The government of Suriname is trying to breathe new life into the country’s ailing economy through a series of measures aimed at improving the domestic business environment, including the operationalisation of a national investment promotion agency (IPA) that has been in the making since 2002.
“The government is well aware that the regulatory environment is outdated and in need of reform,” says finance minister Gillmore Hoefdraad.
“We are working with various international organisations, most notably the Inter-American Development Bank, to modernise the regulatory environment and also to improve the ease of doing business in Suriname. The reforms include eliminating unnecessary autocratic steps, updating laws to reflect best international practices, and streamlining the processes investors need to comply with to successfully establish and operate a business in Suriname.”
The $3.32bn economy, located on the north-eastern coast of South America, and which has long pinned its fortunes on the mining of bauxite for the production or aluminium, is recovering from a recession triggered by the end of the commodity boom. This hit the economy in 2014-2015 and caused growing fiscal deficits. The downturn of the commodity market even pushed US aluminium producer Alcoa to announce its departure in 2015 after a century of operations in the country, thus casting a shadow of uncertainty over the future of its local mining and refining sites, as well as the Afobaka hydroelectric dam it owns, and which powers half the country.
The government, led by former military leader Desi Bouterse, who emerged as president after the 2010 elections and has retained the post ever since, is now renewing efforts to bring in new foreign investors and diversify the economy away from the resources sectors.
"The country would warmly welcome FDI, and in particular FDI in sectors that allow for more diversification of our economy. As an example, we would welcome large-scale export agriculture investors, who could benefit from the availability of large tracts of arable land, ample water, and an efficient port to ship agricultural products abroad,” Mr Hoefdraad says.
National IPA InvestSur will now be in charge of spearheading the government’s efforts to attract investment and diversify the economy. Established by law back in 2002, it is officially becoming operational on November 16.
“At the moment, we have three main priorities,” Ike Antonius, CEO of InvestSur, tells fDi Magazine. “Institutional strengthening, investment promotion and export promotion connected to promoting linkages between foreign investors and local businesses.”
The Interamerican Development Bank (IDB) is providing a $10m loan to support the development of InvestSur, which is expected to become a fully fledged IPA with a clear mandate to promote investment and local exports. Its priorities in terms of sectors have yet to be defined and will be part of a five-year plan under development, he adds.
Suriname suffered a net ouflow of foreign investment of $87m in 2017, according to Unctad figures, and scored poorly in international business environment indicators – the World Bank’s 2018 Doing Business Report ranked the country 165th out of 190 countries for its ease of doing business. InvestSur is now being tasked with changing perceptions while the government pushes through reforms to unleash the country’s economic potential.