PARAMARIBO, Suriname, CMC -The deputy managing director of the International Monetary Fund (IMF), Kenji Okamura, has called on Suriname to ensure the Dutch-speaking Caribbean Community (CARICOM) country maintains the current achievements even after the Extended Fund Facility (EEF) comes to an end.
Speaking at a news conference here, Okamura told reporters that the vigorous implementation of the IMF’s economic recovery program has helped bring about the long-awaited macroeconomic stabilization in Suriname.
He said the short-term priority is to maintain the achievements even after the end of the current EFF.
Last month, the IMF announced that Suriname would receive US$53 million after the executive board of the Washington-based financial institution completed the fourth review under the EFF arrangement for Suriname.
It said that the completion of the review allowed Suriname to draw the equivalent of SDR 39.4 million bringing total purchase under the EFF arrangement to SDR 197 million or an estimated US$263 million.
In completing the review, the IMF executive board also approved Suriname’s request for an augmentation of access equivalent to SDR 46.8 million or US$ 63 million and an extension of the EFF arrangement to end March 2025.
“With this augmentation, the total access expected under the EFF arrangement is SDR 430.7 million or about US$ 577 million,” the IMF said.
Okamura told reporters that to maintain the achievements recorded to date, Suriname must follow at least four policies.
He said tight fiscal policies must be maintained first to drastically reduce debt and build economic resilience against future shocks. At the same time, Okamura said it is essential to expand social assistance programs to protect the poor and vulnerable.
“The most important issue that the government and the IMF have not yet resolved is the complete phasing out of the electricity subsidy before the program ends,” he added.
The IMF official, who was on a working visit here, said the government’s spending on growth-enhancing infrastructure projects will need to be increased to support economic recovery. At the same time, the third policy is the maintenance of the independence of the Central Bank of Suriname.
“The tight monetary policy has been crucial in reducing inflation, and this must be maintained as inflation is still high,” he said, noting that the government should continue with broader governance reforms to strengthen the anti-corruption legal framework.
The Washington-based financial institution said it would continue working closely with the authorities here to help Suriname maintain macroeconomic stability and improve growth prospects.
“I look forward to working with the President and his team to strengthen the prospects for Suriname’s economic recovery and support the country’s medium-term economic development for the Surinamese people, including future generations,” said Okamura.
The IMF mission leader, Anastasia Guscina, said she expects the parties to reach an agreement at a technical level this week.
In recent weeks, the evaluation mission in Paramaribo has been satisfied with the progress made in implementing the recovery program. The most critical issue that the government and the IMF still need to resolve is the complete phasing out of the electricity subsidy before the program ends.
The IMF board will meet in March to review progress and make a decision. Suriname could receive US$63 million under the IMF program if the assessment is positive.
Finance and Planning Minister Stanley Raghoebarsing said the program had been extended by three months until March 2025 because it had become too burdensome on society.
He told reporters that the pace of the measures to be implemented had been adjusted. Still, the extension also enables the government to meet one of the IMF’s requirements: bringing the so-called primary balance to 3.5 percent of national income.
The government said that with such a buffer, the country is considered able to pay off its debts in a sustainable manner without jeopardizing other government expenditures. For this year, the primary balance has been set at 2.7 percent.
Meanwhile, President Chandrikapersad Santokhi told reporters that the IMF plays a vital role in getting the country out of the crisis and regaining the trust of foreign partners and institutions.
“The results that we are now seeing, and everyone can see, is that the exchange rate has stabilized considerably. International reserves have been restored. We are in the final phase of debt restructuring and debt rescheduling.
“We have moved from severely negative economic growth to positive three percent this year. Inflation is significantly lower. Confidence in our currency has been restored,” Santokhi said.
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