Suriname: Risk Assessment

Country Rating1

Rating: C

Business Climate Rating1

Rating: C

Risk Assessment2

An economy driven by raw minerals and oil

In 2014, as in 2013, activity will benefit from buoyant investment in the mining and energy sectors. Public investment will boost the repair and construction of roads, bridges, schools, housing and port installlations at Paramaribo, which should spur the mining industry. However, a pronounced fall in the gold (a third of GDP), bauxite (therefore of aluminum) and oil prices, the key locally extracted raw materials, will certainly lead to an appreciable slowdown. The contribution of forestry (tropical woods), agriculture (bananas, sugar cane, and rice), fishing (shrimps) and tourism will remain weak although these sectors employ a quarter of the workforce. The development of oil palm plantations is seen as a beacon of hope. Household consumption will suffer from VAT introduction. Inflation is expected to accelerate temporarily, while the Central Bank’s freedom of action is restricted by the dollarization of half of the money supply and the absence of a money market.

Public accounts dependent on raw materials

The public accounts are reporting a moderate deficit. Despite higher taxes on oil, alcohol, tobacco and the casinos, revenues are still very dependent on the dividends paid by the Staatsolie national oil company (30% of the total) and gold (13 %). Without these contributions, the deficit would stand at 8%. At the same time, social transfers with the introduction in 2014 of social security and infrastructure catch-up efforts will swell spending. The reduction in electricity price subsidies (2% of GDP), the consolidation of the accounts of the state-owned water and electricity enterprises, wage restraint, the introduction of VAT at 17% and the continued fight against illegal gold panning are on the agenda. The authorities are also counting on the start of operations or the extension of two gold mines in 2016. Movements in oil and gold prices will be determining factors for beefing up the currently empty sovereign fund intended to gather surplus income during periods of high mineral prices.

Public debt represents only 30% of GDP (18% of which is external). Its growth in 2013 is explained by the $500 million in bonds intended to fund a 25 to 30% public stake in the two big gold mining projects, currently being developed.

External surplus relies on commodities

The balance of trade in goods is in surplus. Those of services and revenues are in deficit due to the use of foreign personnel and dividend repatriation by foreign companies. Gold, oil and aluminum sales represent almost all exports. The trade surplus is expected to dip temporarily due to sinking raw materials prices and acceleration in investments necessitating growing imports of capital goods and services. Once these investments have been completed, the surplus should grow. The completion of the Paramaribo refinery extension by Staatsolie will enable processing of all local crude production and elimination of the deficit in refined products. Staatsolie also intends to build a sugar cane treatment plant to produce ethanol as a fuel, sugar for export and bagasse as a fuel for electricity production. In addition, gold output will rise by 2016. Increased oil production is more uncertain, despite the granting of offshore exploration permits to foreign companies. The same applies to bauxite production, affected by the replacement of the near-exhausted mines in the east of the country by the exploitation of new deposits in the west. The current account deficit will be largely covered by foreign investments and bilateral and multilateral concessional loans, shoring up the foreign exchange reserves, which represent 5 months of imports and promote the stability of the local dollar.

A president with a notorious reputation

The 2010 elections led Désiré Bouterse, ex-military dictator from 1980 to 1987, to the presidency for a 5-year term. Local legal proceedings against him and 24 other people for political assassinations committed in 1982 are currently stalled. A constitutional court, yet to be created, will decide whether the 2012 amnesty law can be applied to proceedings underway. The president was also sentenced in absentia by a Dutch court to 11 years in prison for drug trafficking. The president’s terrible reputation may put off investors, though it must be acknowledged that the government is practising a rigorous economic policy in line with the wishes of multilateral and bilateral donors. He has a comfortable parliamentary majority in a coalition.


  • Mineral resources and agricultural potential
  • Support from international donors and international investors
  • Low level of public and external debt
  • Low inflation, moderate expansion of credit and Surinamese dollar tied to the US dollar


  • Dependence on oil, gold and aluminium (95% of exports, 50% of GDP)
  • Scale of the informal economy (30% of GDP) with casinos, alluvial digging and contraband
  • Problems with the management of public companies
  • Lack of transport (roads, ports) and school infrastructure
  • Difficult business climate, ineffective justice system

1Country and Business Climate Ratings courtesy of Coface (10/2015)
2Risk Assessment and methodology courtesy of Coface (10/2015).