Suriname is nestled in a neighbourhood of states with deeply contrasting fortunes. Here at STAR Businessweek we’ve previously touched on the economic trials and triumphs of Brazil, Venezuela and Guyana, which all border this nation of 573,000. Just as each of the aforementioned countries is presently — for better or worse — writing landmark chapters in its national story, so too is Suriname arriving at an important crossroads. So let’s look at its present performance and future prospects.
An Overview of Suriname
Though Suriname has a comparatively small population, it is today one of the most ethnically diverse nations on Earth due to its complex history, commencing with European arrival in the 16th century. The country went through decolonisation in the 1950s and obtained full independence from the Netherlands in 1975.
Its journey through the second half of the 20th century also saw political upheaval complicate upward growth. A 1980 military coup made Dési Bouterse the president; elections in 1987 and 1991 saw his power ebb away before his ultimate return via the 2010 election as part of a four-party coalition. The decade since has been an economic roller coaster but now seems to be on the up and up although substantial structural challenges remain.
Suriname’s Economy from 2010 to Present
Following two years of contraction, the nation’s economy recorded a 1.7% growth in real GDP during 2017, achieved 1.4% growth in 2018 and is projected to achieve 1.6% in 2019. This is good news for the country but it has travelled this road before in recent times, only for it to all end in tears.
Strong reforms were pursued in the post-GFC era and showed early signs of success. The past six years have also seen a reform programme that is intended to modernise the economy and make it more competitive. Yet the inroads laid in the early 2010s were unable to prevent the economic contractions seen in the middle of that decade.
Despite this, recent progress of Suriname has been positive. The conclusion of the IMF’s Article IV visit in November 2018 was that unemployment had declined and inflation had dropped to a single digit. However, the IMF cited concern surrounding fiscal deficits and sizeable public debt, especially as the latter is expected to increase in the immediate years ahead.
There also remain structural issues of real concern. Suriname’s heavy reliance on the mining sector — accounting for around 85% of exports and around 27% of annual government revenue — means any volatility within the sector globally can rapidly become a source of economic misery for the nation domestically.
Unfortunately the nature of the mining industry internationally makes it vulnerable to corruption; economic graft and resource looting can occur more easily in secret than is possible in other industries. Although the mining sector has diminished slightly in importance to the nation’s economy — in 2013 representing around 95% of its exports — for the near future, whatever route Suriname’s mining sector takes, then so goes the rest of the economy.
Unsurprisingly, given the nature of the country’s governance, Suriname does not perform well on Transparency International’s annual Corruption Perceptions Index. Recent years have seen Suriname on the slide, ranked 64 out of 176 nations in 2016, and slipping to 77 out of 180 in 2017. A slight improvement was seen in 2018, ascending to 73, but bearing in mind the nation’s enduring battle with corruption, a steep improvement in the rankings isn’t anticipated at this time.
Looking Around the Neighbourhood
Suriname’s immediate region is also a key consideration. To the south, Brazil, under the leadership of President Bolsonaro, is attempting to revive Latin America’s largest economy after a period of ‘lost years’ over the past decade. Venezuela remains a deeply embattled nation, with its economic woes compounded by its political instability, and the foreign policy skirmishes of the disputed president Nicolás Maduro further complicating regional relationships. By contrast, Suriname’s immediate neighbour, Guyana, is at present the fastest growing economy in the world.
The newly oil-rich nation has also known its share of political instability over the past calendar year but ultimately has a bright economic future to look forward to.
Feeding The Global Appetite
Internationally, Suriname must contend with a global economy that is not salivating for new growth. Forecasts by the World Bank project global economic growth for 2019 in whole at just 2.6%, with only a modest increase of 2.7% anticipated in 2020. The growth among developing economies is slightly better at 4% for 2019.
Globally, investment in developing nations remains sluggish. This is unlikely to change rapidly due to the enduring political uncertainty of Brexit, a US-China trade war and now increasingly a look to November 2020 and consideration of whether Donald Trump will win re-election or see his flirtation with protectionism end with the election of a Democratic candidate. Many signs suggest that the current political turbulence seen globally is not merely a speed bump on the road but is going to be the ‘new normal’, so waiting is simply not an option.
Building for the Future
The present work of Suriname’s foreign ministry will be important to watch in this regard, with recent months seeing a strengthening of ties with the emerging powers of the Kingdom of Morocco in Africa and Indonesia in Asia. Whether these ties will sustain and thrive remains to be seen, but not only are those two nations today economic partners of rapidly growing importance, they are signposts for the future profitability to be found in the MENA and Asian regions.
Suriname can expect a bumpy few months ahead — maybe even years — but there are strong signs that the country has started down a new road in 2019. Now to watch where it leads to.
