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TRANSCRIPT
2012
Suriname 2012
PSAR
October 2012
This Suriname Private Sector Assessment Report (SU-PSAR) presents an overall assessment of private sector development (PSD) and recommendations for facilitating and accelerating private investment and growth. This report includes a summary of the main characteristics and issues of the economy of Suriname as it relates to private sector development, the selection of priorities, a section on monitoring and evaluation of PSD initiatives, and finally a section with recommendations for interventions and also for filling in data gaps. The report includes two annexes the Suriname Donor Matrix (SU-DMX), and the most important sources of information currently available for the analysis of PSD.
I want to thank the support, comments and suggestions of Diego Morris, Steven Hofwijks, Adriana La Valley, Marco Nicola, Paz Castillo-Ruiz, Tara Lisa Persaud and JJ Saavedra. I also want to recognize the comments and support from Vice President Robert Ameerali, and from Kenneth Foe A Man and Sieglien Burleson from the Suriname Business Forum. Finally, I want to thank all the people that were interviewed in Paramaribo that provided data, analysis and experiences that have been incorporated into this report.
Carlos Elias Ph.D.
Suriname PSAR
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Suriname Private Sector Assessment Report
Table of Contents
1) Introduction ............................................................................................................................. 4
2) Chapter I: Indentifying market failures ................................................................................... 6
a) Goal of PSD in the country and current programs ............................................................... 6
b) Overview of the economy ................................................................................................... 8
i. The domestic economy .................................................................................................... 8
ii. The international economy ............................................................................................ 14
iii. The productive structure ................................................................................................ 17
iv. The institutions .............................................................................................................. 19
c) State of the private sector .................................................................................................. 20
d) Large and fast growing sectors in the economy ................................................................ 22
e) Issues for private sector development ............................................................................... 22
i. Business supportive institutions structure ...................................................................... 23
ii. Donors and other international entities .......................................................................... 25
iii. Access to finance ....................................................................................................... 28
iv. Corporate taxation ......................................................................................................... 30
v. Business environment .................................................................................................... 32
vi. Technology and innovation ........................................................................................... 38
vii. Trade and FDI policies ............................................................................................... 40
viii. Labor regulation ......................................................................................................... 44
ix. Infrastructure, communications and energy ................................................................... 44
x. Environment .................................................................................................................. 48
xi. Gender ........................................................................................................................... 49
3) Chapter II: Selecting and prioritizing issues .......................................................................... 52
a) Priority PSD issues—improving PSD coordination .......................................................... 52
b) Priority PSD issues—improving the business climate ....................................................... 53
c) Priority PSD issues—opening space for private sector participation ................................ 54
d) Priority PSD issues—increase participation of domestic companies in the mining sector 54
e) Action plan ........................................................................................................................ 54
4) Follow-up, monitoring and evaluation .................................................................................. 55
5) Chapter III: Conclusions and recommendations .................................................................... 57
Annex 1: Sources of information used in this report .................................................................... 59
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Annex 2: Suriname Donor Matrix Report (SU-DMX) ................................................................. 60
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1) Introduction
The main result from the analysis presented in this report, and its common thread, is the
identification that the greatest challenge for private sector growth and development is the poor
business environment that limits the creation and growth of private sector enterprises. The
weakness of the private sector is related to the strength of the public sector that employs about
60% of total employment and participates in many sectors in the economy, including among
others financial services, transport, and agriculture. From a sector perspective, mining is the
engine of growth of the economy and largely funds the public sector. Simplifying the growth
process: in Suriname economic growth results from the transmission of resources from exports
of gold, oil and bauxite, to government, and from government to the rest of the economy via
public spending.
In this overall context the domestic private sector is small and its economic activities are mostly
limited to the provision of non-tradable goods and services, most notably in commerce. It is
important to clarify that the mining sector behaves as an enclave as it is dominated by large
multinational corporations with few links to the rest of the economy. Importantly for this report,
there are no large and fast growing sectors, with the exception of mining, because the private
sector is underdeveloped. Although some export oriented economic activities exist and there is
some industrial production, in the aggregate these activities and industries are small. This report,
therefore, notes that to facilitate private sector growth it is necessary to facilitate the expansion of
the private sector into all areas of economic activity by improving the business climate and
reducing over time the presence of the state in the economy. Throughout this report, this is
called to open space for the expansion of private sector domestic and export oriented activities.
It is also important to highlight that the analysis presented in this report is limited by the
availability of data. All efforts have been made to back findings and analysis using available
data, however, in many cases a subjective interpretation was necessary to prepare this report and
to identify priorities. For this reason important recommendations included in this report relate to
filling in data and information gaps.
Therefore, this Suriname Private Sector Assessment Report (SU-PSAR) presents an overall
assessment of private sector development (PSD) and recommendations for facilitating and
accelerating private economic investment and growth.1
Following the suggestion of the
guidelines for the preparation of Donor Coordination Matrices (DMX) for CARIFORUM
countries, the SU-PSAR includes as an annex the Suriname Donor Matrix (SU-DMX). This
introduction presents a brief description of the purpose of the PSAR and DMX, and explains
their purpose and how they complement each other. It is important to note that this report would
need to be updated over time as the overall economic conditions change, new PSD programs and
projects are implemented, new actors enter or leave the market, and data gaps are filled in with
primary data and analysis. It is recommended that this report is updated every two years, or less
if conditions change significantly.
1 This report is funded by Compete Caribbean, which is a program created to facilitate Private Sector Development
(PSD) in CARIFORUM countries and sponsored by DFID, CIDA and the IDB.
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According to the PSAR guidelines the PSAR is: “a report meant to provide a comprehensive
framework to identify market failures concerning the development of the private sector and
prioritize them in terms of their need for an urgent solution. These outcomes are the result of a
process that involves the use of descriptive and analytical tools to assess the state of the private
sector and the economy as a whole, as well as consulting with firms in strategic sectors of the
economy to prioritize issues. The PSAR can be decomposed in two big parts: first, it compiles
and analyzes information from different sources in order to provide a snapshot of the state of the
private sector in the country, and second, it brings the information to relevant stakeholders –
such as firms in the economy – to establish priorities on all the identified issues affecting further
growth in the private sector.”2
According to the DMX guidelines the DMX is: “is a dynamic tool designed to improve
coordination among government, stakeholders and the donor community of PSD programs and
projects in CARIFORUM countries. The DMX will identify PSD programs and projects,
including, among other, business climate reforms, macroeconomic support to governments,
direct support to the private sector, and women in business initiatives and related gender
mainstreaming efforts. As such it is a tool that will be used to identify, assess, and monitor PSD
programs and projects in individual CARIFORUM countries as well as sub regional programs
and projects. The DMX is also meant to be used for the development of strategic partnerships,
to identify gaps and omissions, and to maximize the impact of projects through improved donor
coordination.”3
The DMX guidelines note that: “The DMX and PSAR complement each other, with the DMX
providing information about past and present programs and projects in each country; and the
PSAR identifying priority areas for Private Sector Development (PSD) interventions at the
country or sub-regional level. The contrast between what is currently being supported by the
donor community identified in the DMX, and what should be supported identified in the PSAR, is
an important input for the definition of PSD programs and projects, and for improved
coordination between government, stakeholders and the donor community.”
It is expected that donors, working together, would use this report to improve coordination and
identification of larger, more comprehensive private sector projects and programs to accelerate
growth across the region. Improved coordination would lead to increasing the development
impact of private sector development projects and programs while reducing transaction costs.
These activities fall within larger donor coordination efforts to improve the quality and
effectiveness of development cooperation as reflected in the Paris Declaration on Aid
Effectiveness of 2005, the follow-up Accra Agenda for Action of 2008 and the Busan
Partnership for Effective Development Cooperation recently agreed on by donors in November
2011.
The analysis presented in this report rests on two sources of information: primary data collected
during a trip to Paramaribo in May 2012 that served to identify actors and PSD programs as well
2
Guide for Private Sector Assessment Report (PSAR) in the Caribbean Countries. Version 1.2. InterAmerican
Development Bank, 2011. The guide was created for Compete Caribbean by Dany Bahar. 3
Donor Matrix Guidelines. Draft February 2012. InterAmerican Development Bank, 2012. The guidelines were
created for Compete Caribbean by Carlos Elias.
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as the main bottlenecks for investment and growth; and secondary data and information available
from multiple sources that are referenced throughout the document. An important contribution
from this report, in addition to fulfilling the purpose of the SU-PSAR, is to identify data and
information gaps. Because of the importance of this issue, the report includes an annex with the
most important sources of information available for Suriname.
The rest of this report presents a summary of the main characteristics and issues of the economy
of Suriname as it relates to private sector development, the selection of priorities including those
identified by the business community in Suriname, a section on monitoring and evaluation of
PSD initiatives, and finally a section with recommendations for interventions and also for filling
in data gaps. The report includes two annexes the SU-DMX, and an annex with the most
important sources of information currently available for the analysis of PSD.
2) Chapter I: Indentifying market failures
This section presents the economic background for this report and concludes that the largest
challenge is to open space to the private sector for the expansion of domestic and export oriented
activities. First this section presents an overall assessment of PSD and explains the importance
of the private sector for growth and development of Suriname noting the large size and pervasive
presence of the public sector in the economy, and the importance of mining for overall economic
performance. In this overall context, the improvement of the macroeconomic environment since
2000 is explained by investments in the mining sector linked to high prices of gold, oil and
alumina and also by the implementation of conservative fiscal and monetary policies. The
section includes an overview of the private sector, which can be characterized by large
multinational corporations active in mining, and many small domestic companies active for the
most part in the production of no-tradable goods.
a) Goal of PSD in the country and current programs
The common thread of this report and its recommendations, and the overarching PSD goal in
Suriname, is to gradually open space for the expansion of private sector activities, and as such,
this goal is closely linked to public sector reform because of the large size of the public sector.
Because of the small size of the economy and its relative isolation, the expansion of the private
sector activities would require to gradually replace public enterprises by private enterprises, and
a special emphasis on export promotion and regional integration.
Suriname needs to change the current economic model. Up to now the country’s economic
model may be summarized as follows: the extraction of minerals by multinational corporations
to be sold abroad has generated income that has been distributed throughout the economy by the
public sector, primarily by providing public employment in the central government, but also in
the many public enterprises; and the non-mining private sector is small and limited to selling
goods and services to government, and also to importing goods and services that are demanded
but not produced in Suriname. The local industry has not developed because: the size of
domestic demand is small and therefore the Surinamese industry cannot compete against imports
on price and quality without very large investments that would allow for the satisfaction of local
demand and also for production for the export market—these investments are not promoted
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because of a poor business climate. Over time as the economy expanded or contracted following
the swings in prices of exports, the non-mining private sector accommodated all the internal
adjustments by expanding or shrinking, making it extremely difficult to save and invest, and
therefore to grow. Additionally, Surinamese companies are relatively isolated, because of
history, language, and business practices, and have few contacts or ties with regional private
companies and favor their European traditional business partners, especially in The Netherlands.4
The business climate for private sector expansion is not good and may be summarized, as one
businessman put it, as “Suriname is a country of licenses, and all systems are based on the ad
hoc concession of a business license of one form or another.” A long-standing tendency of
government to distrust the private sector resulted in the creation of regulations that added barriers
to PSD. An example, repeated to exhaustion by all the analysts of the private sector business
climate in Suriname, is that any business license has to be individually and personally approved
by the President of the country, but only after the application has been reviewed and moved
forward by the full Cabinet of Ministers. As a result it takes over two years to receive a business
license, if the President agrees. This astonishing barrier to establish a business is not as binding
as it appears because it has fueled an active business of creating phantom companies, and then
selling those companies to the highest bidder among those wishing to avoid the long delay.
Recently the process has been significantly improved and it is reported that the approval of a
business license takes less time than before. Nevertheless the regulation stands to this day and
allows analysts to make the point of the attitude of Government towards the domestic private
sector.
Suriname’s economy can be characterized as a small and very open economy that depends on the
exploitation of mining natural resources, and that is dominated by the pervasive presence of the
state in all sectors of the economy. During the last 40 years the public sector has employed, in
government and public enterprises, over 60% of the economically active population.5
Government was able to maintain a large presence because of two factors: in the past it received
large amounts of annual transfers from The Netherlands as part of the Independency Treaty
through what is called the Treaty Funds; and because the mining sector is export oriented and
very large compared to the economy and government receives from it a large proportion of its
income—in 2010 and 2011 the IMF noted that mineral revenues represented about 1/3 of total
government revenues and about 95% of total exports. 6
The first factor is not relevant anymore
as the Treaty Funds provided by The Netherlands have been exhausted and the balance, as of
April 2012, is only about €20 million. The second source of income that allows government to
maintain a large presence in the economy remains strong and it is expected to grow over time if
oil and gas are found offshore. However, over the medium term the mining sector also faces
challenges related to its non-renewable nature and dependency on continuously finding new
assets, which although available tend to be more expensive to exploit.
4
Isolation, from a trade perspective, is related to trade agreements with CARICOM, the European Union, Brazil and
South American countries that are in place but are not being fully used by Surinamese businesses. The United
Nations Commodity Trade Statistics Database report that in 2010 Suriname exported to Brazil US$1.5 million,
about 0.1% of total exports of about US$1.5 billion. 5
IDB “Country Strategy with Suriname 2007-2010.” Inter-American Development Bank, Washington DC (2007). 6
IMF “2011 Article IV Consultation—Staff Report.” IMF Country Report No. 11/256, February (2011).
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Exp
ort
an
d g
ov
ern
men
t re
ven
ues
(cu
rren
t U
S$
, m
illi
on
)
GD
P (
curr
ent
US
$,
mil
lio
n)
Therefore over time the economy would have to rely less on the mining sector and more on other
export-oriented non-mining activities that require the creativity and investment of the private
sector. Suriname can afford the gradual transition to this new economic model while mining
resources continue to maintain the economy. Therefore, the next few years offer Suriname a
window of opportunity to transform its current mining-dependent economy into an export-
oriented non-mining economy.
b) Overview of the economy
i. The domestic economy
Suriname’s small open economy is fragile because it depends on mining exports, exposing the
economy to changes in external prices of minerals. The combination of a large wage bill and
exposure to price volatility of primary exports constrains government fiscal options. Figure 1
presents exports, GDP, and government revenues since 2000. The figure shows the high
correlation between exports and GDP, and between exports and government revenues. The price
volatility of Suriname’s export products—bauxite, alumina, oil and gold—is transmitted to the
rest of the economy via its impact on royalties and taxes paid to government.
Figure 1: Exports, GDP and government revenues are correlated (current US$ million)
2500
2000
1500
1000
500
0
4500
4000
3500
3000
2500
2000
1500
1000
500
0
Total revenues (current US$) Total exports (current US$)
GDP (current US$)
Source: IMF Article IV and World Bank Data Set.
Table 1 shows graphically the price volatility of Suriname’s exports, with oil the most volatile,
followed by gold and then aluminum. In the past a large drop in export prices would cause a
series of difficulties: (i) it generated lower fiscal revenues; (ii) when confronted with a large
public sector wage bill, government did not have fiscal flexibility to accommodate the drop in
income with cuts elsewhere; (iii) the inevitable fiscal deficit was monetized resulting in inflation,
in fact, by May 2012 government is still allowed to draw from the Central Bank to up to 10% of
the total deficit; (iv) the recurrent policy in Suriname to anchor prices to the nominal exchange
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1
98
0M
01
19
81M
10
19
83M
07
19
85M
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87M
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88M
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04M
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06M
04
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08M
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09M
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11M
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82M
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84M
04
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02
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89M
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07
30 year monthly indicators
Average
Standard
Deviation
% Std.
Dev./Avg.
Aluminum
1649.49
497.92
30%
Gold
485.67
278.94
57%
Oil
34.27
24.48
71%
rate resulted in appreciation of the real exchange rate; (v) which in turn impacted on foreign
reserves to the point where a devaluation is forced on the Central Bank; and (vi) the process
ended in a combination of inflation and a large real devaluation of the exchange rate with
negative impact on growth, income of businesses and families, and employment generation.
Similarly, an increase of the wage bill—a common occurrence during electoral periods such as
1999, 2005 and 2010—increases public spending with similar consequences.7 8
Table 1: Prices of Suriname main exports
Aluminum US$ per metric ton Oil US$ per barrel
4000
3500
3000
2500
2000
1500
1000
500
0
140
120
100
80
60
40
20
0
Gold US$ per troy ounce
2000
1800
1600
1400
1200
1000
800
600
400
200
0
Source: IMF commodity database and the World Gold Council.
Over the last decade, the favorable external environment for the mining sector and large
improvements in fiscal and monetary policy—and a somewhat isolated financial sector that
shielded Suriname from the negative impact of the international financial crisis of 2007-2009—
7 A description and analysis of these events is presented in the IDB Country Strategy (2007), and in several IMF
Article IV reports (2001-2009). 8
The latest attempt to deal with the issue of low salaries and salary compression in the public administration is
FISO. FISO is the program that attempts to reform the public administration by defining minimum qualifications
for government positions and job descriptions, and significantly increasing salaries and reducing wage compression.
The program was designed so that public servants could be reclassified upwards if they could prove they met the minimum qualifications. Reflecting the difficulties of dealing with a large public sector in the context of political fragmentation the program also establishes that any public servant cannot be downgraded.
Suriname PSAR
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help explain the good performance of the economy over the last several years. Table 2 compares
key indicators of economic performance for the period 1990-2000 and 2000-2009. The Table
shows overall improvement in all indicators and in particular a reduction in volatility, with the
exception of income per capita for which volatility is welcomed as it implies higher and faster
income growth in 2000-2009 compared to the previous decade.
Price stability has been beneficial to Suriname in facilitating growth and domestic investment
since 2000. Compared to the last 10 years, the period of 1990-1999 was characterized by
extreme volatility. Large swings in inflation and related real exchange rate did not provide a
stable environment for growth, and as a consequence Suriname grew on average only 0.6% for
the decade. By comparison, the decade of 2000-2009 exhibits remarkable improvement in lower
inflation rates and more stable real exchange rates than in the past. The overall consequence is
higher growth, an average of 4.4% that translated into significantly higher income per capita at
US$6,610—50% higher than in the previous decade.
Table 2: Comparison of key indicators in the Surinamese economy
1990-1994 1995-1999 2000-2004 2005-2009 1990-1999 2000-2009 1990-2009
RER Index SDR/US$ (1)
Average 175.4 329.7 344.1 275.1 252.5 309.6 281.1
Standard Deviation 244.5 34.8 28.0 24.5 183.6 44.0 133.2
Inflation (period average, percent change)
Average 120.7 72.0 34.1 8.7 96.3 18.9 57.6
Standard Deviation 147.2 99.7 20.0 5.1 121.3 17.7 93.2
GDP real growth (percent change)
Average -0.6 1.8 3.4 5.1 0.6 4.4 2.5
Standard Deviation 4.2 2.4 3.3 2.0 3.5 2.4 3.5
Gross domestic product based on purchasing-power-parity (PPP) per capita GDP (US$)
Average 4,267 4,609 5,143 7,589 4,438 6,610 5,524
Standard Deviation 126 192 582 903 236 1,444 1,502
Note 1. An appreciation of the RER is reflected in a drop of the RER index. RER index is 100 in 1990. The RER
index was estimated using US and Paramaribo CPI, and SDR/US$ official exchange rate.
Source: IMF IFS dataset and authors calculations
The success over the last decade is also linked to large increases in mineral prices, and since
2000 exports more than quadrupled from US$490 million to US$2,309 million, with about 95%
of total exports represented by alumina, gold and oil. In spite of the large growth in exports the
trade balance has not improved as imports have also grown at a high rate as a consequence of a
growing economy that demands more of the goods and services that Suriname does not produce
and must buy from the rest of the world—see Figure 2.
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Figure 2: Annual export and import performance in Suriname 1980-2010
3.E+09
2.E+09
2.E+09
1.E+09
5.E+08
0.E+00
Exports of goods and services (BoP, current US$)
Imports of goods and services (BoP, current US$)
Source: World Bank Databank
The rest of this section presents the macroeconomic developments over the last few years in the
real sector and prices, money and credit, and fiscal accounts. The source of information of the
analysis is the IMF Article IV Staff reports and the Central Bank of Suriname, see Table 3.
Suriname has been growing at an average rate of 4.3%for the period 2007-2010. Nominal GDP
stood at US$3,682 million, about US$7,471 per capita using the 2004 census population of
492,829 people. This estimate includes the informal sector, and puts Suriname per capita income
at a high level compared to the region. A sign of concern noted by the IMF and reported by the
Central Bank is the increase in inflation recorded in 2010 and more markedly in 2011, about
6.9% and 17.9% period average respectively. In particular inflation in 2011 reflects the
adjustment in the nominal exchange rate from the long-standing level of 2.75 SRD/US$ to 3.3
SRD/US$ in 2011. Because the economy is so open and depends so much on imports of most
goods consumed in the country, the necessary adjustment of the nominal exchange rate, of 20%,
has a large pass through effect on the overall price level. The IMF reports that the real exchange
is “broadly in line with fundamentals’ indicating therefore that the large devaluation in 2011 has
corrected the overvaluation of the real exchange rate, consistent with the fact that the spread
between the official and parallel exchange rate is less than 2%.
Monetary policy is broadly consistent with maintaining the real exchange rate in equilibrium.
An important development since 2007 is the de-dollarization of the financial sector, from 51.5%
of credit and 55.2% of deposits in US$ in 2007 to 36.8% and 50.4% respectively in 2011. This
development is probably related also to the steady devaluation of the US$, and reduces risk in
the system due to its exposure to credit in foreign currency by local companies which revenues
are denominated in SRD. Also of relevance to the SU-PSAR is to note the steady growth of
credit to the private sector, mirrored by a steady decline in credit to the public sector.
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The fiscal accounts show deterioration from good performance measured by positive overall
balances of the central government in 2007 and 2008, to large negative balances in 2009, 2010
and 2011. The switch from positive to negative balances may be attributed to the slowdown of
the economy from 2009, in part related to the impact of overall global demand on mineral
products and therefore lower prices. Interestingly government is relying more on domestic
sources of financing than on external sources. From a public debt management perspective this
is a sign of lowering debt risks by tapping on domestic savings and borrowing in domestic
currency. However, for the purposes of this report focusing on PSD, public sector borrowing
almost always crowds out private sector access to financial resources. This is an issue that needs
to be further analyzed with the Suriname Debt Management Office and the Central Bank. The
issue is relevant because Suriname’s public debt is very low, which gives government the choice
of borrowing from domestic or external sources. As of 2011 total public debt was only 20% of
GDP, of which 9.7% was domestic and 10.3 external. An outstanding issue that still remains
unresolved is public sector debt in arrears. Over the last 5 years arrears have been slowly cleared
with all bilateral creditors, and the small amount in arrears is related to old commercial debt.
This is another issue that should be prioritized by government as it has an impact on private
sector access and price to borrowing from abroad.
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Table 3: Suriname Selected Economic Indicators, IMF Article IV Staff Report 2011
Source: IMF Article IV Staff Report 2011
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The IMF predicts continued success of the Surinamese economy in the near-term. The positive
outlook is explained by large investments in mining, therefore, the downside of the outlook
would be linked to a global economic slowdown with an impact on mineral prices. In spite of
the likely slowdown of the global economy, and a drop in mineral prices, large investments
underway include building a new refinery by Staatsolie, an investment equivalent to 15% of
GDP that would also solve a long standing problem of Suriname: although it produces oil it
spends a large amount resources importing gasoline and diesel. Additional investments in the
sector, for as much as 14-16% of GDP according to the IMF, would be required for the
development of new bauxite and gold mines in eastern Suriname.
Table 4: IMF medium-term outlook as of August 2011
Source: IMF Article IV Staff Report, 2011
ii. The international economy
The analysis of savings and investment balances reveals the fragility of the private sector that has
to adjust to changes in the external and government accounts—see Table 3. The adjustment is
related to large swings in investment and growth related to addressing internal imbalances out of
the control of the private sector. The private sector balance, the difference between savings and
investment, has fluctuated from about 8% of GDP in 2007 and 2008, to 0.9% of GDP in 2009,
and up again to 4.6% and 2.1% of GDP respectively in 2010 and 2011. In all cases since 2007
the private sector has been saving more than investing, filling in gaps generated either in the
external accounts, such as in 2007, 2008, 2010 and 2011, or in the public sector, such as in 2009,
2010 and 2011. Only in two years in the series, 2007 and 2008, the public sector contributed to
overall savings in the economy. Importantly, these two years recorded the highest growth in the
series, in 2007 and 2008, probably as a consequence of not crowding out private investment. It
is also important to note that the analysis would benefit from the disaggregation of data into
mining and non-mining sectors, because the mining sector is so large it introduces severe
distortions and does not allow for a proper understanding of the savings and investment behavior
of the non-mining private sector.
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The dependence on mining and exports is presented in Figure 3Error! Reference source not
found., that shows the tree map of exports, noting that the vast majority of exports were related
to gold, alumina (noted as artificial corundum in the figure), and oil. All other exports are very
small and limited to agriculture and fisheries.
Figure 4Error! Reference source not found. shows that Suriname imports a highly varied set of
goods and services. With the exception of refined oil that represent about 25% of total imports,
the other goods imported into the country reflect the tendency to import rather than produce for
domestic consumption. It is worth noting that both figures also show the total amounts exported
(US$1.7 billion) and imported (US$1.2 billion) that are included in the database of the MIT
Observatory of Economic Complexity. Total GDP for 2010 was about US$3.7 billion, therefore
the openness of the economy for that year was 78%, one of the highest in the region.
Trade opportunities may be limited by trade agreements between Suriname and trading partners.
Suriname is member of the Caribbean Common market as of 1995. CARICOM products are
subject to tariffs ranging from 5% to 20%. Trade with CARICOM has increased in the last few
years, however, the largest trading partner continues to be the U.S. Since 2008 some goods
imported from the European Union may enter the country duty free as part of the Economic
Partnership Agreement between the E.U. and CARICOM countries. Additional trade agreements
with Brazil and South American countries are in place but are not being fully used by
Surinamese businesses.
Figure 3: Suriname tree map of exports, data 2010
Source: The Observatory of Economic Complexity,
http://atlas.media.mit.edu/explore/tree_map/export/sur/all/show/2010/
Suriname PSAR
16
Figure 4: Suriname tree map of imports, data 2010
Source: The Observatory of Economic Complexity,
http://atlas.media.mit.edu/explore/tree_map/import/sur/all/show/2010/
More recently the external accounts shows the impact of the global economic slowdown from
2007 in the large reduction of the current account balance, from +10.7% of GDP in 2007 to
+0.4% in 2011. The external adjustment, however, was fully accommodated in the capital
account and foreign reserves in the Central Bank have continuously increase over the period,
from 3.8 months of imports or US$433 million in 2007 to 4.6 months of imports or US$966
million in 2011. The increase in foreign reserves confirms the IMF assessment of the real
exchange rate in equilibrium.
The poor investment climate is best portrayed in Figure 5 that shows that Suriname net FDI was
negative for the period 2000-2010. The mining sector attracts most FDI, however, the
characteristics of the cash flow of the sector, especially in gold, determine very large initial
investments but also large outflows related to exports.
Suriname PSAR
17
Figure 5: Suriname 10-year net FDI performance compared to countries in the region
12000
10000
8000
6000
4000
2000
0
Suriname Belize Guyana Barbados Bahamas, The Jamaica Trinidad and
Tobago
-2000
iii. The productive structure
Over the years the economic structure of Suriname has been changing, see Table 5Error!
Reference source not found.. The period of 1960-1980 shows a large share of industry
compared to the period after 1980. A working hypothesis is that industrial investment suffered
from the uncertainty related to the independence of Suriname from The Netherlands in 1975, in
fact, evidence many Surinamese migrated to Europe before independence. This event may also
have triggered a large reduction of Dutch investment in industry. Industry as a proportion of
total GDP did not recover to the 1980 levels and for the period 2001-2008 represents about 1/3
of value added output. The agriculture sector, relatively strong in coastal areas that cultivate rice
and bananas, is recovering from the difficult decade of 1991-2000 and now has reached levels
similar to those recorded from 1981-1990. The service sector, such as with other economies in
the region, has become more relevant over time and currently represents the largest share of
GDP. This sector encompasses almost all of the domestic private sector and is dominated by
small family owned firms, the vast majority of which employ less than 3 employees, many of
Suriname PSAR
18
which are informal, and are active in non-tradable activities such as commerce, transportation,
restaurants and hotels.9
Table 5: Structure of the Surinamese Economy
1961-
70
1971-
80
1981-
90
1991-
2000
2001-
08
Agriculture, value added (% of GDP)
9.4
8.0
9.5
13.1
6.5
Industry, value added (% of GDP) 46.0 44.1 29.9 24.4 34.4
of which Manufacturing, value added (% of GDP) NA NA 13.2 9.6 16.3
Services, etc., value added (% of GDP) 44.6 47.9 60.6 62.5 59.1
Agriculture, value added (current US$, million) 14.0 31.4 85.8 77.3 83.7
Industry, value added (current US$, million) 67.0 181.9 287.1 152.8 385.2
of which Manufacturing, value added (current US$, million)
NA
NA
128.4
61.4
177.3
Services, etc., value added (current US$, ,million) 63.4 191.4 522.9 368.0 709.0
Agriculture, value added (annual % growth) NA NA 2.0 -1.3 2.8
Industry, value added (annual % growth) NA NA -2.9 0.1 6.3
of which Manufacturing, value added (annual % growth) NA NA -4.4 -2.2 10.4
Services, etc., value added (annual % growth) NA NA -1.3 1.9 4.3
Source: World Bank World Development Indicators 2010
The importance of mining should be highlighted. As previously noted it contributes significant
revenues to government, and represents almost all exports, nevertheless the sector only provides
about 3% of total employment. For this reason the development impact of mining may be
limited because mine-related activities are enclaves, and as such the economic spillovers,
especially in employment to the domestic economy are small. The impact of the mining sector is
reflected in the employment of a small number of people in the service sector, such as
transportation or food services. This is the “traditional” view of enclaves in which large
investments in mining do not generate significant backward or forward linkages within the
domestic economy (Hojman, 1983), which unfortunately appears to be the case in Suriname.10
The mining sector also includes large numbers of informal miners. Suriname’s abundant gold
resources have attracted a large number of illegal miners from neighboring Brazil, the
garimpeiros. The overall impact of informal mining on development is negative as it is
responsible for severe environmental damage including mercury poisoning of the population
adjacent to the informal settlements.
9 IDB Country Strategy with Suriname 2007-2010.
10 However, the term “enclave” has evolved over time, from a dualist approach to more modern views of the impact
of social corporate responsibility on development. In fact many argue today, in complete opposition to the analysis
of the past, that “enclaves” may be catalysts of change and development (Auty, 2006).
Hojman, David E. “From Mexican plantations to Chilean mines: the theoretical and empirical relevance of enclave
theories in contemporary Latin America.” Working Paper 3, Centre for Latin American Studies, University of
Liverpool, Liverpool, 1983.
Auty, Richard. “Mining enclave to economic catalyst: large mineral project in developing countries.” Journal of World Affairs, Fall/Winter 2006, Volume XIII, Issue , (2006).
Suriname PSAR
19
iv. The institutions
Suriname is a presidential democracy. National elections are held every 5 years to elect the 51
members of the National Assembly. After parliamentary elections, the President of the Republic
is elected by the National Assembly with at least two-thirds of the votes—34 votes out of a total
of 51. In the 2010 elections 12 parties were elected to the National Assembly clustered around
five coalitions. The Mega Combinatie, led by Mr. Bouterse NDP party and including a group of
additional small parties, won 23 out of 51 seats in the National Assembly. The NPD was able to
form government by succeeding in creating a coalition that gave them the required 34 votes
majority. Then, the National Assembly elected Mr. Bouterse President.
Of the twelve parties represented in parliament in 2010, six are ethnically based (over 85% of
their voters are from one ethnic group). In spite of the close link between ethnicity and politics,
Suriname is respected for the harmonious coexistence of diverse ethnic groups. It should be
noted that three of the four coalitions that participated in the 2010 elections constitute a multi-
ethnic alliance. Only the three Maroon parties that formed A-Combinatie constitute a mono-
ethnic alliance.
The InterAmerican Development Bank (2007) summarizes that “The political environment in
Suriname is complex, reflecting the unique diversity of the Surinamese population, which
includes Hindustanis (27%), Creoles (17.7%), Javanese (14.6%), Maroons (14%) and
Indigenous Peoples (3.7%) as well as people of European, Chinese and other descent. Political
alliances bring together combinations of ethnically based parties that contribute to a complex
political balance. In this context consensus-building in the Surinamese government and society
comes at the cost of a protracted pace of decision-making and implementation. However, once
decisions take root, the degree of commitment on the part of the Government is generally high
and firmly established. Suriname’s multi-ethnic and multi-lingual society continues to evolve; it
has been enriched by the inclusion of Indigenous Peoples and Maroons in politics.”11
The importance of consensus building for decision making cannot be sufficiently highlighted and
should be carefully considered for the design of donor support to Suriname. Every step in the
decision making process of government, the interactions between government and the private
sector, the interactions between government and the donor community, and the interactions
between central government and local governments may be characterized by a complex process
of building consensus among the many different groups represented in society.
By all standards Suriname’s consensus building approach to making decisions results in long
delays. From the selection of personnel appointments, the definition of the agenda for reform,
the creation of new laws, the registration of firms everything takes time and patience. This
characteristic of Suriname discourages FDI and confuses the donor community that cannot
understand how inefficient this process can be. It is important to note that Suriname has never
privatized a public company, but it also has never nationalized a private company.
11 IDB Country Stragegy with Suriname 2007-2010.
Suriname PSAR
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In a multiethnic and diverse society in which ethnic groups maintain their traditions, religion,
and language, maybe this is not too bad even if it is inefficient, this may be a second best that
works well for the citizens of Suriname. See Figure 6 that shows that in Paramaribo the
Synagogue sits right next to the Mosque. This level of tolerance and respect for diversity is an
asset for the people of Suriname.
Figure 6: Paramaribo Synagogue and Mosque, side by side
Source: This is a file from the Wikimedia Commons, by Mark Ahsmann.
http://en.wikipedia.org/wiki/File:Paramaribo_synagogue_and_mosque.JPG
Several public institutions are very active in the promotion of private sector development in
Suriname—see the SU-DMX. The most relevant among them is the Suriname Business Forum
given its wide representation and inclusion of actors from many different sectors in the public
and private sectors. Currently the Office of the Vice President also plays an important role in
prioritizing and promoting private sector development.
c) State of the private sector
As previously noted, the private sector includes large multinational corporations active in the
mining sector—Iamgold, Newmont Suparna Gold Corp in gold and Alcoa’s subsidiary Suralco
in bauxite, with increasing interest in investing in oil that is managed by the public oil company
Staatsolie that is granting offshore exploration rights to multinational oil companies including
Repsol—while the non-mining private sector is small and produces goods and services for
government and domestic private consumption and investment with few companies active in
selling goods and services abroad. Importantly, the larger non-mining private businesses
specialize in selling goods and services to government, especially in the construction sector, or in
importing goods from abroad for domestic consumption or investment.
Suriname PSAR
21
Some relevant information is presented in the 2010 World Bank and IFC Country Report of
Enterprise Surveys in Suriname. According to this report, which is based on the execution of a
survey to non-agriculture private sector firms in Suriname, firms in the sample tend to be well
established. In the sample of firms used by the survey, about 80% of firms have 10 or more
years of continuous presence in the market, see Figure 7.
Figure 7: Suriname distribution of firms by age in the sample used by the WB/IFC
Enterprise Survey
Source: Suriname Country Profile 2010, World Bank and IFC Enterprise Surveys
The SU-DMX presents a review of associations that represent private sector interests. As noted,
most of the members, with the exception of multinational mining corporations, represent small
businesses active in many sectors of the economy. These institutions are directly financed by
government and include government representatives in their Boards. This peculiar characteristic
of Surinamese PSD institutions offers a large opportunity for facilitating PSD initiatives in the
country. For instance simplifying the tax code or investment laws are important initiatives with
large impact on private sector growth. Initiatives sponsored by PSD institutions have the
potential to implement these initiatives because of the participation of government
representatives in their Boards. The initiatives that are supported by these institutions, therefore,
to some extent have been already acknowledged by government because of their membership on
the Board of Directors of these institutions. However, successes of PSD institutions in
improving the business climate are limited.
Suriname PSAR
22
Beyond the information presented, there is no information that would permit for a more detailed
description of the private sector in the economy. As noted in the SU-DMX, PSD analysis would
benefit from investing in filling in the following information and data gaps:
A mapping of private sector activities by sector
A mapping of financial sector products available to the private sector—such as banking
services on factoring, secured transactions, discount of letters, long-term lending terms
and options, stock exchange bond issue conditions, credit ratings of people and
companies
A mapping of trade-related information relevant to companies in selected sectors for
selected market—such as phytosanitary and other food safety concerns, standards and
certification, trading mechanisms and timing, costs
A complete description and analysis of labor markets
A complete description and analysis of the tax system
A complete description and analysis of registries, real estate and movable property
A complete mapping of licensing requirements by sector
A complete mapping of bottlenecks for private sector development
d) Large and fast growing sectors in the economy
As previously noted it is not possible to identify large and fast growing sectors in the economy.
This should not be confused with stating that there are no industries or export oriented businesses
with potential for expansion and growth. Most businesses with export potential are being
developed and face, such as the rest of the private sector, a difficult business climate. An
indication of the areas in which future investments may be prioritized is provided by the U.S.
Commercial Guide, which is designed to help develop trade ties between the U.S. and Suriname.
According to the U.S. Commercial Guide the following as leading sectors for U.S. exports and
investment:
Commercial sectors
o Gold mining
o Oil and gas
o Bauxite
o Consumer products—computers, cell phones and related equipment, home
appliances, electronic gaming
o Construction—concrete, construction equipment, ceramic tiles, locks and
locksets, faucets, electrical equipment, plumbing equipment and materials, copper
products, bathroom accessories
o Forestry/woodworking
Agriculture
o Palm oil
o Bananas
o Fish/shrimp
o rice
Suriname PSAR
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e) Issues for private sector development
This section presents detailed analysis of PDS bottlenecks clustered around the following issues:
business supportive institutions structure, donors and other international entities, access to
finance, corporate taxation, business environment, technology and innovation, trade and FDI
policies, labor regulation, infrastructure communications and energy, environment, gender, and
other. A recurrent problem for the analysis of PSD initiatives in Suriname is lack of reliable
information, therefore in all cases the report provides as much factual information as possible
including complete references. When subjective assessments have been made those are also
clearly identified in the report, usually with recommendations for investing in primary data
collection and analysis.
i. Business supportive institutions structure
The section summarizes the information presented in the SU-DMX annex, with emphasis on the
most relevant institution and the roles that they play in PSD.
There are many institutions that represent private sector interests in Suriname, and many of those
are directly financed by government and include government representatives in their Boards.
This peculiar characteristic of Surinamese PSD institutions offers a large opportunity for
facilitating PSD initiatives in the country. For instance simplifying the tax code or investment
laws are important initiatives with large impact on private sector growth. Initiatives sponsored
by PSD institutions have the potential to implement these initiatives because of the participation
of government representatives in their Boards. The initiatives that are supported by these
institutions, therefore, to some extent have been already acknowledged by government because
of their membership on the Board of Directors of PSD institutions. In spite of the presence of
government, successes of PSD institutions in improving the business climate are limited. The
most important finding of the SU-DMX report is the following: the link between
government participation in PSD institutions through funding and inclusion of government
representatives in the Boards of these institutions and government support for PSD
initiatives is broken and should be restored. Restoring the link would allow for government to
take action and support priority initiatives with high impact on the business climate of Suriname.
The four largest PSD institutions in Suriname are: the Suriname Business Forum (SBF), the
Suriname Trade and Industry Association (VSB), the Manufacturers Association of Suriname
(ASFA), and the Chamber of Commerce and Industry (KKF).
The SBF was created with funding from the EU to promote private sector development. The
SBF Board includes representatives of the Chamber of Commerce (KKF), the Suriname Trade
and Industry Association (VSB), the Ministry of Finance, the Manufacturers Association of
Suriname (ASFA), the Ministry of Trade and Industry, the Ministry of Justice and Police, the
Ministry of Agriculture, Animal Husbandry and Fisheries, the Anton de Kom University
(ADEK), the Council of Trade Federations in Suriname (RAVAKSUR), and the Women’s
Business Group. The SBF is, therefore, a point on intersection of PSD associations representing
a wide variety of sectors, including government. The wide membership of the SBF offers the
ideal space for the definition of PSD priorities in Suriname. In fact, the SBF has prepared a PSD
Suriname PSAR
24
strategy with the following pillars: foreign direct investment, competitiveness, new growth areas,
public/private dialogue, legal framework, and business development services. The strategy
identifies 88 activities, however, the SBF needs to prioritize them and focus on those prioritized
areas. The SBF hosts the Suriname Business Development Center in which private companies
have access to resources for their own strengthening and development, including training in
selected issues and business services.
The SBF is transitioning in 2012 from its initial phase of creation, funded by the EU, to a mature
self-sustaining institution that aspires to take the lead in the design and implementation of PSD
reforms. Up to now the SBF has been funded with EU grants, and now it needs to find its own
sources of funding to continue and expand their coordination role. These sources of funding are
limited to: contributions from its members, charging for services provided, additional
contributions from government, or contributions from other donors. It is unclear at this stage
which one of these sources, or combination, would end up funding the next phase of the SBF.
This is not the only challenge for the SBF. As previously noted, the government inclusion in this
PSD forum should be leveraged more to move from planning to execution of the private sector
development strategy already prepared by the SBF.
The Suriname Trade and Industry Association (VSB) is the largest and oldest privately funded
PSD institution in Suriname. The VSB membership includes over 230 companies, which jointly
produce more than 95% of private sector production in the country, and employ over 20,000
people. The VSB represents the private sector in the tri partite meetings between government,
unions and private sector—it is worth noting that Suriname does not have a tri partite social
compact such as other Caribbean countries—and in other committees such as the State Council,
the Labor Advisory Council, the Mediation Council, and the National Commission for the
elimination of Child Labor. Internationally, the VSB is affiliated to the International Labor
Organization (ILO), the International Organization of Employers (IOE), and the Caribbean
Employers’ Association (CEC). The VSB is organized in committees that reflect the economic
sectors in Suriname: agriculture, banking, trade, lumber, industry, mining, transport, insurance
and services.
In 2010, during celebrations of their 60th
anniversary, the VSB presented its priorities for private
sector development: macroeconomic and financial stability, improving opportunities and
possibilities for entrepreneurs, stimulation of the labor market and development-oriented
education system, adequate physical infrastructure and public utilities, targeted planning and
land policy, sustainable environmental policy, an effective and efficient government, good and
innovative management, and intermediate role of the VSB. Of these, the VSB identifies that the
challenge for privately owned companies is to improve management. Importantly the VSB
highlights the importance of opening economic space for the expansion of SMEs, strengthening
clusters for the industry, improving quality and standards, and expanding ISO certification
including the creation of a Documentation and Information Center for Standardization and
Certification.
The Manufacturers Association of Suriname (ASFA) represents about 105 small manufacturers.
Compared to the VSB, ASFA focuses on small and medium companies, whereas VSB tends to
attract larger companies—it is also worth noting that there is large overlapping in membership,
Suriname PSAR
25
so that a company is at the same time a member of VSB, ASFA, KKF and other private sector
institutions. Most of ASFA members have less than 25 employees, with representation in many
sectors such as construction, food, lumber, dairy products, syrups, with some companies
exporting to European markets. About 25 members have ISO certificates.
By law all companies in Suriname have to be members of the Chamber of Commerce and
Industry (KKF). The Chamber, which is fully funded by government, has three main functions:
implementation of economic legislation, provision of trade information, and representation of the
interests of regional trade and industry. The KKF provides its members with services and
information in a one-window format for starting a business, financial, commercial and legal
issues, personnel, closing a business, regional and international trade.
In addition to these main representatives of the private sector, the SBF, VSB and KKF, other
institutions also represent specific sectors or interests. For example the American Chamber of
Commerce of Suriname facilitates trade and investment in Suriname and in the USA, the Kwaffa
Agricultural Organization represents over 300 farmers, the Mohamas Hoeseing Fisheries
Cooperative represents over 60 fishermen, the National Women’s Movement facilitates business
opportunities for women and people of the Interior, the Surinamese Tourism Foundation
provides specialized services to its members, the Association of Small and Medium Size
Enterprises (AKMOS).
Some additional ad-hoc PSD programs were also identified in the SU-DMX. Anecdotal
evidence provided during meetings indicate that Staatoile, the public sector Surinamese oil
company, provided support to ADEK university to start a geology program to train Surinamese
students in oil and gas exploration and extraction. The Ministry of Labor also facilitated
vocational training in welding, a key skill for the oil and gas industry. Finally, with support from
the IDB government procurement is being improved to increase transparency, efficiency and
equal access.
Coordination efforts among private sector representatives appears difficult, and such as in other
areas of society, it is difficult to build consensus about PSD programs and projects. The SBF
offers significant opportunities to increase coordination, and representation of the private sector
in Suriname.
ii. Donors and other international entities
The section summarizes the information presented in the SU-DMX annex.
Suriname is a country with a large contingent of international bilateral and multilateral
institutions that actively support PSD programs. The multilateral donors’ largest actor in
Suriname is the InterAmerican Development Bank that is executing a work program that
includes PSD activities, including projects financed by the InterAmerican Investment
Corporation, the private sector institution linked to the IDB. Importantly, the InterAmerican
Development Bank partnered with DFID and CIDA to provide funding, US$40 million, to create
Compete Caribbean, a program that is fully devoted to PSD activities with an active prospective
program in Suriname—this program is coordinated in Suriname from the office of the Vice
Suriname PSAR
26
President. Additional multilateral donors include the International Finance Corporation, linked
to the World Bank, and very recently the World Bank has initiated dialogue with the authorities,
that expect formalizing a program in the near-term that would include PSD projects. The
European Union is the largest bilateral actor in Suriname, with an active program designed to
improve transport infrastructure. The Dutch and Chinese governments offer direct support, via
grants and loans respectively, to Surinamese companies that want to expand trade with their
respective countries.
In spite of the large number of international institutions in Suriname, coordination mechanisms
are informal and limited to informal contacts among representatives of these institutions—it is
worth noting that the EU has a somewhat dated donor matrix showing the work programs of the
international donor community. Different donors have different counterparts in Suriname. For
example, the Ministry of Finance interacts with the IDB, CDB and bilateral donors with the
exception of China and India; the Central Bank interacts with the World Bank, IFC, Islamic
Development Bank; and the Ministry of Foreign Affairs interacts with China and India. Because
the political system in Suriname forces the creation of a coalition of political parties to elect the
President, and because the negotiations include the distribution of Ministries, it is common for
Ministries to work in isolation, and therefore do not share information unless it is at the level of
the Cabinet of Ministers. In this context, coordinating PSD programs and projects with the
authorities is challenging.
Almost all programs and projects identified in the SU-DMX annex mention the importance of
gender issues. Nevertheless, there is not a formal coordination mechanism to identify gender-
related issues, monitor estimates of participation of women in business or in the labor force, or
other relevant indicators that may be used to monitor improvements.
The programs supported by international institutions cover many areas and appear to favor
providing direct support to individual companies and less emphasis on the improvement of the
business climate. There is a preference for individual projects that either are designed to support
specific private enterprises, such as loans facilitated by the IIC and the IFC, or individual
projects with government as counterpart that focus on broader areas of development, such as
building infrastructure in transport. Notable exceptions are Compete Caribbean and the EU, that
provide funding for individual companies or for improving the business climate. A highlight of
the later is the EU support to the Surinamese Business Forum, which provides the opportunity
for PSD stakeholders, including representatives of the private and public sector to come together
and identify, and try to solve, PSD bottlenecks. Another important exception is the support to
improve the business climate offered by the IDB MIF program and also by Compete Caribbean
through small grants for programs in specific sectors or for business climate improving
programs. A highlight of these grants is SU-T1025, Competitiveness Benchmarking for
Suriname, that funded the execution of the Executive Opinion Survey and the collection of
additional data that were necessary to include Suriname in the World Economic Forum World
Competitiveness Report (WEF GCR)—follow up support for the continuing inclusion of
Suriname in the WEF GCR is also being provided by Compete Caribbean. More recently
Compete Caribbean is funding the National Competitiveness Program for Suriname that would:
(a) establish a business climate reform unit; (b) identify, prioritize and implement a select
number of achievable business climate reforms over the near term; and (c) design a
Suriname PSAR
27
comprehensive competitiveness program for Suriname to be implemented over the medium term.
The SU-DMX provides a list of individual programs by institution, and the SU-DMX MS Access
database provides a more structured list of characteristics of each program.
Monitoring execution and measuring results of these programs are circumscribed to the
processes required by each individual institution, and in general, results are not shared with other
donors or local stakeholders. The emphasis of PSD programs sponsored by multilateral and
bilateral donors is on the design and execution, but there is little effort in monitoring outputs or
outcomes and on evaluation of the results. For PSD programs, probably because tend to be
small, the data collection effort for the creation of baselines, monitoring results, and evaluation,
is low. For example, programs that provide grant funding of less than US$1 million do not have
enough resources to design a good monitoring and evaluation system. This report identifies the
need for consolidating efforts to monitor results of relevant PSD indicators. Similarly, this report
identifies poor information about relevant PSD information, such as: a mapping of the private
sector; a mapping of services, especially financial services, offered to the private sector; a
mapping of capital supply options, venture capital and additional sources of investment including
the Suriname Stock Exchange.
Based on this assessment, we identify significant opportunities to improve coordination using the
SU-DMX tool as well as the SU-PSAR. The most important include the following
recommendations:
General recommendations
More private, less public. Importantly, PSD initiatives should be sponsored and led by
private sector stakeholders and less by public sector actors. Suriname’s public sector is
very large, and as it is explained in the SU-PSAR, the largest challenge for PSD success
rests on the capacity to create space for the expansion of private sector activities. It is
notable that the largest PSD institutions include a majority of public sector
representatives. This characteristic, however, is not necessarily negative in the context of
Suriname. It could be used to ensure government support of PSD reforms. This would
be a fundamental change from current business as usual practices which emphasize
consensus building with little real decisions made, to a new practice of making decisions
and implementing plans in the short-run. Suriname, at this stage, does not need more
private sector development strategies, it needs to implement a small and prioritized list of
concrete actions with high value added in the short-run.
Recommendations to improve coordination among the donor community
PSD projects are too many, too small, and there is duplication of efforts. In general
PSD programs are too small, and although there are many donors that willingly provide
funding, funding for each individual project is small. Therefore, there are many small
initiatives and it is difficult to assess the overall impact of these initiatives. Because
projects are small, they do not have proper monitoring of execution and evaluation of
results systems. It is extremely difficult to discuss counterfactuals, i.e. what would have
happened without the projects, because systems are not in place to follow up PSD
Suriname PSAR
28
projects results. To make programs bigger than they are now, the donor community and
stakeholders need to coordinate better and prepare jointly financed projects.
Better coordination would improve PSD design and execution of programs. Although there are many PSD institutions, there is poor coordination. Good coordination would result in fewer projects with larger funding than now.
Recommendations to improve coordination between the donor community and local stakeholders
The first step is the definition of priorities for PSD. The Suriname Business Forum
private sector development strategy presents most of the main problems for private sector
growth, however, there are too many activities and as it is, the strategy lacks focus. The
Business Forum needs to identify a short-list of priority PSD initiatives, and focus on the
design and implementation of these initiatives in the short-term.
Recommendations to improve PSD-related information systems and monitoring and evaluation
of results
Poor follow up of projects. In general projects are not designed considering
sustainability of funded actions. Larger and more focused projects would address this
problem.
Monitoring and evaluation of projects need to be strengthened. Larger and more
focused projects would benefit from the establishment of monitoring and evaluation
systems. Such systems are generally characterized by the definition of baselines of
relevant indicators, the definition of targets over time, and the use of evaluations for the
modification during project execution and the definition of follow up projects.
iii. Access to finance
This is an important bottleneck to PSD in Suriname and it is noted by the WEF Global
Competitiveness Index and by the World Bank/IFC Ease of Doing Business Report. The
financial sector is very small, characterized by a handful of banks and large concentration of
lending and deposit in the largest three banks: RBTT Suriname, DSB and Hakrinbank. It is
worth noting two of the largest banks, DSB and Hakrinbank, are totally or partially owned by
government. Godo is a bank that specializes in providing credit to small enterprises, and its
importance is ascending given the approach of the institution towards credit, and to the high
demand from this segment of the private sector. Credit to the private sector is limited, and as of
April 2012 total credit in was SRD 2,396.6 million and in foreign currency the equivalent of
SRD1,563.6 million (US$350.4 million, and €91.2 million). Overall credit to the private sector
represents about1/3 of total GDP, small by regional standards. The Central Bank provides
disaggregated data that allows for the estimation of credit by sector. Table 6 shows several
interesting characteristics of credit to the private sector in Suriname: (i) the banking sector is
exposed to foreign currency risk as about 40% of loans are denominated in US$ or €, in part due
to the reluctance of banks to lend in SRD that exposes them to devaluation risks; (ii) the largest
sector is trade, which is for the most part dedicated to imports of goods that are consumed in
Suriname; (iii) the line “other” includes personal loans, including credit card debt, and also
lending to government; (iv) lending to primary and secondary sectors is very small, in part
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because of the small size of the private sector, but probably mostly because access to credit is
limited to large companies.
Table 6: Suriname total credit to the private sector by April 2012
Domestic currency (million
SRD)
Foreign currency
(million SRD)
Total credit
(million SRD)
% of
total
Total primary and secondary sectors 338.6 424.2 762.8 19.3%
Agriculture 71.8 59.4 131.2 3.3%
Fisheries 9.3 29.6 38.9 1.0%
Forestry 2 0.4 2.4 0.1%
Mining 3.6 90 93.6 2.4%
Manufacturing 164 165.5 329.5 8.3%
Construction 86.3 61.7 148 3.7%
Utilities 1.6 17.6 19.2 0.5%
Total other sectors 2,058.30 1,139.40 3,197.7 80.7%
Trade 459.3 597.7 1,057.0 26.7%
Transport, storage and communications
81.2
26
107.2
2.7%
Services 142.5 246.7 389.2 9.8%
Housing 536.7 81 617.7 15.6%
Other 838.6 188 1026.6 25.9%
Of which credit to government 164.2 164.2 4.1%
TOTAL CREDIT 2,396.90 1,563.60 3,960.5 100.0%
Source: Central Bank of Suriname, website, Tables 8 and 9, http://www.cbvs.sr/STA/Eng/Table%208.pdf and http://www.cbvs.sr/STA/Eng/Table%209.pdf
In spite of the small size of credit to the private sector in Suriname, lending rates are relatively
low. According to the Central Bank, average lending rates in SRD by April 2012 were 11.6%,
with average deposit rate at 6.7%. Because inflation, measured month to month from April 2011
to 2012, is 4.2%, then real average real interest lending rate is 7.4%, within the range of rates in
the region but significantly higher than international rates during this period characterized by
very low rates throughout capital markets. Average lending rates in US$ is 9.5% and average
deposit rate is 2.6%, and in € is lending is 9.9% and deposit 0.8%. The real lending interest rates
in US$ and € are high and higher than in local currency. Similarly, deposit rates are very low,
especially in €, probably in response to demand for these currencies in the financial system,
although this is an issue that would require additional analysis to determine the preferences for
lending and deposit.
An important issue that requires additional research is related to the financial services available
to the private sector. Anecdotal evidence collected during April 2012 indicates the pervasive use
of lending using real estate as collateral, and limited offering of factoring. Additional potential
financial instruments that would deepen financial intermediation are not available. Such
instruments may include: the expansion of the market for government bonds therefore promoting
savings and investments of persons and firms; leasing; secured transactions; and revitalizing the
stock exchange that is increasing trade, during 2011 total trade was SRD670,000 or about
US$200,000 in spite of a large increase compared to 2010, is just not fulfilling its role to
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facilitate trade and investment by offering options to persons and firms for saving and
investing.12
In general country credit ratings are improving, although they remain low at B+ from Fitch and
Standard & Poor’s, and from Moody’s B1. Ratings have improved from 2009, and mostly
related to an improved macroeconomic environment and outlook, and to the serious attempt from
government to resolve the long standing problem of debt in arrears with bilateral donors and
commercial banks. The Fitch note indicates that “national and international entrepreneurs will
be able to feel reassured that investments in the Republic of Suriname are safe.”13
The Fitch
report also recognizes the government’s effort to eliminate debt in arrears, and quoting the
report: “In its press release of July 20, 2011, the Central Bank of Suriname indicated that the
economy is on the right track but that a prudent fiscal and monetary policy will continue to be
the guideline. In this respect it is worth mentioning that this week the government reached an
agreement with the American government to redeem within three years, the many years’ arrears
of an outstanding debt. The first redemption has meanwhile been made. This demonstrates the
resolve of the government to settle its accounts. These activities will have to further improve our
credit rating in the future.” The Standard & Poor’s analysis in general agrees with Fitch,
although it also notes the high macroeconomic risk related to the dependency from a few export
commodities.
The efforts of the Central Bank to ensure that Suriname receives the attention of credit rating
agencies is commendable and should be recognized and encouraged. In part because of the
effort to receive a credit rating, and the consequent commitment to monitoring and improving it,
Fitch and other credit rating agencies provide an important source of information for prospective
investors. These efforts also benefit the domestic private sector because it facilitates finding
partners abroad, and also for those that would prefer to borrow abroad get a good measure of
country risk.
iv. Corporate taxation
The information provided in this section comes from the World Bank/IFC Ease of Doing
Business Report 2012, complemented by information included in the 2003 FIAS report and
anecdotal evidence provided by business representatives in April 2012.
Suriname ranks well when compared with other countries in the region in how much taxes are
really paid by businesses and who difficult is it to pay taxes in Suriname—see Figure 8. The
WB/IFC report notes that Suriname ranks 34 out of 183 countries, and that firms make 17 tax
payments per year, spend 199 hours per year filling tax forms, and that preparing and paying
taxes represent 27.9 % of profits. By comparison, in Latin America the best performer is Chile
with a tax rate equivalent to 25% of profits.
12
http://www.surinamestockexchange.com/nl 13
Press release of the Central Bank of Suriname as presented in the webpage of the Central Bank of Suriname. The
title of the press release is: Fitch ratings upgrades Suriname to B+. http://www.cbvs.sr/wp-
content/uploads/2011/08/persberichten-20110801E1.pdf
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Figure 8: Suriname ranking in paying taxes according to the WB/IFC Ease of Doing
Business Report
Source: World Bank/IFC Suriname Country Report, Ease of Doing Business Report, Table 8.1
Table 7 notes that the corporate tax rate is 36%, however the existence of multiple tax
exemptions, most of which are ad hoc and will be presented in the section that deals with FDI,
brings down the overall rate to 27.9%. The VAT stands at 10% and taxes related to employment
are 4% of net salaries.
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Table 7: Suriname corporate taxes according to the WB/IFC Ease of Doing Business
Source: World Bank/IFC Suriname Country Report, Ease of Doing Business Report, page 71
v. Business environment
This section presents the results from three relevant PSD sources of information: the World
Economic Forum Global Competitiveness Report, the World Bank/International Finance
Corporation Ease of Doing Report, and the WB/IFC 2010 report on Suriname Enterprise Survey,
which incidentally was financed by Compete Caribbean. These reports complement each other
and provide a view of macro/competitiveness problems and more micro problems.
The World Economic Forum’s (WEF) Global Competitiveness Index (GCI) 2011-2012 ranks
Suriname’s competitiveness at 112 out of 142 countries. In Latin America, Suriname only
compares favorably with Nicaragua at 115, Paraguay at 122, Belize at 123, and Venezuela at
124. The analysis provided by WEF also shows that for basic requirements Suriname ranks
better at 79, but worse at efficiency enhancing factors, 124, and innovation factors at 122.
According to responses to the survey executed in Suriname the following are the top five
pressing problems: (i) inefficient government bureaucracy (19.4% of respondents); (ii) access to
financing (9.9%); (iii) inflation (9.7%); (iv) corruption (9.1%); and (v) inadequate supply of
infrastructure (7.9%) that ties with poor work ethic in national labor force.
In terms of institutions, Suriname’s WEF survey shows respondents concerns about: protection
of minority shareholders’ interests, intellectual property protection, strength of auditing and
reporting standards, efficiency of legal framework in challenging regulations and in settling
disputes, and transparency of government policy making. Additional shortcomings point to the
following problems: (i) in infrastructure the quality of air transport infrastructure; (ii) in
macroeconomic stability the on-going prevalence of inflation; (iii) in health and primary
education: HIV prevalence, malaria incidence, and business impact of HIV/AIDS; (iv) in higher
education and training: the lack of local research and training services, internet access in schools,
and extent of staff training; (v) in goods market efficiency: the time required to start a business,
business impact of rules on foreign direct investment, and the burden of customs procedures; and
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finally, (vi) in labor market efficiency: hiring and firing practices and cooperation in labor-
employer relations.
The WEF Competitiveness report highlights the long list of problems that if resolved would
improve the business environment in Suriname. Local stakeholders, most visibly the Chamber
of Commerce, advocate for a reduction of red tape—note that the Chamber of Commerce is a
public sector institution, fully owned by Government and with salaries paid by the public sector,
and the head is appointed by the President. It is also worth noting that not all the private sector
stakeholders are supporters of increased competition. Anecdotal evidence indicates that some
private sector firms benefit from government’s tight control over the economy and from the
cumbersome government procurement system—after all government is the largest buyer in the
country. These firms wish to maintain the status quo as it gives them an edge over newer and
less experienced firms that also want to win contracts from Government.
The World Bank/International Finance Corporation Doing Business report on Suriname focus on
the following topics: starting a business, dealing with construction permits, getting electricity,
registering property, getting credit, protecting investors, paying taxes, trading across borders,
enforcing contracts and resolving insolvency. As such, this report provides a more focused
microeconomic view of how easy it is to do business in Suriname. Overall, Suriname is not
performing well on this index and compared to the rest of the economies also included in the
analysis, the country has dropped 5 spots to rank 158, out of 183 countries, in 2012 from rank
153 in 2011. Figure 9 shows that Suriname ranks only better than Haiti in the region.
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Figure 9: Suriname overall ease of doing business ranking
Source: Ease of Doing Business Report 2012
According to this report, the most difficulties are found in: starting a business (rank 173 out of
183 countries), protecting investors (rank 181), enforcing contracts (rank 178), registering
property (rank 170), getting credit (rank 159), resolving insolvency (rank 157), trading across
borders (rank 105), and dealing with construction permits (rank 98). In fact, only in two aspects
Suriname ranks better than the Latin American and Caribbean: in getting electricity (rank 38)
and in paying taxes (rank 34).
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Figure 10: Suriname ten doing business factors
Source: Ease of Doing Business Report 2012
Over time comparing the ease of doing business in 2011 to 2005, the report finds that in general
Suriname’s has improved in how easy it is to start a business and in getting electrocity. In all
other areas either it has become more difficult, or it has not changed. Figure 11 shows the
comparison by presenting the starting point in a yellow dot and the change in a red line. A red
line moving up indicates an improvement in that factor in 2011 compared to 2005. The figure
also shows that the lower the yellow dot is, the worse the condition of that factor was in 2005.
For example, resolving insolvency and protecting investors are, according to the report, the most
difficult overall problems for businesses in Suriname.
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Figure 11: Suriname comparison of 2011 to 2005 ease of doing business
Source: Ease of Doing Business Report 2012
Surprisingly for such an open economy, trading across borders is also problematic. The report
notes that the number of documents that are required for exporting one container is 8, it takes 25
days to export, and the cost per container is US$995. The number of documents to import a
container and the number of days is the same, but the cost of a container when imported
increases to US$1,065. Similar information for Trinidad and Tobago indicates that it takes 5
documents, 14 days and US$843 per container to export; and 6 documents, 19 days and
US$1,260 to import.
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Figure 12: Suriname ease of trading across borders
Source: Ease of Doing Business Report 2012
Therefore the barriers that prevent private sector development in Suriname may be summarized
as those that limit the expansion of private sector businesses, and in particular those barriers that
limit the capacity of local firms to sell goods and services beyond the Surinamese market. The
domestic market is small and cannot accommodate a large expansion of businesses, while access
to Caribbean and European markets would offer an opportunity for growth in sectors in which
Surinamese firms may have a comparative or competitive advantage. There are some sectors
that may already be developing in the direction of expansion to external markets, such as
fisheries taking advantage of Suriname’s tropical climate and abundance of water resources,
specialized agricultural goods, and tourism.
According to the Suriname Country Report produced by the World Bank/IFC Enterprise Survey
the four largest problems for doing business in Suriname include: inadequately educated
workforce, customs and trade regulations, access to finance and corruption.
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Figure 13: Suriname snapshot of the business environment according to the WB/IFC
Country Report based on the Enterprise Survey
Source: Suriname Country Profile 2010, World Bank and IFC Enterprise Surveys
vi. Technology and innovation
The WEF Global Competitiveness Report for 2011-2012 presents data that was collected by the
Executive Opinion survey that indicates that technology and innovation are lagging compared to
other countries with similar development as Suriname. Interestingly Suriname ranks well on
Internet users, broadband Internet subscriptions, and Internet bandwidth. Areas that require
improvement include: availability of latest technologies, firm-level technology absorption, and
FDI and technology transfer—more on this in the next section—see Table 8.
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Table 8: Suriname WEF GCI 9th pillar technological readiness, 2011-2012
Source: World Economic Forum Global Competitiveness Report 2011-2012, data for Suriname
The mining sector offers an opportunity to accelerate technology transfers into Suriname
following the example of Trinidad and Tobago. In Trinidad and Tobago the energy sector is
experiencing an interesting process of technological spillover from the foreign owned companies
to a large number of small and medium domestic companies. The spillovers exist in upstream
and downstream activities, and involve high specialization by local firms in some areas related to
the gas and oil sector. These companies are expanding and selling their highly specialized
services in Africa and the Americas. Suriname can learn from this process and use the mining
sector because it involves some of the most advanced multinational corporations that specialize
in gold extraction, alumina production, and gas and oil prospection and extraction. An area of
future work for private sector stakeholders in Suriname is to build a linked cluster of small and
medium sized companies that specialize in providing services to multinational corporations.
When building them, gender and diversity criteria to benefit different groups of the economy
should be taken into account . As it is now, and as it is presented in this report, the mining sector
appears to be an enclave with few linkages to the local economy.
Building linkages to the mining sector by providing highly specialized services to multinational
corporations would require a focused effort into facilitating the sophistication of businesses and
their capacity to innovate. Table 9 provides the results from the WEF Executive Opinion survey
and shows that in general business leaders consider that businesses in Suriname are nor
sophisticated as measured by: the development of clusters, willingness to delegate authority,
control of international distribution, and the value chain breath. All of these are important issues
that need to be addressed by the private sector.
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Table 9: Suriname WEF GCI 11th pillar business sophistication, 2011-2012
Source: World Economic Forum Global Competitiveness Report 2011-2012, data for Suriname
The development of linkages with multinational corporations would also require a special effort
from the private sector in strengthening their capacity to innovate. Table 10 shows the results of
the WEF Executive Opinion survey and notes that business leaders identify the following factors
as most problematic: government procurement of advanced technological products, quality of
scientific research institutions, university-industry collaboration in R&D, and company spending
on R&D.
Table 10: Suriname WEF GCI 12th pillar innovation, 2011-2012
Source: World Economic Forum Global Competitiveness Report 2011-2012, data for Suriname
vii. Trade and FDI policies
This section is based on a 2003 Foreign Investment Advisory Service (FIAS) Report that was
requested by government and financed by the IDB. This is an excellent report that addresses the
problem of the business climate in Suriname and focuses on investment and the need for a new
investment law that would make it easier for PSD in the country. Although the document is now
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9 years old, most of the analysis and recommendations remain relevant today and should be
revised by PSD stakeholders.
The FIAS report provides, such as this SU-PSAR does, an overview of the economic condition
of the country and identifies the need for space for PSD and notes the large size of government
and government regulations that choke investment opportunities. The report, in this context,
focuses on: the reduction of ad hoc government actions in general, the revision of the 2001
Investment Law to level the playing field for investors, and the revision of a law that was
designed to create an Investment Promotion Agency, InvestSur. The 2001 investment law was
never implemented because in essence it is not a good law, and because government could not
agree on the creation of the new investment agency and faced some opposition from the private
sector for the general provisions of the law.
The 2001 Investment Law did not provide equal access to investment in the country, had a strong
bias against FDI, and focused almost exclusively on the use of ad hoc fiscal incentives for PSD.
As such, the law was highly discretional and did not provide guidance for investors about the
rules for PSD, it was clear that investors would have to negotiate individually with the authorities
every project, such as is the case with the mining sector in which each multinational company
individually negotiates different conditions with government for each individual large
investment.
In this context, the FIAS report focuses on rewriting the Investment Law, on incorporating
within it the creation of an Investment Promotion Agency. These are the highlights of the
recommendations of the FIAS report:
But without a doubt, the orientation and objectives of the new investment law and the Law on
InvestSur need to be adjusted. In order for it to play an important role in shaping the investment
environment so as to be in a position to attract more investment to the country, InvestSur has to
change its intended function from incentives administrator to a true Investment Promotion
Agency (IPA). The primary focus of this entity should be on policy advocacy and the initiation of
policy reforms relevant to investors in order to facilitate the entry of new investment projects.
In Suriname, the initial focus should certainly be on three main issues:
Developing a legal framework appropriate for modern businesses and investment
projects,
A systematic removal of administrative barriers to investment, especially developing a
streamlined process of business registration and licensing, and
Reviewing the country’s corporate income tax system to change the high-tax/
discretionary incentive environment to one with an internationally acceptable level of tax
burden without discretionary incentives.
In order for this work to be effective, InvestSur would clearly have to work closely with the
private sector to ensure that the proposed reforms meet investor needs. Close collaboration with
relevant government agencies involved in the proposed reforms is equally important. In taxes,
for example, InvestSur would need to involve the Ministry of Finance throughout to develop a
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clear understanding of existing revenue generation needs. The Suriname Business Forum
presents itself as an excellent opportunity in these collaboration efforts, and InvestSur could
strengthen the ongoing efforts, while benefiting from the existing consultative mechanism.
Important findings from the FIAS report about administrative complexity and discretion include:
Investors in Suriname face a public administration that heavily interferes with the
activities of the private sector.
Registering a company to the Chamber of Commerce is relatively easy as it takes only 2
to 3 days for investors to register their company. However, after registering the company
to the Chamber of Commerce investors need to obtain a special industry license to
operate the company. Almost all economic activities need to have special industry
licenses. Entrepreneurs are always dealing with licenses as it takes two years to obtain a
license, valid only for three years. Thus, a soon as the investors obtain his license, he has
to restart the procedure for its renewal.
The system is extremely investor unfriendly and encourages corruption.
This means that an investor is never sure of being in compliance with laws and
regulations, and always at risk of an inspection.
Investors that want to buy land from a private owner can freely do so, but they must have
an authorization to import into the country the foreign currency needed for the purchase.
If the land is owned by the State, the transactions are more difficult and corruption seems
common according to investor experiences.
With respect to the PSD legal system the FIAS report notes:
Most of the laws in Suriname are the inheritance of the Dutch legislation and were never
updated. The Business Forum estimates that there are some 200 laws that need to be
changed. An example is the Company Law, a Dutch Law of 1838, which is the basis for
the two-years long process to found a LLC. The LLC have to be authorized by the
President of the Republic in the Council of State. In addition, company directors as well
as the majority of owners have to be of Surinamese nationality, and most investors get
around these requirements by creating a sister company of an existing LLC, which is
100% owned by Surinamese
In addition, new laws seem to be enacted without a clear underlying policy and without
consulting the stakeholders involved or the legal community
The government does not seem to pay attention to the international agreements of which
Suriname is part (i.e. the Cotonou Agreement (signed in 2001) and the Caricom
Agreement, signed in 1995). Following Chapter 7 of the Cotonou Agreement, the
Government of Suriname shall implement measures to reduce the commercial risks for
investors, i.e., arbitration mechanisms, and take measures and actions, which help to
create and maintain a predictable and secure investment climate. Neither an Arbitration
Tribunal nor a predictable environment is present in Suriname. The existing Arbitral
Tribunal of Suriname has not been active for the last 30 years
The current “2001 Investment Law” does not include any of the usual rights
internationally recognized to investments and investors. Among those is the “Minimum
Standard of Treatment”, which means that all direct investors will be treated in
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accordance with International Law, including fair and equitable treatment and full
protection and security . Foreign investors should also have the right to invest under the
same rules that apply to national investors (National Treatment), unless expressly
provided by the investment law itself, e.g., the ability to repatriate capital and earnings in
the country of origin
Investor cannot even rely on the Judiciary to see their rights recognized because of the
slowness and delays in the judicial process. Although the judiciary is generally regarded
as fair and impartial, the lack of judges and the general concerns about favoritism and
corruption in the public sector decision-making process are problematic
The FIAS report of 2003 triggered follow up support from the IDB to rewrite the investment law
according to the recommendations of the report. A new investment law was drafted that
provided a clear set of rules that would apply to all private sector investment in the country,
including equal rights for FDI. In Suriname the executive branch proposes laws to Parliament,
that then approves them or modify them before approval. Because the initiative is on the
executive branch, a new law has to be approved by the Cabinet of Ministers, that then submits it
for review and approval of the President. Only then, the President would submit a draft law for
review and approval of Parliament. Because the process is complex, and requires building
consensus among the political parties that form government, negotiations are long and tedious,
and minimum disagreements may result, such as is the case for this law, in long delays. Up to
April 2012, the new investment law is still waiting approval by the Cabinet of Ministers. This is
a priority that requires renewed efforts by PSD stakeholders.
Another recommendation that is still valid and should be implemented is to prepare an analysis
of barriers to investment. It is worth noting that FIAS specializes in such an analysis and would
be the ideal candidate for its execution. Such an analysis would include:
Investment approvals/licenses;
Other authorizations (incentives, exemptions, etc.);
Company registration;
Tax and foreign exchange registration and reporting;
Registration with other authorities (statistical offices, social security, labor, etc.);
Visas, work permits, and residence permits;
Local and municipal business license;
Access to land and land titles or long-term leases;
Construction and building permits;
Environmental permits and approvals;
Utility connections (telephone, water, sewerage, electricity, gas, etc.);
Selected sectoral approvals or licenses;
Operational formalities such as import/export, labor, transport, taxes, etc.;
Procedures to initiate a case in court
Finally, the FIAS report presents a detailed proposal for the creation of an Investment Promotion
Agency that we do not support. The main reason is that Suriname has already a very complex
institutional web that includes many government supported institutions that should be facilitating
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PSD. Because of this, the SU-PSAR suggests that the Business Forum takes the lead in
investment promotion and uses some of the recommendations presented in the FIAS report to
guide their actions.
viii. Labor regulation
There is scant formal analysis about rigidities in the labor markets. Information collected in
April 2012 notes that the “formal” labor market is very rigid, including provisions included in
the “Dismissal Decree” that requires a special permit from the Ministry of Labor for the
dismissal of any employee. Because of this requirement the private sector has an incentive of
maintaining very small companies that employ few people.
The SU-PSAR recommends the preparation of a comprehensive analysis of labor markets to
identify reforms that would facilitate PSD.
ix. Infrastructure, communications and energy
The WB/IFC Enterprise Survey provides important information about the supply of electricity,
water, and telephone connections. Figure 14 shows the results from the survey related to the
provision of electricity. As the survey notes supply of electricity is adequate compared to other
results in Latin America. This is somewhat surprising as anecdotal evidence collected during
April 2012 indicated a problem with supply in rural areas, that generate electricity using diesel
generators. The survey may be picking up results from firms that are located in Paramaribo or
Nickerie, but not in other areas of the country. It is also worth noting that the survey does not
include firms in agriculture.
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Figure 14: Suriname electricity provision according to the WB/IFC Enterprise Survey
Source: Suriname Country Profile 2010, World Bank and IFC Enterprise Surveys
Figure 15 shows the results from the survey when asked about the provision of water. Compared
to electricity water appears to be supplied less reliably, and the number of monthly shortages is
higher than other Latin American countries, and the duration of shortages is also higher. This is
also a surprising result as we do not have anecdotal evidence about water supply shortages. In
fact an emerging industry is bottled water that is sold regionally, Para Springs Mineral Water.
This is an issue that also requires additional analysis.
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Figure 15: Suriname water provision according to the WB/IFC Enterprise Survey
Source: Suriname Country Profile 2010, World Bank and IFC Enterprise Surveys
Figure 16 shows the results from the survey about delays in obtaining electricity, water and a
telephone line. The information provided by respondents to the survey indicates that delays are
more when compared to the Latin American average except for the time it takes to get a
telephone land line.
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Figure 16: Infrastructure services delays according to the WB/IFC Enterprise Survey
Source: Suriname Country Profile 2010, World Bank and IFC Enterprise Surveys
The other factors of relevance are land transportation, air transportation and water transportation
and ports. Given the size of the country and the difficulties and environmental fragility due to its
geographical location, government is actively involved in improving all three types of
infrastructure.
The road infrastructure of Suriname may be summarized as follows: there are two main axis:
east-west connecting the country with Guyana on the west and French Guyana on the east; and
north-south connecting Suriname with Brazil on the south. In general road condition varies
greatly, with some sections in good condition and other in very poor condition, moreover,
volume of traffic is in general low. The European Union notes that there are about 4,570
kilometers of roads, of which 1,125 are paved.14
In all cases, but especially the east-west roads,
government is improving the quality with the active support of the donor community, in
particular the European Union, the Government of France, the Government of China, and the
IDB. Several sections of the east-west axis are being repaved and improved, in addition to
improving connectivity with Guyana, via a bridge, and French Guyana, a ferry system. It is
expected that improved connectivity in general would facilitate the development of private sector
activities in agriculture. For example, anecdotal evidence collected in April 2012 indicates that
the region between Paramaribo and French Guyana had an active agriculture before the civil war
14 Development and cooperation – Europeaid http://ec.europa.eu/europeaid/where/acp/country-
cooperation/suriname/suriname_en.htm
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of the late 1980s. One of the main economic consequences of the civil war was the destruction
of agricultural production, which never recovered.
Air and water transportation is extremely important for the Interior of Suriname as these are the
only way to connect the coastal region with all the towns and villages that exist in the Interior.
These towns and villages are the homes of most of the Amerindian and Maroon population. For
example Medical Mission, an international NGO, provides medical services to the people of the
Interior using almost exclusively air transportation. Small airports throughout the country are
used for this purpose. There is no information about investing in the expansion of air or water
transportation services to the Interior. Water transportation is provided by the state through a
ferry system, which for the most part are very small boats that go into the Interior bringing
goods, most importantly gasoline and diesel to be used by electric generators.
Finally, port infrastructure is not good and is in need of upgrading and expansion. The European
Union has provided funding in the past for dragging the port of Paramaribo and also for its
expansion. Additional information is needed related to government plans for improving port
infrastructure in the country.
x. Environment
Suriname assets include a diverse and rich biodiversity in coastal areas and in the Interior. This
rich environment is also fragile, and exposed to the risk of informal gold mining. As noted,
garimpeiros are active in remote areas of the country and are causing significant, yet localized,
damage to soil and water quality. Moreover, their presence also adds health-related risk, due to
pollution of water and also to the transmission of STD, especially AIDS, because of the
existence of wide prostitution networks.
The issue of the environment is closely linked to the rights of Amerindians and Maroons. The
vast majority of Suriname’s mineral and forest resources are located in “the Interior” (or
hinterland), which also boasts high biological diversity and potential for tourism. The Interior,
however, is also the home of Indigenous peoples and Maroons who, for centuries, have almost
exclusively occupied and used the forests, savannahs, rivers and creeks. While they speak their
own languages and have their own culture and history, Indigenous peoples and Maroons are not
simply ethnic groups; in terms of governance two important circumstances set them apart.
First, Indigenous peoples and Maroons have their own traditional governance systems. These
traditional governments provide structure for the community and regulate access to resources.
They are to some extent recognized by government as traditional authorities. They receive
monthly stipends from the central government and are officially installed after being appointed
by their communities. Legally, however, traditional governments are not mentioned in the
Constitution or in any other Surinamese law or statute.
Secondly, Indigenous peoples and Maroons are recognized under international law as having a
right to self-government and the right to own and control their traditional lands and resources in
accordance with their own customs and traditions. This was confirmed in a recent judgment of
the Inter-American Court of Human Rights (the Saramaka People vs Suriname case, 2007). The
Suriname PSAR
49
Court ordered Suriname to adopt legislation to recognize the traditional authorities and the
ownership of the traditional territories and resources, it also issued specific orders with regard to
resource exploitation in Indigenous and tribal areas. These included the adoption of minimum
principles for consultation and consent, as well as requiring benefit sharing agreements and
environmental and social impact studies carried out before the resource development. The
Venetiaan government acceded to the jurisdiction of the Court and indicated that it would
comply fully with the Court’s order, however this part of the judgment is still awaiting
implementation.
Recently news reports published in Paramaribo indicate that the Association of Saramaccaanse
Gezagsdragers (VSG) drafted a map demarcating approximately 9,000 km2
of what they
consider their territory for purposes of autonomy. This, and other similar actions, would have
significant impact on the development of the Interior and the rights for mining or development of
tourism.
Unfortunately Suriname does not have readily available data to present a more detailed analysis
of PSD and the environment—the Yale University Environmental Performance Index does not
include Suriname, and the 2011 WEF Travel and Tourism Report does not cover Suriname.
In spite of the lack of information, the SU-PSAR identifies that the single most important source
of risk to the environment is related to informal mining. The SU-PSAR recommends the
preparation of a report focused on PSD and the environment with recommendations to maintain
the bio diversity of Suriname, and to provide a framework for respecting rights of Amerindians
and Maroons.
xi. Gender
Important efforts have been undertaken by the Government of Suriname to mainstream gender,
however information disaggregated by gender on entrepreneurship in Suriname is scarce.15
Some information is available on labor market participation, sector segregation and female
unemployment.
This issue is important and has been recognized in the Multi-Annual Development Plan (MOP)
2006-2011 presents gender as a crosscutting issue which concerns all sectors. It states that
reaching a fair and just society requires including gender analyses in all policy programs,
projects and plans. Additionally, one of the MOP strategies for poverty alleviation consists in
increasing the economic and physical independence of women. Moreover, gender focal points at
the various Ministries (the Gender Management System) assist in this matter while the National
Bureau on Gender Policy (NBG) is responsible for the execution of gender policy.
In spite of Government efforts, Suriname is rated by the Gender Gap Index (GGI) 102 out of 134
countries and it is the ranked last among 7 Caribbean Countries, indicating that significant
differences exist in opportunities. The Gender Development Index (GDI), however, notes the
high development level of Suriname even after gender differences have been discuounted from
15 The NBG is working on the development of a Gender Database System (GDS), using the software programe
DevInfo. Three staff members have been trained in working with DevInfo by the Bureau of Statistics (ABS).
Suriname PSAR
50
the human development index, and rates Suriname number 72 out of 157 countries and third
Caribbean Country only behind Trinidad and Tobago and Barbados.16
On the specific subject of women’s employment and economic opportunities, it is known that
even thought women participation in the labor market has been increasing importantly, men still
constitute about 60% of the labour force. Also there is available data that shows that the majority
of the workforce is comprise of employees (80.7%.), of which 77.8 are male and 86.8% are
female. The rest are employers and own account workers, 0.64% and 15.7% respectively. In both
case the majority (0.8% and 18.7%) are male and only 0.2% and 9.3% are female.
The largest share of employed persons is in the age group 25/54 years. The figures show that a
much larger number of men (78.625) than women (48,052) have an occupation. The age
category 15/24 years counts 17,085 employed persons, 25.6% of these people are women and
74,4% is a man. This figure is consistent with the finding that girls and women are more likely
than men to continue education.
In the age group 25-64 year of the active population, 35%-40% of the women are formally
employed. For men this figure lies around 60%. Informal labor offers many women a household
income or a necessary financial addition to a regular wage. Working in the informal sector is
attractive because of the flexible hours and possibility to work (partly) from the home, which
facilitate combining this form of labor with the care for children and household chores.
Additionally, a significant share of households is female-headed. In 2008, a woman was the head
of one third of households (32.9%, N=29,058).
Unemployment is considerable larger for women than for men. In 2008, 13,082 persons were
formally unemployed. Of this number, 71% were female and 29% were male. For adolescents in
the age category 15-24, the total number of unemployed persons was 4859. Of this number, 61.2
percent were female and 38.8 percent were male. In order to combat unemployment, the
government has initiated various projects including: the project Social Investment Fund (SIF);
Project vocational education for women; Projects to increase the economic participation and
resilience of women; and credit programs for entrepreneurs. In 2009 the Labour Market program
started.
As per sectors, women are overrepresented in education, public administration, services and
hotel and restaurants, and as services workers, technicians and associate professionals,
legislators, senior officials and managers. Women are employed in administrative functions and
in lower service and commercial occupations. They are underrepresented in the technical sector,
where only 89 out of 9785 persons who find employ in this sector are female. Many women
(10,074) have an administrative job. In this sector only 4,056 men are active. In addition, many
16 The Gender Gap Index (GGI), World Economic Forum index, measures the gap between men and women in
economic participation and opportunity, educational attainment, health and survival and political empowerment in a
total of 14 different variables and a total of 134 countries. The Gender Development Index (GDI), the UNDP index
it is basically the Human Development Index discounted for gender inequality in life expectancy, education and
estimated earned income. It focuses on extension of capabilities for 157 countries.
Suriname PSAR
51
women have scientific occupations. More women (6545) than men (3111) have jobs in the field
of science. These data are in line with the graduation results of the Anton de Kom University,
which show that more women than men obtain scientific degrees.
According to the 3rd CEDAW report, in the private sector men fill the majority of top positions
and among the higher and middle level technicians and professionals. In comparison to men,
women are less likely to have leadership positions or work as higher and middle-level
professionals.
The only additional data that was found providing information related to business ownership by
gender is provided by the WB/IFC Enterprise Survey. Figure 17 shows that the sample for
Suriname suggest the fewer women own or participate in ownership of businesses when
Suriname is compared to Latin America. This is an issue that is also highlight, although without
the support of data, by the Heemskerk and Apapoe gender report on Suriname.
Figure 17: Suriname females in management and ownership according to the WB/IFC
Enterprise Survey
Source: Suriname Country Profile 2010, World Bank and IFC Enterprise Surveys
The above data indicates that lack of professional expertise, informality, segregation by sector
and occupation, and family responsibilities are likely barriers for women to become
entrepreneurs. Others barriers present in Suriname and related to the business environment
difficulties and lack of credit and services will, according to the literature, disproportionately
affect women. Therefore, to improve the effectiveness of the private sector, additional efforts and
Suriname PSAR
52
resources should be allocate to assess, study and analyze, and open opportunities to women in
business or with the potential to open their own businesses.
3) Chapter II: Selecting and prioritizing issues
This section presents the priority PSD issues which have been identified throughout this report
and the SU-DMX annex, and a proposal for a PSD plan to be implemented in the short-term that
would re-energized several PSD processes that are currently in preparation and in execution in
Suriname.
It is important to clarify that the set of priorities and the proposal for a PSD plan are preliminary
suggestions that will be validated in November in Paramaribo by stakeholders. As noted in the
SU-DMX, there are many important stakeholders very active in facilitating PSD in Suriname,
and the Suriname Business Forum is strategically located to represent most, if not all, of PSD
stakeholders in the country. Therefore, the Business Forum would play a central role in
validating the priorities presented in this report, and the suggested work program. In addition to
the Business Forum, the SU-DMX identifies the PSD supporting role of the office of the Vice
Presidency, therefore, this report also suggests that this office plays a central role in the
validation of priorities and the suggested work program. It is expected that significant comments
and suggestions would be provided by representatives of the Business Forum and the office of
the Vice Presidency, which would be incorporated in the final version of this SU-PSAR. It is also
worth clarifying that this report, now and after validation, should reflect a process and therefore
should be updated as often as stakeholders consider necessary.
In this context the SU-PSAR identifies the overarching PSD objective to open space for private
sector expansion in all sectors of the economy. As noted in this report, the detail and number of
possible priorities is very large. The priorities presented here reflect an effort to select only those
that at the same time have high value added, may be implemented in the near term, and their
implementation does not face possible large political opposition.
The priorities are presented clustered around the following issues: (i) those that are related to
PSD coordination that were identified in the SU-DMX; (ii) those that are related to improving
the business climate; (iii) those that are related to opening space for private sector participation
in the economy; and (iv) those related to the design of a policy that would increase the
participation of domestic companies providing goods and services to the mining sector.
a) Priority PSD issues—improving PSD coordination
Table 11: Suriname priorities for PSD coordination
Issue Responsibility for leadership Technical
difficulties
Medium—
Political
friction
Inadequate follow up of PSD projects, and poor
monitoring and evaluation systems
Suriname Business Forum—
build a single system to monitor
all PSD indicators with links to
PSD projects
requires building
the capacity to
collect and
analyze primary
data
Low
Public servants representing government in PSD Office of the Vice Presidency— None Medium
Suriname PSAR
53
institutions, especially the Business Forum,
need to become active champions for PSD
reform in their respective Ministries
The Suriname Business Forum is ideally
situated to play the role to coordinate reforms
necessary to facilitate private sector
development. The most relevant tasks in the
short-run for the institution are: (i) ensure its
financial sustainability; and (ii) define a small
number of priority activities for private sector
development
PSD projects are too many, too small, and there
is duplication of efforts. To make programs
list of actions and responsibility
assigned
Suriname Business Forum None Medium
Suriname Business Forum &
Office of the Vice Presidency
bigger than they are now, the donor community
and stakeholders need to coordinate better and
prepare jointly financed projects
More private, less public. PSD initiatives
create a “one-stop PSD donor coordination window”—
formally taking the leadership
in PSD donor coordination
None High
should be sponsored and led by private sector
stakeholders and less by public sector actors
Office of the Vice Presidency None High
Source: author analysis and recommendation
b) Priority PSD issues—improving the business climate
Table 12: Suriname priorities for improving the business climate Issue Responsibility for leadership Technical difficulties Political friction
Medium—requires
Access to finance: identify
opportunities for adding
financial services
Access to finance: continue
improving credit ratings from
Ficht, Moody’s and Standard
& Poor’s
Re start the process to
Suriname Business Forum
Office of the Vice Presidency
banking expertise in
preparing an assessment
of current services and
options Medium—
requires reviewing very
old loans in arrears and
negotiating resolution
with debtors
None
None—the
government already
has agreed to resolve
this problem
Medium—requires
approve a new investment
law
Improving property rights—
property registration,
Office of the Vice Presidency None support from the
Cabinet of Ministers
and the President
resolution of conflict,
enforcing contracts
Lower transaction costs for
international trade—exports
and imports, customs and
port and airport infrastructure
Suriname Business Forum High Medium
Office of the Vice Presidency Medium Medium
Improving labor market
efficiency
Suriname Business Forum—
prepare an assessment and
identify quick wins to make
the labor market more flexible
Medium
High—public unions
may oppose this
initiative
Source: author analysis and recommendation
Suriname PSAR
54
c) Priority PSD issues—opening space for private sector participation
Table 13: Suriname priorities for opening space for private sector expansion Issue Responsibility for leadership Technical difficulties Political friction
Focus on innovation and
facilitating research and
development—design a
policy/approach
Focus on accelerating trade
expansion and regional
integration
Public sector reform—
procurement system that
Suriname Business Forum—
learn from other relevant
experiences
Suriname Business Forum—
complete review of
opportunities for accelerate
trade and regional integration
None None
Medium None
Medium—requires
specialized review of
facilitates participation of small
and medium enterprises
Public sector reform—
privatization of public
enterprises
Reliable infrastructure—focus
on roads to expand the
Office of the Vice Presidency
Office of the Vice Presidency
procurement
processes
Medium—requires
specialized due
diligence
Medium
High
High due to the cost
of investing in roads
agriculture horizon; focus on
ports
Office of the Vice Presidency Medium
Source: author analysis and recommendation
and the port of
Paramaribo
d) Priority PSD issues—increase participation of domestic companies in the mining sector
Table 14: Suriname priorities for increasing participation of domestic companies in the
mining sector
Issue Responsibility for
leadership
Office of the Vice
Technical difficulties Political friction
Building linkages between
the domestic private sector
and the mining sector
Identifying opportunities
for agglomeration and
specialization, including
cluster and related value
chains
Skills development
focused on the mining
Presidency and Suriname
Business Forum—bring
the mining sector into the
Forum
Suriname Business Forum
Suriname Business
Medium None
Medium—requires
specialized analysis None
High—takes time to
develop programs and
sector—Staatsoile and
ADEK have started, need
to strengthen
Forum—coordination of
efforts
train specialist, need to
identify highly paid,
highly demanded skills
None
Source: author analysis and recommendation
e) Action plan
The proposed action plan is summarized in Figure 18. The recommendations presented in this
report will be discussed in Paramaribo in November 2012 with the Suriname Business Forum
and staff of the office of the Vice President. Ownership of the process fully rests on
Suriname PSAR
55
stakeholders, therefore during the visit we expect to accomplish the full definition of the second
stage of the process as defined in the figure. It is also important to note that, in addition to the
definition of priorities, we expect that stakeholders will also agree on a plan to prioritize filling
in data and information gaps. As it is noted in this report, there are many data gaps that need to
be filled with primary data collection. The donor community may play an important role in
funding some the collection an analysis of data.
Figure 18: Suriname suggested framework to achieve reforms
Source: Guide for Private Sector Assessment Report (PSAR) in the Caribbean Countries. Version 1.2.
InterAmerican Development Bank, 2011
4) Follow-up, monitoring and evaluation
The PSAR/DMX includes the definition and creation of databases for future monitoring and
evaluation of results of both instruments. These instruments are powerful tools for the selection
of priority interventions to support PSD, as well as for the coordination of ongoing and future
programs and projects. Of particular interest is to be able to determine savings related to
improved coordination when donors jointly focus their work programs, and on results related to
more focused and larger PSD interventions. As already noted in the introduction, the DMX
guidelines note: “The contrast between what is currently being supported by the donor
community identified in the DMX, and what should be supported identified in the PSAR, is an
important input for the definition of PSD programs and projects, and for improved coordination
between government, stakeholders and the donor community.”
Therefore, the final report will include a selection of baseline indicators for future PSAR/DMX
monitoring of results as they relate to coordination and focus of PSD initiatives. Table 15 and
Table 16 provide lists of indicators to use in the final PSAR/DMX report.
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Table 15: DMX monitoring indicators
Purpose of the DMX Indicator Output Outcome
Provide an inventory of programs and projects
Number of programs and projects X
% of complete information about programs and projects in the DMX Database relative to the total number of
programs and projects
X
Facilitate access for stakeholders and
Website usage metrics (among others number of visits,
queries, frequency of updates, repeat visits)
X
representatives of the donor community to the
inventory of programs and projects
Classify programs and projects according to the
Number of programs and projects classified
X
PSAR guide
Identify duplication and overlapping initiatives to
Number and amount of programs and projects that duplicate or overlap initiatives
X
Number and amount of programs and projects that have been merged/consolidated
X improve efficient private sector support by the
donor community
Number and amount of new multi-donor efforts in areas in which duplication or overlapping had been identified
X
Identify omissions and gaps in donor supported
Number and amount of new programs and projects that have been identified as omissions and gaps in the DMX
report
X
programs that need to be filled to accelerate
private sector development Number and amount of new multi-donor efforts in areas identified as omissions and gaps in the DMX report
X
Table 16: PSAR monitoring indicators
Purpose of the PSAR Indicator Output Outcome
Overall characteristics of the economy in
relation to PSD
General macroeconomic indicators, such as total and private
sector real growth, inflation, total and private sector
employment, private sector exports as a percentage of total X
exports
Competitiveness indicators as presented in the World Economic
Forum Global Competitiveness Index and the World Bank Ease X
of Doing Business Reports
Collect primary data on businesses that provide goods and
services to multinational corporations in the energy sector— X
sales, exports, number of employees
Identification of PSD priorities Short selection of PSD priority areas that merit support from the
X
donor community
Increased focus on PSD support from the
donor community Average size and number of programs and projects X
Suriname PSAR
57
Identify duplication and overlapping
Number and amount of programs and projects that duplicate or overlap initiatives
X
Number and amount of programs and projects that have been merged/consolidated
X initiatives to improve efficient private
sector support by the donor community
Number and amount of new multi-donor efforts in areas in which duplication or overlapping had been identified
X
Identify omissions and gaps in donor
Number and amount of new programs and projects that have been identified as omissions and gaps in the DMX report
X
supported programs that need to be filled Number and amount of new multi-donor efforts in areas
identified as omissions and gaps in the DMX report
X to accelerate private sector development
It is worth noting that the complementarities between the PSAR and DMX are reflected in the
fact that both instruments use the same baselines for monitoring and evaluation when measuring
their impact on reducing duplication and overlapping, and also in the identification of omissions
and gaps in donor support. An issue that may need to be considered in the future design and
execution of PSD programs is how to resolve the problem of attribution. In general it is very
difficult to assess the impact of a project on overall outcomes because it is extremely difficult to
map out the transmission mechanism from inputs to outputs, and from there to outcomes. An
option to consider is the use of randomized controlled trials to test alternative program design
before expansion to the full set of participants. Although this is a popular option in the
development literature, there are significant problems with the design of these trials, and to the
cost, including the opportunity cost, of phasing support in priority areas. This issue goes beyond
the purpose of the PSAR/DMX exercise and should be addressed in the context of programming
future PSD support in Suriname.
5) Chapter III: Conclusions and recommendations
This Suriname Private Sector Assessment Report (SU-PSAR) presented an overall assessment of
private sector development (PSD) and recommendations for facilitating and accelerating private
investment and growth. This is a draft report, and the preliminary recommendations presented
here will be discussed with stakeholders in Paramaribo in November 2012. Priorities, as defined
by stakeholders, as well as an action plan for the execution of short-term initiatives, would be
incorporated into the final report along with a plan to prioritize filling in data and information
gaps.
It is important to clarify that important PSD initiatives are currently supported by stakeholders in
Suriname. The objective of this report is to respectfully contribute to the process to accelerate
growth and development in Suriname, not to compete or upstage any existing PSD effort. The
intention of this report is to provide stakeholders with a complementary and comprehensive
review of programs, alternatives, and options, including a preliminary proposal for priority
interventions and an action plan. If this report is to succeed in re energizing PSD support in
Suriname, it is because stakeholders take ownership of the action plan and agree on the way
forward. Therefore, this first draft is intended to energize the process and facilitate dialogue with
PSD stakeholders, and as a result to agree on a common approach to stimulate growth.
Suriname PSAR
58
Hopefully it will also secure interest and funding from the donor community for some of the
proposals that would result from the process.
The common thread of this report and its recommendations, and the overarching PSD goal in
Suriname as presented in this report, is to gradually open space for the expansion of private
sector activities. Because of the small size of the economy and its relative isolation, the
expansion of the private sector activities would require to gradually replace public enterprises
with private enterprises, and a special emphasis on export promotion and regional integration.
To gradually opening space for private sector development is not easy and would require the
design and implementation of coordinated actions in many different areas.
Recommendations in addition to those already presented in this report include those with
emphasis on the environment and indigenous peoples.
Environment and Indigenous Peoples. The SU-PSAR recommends the preparation of a report
focused on PSD and the environment with recommendations to maintain the bio diversity of
Suriname, and to provide a framework for respecting rights of Amerindians and Maroons.
Data and information gaps Suriname would benefit from filling in the following
information gaps, disaggregated by gender whenever possible:
A mapping of private sector activities by sector
A mapping of financial sector products available to the private sector—such as banking
services on factoring, secured transactions, discount of letters, long-term lending terms
and options, stock exchange bond issue conditions, credit ratings of people and
companies
A mapping of trade-related information relevant to companies in selected sectors for
selected market—such as phytosanitary and other food safety concerns, standards and
certification, trading mechanisms and timing, costs
A complete description and analysis of labor markets
A complete description and analysis of the tax system
A complete description and analysis of registries, real estate and movable property
A complete mapping of licensing requirements by sector
A complete mapping of bottlenecks for private sector development
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Annex 1: Sources of information used in this report
FIAS 2003. Review of the InvesSur Initiative to strengthen Suriname’s Investment Climate.
Foreign Investment Advisory Service, a joint a joint service of the International Finance
Corporation and The World Bank.
International Monetary Fund, 2011. 2011 Article IV Consultation, Staff Report.
U.S. Commercial Service, 2012. Doing Business in Suriname: 2012 Country Commercial Guide
for U.S. Companies.
World Bank/International Finance Corporation, 2012. Doing Business, Suriname Country
Report.
World Bank/International Finance Corporation Enterprise Survey 2010, Suriname Country
Profile. The survey was executed to 152 private sector firms excluding agriculture—66 were
small with less than 20m employees, 77 were medium size with 20-99 employees, and 9 were
considered large with more than 100 employees; 75 firms were active in manufacturing, 26 in
retail, 51 in other services. Importantly the “Enterprise Survey and Indicator Surveys, Sampling
Methodology” from August 2009 provides important information about the sampling
methodology, the number of surveys executed, and the stratification strategy.
World Economic Forum Global Competitiveness Report 2011-2012. The Global
Competitiveness Report 2011–2012 is published by the World Economic Forum within the
framework of the Centre for Global Competitiveness and Performance
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Annex 2: Suriname Donor Matrix Report (SU-DMX)