Suriname faces its economic realities 📉

Happy Monday!

This week we cover the economic realities of the country, from VAT to inflation to rising pensions. There were also protests for the prospected “land robbery" that has occurred in the country.

There was once again an amendment to the VAT law in Suriname which is likely to increase consumer prices. While there are also increases to the pensions in Suriname.

• The VAT law in Suriname was once again amended as Minister Stanley Raghoebarsing of Finance & Planning and several coalition members argued that the amendment was a contended that the amendment was a necessity to improve the health of the country.

• However, it received criticism from parties like NDP, NPS, and BEP which argued that it would further impoverish the population. However, the law the government contends needs to receive a positive review from the IMF in September to allow a third set of funding of $53 million to enter the economy. This is aimed at increasing government revenue.

• There has been criticism of an increase of VAT on fuel and electricity and that the government continues to tax the people instead of sectors like gold and timber.

Furthermore Inflation also continuously increases

• Inflation has shown a slight increase reaching 56.6% during 2023. Inflation has increased about 399% over the past three years which will only increase in the coming years with this trend continuing.

• The adjustment to the VAT is expected to continue to rise in inflation according to the Association of Economists in Suriname (VES) which argues that the government has avoided addressing economic problems elsewhere.

• There are calls for the government to revise its policies on subsidies to help vulnerable households instead of tax-specific products. There are further concerns as to how the government will tackle necessary wage adjustments and water and electricity hikes in the future.

• Gas cylinders in Suriname are due to see enormous increases from the 100 lbs which were previously priced at SRD 186 for years will now be priced at SRD 1000 while 28 lbs cylinders previously priced at SRD 48.50 will cost SRD 150.

• These prices will be adjusted quarterly and some will increase per quarter.

Rising Pension prices present some economic relief for older adults.

• The General Pension Fund (APF) in Suriname has implemented pension indexing, as indicated in the State Gazette published on August 7, 2023. This indexing has raised pension payments for participants from SRD 300 to a minimum of SRD 1,350, with a maximum pension basis of SRD 22,500.

• Pension indexing is a method of adjusting pension payments to account for inflation and wage increases, ensuring that retirees receive adequate support. This indexing is particularly significant in the context of the pay-as-you-go system, where active contributors support pensioners.

• Minister Bronto Somohardjo recognizes the challenging economic circumstances and highlights the government's efforts to alleviate the financial burdens faced by the population. Civil servants receive a monthly SRD 2,500 purchasing power boost, and various social benefits have seen multiple increases.

New decrees to increase the transparency in Suriname regarding public officials.

• Suriname has introduced a new decree, the "Declaration of Income and Assets and Register of Receipts," as part of its efforts to combat corruption. This decree requires public officials to provide detailed information about their income, assets, and financial holdings. This will be used to increase transparency of the public officials in the country and prevent corruption.

• The decree, based on the Anti-Corruption Act, mandates that public officials periodically submit a declaration of their income and assets to a notary of their choice. This declaration will be kept confidential and is subject to relevant laws and regulations.

• The decree also regulates the custody of these declarations, the registration of receipts with the Anti-Corruption Commission, and the process for judicial authorities to request these declarations for criminal investigations.

• The Anti-Corruption Commission, established earlier this year, will oversee the implementation of this decree and manage the Register of Receipts while ensuring the confidentiality of the provided information. The decree comes into effect upon its announcement, with the Minister of Justice and Police responsible for its execution.

Instances of “land robbery“ in Suriname have led to protests and petitions being handed to the government.

• A group of individuals, who have faced problems with their land being given to third parties without their knowledge, have submitted petitions to the National Assembly and the Office of the President in Suriname.

• The issues revolve around unprocessed requests for land lease renewals or ground rent extensions. Some individuals have initiated the renewal process well in advance, but have seen their land allocated to others while they were told their request is being processed.

• The Speaker of the National Assembly, Marinus Bee, and the Director of the Office of the President, Adjay Moensi, have acknowledged the matter and pledged to take action. There is growing frustration among those affected, with some questioning why the government has not yet resolved these issues despite previous efforts by different groups.

• There has been some positive news from the Minister of Land and Forest Management, who revoked declarations of intent and returned the land to the state. However, the group is waiting for their specific land issues to be fully resolved and threatens further action if necessary.

• President Chan Santokhi has pledged to take action against land theft and ensure that wrongfully taken land is returned to its rightful owners. He made this commitment during a speech at the launch of a national housing project stating that he has used presidential decrees to initiate the return of land to individuals who had their properties taken without their knowledge, marking the first steps against what he called "land robbery."

• He mentioned various land-related injustices, including the failure to process lease extensions or land rentals, which have led to protests and petitions. A team has been established to investigate these issues and the president will use decrees to suspend land grants that have been wrongfully obtained.

• Furthermore, he criticised those involved stating that they have done so to improve their position, leaving the government to hold the bag. And has initiated a reorganization of the Ministry of Land Policy and Forest Management for changes. He stated that there would be reports submitted to the Attorney General that could result eventually in legal action and imprisonment.