Jump-starting the economy
SURINAME'S YEAR-OLD ADMINISTRATION HAS ALREADY ACHIEVED THE TWIN PRIORITIES OF STABILIZING THE EXCHANGE RATE AND BRINGING DOWN THE DEFICIT. THE CHALLENGE NOW IS TO CREATE A FAVORABLE CLIMATE FOR INVESTMENT

The return to power last year of president Ronald Venetiaan and his team has put an end to the political and economic crisis that had forced his predecessor, Jules Wijdenbosch, to call early elections.
In less than one year, the new Venetiaan government has pulled the economy out of a nose dive and begun to apply the structural reforms it initiated during the president’s previous term of office, from 1991 to 1996.
Although the belt-tightening may be painful in the short term, Mr. Venetiaan sees it as necessary in order for Suriname to attract foreign investment, stimulate the private sector and meet the challenge of integration into the Free Trade Area of the Americas (FTAA) in 2005.

Already, after less than a year in office, Mr. Venetiaan says: “we think we can now present better conditions to those who want to invest in Suriname. When we took over in 2000, we had obvious economic problems, such as the exchange rate running wild, the lack of foreign exchange that was badly needed for imports, the government deficit,” he recalls.
In response, “we put an end to the so-called monetary financing of the budget deficit [that is to say, simply printing more money to pay the bills]. We have a different policy to deal with the deficit, which still exists,” he says.
But while the government has scored successes in stabilizing exchange rates and bringing down the deficit, Mr. Venetiaan recognizes that the reform measures have “had some unavoidable effects for households.”
“Household budgets became tighter, as one of the measures could be termed a devaluation of the Suriname guilder, which obviously had an effect on families,” he admits. “We tried to counter that with some measures, but at the moment we cannot say we have met all the requirements with regard to households, and we still need to work on that.”

What is required at this point, the president believes, is that the private sector speedily take advantage of the opportunities the liberalizing reform measures are creating for it.
Since the government, following the guidelines of the International Monetary Fund, is liberalizing the economy and reducing its own role in economic activity, private investors should “respond to the improved conditions put in place by stepping forward and investing and coming up with initiatives in the areas of economy, production, business and trade,” he says.
In keeping with the goal of attracting foreign investment, Mr. Venetiaan hopes to qualify his country for the U.S. Caribbean Basin Initiative (CBI), which would open American markets to most exports from Suriname. Just as Suriname has lagged behind in qualifying for the CBI, it was late in joining the CARICOM (Caribbean common market), becoming a member just six years ago.
The task the country now faces is preparing itself first for CARICOM’s Single Market and Economy and then for the FTAA. Mr. Venetiaan’s trade and industry minister, Jack Tjong Tjin Joe, sees this as an enormous challenge, given that Suriname still imports more than it exports. “FTAA means that all import barriers will be removed, and that means we will have no income from import duties,” he points out.
The minister feels that the only course is to rapidly “create a favorable investment climate” in order to increase production, and, therefore, exports. “We know that the FTAA will bring great changes to our hemisphere and sub-regions, to the Caribbean and Suriname”, he adds, “so of course we are preparing ourselves to be able to take advantage of the possibilities.”