🪧 Cost of living protests in Suriname unresolved

Happy Monday Tuesday!

First we apologize for this late edition of De Brief.

This week we cover the cost of living protests last week and the agreements made so far, the Central Bank’s latest report of 2020, and new building developments in Suriname.

Cost of living protests in Paramaribo

• The government acknowledges the impact of necessary economic measures on purchasing power but highlights efforts to alleviate needs, including increased social benefits, raised tax-free limits, and continued subsidies in various sectors.

• Continuous and constructive consultations between the government, business community, and trade unions aim to provide assistance within feasible limits, including agreements on subsidies in health care.

• Trade union concerns about falling purchasing power were discussed in consultations, leading to a government proposal involving maintaining VAT on utilities for 8 months and adjusting tax brackets to enhance purchasing power.

• Tax brackets will be adjusted, and the tax-free limit will increase starting January 1, with ongoing efforts to work on wage compensation for various groups.

• The government have however rejected an unworkable proposal for an integral amendment of the VAT law, emphasizing the necessity of maintaining VAT on fuel for state expenditures and proposes specific measures to address union concerns regarding VAT and purchasing power.

This has calmed the protests

• Trade unions will present discussed proposals to their members, including a potential reversal of VAT on utilities and a thorough examination of the VAT law, along with proposals in the fuel sector.

• Collaborating unions have temporarily suspended their protests and are in ongoing discussions with the government.

• Although supporters are not entirely satisfied, they have given leaders the mandate to continue negotiations, despite the inability to reverse the VAT increase on fuel from 5% to 10%.

• A positive outcome includes the removal of SRD 1 per liter from the government take on fuel, effective immediately. The government take on fuel remains at SRD 3.50 per liter.

• VAT on cooking gas, electricity, and water will be reversed, and a complete revision of the VAT law is scheduled for January 2024 to ensure fairness.

• Agreements include increasing the tax-free income amount and expanding tax brackets, providing more disposable income for both civil servants and private individuals.

• While not everyone is fully satisfied, the leaders emphasize that the fight is ongoing, and discussions will continue. Civil servants can expect a purchasing power increase of SRD 4,200 in December, with a total agreed increase of SRD 5,000, with SRD 800 to be paid at a later date.

  Not all trade unions have suspended protests as much is seen as unresolved

• However collaborating trade unions have not suspended their protests, with meetings called by various unions, including one by the Syndicate for Educators 'Wi Sa Strey.’

• Union leader Michael Sallons from Public Works has asked unions to leave work and go to a secret location, indicating that trade union COL has not suspended its actions.

• Minister Stanley Raghoebarsing of Finance and Planning has not instructed oil companies to remove SRD 1 from the government take, maintaining a government take of SRD 3.50 for unleaded petrol and SRD 3.15 for diesel.

• In a letter to the president and vice president, collaborating trade unions propose immediate removal of SRD 1 per liter in government take from fuel prices, with a one-month duration and preparations for a comprehensive amendment to the Value Added Tax Amendment Act in a tripartite context.

• The letter outlines the decision on VAT, stating that continuing the implementation of VAT on fuel is not possible, and the government can provide compensation of SRD 500 as of January 1.

• The collaborating trade unions include COL, C-47, Bundling of Health Unions, Safety Unions, Military Legal Status Association, FOLS, Teachers' Syndicate, Dignitaries Security Association, Customs Association, Surinamese Police Association, Professional Training Personnel Association, and Newmont Employees Organization.

Central Bank releases 2020 report three years later

• The CBvS faced significant financial losses in 2020, attributed to issues like the cash reserve incident and adjustments to the exchange rate.

• Despite losses, the 2020 financial year ended with an operational profit of SRD 2.2 billion, mainly due to the reversal of the 2019 write-down on State receivables.

• Efforts are underway to publish the 2021 and 2022 annual reports in the coming year, with a goal to align with legal provisions and standards, particularly the International Financial Reporting Standards (IFRS).

• The 2020 report covers general, financial, and economic developments, as well as the Bank's policies during that year, with attention to events post the balance sheet date.

• Remeasurement effects from transitioning to IFRS in 2018 are recognized in the 2019 opening balance sheet, resulting in a loss of SRD 2.2 billion for the already audited 2019 financial year.

• The report delves into international and regional economic developments, national economic development, monetary and balance of payments development, state finances, financial sector supervision, and the CBvS's financial position.

New building projects announced and underway

• Public Works Minister Riad Nurmohamed provides details on the Santokhi government's national housing construction program phase 1, already underway in Reeberg.

• Phase 1 focuses on areas where individuals possess land papers but lack access to the land, and these areas are now being parceled out.

• Five additional projects, including Richelieu in Commewijne and Hazard in Nickerie, are identified for development, with the opening of infrastructure in Crepi postponed due to the president's scheduling obligations.

• Phase 2 is in preparation, seeking investors for housing projects under a public-private partnership.

• A collaboration with China involves the construction of 350 houses in Reeberg, a project initiated in 2019 as a Chinese government donation. Construction plans were approved during a recent visit by a Chinese delegation, with the project set to commence next year.

• The minister visited a prefab home factory, 'Broad Homes Suriname PC Factory,' exploring options for affordable housing. The current cost per home is at least US$30,000.

• Negotiations are ongoing with the manufacturer to potentially lower prices, making it more accessible, especially for civil servants. If an agreement is reached, dozens of houses could be set up within two weeks.

  Progress is also discussed for the Saramacca Canal Project

  

• The Saramacca Canal project, initiated in 2019 with a US$30 million loan from the World Bank, officially started this week with the signing of the contract between the government and contractors Infra International NV. and Bouw & Infra Suriname NV.

• The project, scheduled for completion by the end of May 2024, aims to rehabilitate and upgrade the Saramacca canal system to address drainage issues in Greater Paramaribo.

• Key components of the project include the rehabilitation of the existing lock and lock, the development of a master plan, and the creation of a data and asset management system to effectively manage the canal.

• Vishnu Kalloe, project manager at Infra International NV., highlighted the challenges of removing weeds and vegetation along the 25-kilometer canal, emphasizing occupational safety and the use of suitable equipment.

• Public Works Minister Riad Nurmohamed stressed the importance of canal cleaning and community awareness, thanking the World Bank for its contribution and urging active involvement of Surinamese contractors.