Suriname heads to the polls on May 25, 2020 to elect a new 51-seat parliament, which will then vote for the country’s president. The incumbent ruling party, the National Democratic Party (Nationale Democratische Partij or NDP) and its president, Desiré Delano “Desi” Bouterse, face a daunting re-election landscape. Coronavirus has hit the country, the economy is in steep decline, and a scandal at the central bank has shaken confidence in the financial system. On top of that, President Bouterse was sentenced by a Surinamese court in November 2019 to 20 years in prison for the December 1982 executions of 15 political opponents.
In many regards, the 2020 elections are a referendum on the 74-year old Bouterse, who has played a major role in Suriname’s political development since the 1980 military coup. Whatever the outcome, the next government faces substantial challenges in dealing with corruption, the potential for a further deteriorated economy and getting caught in the crossfire of a deepening Cold War-like situation between China and the United States.
Risks to Suriname’s oil opportunity
Suriname’s place on the geoeconomic map comes from its longstanding production of bauxite, as well as gold, timber and oil (onshore with modest production). Although gold has dominated the country’s exports in recent years—as the bauxite industry wound down—the excitement generated by the discovery of large commercial quantities of oil in next door Guyana raised hopes that similar finds could be discovered in Suriname. Hope increased by the realization that both countries share the same geological formation known as the Guiana Shield. Indeed, in January 2020, a significant oil discovery was made in Suriname’s offshore Maka field, which was followed by other discoveries that appeared to confirm that the long-hoped oil boom was finally in motion.
The discovery of large commercial amounts of oil initially injected a degree of excitement about Suriname’s economic future. Suriname is a small country, with a population of around 600,000 people and a nominal GDP of $3.77 billion. Although it is considered a middle income economy by the World Bank and has less poverty than Guyana when looking at socio-economic indicators, Suriname is not an affluent country. If managed well a major inflow of petro-dollars could go a long way in improving the country’s standard of living.
However, three developments have sucked the excitement out of Suriname’s oil discoveries. First, coronavirus has resulted in a global economic shutdown that has hurt Suriname’s exports, while also affecting its domestic economy—though the virus has thus far was relatively mild compared to countries like China, the United States and Italy.
A second development was the brutal collapse of international oil prices caused by a price war between Russia and Saudi Arabia, resulting in a massive oversupply. Exacerbating the situation is the drop in demand around the world due to the pandemic. For Suriname, once eager to become a global oil producer, this means that while having commercial quantities of oil is good, it is going to take some time before it reaps the wealth of its discoveries.
The third development is the mismanagement of Suriname’s economy by the Bouterse government. The government has problems with the management of foreign currency; the state continues to play too large a role in the economy, slowing the development of a more robust private sector; and earlier this year its central bank was involved in a major scandal involving the transfer of $100 million of foreign exchange holdings to the institution, later used to import basic foodstuffs, meet monthly foreign debt requirements, and inject hard currency into the economy to stabilize a weakening Surinamese dollar. In early 2020, Central Bank President Robert van Trikt was sacked over the misappropriation of the $100 million and the government struggled to find a permanent replacement. Moreover, a corruption inquiry into the exchange holding scandal was set up and led to the jailing of van Trikt and criminal charges being leveled against Finance Minister Gillmore Hoefdraad—a close Bouterse ally suspected of forcing out the previous central bank governor for not cooperating with the Bouterse government’s plan.
A further deteriorated economy
None of the above has generated confidence in the economy. According to the International Monetary Fund (IMF), the combination of these factors is likely to contribute to a 4.9 percent contraction in the economy in 2020. The Inter-American Development Bank suggests an even gloomier outlook: the contraction could be at least comparable to the 5.6 percent decline in 2015, when global commodity prices sank. Although the IMF forecasts a 4.9 percent recovery in 2021, the prediction appears too optimistic, considering access to external financing may prove challenging—central government debt was heading toward 75 percent in 2019 and was set to climb higher in the next several years.
The deterioration in Suriname’s economic situation has raised major questions over its ability to repay its debt. Fitch, Standard & Poor’s and Moody’s all downgraded Suriname’s debt ratings, the first two agencies to default levels. Fitch downgraded Suriname on January 16, ahead of the coronavirus outbreak. It noted that the “key triggers behind the downgrade were a sharp increase in government debt, reduced financial flexibility evident in the stressed terms of recent external sovereign borrowing and declining liquidity, which increases risks to the government’s capacity to service its foreign-currency (FC) liabilities.” Moody’s and Standard & Poor’s followed with their downgrades in April.
At a time when Suriname has caught the attention of a large number of international oil companies, including Apache, Total and Kosmos, these ratings don’t produce much confidence. Worse, when the country’s relations with the West is complicated.
Caught in the cross fires
The Dutch still have an outstanding arrest warrant for Bouterse for his 1999 drug trafficking conviction in The Netherlands. The U.S. officially enjoys “a constructive partnership” with Suriname, but Washington was one of the countries that signed a letter of support to the Surinamese court that pressed ahead with sentencing Bouterse to 20 years in prison. Moreover, the U.S. holds in its prison system Bouterse’s son, Dino, who was convicted for conspiring to traffic cocaine into the United States as well as trying to offer Suriname as a base for Hezbollah.
Another point of friction is Bouterse’s willingness to deepen his country’s ties with China, putting additional pressure on the Washington-Paramaribo relationship. In fact, Bouterse was on a state visit to China seeking greater aid when he was convicted and sentenced for the 1982 murders. Rounding out the picture, Suriname has been relatively close to the Nicolás Maduro regime in Venezuela and has cordial relations with Cuba. In the case of the former, Bouterse has been accused of helping the Maduro regime beat U.S.-imposed economic sanctions by helping with the international sale of illicitly mined gold. With an increasingly Cold War approach to Caribbean affairs on the part of the Trump administration, Suriname has quietly entered Washington’s radar.
All roads lead to the general elections
But even with all eyes on Suriname and considering the mix of recession, economic mismanagement, corruption, and alleged criminality, it is questionable that the opposition will unite against the NDP and Bouterse in the May 25 elections. Seventeen parties have registered to run against the NDP, leaving an uncertain political landscape in the aftermath of the elections. If the NDP suffers heavy losses at the polls—which is a distinct possibility—the opposition will need to quickly form a coalition government to counterbalance Bouterse, something that has been done in the past.
However, defeating Bouterse won’t be an easy task. Using the system of patronage he has built up around the NDP, composed of officials who are also vulnerable to investigations into corruption, Bouterse can rally the faithful to keep him in power. Bouterse himself depends on winning the election to avoid prison.
Of the 17 parties registered, the main opposition parties are the Progressive Reform Party (VHP or Vooruitstrevende Hervormingspartij), the National Party of Suriname (Nationale Partij Suriname or NPS), Brotherhood and Unity in Politics (Broederschap en Eenheid in de Politiek or BEP), and Pertjajah Luhur. Each of these parties has some core ethnic group to which they appeal. The VHP has a strong following in the Indo-Surinamese community and is considered as center-left social democratic. The National Party was the country’s largest political party for many years and was the base for President Venetiaan’s two periods in office from 1991 to 1996 and then 2000 to 2010. It won only two seats in 2015; in 2020 it is looking to recover its national standing.
The opposition parties are running against Bouterse and his record of economic mismanagement and corruption. The VHP put out a reconstruction plan aimed at reforming the country’s health care system, the government’s management of the country’s natural resources, and strengthening the rule of law. As one VHP candidate stated, “…every time the NDP comes to power, society experiences a major downgrade. We see every time the level decreases in quality, our living standards are nothing. There is poverty in society. I also have personal principles and I am not open to working with someone who has a criminal record and has been convicted of murdering 15 innocent citizens.”
The May 25, 2020 elections loom for Suriname. Bouterse and the NDP are using everything they can to win. There are allegations that the government is using the coronavirus to limit social gatherings to 10 people, while at the same time holding larger rallies in the interior—including flying NDP members from Paramaribo.
Suriname’s elections are crucial. Considering the botched election outcome in neighboring Guyana—which have yet to be resolved—and upcoming elections elsewhere in the region, the Caribbean does not need another mishap with the democratic process. For Suriname, it is crossroads time.