US-based credit rating agency Moody’s has downgraded the outlook of Suriname’s ‘Ba3’ government bond rating from ‘positive’ to ‘stable’.
Guyanese farmers produced a record 535,000 tons of rice in 2013, eclipsing 2012’s mark of 423,000 tons and easily staking a claim as Guyana’s top agricultural commodity. That amount not only placed Guyana among the top rice producers in the Americas, it marks the first time that a Caribbean nation has surpassed the 500,000-ton mark. Meanwhile, production in Suriname experienced its fourth consecutive year of growth, with the 151,000 tons of milled rice representing a +4% YoY increase for 2013 and a high water mark since 1995.
Suriname depends primarily on one single export product for foreign currency earnings: Gold. However, the Central Banker cautions that over-exposure to gold could be a tremendous risk for the country. The Central Bank received criticism in 2013 for the decision to sell gold, reducing the portion of the metal as part of the country’s international reserves.
Suriname’s new Minister of Finance Andy Rusland will be tasked not only with righting the nation’s finances, but also bringing a measure of stability to a post that has been in constant flux since the election of President Dési Bouterse in 2010. Since then, no fewer than three ministers have occupied the post. The first, Wonnie Boedhoe, quit four months after her appointment and was succeeded by Alelien Wijnerman and Minister of Zoning Steven Relyveld, respectively. Relyveld served as Finance Minister on an interim basis.
The $125MM highway development project from Paramaribo to Zanderij, also known as Dalian IV, is underway. The project is being developed in collaboration with the China Dalian International Group (CDIG), with financing coming from the China ExIm Bank. The complete scope of the program is estimated to unleash a total of US $235MM in public infrastructure investment.
Three months after completing its final requirement, Suriname became a full member of the Caribbean Development Bank (CDB) on December 12 at the institution’s 259th meeting of the Board of Directors. Assuming its seat as the 27th member of the institution is a landmark in Suriname’s development, indicating a greater degree of integration into CARICOM and opening the door to subsidized loans for development projects.
Drilling activities in the Guyana-Suriname Basin could be key to helping Guyana and Suriname drive down energy prices. The basin holds an estimated 15 billion barrels in oil reserves and 42 trillion cubic feet of gas. Suriname’s state-owned oil company Staatsolie indicates that the reserves will likely be found in deeper offshore areas, and will provide a cheap source of energy for western Suriname.
The results of the IMF’s Article IV consultations with Suriname in September show that the country’s macroeconomic position has improved since 2000, the result of political stability, strong policymaking and buoyant commodity prices. The outcome of these favorable conditions has been a comparatively strong GDP growth of 4.75%, falling inflation rates and upgrades from major ratings agencies.
Major developments are afoot for the mining industry in Suriname. The government has taken a 25% stake in Surgold at a cost of nearly US $400MM, A move that is considered risky by some in the Opposition. National Party of Suriname (NPS) member Runaldo Venetiaan has called for greater clarity regarding the terms of the deal and Government’s path to meeting the terms of the agreement. The Nieuw Front party, meanwhile, has raised concerns over how the investment will be made and what degree of control Suriname will have over management of the company.