very new, to be honest. We are now in the process of thinking and discussing how we will set this up. In my opinion, it will be a unit that will, as I already said, monitor the programs and projects that are financed by different organizations. The Ministry of Finance is the counterpart of the IDB and other international organizations. Applications from the line ministries to finance the different programs and projects have to submit through the Ministry of Finance to the international financial organization. According to the national Debt Law, the Minister of Finance is the one to approve and sign the financing agreements. So it is very important and necessary to manage those investments in an effective and efficient way. I mentioned also the issue of public-private partnership. This instrument will also be a challenge for us to implement, and I think this will be one of the activities that the unit will have to manage. We have to look for different finance sources to finance all those projects that we will deal with. To be very honest, I don’t know yet what our specific task will be in this matter. The implementation has to be done in cooperation with other, still to be identified, ministries and institutions. We are now in the pre-feasibility phase and we are asking for assistance from different institutions -the IDB is one of the institutions that is helping us in setting this unit up.
I like this idea very much, because you are strengthening relationships with international institutions, as well as with national like the Governor of Central Bank, so you are creating a strong team to achieve goals of common interest.
Your country and the United States engage in mutually beneficial relations, based on the principles of democracy, respect for human rights, rule of law, and civilian authority over the military. Thus, the US remains one of Suriname's principal trading partners, being the largest import provider to Suriname, and the third largest export market for Surinamese, largely due to the natural resources. In fact, Mr. Caldeira told us yesterday that US has been the most important country in the Suriname’s economic development. How would you evaluate the overall state of Suriname-U.S. relations today, and the role of the US in Suriname´s economy?
Yes, they definitely have a role. If you look at the example of SURALCO, this is one of those companies that is an important American company here, and there are others. In fact, I don’t know if you talked with the Minister of Trade, most of the products we have in Suriname come from the U.S. or are imported from the USA, and that speaks about the economic relation we have with the U.S.
Another thing in the perspective of Finance is that there was a loan that was causing some problem with U.S, because there were great arrears, tremendous arrears. But we’ve already settled that with U.S., so I think our relationship is now on track, because we have already settled that with the US Embassy, we have an agreement to settle this.
The U.S. benefits greatly from our balance of payment, but I think the governor can give you the whole picture about that, so I will forward this question to the Governor so he can provide you with all the information about that. To summarize, in my perspective the relationship is, we have already settled with the United States, and the benefit to our economy is clear, not only because of the SURALCO Company and other companies that are here, but also because one of our main import provider is the U.S.
And the cultural relationship is worthy to mention as well, because you hear the music and you see the television of USA.
Yes, that is very true, and something that sounds very strange, because we have close relationships with the CARICOM, you could expect we have CARICOM music; but it is true, we are American-oriented in this particular case. You have the people also; everyone speaks English, everybody understands English, some of our young people look at the different U.S. movies, they listen to the U.S. music, etc. I have a nephew and I saw him walking on the street with his pants below his waist, and yes, the ties are very strong.
In cooperation with the Caribbean Export Development Agency (CEDA), the Caribbean Association of Investment Promotion Agencies (CAIPA), a few months ago took the initiative to conduct a study on attracting Foreign Direct Investment (FDI) to the region, including Suriname. This study is intended to improve the investment climate. In fact, Mr. Caldeira told us that the U.S. has been the most important country in the economic development of Suriname. As our report is going to be read by the main top leaders and decision makers in the United States, which will consider investing out of their frontiers, how would you consider the importance of attracting more FDI, in this case from North America?
I think it is very important for Suriname because we don’t have enough resources to finance all those infrastructure projects. And not only finance with money, but also with expertise. I think we have good intellect in Suriname. We are open to those foreign investors, not only because of the money. Money is not everything. I think Mr. Caldeira was focusing on the financing part, but I also talked about the public-private partnership, and I think we have to look at both issues. Both will be very important for Suriname, because if we want to meet all those goals, we have to set up policies for the coming years, we need to look very carefully at those foreign direct investments, especially by taking into account the public-private partnership option.
I think I would like to congratulate you on the strong economic growth, the prudent monetary policy and the good economic prospects; Fitch Ratings has recently elevated Surinam’s risk rating, positioning the country up to countries like Brazil or Colombia. Why do you think that Fitch Ratings has decided to improve the rating at this particular moment in time, and how would you value the importance of Surinam increasing his credibility towards the international community?
To start with the last point, I think it is a very good point, because taking into account what is happening in the world, it is already a very important achievement for Suriname. I think Fitch Ratings -and not only Fitch Ratings but also Standard and Poor’s- increased our rating, possibly bearing in mind our arrangement with the US Embassy regarding the loan. I already talked about that, because that was one of the issues that has always been a problem when we were in discussion with those rating agencies. Now we have a debt repayment arrangement, so we don’t have any arrears. That was the only issue that was still outstanding, and I think that was one of the reasons. Another thing is the different economic perspective of our country in terms of the good management and that sort of thing. They’ve been here and we have had discussions with them, and we showed them all our aims and figures, statistics, etc.
Suriname is the undiscovered gem of the Caribbean. Taking into account the strong media impact of this communication campaign, in which all our interviewees are acting as ambassadors of Suriname’s image at an international level, tell us, how would you like your country to be perceived by the US community?
I hope it is very good and attractive, especially for the investors; and maybe also for the tourists because we’ve had some, but not enough American tourists. The hospitality of the Suriname people and our cuisine is amazing.
Actually, Lonely Planet, the most recognized authority in tourism worldwide, placed Suriname as one of the best spots to go to do Eco tourism.
How do you call us within the Caribbean, “The undiscovered gem”? That’s because we differ from the other Caribbean countries, not only in language, but also in culture. That’s why we are not discovered. I hope that your campaign and promotions, through your organization, will awaken more social and economic interest in Suriname.
And you truly deserve it, because sometime we think it’s like a futuristic country in some way, with so many cultures living peacefully here.
Finishing the interview, in your position, your thoughts and opinion are crucial in order to create the confidence and trust that the people may need. Taking advantage of this opportunity to talk directly to the heart and soul of the first trade partner, the USA Today, what final message would you send to the international investor community, in order that they decide to come to Suriname?
I would invite them to come to Suriname and discover the mutual benefits. We have a lot to offer, not only our mining sector, but we can also offer them other potential sectors and eco-tourism. Our needs will be met mutually as well because we want to develop our country and to sustain economic growth. We can’t do it alone, so we need to find those partners to come and support and join us. We are not only seeking for money to do these things, but also assistance to develop and support our expertise, that’s one of the things we sometimes lack in different fields. I believe that in order to reach sustainable development in all the different areas, as well as for our economic growth, it is fundamental to have investors here and international organizations that strengthen our human capital and support the production sector.
Well Ms. Wijnerman it has been a great pleasure and great interview and I am sure it will give high credibility and the quality to our editorial, so thank you very much.
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