PARAMARIBO, Suriname, CMC -President Chandrikapersad Santokhi Friday said that Suriname’s national debt has been reduced to US$3.1 billion but warned the country to maintain a prudent economic policy.
“Let us also not forget that if we cannot service debts, which are more than US$100 million per year, and if we do not successfully negotiate a restructuring, the creditors can claim their money and possibly go to court to enforce payment.
“ You understand that in such a situation, the effects on our national economy and the existence of Surinamese citizens would be incalculable,” Santokhi said as he delivered his annual speech during a special public meeting of the National Assembly.
Santokhi said that the national debt had been estimated at nearly four billion US dollars last year and that the country’s External Fund Facility (EFF) program with the International Monetary Fund (IMF) will continue to help implement the monetary and fiscal policies that fit within the macroeconomic framework that has been agreed.
He told legislators that the policy contributes, among other things, to keeping the exchange rate stable and maintaining inflation at a manageable level.
“With this policy, we want to keep the exchange rate stable and reduce inflation to 35 percent and lower. The government periodically evaluates the benefits of this program, on the financial-monetary parameters, and about the social effects.”
He said that the rescheduling of the national and international debt has continued into 2023 and resulted in an agreement in principle with commercial creditors and debt restructuring with India.
He said debt negotiations with China are currently at an advanced stage, and this week, a delegation from the People’s Republic of China has arrived in Suriname to continue the talks.
Santokhi said that the IMF program, including the need to “re-balance our debt portfolio,” is essential in many respects and that carrying out the measures creates trust with international financial institutions.
He said a successful debt restructuring program also means that pressure on the national budget is effectively reduced.
“A successful realignment also has positive effects on monetary parameters, including the pressure on our monetary reserve and, relatedly, the exchange rate. Importantly, the effects of successful realignments on the international financial market: our credit rating is improving, and interest rates on loans are getting lower.”
But Santokhi acknowledged that not everything has yet been achieved and not everything will be achieved within this term of office, reflecting on the ‘gradual’ phasing out of subsidies on utilities and fuel, among other things.
“Macroeconomically, this is an important condition for eliminating the imbalances in our economy. To dampen the painful effects, government policy is supported by financial provisions for the vulnerable in society.”
Santokhi said that among the positives is strengthening the purchasing power for families with an income of less than SRD 6,500 (One SRD=US$0.02 cents) and increasing financial assistance for households and people with disabilities.
“Be assured that the government will increase efficiency and take the necessary steps to improve it structurally. Tax collection is a high priority; however, based on the principle that the broadest shoulders bear the heaviest burdens,” President Santokhi is promising for 2024.
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