Angry Surinamese stormed parliament last week. Shops were looted, dozens of people were arrested. Residents of the country are fed up with the poor state of the economy.
Inflation is sky-high and therefore groceries have become increasingly expensive, but the income of the average Surinamese is not increasing. After the elections in 2020, the current president Santokhi took over a country from his predecessor Bouterse that was practically bankrupt. Santokhi promised better times.
An explanation of the state of the economy in Suriname.
Inflation
Suriname has been struggling with high inflation for a long time. Last year the average inflation rate was 52.4 percent, compared to 59.1 percent the year before. By way of comparison: inflation in the Netherlands was 10 percent last year.
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The average salary in Suriname is relatively low compared to the Netherlands. On a monthly basis, people earn an average of 2,000 to 3,000 Surinamese dollars (SRD), converted to a maximum of less than 90 euros.
In addition, the costs for Surinamese will only increase. Prices for vegetables, fruit, bread and grain, for example, have risen enormously in the past year.
Suriname is an import country. The country itself produces little for its own consumption, almost everything is imported from abroad. Imports have only increased in recent years.
Suriname exports raw materials such as wood and oil. But the main export product is gold. “Mining has an important place in our economy. Gold exports account for about 60 percent of foreign currency income. The gold mainly goes to the United Arab Emirates,” says Steven Debipersad, economist and chairman of the Association of Economists in Suriname.
It is precisely those exports that have performed less well in recent months, because the international price for gold has fallen.
Oil off the coast
Then there’s the oil. According to the Netherlands Enterprise Agency, Suriname produces an average of 17,000 barrels of oil per day. This makes Suriname a small player worldwide, the US produces 13 million a day, Saudi Arabia about 12 million.
Debipersad: “The production, processing and export of petroleum is also a source of income. However, only a small part of society has a job in this and thus enjoys this business income.”
Hopes were pinned on the oil discoveries near the coast, so that the country could produce more oil. But that process is being postponed by international oil companies. The oil probably won’t come out before 2027.
Impoverishment
Economist Dipersad says that the Surinamese economy has experienced many shocks in recent years. “The population is incredibly impoverished. GDP per capita was nearly $10,000 in 2014. Today it’s less than $5,000.”
In the Netherlands, items are collected for Suriname:
The country borrowed money for years to keep the economy going. “Government debt climbed to 146 percent of GDP at the end of 2020, putting Suriname in the top 10 of countries with a sky-high debt in that year.”
Gross domestic product (GDP) is a way of measuring the size of an economy. It is the sum of consumption by households, government, investment and exports, minus imports. The graph below shows the growth (and shrinkage) of the Surinamese economy per year, between 2010 and 2022.
Slight growth figures are expected for Suriname in the coming years. But according to the economist, these are nowhere near sufficient for the loss suffered.
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Meanwhile, it now seems a bit quieter in the country, shops and schools are open again. President Santokhi has said that “the economy should be normalized as soon as possible”.
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