He calls it ‘the great wake-up call’: the anti-government protest that got out of hand on 17 February last, when the National Assembly was stormed, vandalized and looted in Paramaribo. According to Finance Minister Stanley Raghoebarsing (66), things must now change radically. It is possible to save and grow the Surinamese economy, says Raghoebarsing, who is an economist by training and who was a minister in the Venetian government twice before (2000-2010).
But a number of unpopular measures must be taken, he says. “We cannot always follow the easy path and, above all, tax wage earners and workers more or have them make cuts. A small group of wealthy and local politicians with ties to the resource sector are now overprotected. That has to stop,” he says NRC.
Stanley Raghoebarsing prefers to work in the modern building of his ministry in the north of Paramaribo. The historic, large white building of the Treasury, with wooden stairs in the hall, which is located on Independence Square, is currently being renovated.
Yet, in his own words, he is too often summoned from his office to the National Assembly to address the deep crisis. While Raghoebarsing agreed three months ago with his appointment as Minister of Finance on the condition that he could then focus on a number of things. “I said to President Santokhi: release me from many things. There are a few priorities that I want to focus on, such as exchange rates and prices, so that there will be stability in the country. I mainly wanted to focus on the introduction of VAT and the IMF process.”
But there is so much going on in Suriname that Raghoebarsing hardly gets around to his focal points. Since President Chan Santokhi and his Vice President Ronnie Brunswijk took office in 2020, the economic malaise has only gotten worse. According to recent figures, inflation is above 50 percent, and the exchange rate for the Surinamese dollar is around 35 for the euro and 34 for the US dollar. “As long as we cannot curb the exchange rates, it will have an impact on the households of Surinamese, because then prices will rise,” he says.
Santokhi took over the country from his predecessor Bouterse, who left him with a national debt of more than 4 billion US dollars. Raghoebarsing, who has worked as an adviser to the Treasury Department for the past two and a half years, had already experienced in 2000 what it means to be part of a government that takes on large debts from the previous ruler. “But this time everything was much more intense than in 2000. Then we managed to clear up the mess on our own and with the support of the Dutch guarantee funds. In 2020 we had a reservoir of debt, both internationally and nationally. We had to go to the IMF.”
In 2021, Suriname concluded an agreement with the IMF for a loan of about 570 million euros, but then the country must – as the IMF demands – implement reforms and cutbacks. “The IMF is not an easy party. It has the advantage that with the IMF on board you create international confidence. But at the IMF we are dealing with technicians who have little regard for the human side. They demand cutbacks and the elimination of subsidies that only further impoverish people. They are also demanding revenue-enhancing measures, and that is what we need to focus on now. With or without the IMF, we should make reforms anyway.”
You have come into office at a crucial time. Poverty is worsening and the protests show that people no longer accept this. How are you going to save this country?
“We have to get the money where it is now. Suriname is rich in raw materials such as gold and wood, and fishing can generate income. Income from these sectors only returns far too little to the state treasury. Concessions are in the hands of a few foreign multinationals, or a group of wealthy and local politicians. They profit from the income, but hardly pay any taxes. We will have to take a series of unpopular measures because there is enough money in Suriname, but it is tied up in the informal sector.”
Suriname is a small society: it is not difficult to find out who benefits. You will also have to deal with influential politicians. It is known that Vice President Brunswijk is active in the gold and timber sector.
“It will have to be, because the recent protests have really been a marker. Also for President Santokhi. After the unrest, Santokhi is with national hearings started and talks to citizens and various organizations. What we hear is that people also expect Suriname’s wealth to benefit the state treasury, and that makes sense. So fewer exemptions from taxes on imports and exports, and ensure that foreign currency from exports actually flows back to society and does not – as is often the case now – disappear into foreign accounts. We knew that the political constellation with Brunswijk’s ABOP would not be too easy after the elections. But we really want to make changes. That is also in the reform plan.”
What will change concretely?
Raghoebarsing takes up the reform plan, which contains a series of plans to generate more income and which cuts must be made.
“It is already stated that we will adjust concession rights for gold and wood. And funds from the fishing industry must also be taxed much more. Tax reforms need to be implemented and we have already started doing that this year. VAT has been introduced, so the more you buy, the more you pay and sales tax has been abolished. Rates on, for example, flying over aircraft have not been adjusted for forty years: that will also change. It is much more a matter of good governance and enforcement. But that also means that we have to strengthen our institutions, which have been weakened over the past ten years. It’s not sexy to purify the police or strengthen the judiciary, but it does lay good foundations to build a country with. It is just not the popular things, such as the completion of new people’s homes or shaking hands with foreign powers. It’s a huge job, but it can be done. We can still save the economy for the remaining 2.5 years that this government is elected.”
Despite his optimism, the financial situation is anything but rosy. Raghoebarsing has to make ends meet. And the cooperation with IMF has been at a standstill for months.
“Every day you have to compromise what you spend the money on: education is eager for money, but so is healthcare. Cooperation with the IMF is lagging behind. We’ve had no reviews for several quarters, we need to pick that up again. They then check whether we are doing enough with the reforms and how the cuts are going. The IMF would prefer that we raise electricity and fuel prices sharply and increase the VAT – which has just been introduced – again, but that is not feasible in this crisis. We are seriously working on downsizing the enormous and very expensive civil service, which puts a huge strain on the budget.”
Oil extraction postponed
The fulfillment of the great promise, the offshore oil reserves in Surinamese waters, possibly good for about 6 billion barrels, is also awaited. The French TotalEnergies has already postponed the signing of the so-called final investment decision (FID) a few times. Until then, it is not certain whether they will actually make the billion-dollar investment to extract the oil. It is almost certain that petrodollars will not come in before 2027.
“If it doesn’t happen, it will certainly be a big blow, but everything points to the fact that eventually there will be investment in the oil sector. Perhaps when this government took office we focused too much on it and hoped for the arrival of large investors and paid less attention to the human side. The most important thing now is that we listen to the needs of the Surinamese again and work on a fair distribution of wealth.”
A version of this article also appeared in the March 20, 2023 newspaper