2 DEVELOPMENT PROCESS 2.1 Economic Climate 2.1. The macroeconomic environment has been largely stabilized. The economy is being prepared to face the far more open global economic environment. The need to improve conditions for domestic capital formation and to improve the environment in order to stimulate entrepreneurship while the country attracts foreign investment is also recognized. Small businesses continue to increase in numbers and provide an important growing source of employment. 2.2. Following the stabilization of the economy in 2003, which had brought a fiscal surplus, lower inflation, a narrowing of the balance-of-payments current account deficit and expansion of international reserves, economic policy for 2004-2005 was aimed at accelerating growth while safeguarding stability. 2.3. In 20042 the economy expanded at a rate of 4.6%. This was led by mining, construction and, to a lesser extent, agriculture. The economy grew at a rate of 5.7% in 2005, due to favorable export commodity prices, as well as higher inflows of foreign investment. Mining grew by 18% 1 Development Plan 2012-2016 Suriname in transition. 2 [You must be registered and logged in to see this link.] WT/TPR/G/282 • Suriname - 4 - in 2006, remained the main engine of the economic expansion. There were some developments in construction, transport and commerce. 2.4. In 2007 the Surinamese economy grew by 5.3%, led again by increasing mineral production, with the mining and quarrying sector expanding by 10.6% coupled with increasing international commodity prices. 2.5. Despite the cooling of international commodity prices in the second half of 2008, the Surinamese economy maintained growth of 5.2% in 2008. Growth was led by construction, mining, and wholesale and retail commerce, restaurants and hotels. 2.6. Suriname was one of the few Caribbean countries to post positive growth during 2009. The growth of real GDP was 2.2% due to strong performances by the oil and gold industries and continued infrastructure development. Economic policy was aimed at containing inflation through monetary channels, facilitating economic growth and export growth, particularly through fiscal channels, and maintaining sustainable debt levels. 2.7. The economy of Suriname continued to perform robustly in 2010, recording 4.4% growth, compared with 2.2% in 2009. This performance was driven by buoyant activity in the construction sector and increased government spending. 2.8. In January 2011, the Surinamese dollar was devaluated by 20% against the U.S. dollar. The parallel market has since disappeared due to devaluation of the Surinamese dollar. Government revenue in 2011 benefitted from: • the positive impact on tax collections from the devaluation; • a spike in direct taxes from the oil and gold sectors; and • higher indirect tax collections from domestic fuel products, alcohol, tobacco and casinos.
3 SECTORAL PERFORMANCE 3.1 Key Sectors 3.1.1 Agriculture 3.1. The agricultural sector in Suriname, as a former plantation colony, has always had an important place in the economy. Agriculture, livestock and fisheries form the agricultural sector and have a 10% share in GDP (Gross Domestic Product) of Suriname. The Government stands for a sustainable strategy in the agricultural areas. This strategy aims at sustainable agricultural activities. Under sustainable agricultural production is meant a production system in which the ecosystem is carefully handled, so that the next generations are assured of good conditions for the production of sufficient, healthy and safe food. 3.2. The Government has developed a policy towards converting Suriname into a major food producer and supplier of the Caribbean. The strategy is to increase the export of agricultural products by first increasing the agricultural production in a sustainable way. The effort to achieve this strategic goal is a shared responsibility between the private sector and the government. The Government has decided to create conditions to support the agricultural sector, which are necessary if we want to become a major food provider of the Caribbean. 3.3. Rice as a staple food, foreign exchange earner and job creator has an important place in the Surinamese economy. The rice sector in Suriname employs over 8,000 families. With the spin-off effect of this sub-sector, this number might even be higher. The rice sector provides approximately 35,000 tons of rice annually for local consumption and by-products are used in the production of livestock feed. Besides the demand for the local market, a great deal of the production is exported. In 2011, the rice sector produced 217.915, 96 tons of rice, of which 46.109,00 tons were destined for exportation. The challenge is to produce more value added rice products for non-traditional markets. WT/TPR/G/282 • Suriname - 5 - 3.4. Bananas are the second most important agricultural crop, mainly because of export orientation. The Banana sector produces approximately 65,000 metric tons per year, mainly for the export. The Banana Conservation Association (SBBS) has an agronomic department responsible for collecting business statistics, controlling and monitoring of diseases and pests and the introduction of new varieties and new production technologies. A challenge for this department is working on product diversification, whereby priority is given to the introduction of new crops and making use of by-products. The SBBS is Global Gap certified and thus has to maintain its competitiveness in the international market. With certification a better price is stipulated. The banana industry is in many ways important for our country in terms of production and export, as well as job-creation. 3.5. The exports of bananas and rice from Suriname benefit from preferential access under the CARIFORUM – EU Economic Partnership Agreement (EPA). 3.6. The husbandry sector produces mainly for domestic consumption and includes cattle, pigs and poultry. This sector has great potential for export. With the exception of poultry, the husbandry sector consists mainly of small businesses. A problem for the husbandry sector is the absence of a certification system, which makes the European market more difficult to access to even the most modern slaughterhouse of the Caribbean, the Argema Slaughterhouse. 3.7. The fishery sector is geographically divided into the sea, either industrial, coastal, brackish water fishery and fresh water fishery. The quantities of fish that can be caught sustainably lies above 200,000 tons per year. 3.8. The fishery sector in terms of export value of fishery products is the largest sub-sector within the agricultural branch. For the past few years, the export value has fluctuated around $40 million annually. Its annual contribution to the GDP is around 4% and it provides employment to over 6,000 people. Apart from the mining sector, the fishery sector is the most important sector regarding foreign exchange earnings for the country. The production consists of sea shrimp (highest terms of export value), sea bob shrimp, fish and shrimp farming. 3.1.2 Services 3.9. The services sector accounts for nearly 60% of the total economic activities in Suriname and is a major source of economic activity and employment. The Government is in the process of developing the services sector through the following policy: a. Stimulating entrepreneurship and promoting international cooperation in order to guarantee markets for the Surinamese businesses. b. Clustering, innovation and standardization of services. 3.10. For the development of the services sector, the Government will also: • Simplify licensing procedures and introduce a new law on licences. • Remove all unnecessary administrative barriers to entrepreneurship. • Create a more liberal and more competitive business climate. 3.1.3 Tourism 3.11. Suriname has potential in the area of Special Interest tourism services for on which there is a large demand on the international tourism market. The purpose of the Tourism policy of Suriname is to promote a greater economic contribution to the welfare and quality of life of the country. The starting point for the tourism policy is sustainable utilization of culture and nature, according to the issues surrounding the special interest tourist. The Tourist product of Suriname will mainly be nature oriented. The existing forms of Tourism can be divided in the following four areas: nature tourism, culture tourism, heritage tourism and event tourism. The Government is currently executing a tourism clustering program to strengthen the branch.
WT/TPR/G/282 • Suriname - 6 - 3.12. To promote the tourism sector the Government will adopt the following policy priorities: a. Increase in the number of tourists: • changing visa policy and tourist-friendly facilities, • image building and branding, • a steady and sustainable growth in the number of tourists to Suriname. b. Improvement of the tourism product and organization of the sector: • legislation and financing of the sector, • quality of services and products, • professionalism and quality standards within the professions in the tourism sector. c. Planning: • awareness, research and innovation within the tourism sector, • inclusion of tourism-related statistics in the national statistics. 3.1.4 Financial sector 3.13. The financial sector has an important role in promoting macro-economic stability and the degree of economic growth in the country. The government has a fiscal conservative policy. In this context, stringent cash management, as well as a responsible and balanced policy with regard to public finances will be conducted. Through the project Management and Supervision of State Finance, the efficiency in the management of public finances will be increased. 3.14. Concerning the National Debt, the Government will ensure that the National Debt is always at a legally acceptable level. 3.15. With regard to the taxation system of Suriname, it can be noted that the system needs an urgent and thorough reforming. The current taxation legislation is outdated, complex and difficult to use as an instrument for economic development. In order to substantially improve the effectiveness of the tax administration, a tax authority will be established. This authority will be responsible for the administration of tax services and custom services. 3.1.5 Monetary policy 3.16. The Monetary Authority intends to transform the character of the monetary policy from passive to active. This change is important for the Central Bank of Suriname in order to control the liquidity in the financial sector effectively and to create a basis for efficient allocation of capital in the economy. This transformation process involves the introduction of a framework in which open market policy will be the focus of monetary policy, while the cash reserve arrangement, whether or not modified, will have a supplement role. 3.17. With regard to legislation in this area, the focus is on new and adapted legislations, namely: • a Law on Supervision on the Banking and Credit system; • a Law on Supervision on Insurance Companies; • a Law on Supervision on money remitters; • a new Foreign Exchange Law. 3.18. With the new Foreign Exchange Law the Government intends to make significant changes in the foreign exchange regulations and to align the law with current social circumstances. 3.19. The first three laws intend to create instruments for the Central Bank of Suriname in order to perform its tasks in accordance with international standards and norms, and to provide the general public greater guarantee regarding the safety of the financial system and the adequate functioning of the financial markets.
4 TRADE RELATIONS 4.1. Suriname became a member of the Caribbean Community in July 1995 and this meant that a choice was made towards regional integration. Currently, Suriname’s policy decisions on trade take into consideration the country’s obligations under the Revised Treaty of Chaguaramas. Among WT/TPR/G/282 • Suriname - 9 - others, the internal barriers to trade in goods were removed and Suriname has implemented the common external tariff corresponding with the rest of CARICOM members. The main focus of the Regional integration arrangements is free trade in goods, persons, services, capital and the establishment of companies. 4.2. The Office of Trade Negotiations (OTN), formerly known as Caribbean Regional Negotiating Machinery (CRNM) gives the CARICOM members states guidance in various trade issues and negotiations. Suriname participates fully in regional Consultations and Negotiations but not without consulting the relevant national stakeholders. 4.3. Suriname has no permanent missions in Geneva, however, the Surinamese Ambassador in Paris has now been accredited as the Geneva Representative. Suriname has been a member of the WTO in 1995, and has continually sought to comply with its obligations within the limits of its human, financial, and technical resources. 4.4. Suriname has achieved under the Doha Development Agenda (DDA) Negotiations in the draft Modalities text on Agriculture the possibility to rebind its bound agricultural tariffs at the average level of the rest of CARICOM members. In terms of Non Agricultural Market Access (NAMA), Suriname falls within the category of low-binding-coverage countries and as such does not need to apply the tariff-cut formula. Instead, Suriname will have to bind its unbound NAMA tariff lines. 4.5. Suriname has initiated renegotiations of its bound tariffs under article XXVIII of the GATT in December 2011. 4.6. Suriname is currently engaged in trade negotiations within CARICOM with Canada. As part of the CARIFORUM (CARICOM and the Dominican Republic), Suriname is part of the CARIFORUM – EU Economic Partnership Agreements (EPA) which was signed in October 2008
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