South America’s smallest nation is rich in economic potential, with impressive natural resources, an investor-friendly government, and a well-educated population.
With an area of just 163,820km2, of which 95% is tropical rainforest, and a population of just over 567,000, Suriname is the smallest country in South America. It is also the youngest: it gained independence from the Netherlands in November 1975.
But with GDP per capita projected at $6,800 for 2018, Suriname is a middle-income country. Literacy rates are 95% and, though Dutch is the official language, English is widely spoken.
Unsurprisingly, given a World Bank study in 2000 made it the 17th richest country in the world, based on natural resources per capita, the economy has long been orientated towards extractive industries.
Long before independence, Suriname became one of the world’s leading producers of bauxite.
US company Alcoa began operations in the country in 1916 and ceased only in November 2015 as aluminium prices slumped. As recently as 2007, aluminium accounted for about half of the country’s exports.
Though the end of bauxite mining,combined with slumps in oil and gold prices, brought about a triple commodity shock that wiped 8% off GDP in 2015-2016, a recovery has begun, with gold the new star player.
This started with the Rosebel Gold Mine, Then Newmont’s Merian mine, which has 5.1m ounces of reserves, opened in 2016. Next to open will be Iamgold’s Saramacca mine.
Recent offshore oil discoveries in neighbouring Guyana suggest another sector could become even more important. Several international oil companies have signed production-sharing contracts to look for oil on the Suriname side of the Guiana basin.
BEYOND NATURAL RESOURCES
Suriname’s mining history has made it adept at attracting and dealing with big private companies. Ginmardo Kromosoeto, CEO of government-owned lender Surinaamse Postspaarbank, says: “Because it is a small economy, big investors do not have to jump through a small window, but can talk directly to the government and ministers.”
This should stand Suriname in good stead as it looks to diversify its economy. Agribusiness is a particular focus, and this is a task facing the new investment promotion agency, Investsur.
Of 15 nation states in the Caribbean Community (Caricom), only Suriname and Belize have a trade surplus in fruit and vegetables, suggesting there are several natural export markets.
Suriname is also advertising opportunities in agriculture, where 66,000 acres of prime agricultural land are available; its underexploited fishing areas that boast tuna and shrimp; animal breeding; and processing facilities.
With vast swathes of rainforest, logging concessions and wood-processing opportunities are available, while at the well-attended inaugural Suriname Trade & Investment Forum in Miami in September the government highlighted the possibility of a carbon credit programme.
The rainforest also presents great potential for ecotourism. “Although airlift is a challenge, flights tend to be completely full — especially during vacation times,” says Kromosoeto. “There is incredible ecotourism potential.”
One big challenge in developing new industries is infrastructure, with further construction required for highways, railways, bridges and ports, among others, but its strategic position means that Suriname has high potential.
Finally, Suriname has a competitive advantage over several of its nearby states and rival agricultural producers: it is located outside of the path of most Atlantic hurricanes.
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SURINAME BOOSTS EFFORTS AT FINANCIAL INCLUSION
A key challenge that Suriname faces in its economic development is that the roughly 40% of the population that lives in the interior of the country is disconnected from the rest of the country.
This is also the case with the financial system, says Ginmardo Kromosoeto, CEO of Surinaamse Postspaarbank (the Surinamese Post Savings Bank). The lender is therefore “supporting the government to give access to those who did not before have the option of entering the banking system”, he says.
An important initiative that government-owned Postspaarbank is promoting is the creation of debit cards, known as Moni Karta, that some Surinamese people can use to receive their social support.
“This is a financial inclusion initiative that means that even people living in areas without roads — who therefore don’t have a home address required to open a conventional bank account — can become visible in the banking sector,” says Kromosoeto.
Postspaarbank had already signed an agreement in 2016 with financial software company Euronet to provide banking services to its customers living in more remote areas, by allowing them to conduct transactions at merchant locations rather than traditional bank branches.
Postspaarbank is also looking to encourage the development of the banking system by promoting mobile banking via Union Pay credit cards. “We hope that such a big credit card company increasing its footprint in Suriname can help the drive towards a cashless company,” says Kromosoeto.