Suriname makes its way past turbulence in October

Happy Monday!

This past week Suriname has made strides to get past the rough month of September and October with SLM and the rising exchange rates

The 'operations' (Air Operator Certificate) license of the Surinamese Aviation Company (SLM) has been successfully extended.

It concerns operations at Schiphol, the Netherlands and Miami, USA. The recovery plan to save SLM is still standing, the president emphasized.

The process of bringing in the B737-800 in the colors of the SLM for the regional and a wide-body aircraft for the Mid-Atlantic operation can now be continued energetically but above all constructively, the SLM reports.

Surinam Airways can assure the traveling public of adequate and quality air transport. The flight operation will therefore proceed normally. Work is also continuing on the gradual upscaling of the flight frequencies, to include Miami and Amsterdam in the short term.

Suriname and France signed an agreement on Tuesday to rearrange the outstanding debts after the meeting with the Paris Club. Agreements have been made regarding the outstanding arrears up to and including 2021 and the debt burden from 2022-2024 amounting to € 17.8 million. Further agreements will be made in 2024 on the outstanding debt of approximately € 25.1 million.

The debt, previously owed to Agence Française de Development (AFD), is taken over by the Central Bank of France. The arrears will be repaid in two installments in November 2022 and 2024, while Suriname refinances and repays the debt for 2022-2024 in the period 2029 to 2041. An interest of 0.75% is charged on the amount of refinancing. In addition, Suriname will pay a small amount directly to the AFD for the period prior to the refinancing.

Since the Paris Club meeting, negotiations have continued with each member country individually until an agreement is reached. This has been worked on in recent months with various members of the Paris Club and France is the first country with which a final agreement has been reached, reports Finance & Planning.

With the refinancing, Suriname will have room to repay the debt to France over a longer period and without fines for the arrears. This will also normalize the relationship in the field of development and financial cooperation.

On the French side, the agreement was signed by Emmanuel Moulin (Director General of the Ministry of Finance of France) and on the Surinamese side by Minister Albert Ramdin (Ad Interim Minister of Finance & Planning). The minister thanked the French for their positive attitude during the negotiations, which demonstrates the good neighborliness and good cooperation that exists on many fronts. The minister also thanked Lazard Freres, the agency that assisted the Surinamese government during these negotiations.

Guyana's government has said it has formally asked Facebook and Twitter to remove "illegal maps" posted by users portraying large swaths of Guyana as Venezuelan territory — reflecting a long-standing territorial claim by the neighboring country. .

Social media has been busy for Guyana and Venezuela. Venezuela has long claimed most of Guyana's mineral-rich western Essequibo region, challenging the decision of an 1899 International Boundary Commission at a time when Guyana was a British territory. The International Court of Justice in the Netherlands has agreed to hear the case in 2020, but a ruling could take years.

The area, which covers 40% of Guyana's current territory, is said to contain billions of barrels of oil and large quantities of gas in addition to gold, diamonds and other minerals.

Venezuela has taken military action against Guyana several times as part of the dispute. In 2013, Venezuelan naval boats arrested the crew of a ship leased by US oil company Anadarko. The company was evicted from a disputed offshore area.

In 2019, a military helicopter attempted to land on an oil rig conducting research for US oil company ExxonMobil in Guyana's northwestern region. In 2015, when Exxon stated it had found a large amount of oil and gas off the coast of Guyana, Venezuela issued decrees to change its national map to include much of the coast of Guyana that it hadn't had before.

This has brought some good news for Suriname too as many international organizations, such as Google, have identified the Essequibo region and the Tigri region as officially disputed.

The Price Stabilization Platform must present a package of measures on how to stabilize the price to President Chan Santokhi within three months - with an option to extend it if more time is needed.

This Platform was founded on Friday after a long month of continuously rising prices as a result of the increasing exchange rate. The average rate quoted by the Central Bank of Suriname (CBvS) is SRD 29.15 for the US dollar and SRD 27.36 for the euro.

The main aim is to make the floating price a thing of the past and to establish a real price. To this end, some proposals will be made. The platform will meet to discuss these proposals and propose solutions.

Previously, various proposals have been made to stop the rise in the price. These proposals are being further elaborated today by the platform and cluster ministers.

Some proposals that have been made:

- Import restrictions

- Tackling fuel smuggling

- Cambios must be able to deposit their currency at the bank.

- Land conversion and thus skim off SRD

- Government bond in SRD to skim off

- An institute that will monitor the interest means and ensure that they are used for the right sectors.

- Phasing out the general subsidy and moving on to subject subsidy

- Evaluation of Open Market Operations (OMOs)

Arun Hindori, spokesperson for the Platform of Food Importers in Suriname, had previously indicated that it is important that the price stabilizes. The price rise or fluctuation creates uncertainty among importers. It is also difficult to obtain US Dollars, which makes it much more difficult to import vital goods.

When the price stabilizes, the prices in the shops will not always rise. The price is expected to stabilize with the proposals made by the platform. At what level this will happen, remains to be seen. For more than a year, the exchange rate was stable at around SRD 21 for the US dollar.