- - Friday, October 10, 2014

Suriname’s economy offers many attractions for foreign investors. Steady real GDP growth (projected at a five percent annual average rate through 2016), low inflation and solid international credit ratings (Moody’s Ba3, S&P BB-) are among the headline numbers that have contributed to a recent uptick in foreign direct investment (FDI) flows from the United States, Canada and elsewhere.

Since coming into office in 2010, the Government of President Desir Delano Bouterse has been active in promoting investment opportunities as a crucial component of a broad strategy of sustainable economic development. In addition to the traditional mining sectors that have been the target of most FDI flows to date, the Government is targeting areas like agriculture, infrastructure, tourism and technology to gain share in Suriname’s revenue base.

Creating An Aligned Vision

To make the most of these opportunities requires close cooperation and alignment of vision among implementing entities. A key figure in this process is the Office of the Vice President of Suriname. Vice President Robert Ameerali was chairman of Suriname’s Chamber of Commerce before assuming his current position in 2010, and he has put his business experience to use in helping coordinate a progressive, global vision seeking partners in investment for Suriname.

“Traditionally our investment outreach was more focused on Europe, in part due to our cultural heritage,” says Vice President Ameerali. “Now the vision is more broadly global, and it is important that the Office of the President and my office work closely with all the government departments and mechanisms for example, the Ministries of Foreign Affairs, Trade & Industry and Finance, the Central Bank and the Investment and Development Corporation (IDCS) to ensure that our implementing policies and programs properly reflect this new vision.”

Mr. Ameerali notes, for example, that the gold mining projects recently negotiated with Canada’s Iamgold and Newmont Mining of the United States required considerable political coordination. “We needed to involve our parliament, the National Assembly, because of the far-reaching effect of these projects on our economy, communities and natural capital,” he says. “Getting public buy-in to the projects resulted, in my opinion, in an enhancement of the terms and conditions of the contracts, which will be to the benefit of our country.”

Natural Resources: The Growth Engine

Natural resources principally gold, bauxite and oil are the longstanding engines of Suriname’s economy and comprise the lion’s share of its exports. The Iamgold and Newmont Mining projects mentioned above are both multi-year, multi-billion dollar efforts. Another important development in the gold sector is the creation of Suriname’s first refining facility. The Kaloti Suriname Mint House is an equity joint venture between Suriname and Dubai’s Kaloti Group, one of the world’s largest precious metals refiners and trading houses, and is scheduled to open in December this year. Its 60-ton operating capacity could add more than $2 billion to Kaloti’s precious metals output and establish Suriname as a regional center of excellence for refining operations.

In the hydrocarbon sector there may be near-term opportunities emerging from the offshore exploration activities of Staatsolie N.V., the state-owned oil company. “Currently there are more than ten international investors working with Staatsolie to help bring what we believe to be a considerable amount of resources to market,” says Vice President Ameerali. Plans are also underway for an extensive enhancement of our energy supplies by means of alternative energy like solar farms, hydropower and energy from waste. “President Bouterse during his CARICOM chairmanship introduced a new vision on sharing benefits of natural resources with regional partners under the umbrella of CARICOM Enterprises,” he adds, “His [the President’s] main focus is to enhance wellbeing and welfare in the whole region by combining skills and resources.”

Beyond Mining: Investing in Sustainable Natural Resources

Mining may represent the present in terms of Suriname’s investment environment, but other sectors are driving the future. The Government’s long-term strategy is to leverage the opportunities provided in the mining sector to create and grow sustainable industries that provide for future generations while protecting the environment. “Our main message to international partners in investment is that Suriname is strongly focused on diversifying and balancing our economy,” says Vice President Ameerali.

How this long-term strategy translates to specific investment policy objectives was spelled out recently by President Bouterse. “We want to meet the needs of all segments of our population, undertake an accelerated exploitation of some of our non-renewable resources, and fulfill our duty towards preserving healthy ecosystems. Balancing these three objectives will be key,” he says.

One area of focus is agriculture. Agriculture’s contribution to Suriname’s exports is currently around 11 percent. In the near term the Government aims to double its rice exports to Brazil and increase its presence elsewhere in the region, notably the Caribbean where rice is a dietary staple. Suriname also has quota-free and duty-free access to European markets for bananas. And Suriname’s IDCS is currently seeking joint venture equity partners for development of a palm oil production and refinery operation.

Suriname’s vast rainforest interior holds many natural assets that could help broaden its economic base through investment partnerships. Eco-tourism, one of the world’s fast-growing industries, is an obvious opportunity, interlinked with abundant fresh water reserves. Suriname is home to many indigenous communities whose voices are an increasingly important part of the national discourse on economic sustainability and conservation of biodiversity.

Investing in Infrastructure

Growth and development require infrastructure, and here again Suriname is eager to engage with foreign experts in mutually beneficial public-private partnerships (PPP). One such development, a partnership with Dubai company DP World to upgrade the port of capital city Paramaribo, has resulted in that port being named as the most efficient harbor in the region. “After the Dubai investment, which increased cooperation between private and public entities, our port won the Caribbean Shipping Association (CSA) Award three years in a row,” observes Vice President Ameerali.

China is another country that sees the opportunity for infrastructure investment. Major projects for building roads and housing have been underway for several years. A Colombian cement company has invested in Suriname to supply high quality cement to meet the construction demands associated with a rapid build-out in affordable housing, one of the Government’s key development priorities.

Incentives for Investment Growth

Suriname is not alone in the region, of course, in seeking to attract profitable investment as a means to economic growth. Vice President Ameerali is well aware of the challenges involved in making the country’s presence felt on the global stage. “Our report card is improved from where it was three years ago,” he says. “But we still have work to do if we truly want to be the destination of choice for investors looking at opportunities in our region of the Americas.”

To make Suriname a more attractive investment destination, we need to focus on removing identified weaknesses, for example, by enacting more business-friendly legislation, increasing transparency, tax incentives and training initiatives for the private sector, as well as improving the ease of setting up a business in Suriname. “In 2010 it took 173 days to open a new company in Suriname,” Mr. Ameerali says. “Today it takes only 14 days.” There may still be a long road ahead, but Suriname appears to be moving in the right direction to becoming an increasingly attractive regional destination for investment.

This article was produced in conjunction with The Washington Times International Advocacy Department.

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