PARAMARIBO, Suriname, May 18, 2020 /PRNewswire/ -- Following a thorough analysis and conversations with the trade unions, business community and other stakeholders, Minister of Finance of Suriname Gillmore Hoefdraad has presented an important economic package in support of the Surinamese businesses and families that are financially affected by the COVID-19 crisis. The package involves comprehensive initiatives to help companies and persons during this time, amongst others, the expansion of tax credits, the deferral of income tax, the hassle-free payment schedule, and more.
The intended support will be provided through the COVID Emergency Fund, established through a law passed in parliament, in which the government of Suriname pledges SRD 400 million (about USD 53.3 million), including a COVID Medical Fund, and the Production Fund of SRD 300 million (USD 40.0 million). In addition, Minister Hoefdraad has managed once more to capitalize on his outstanding relations with international organizations to benefit the country, this time as COVID-19 is affecting the economy badly.
The COVID Emergency Fund is focused on helping Surinamese families who have been financially struggling after the lockdown and dealing with the slowdown of the economy. The government will increase allowances for child support, old age pension (AOV), people with disabilities, households who were receiving 37 SRD in aid, adding a monthly allowance for pensioners, and 1,500 SRD for jobseekers or unemployed persons. The fund will also contribute 50 million SRD to the Residential Construction fund to help people who have home security issues.
"These are unprecedented times for the world and Suriname, and a holistic and transparent approach is needed," said Minster Hoefdraad, who added, "this crisis can bring fear and uncertainty, but thanks to the lessons we have learned from past experiences, and the smart decisions we have made, Suriname is prepared for the future."
The Production Fund has been established to stabilize and continue to strengthen the economy. A Commission, composed of the government, the business sector, and the trade unions, will manage the initial capital. Investment, credit, tax and export services will be provided, in particular to companies in the SME segment that are committed to the diversification of the economy through agriculture and tourism. Thus, local production and employment will be boosted and local entrepreneurship promoted.
In terms of the Medical COVID fund, thanks to the long-term relationships the Ministry of Finance has built with international community over the last three years, the World Bank and the IDB will help Suriname's health sector with USD 31.7 million, which will directly help patients and medical facilities, and be used to buy medical supplies. At the same time, Minister Hoefdraad continues to develop specific cooperation projects with the CDB, the EIB and OIC to benefit of Surinamese families, and count on the support of institutions such as the IsDB, ITFC and ICD who are helping the country's international trade and private sector.
Based on a series of smart decisions and long-term relationships built with international organizations and foreign investors, Suriname successfully overcame a deep economic recession in 2015-2016. Minister Hoefdraad led this economic transformation, with efforts from different ministries and sectors, and the Surinamese population. For instance, in 2019, the National Assembly passed four tax laws to make tax authorities and the tax system in Suriname more efficient. These reforms ensured that the Surinamese tax system complies with international tax laws and best practices, and lead to modernization, transparency and simplification, making the system significantly more efficient.
Also, in 2019, the Ministry of Finance successfully led the acquisition of the Afobaka Hydro Dam by the government of Suriname. As the only hydropower generator in the country and the largest power producer with 189MW of installed capacity, this turnover was part of the government's plan to consolidate the generation sector, creating a more accessible and efficient energy sector. Minister Hoefdraad's ability to navigate complex negotiations responsibly enabled Suriname to take this important step towards economic autonomy.
Additionally, whereas the oil sector is shrinking investments plans around the world, this sector is growing in Suriname. The country's openness for business and the abundance of high-quality resources offshore demonstrate a long-term investment that will remain a part of long-term growth plans. International oil companies reaffirmed their plans to advance exploration programs, well drilling and appraisal activity in Block 58.
"The Surinamese economy grew during three consecutive years from 2017 to 2019, and while we face a global pandemic, we have proven we can move Suriname forward and we will keep going," said Minister Hoefdraad, who then added that "since 2017, there has been a constant increase in the per capita GDP."
Other key achievements were to steer inflation in Suriname on a downward path, and build-up foreign exchange reserves, which have continued to increase through 2019. The economic environment created by the policies and sound decisions of Minister Hoefdraad and his team has been seen as favorable to international investment as well as benefit local companies and the people of Suriname.
This is why important opinion leaders have defined Suriname as a "rising Foreign Direct Investment (FDI) star." Also, the UNCTAD's 2019 World Investment Report showed that foreign direct investment inflows have increased from USD 161 million in 2017 to USD 190 million in 2018, with a current FDI stock estimated at USD 2.1 billion.
The Minister's sound fiscal management has gotten the country out of a significant economic crisis in just four years. The Minister has successfully managed the national economy with a focus on progress for generations to come. In the current global challenging times, these achievements are a particular strong point of departure for the continuation of progress and ensuring that the social and economic alleviation package will deliver important solutions. "The Ministry of Finance has demonstrated with actions and results how to put Suriname back on track; we will continue to move forward," said Minister Hoefdraad.
SOURCE Ministry of Finance Suriname