The Surinamese government has again asked its creditors for a postponement of payment. It is the second time that the government of Chan Santokhi has asked for a postponement, the recent period turned out to be too short to get the treasury in order.
The loans to be repaid include the so-called Oppenheimer bond loans. Due to financial mismanagement of ex-president Bouterse, the country has built up a national debt of more than 2.5 billion euros. That corresponds to more than 80 percent of the gross domestic product. Suriname cannot pay the interest on the bond loans, about 22 million euros.
Heavy conditions on the loans
It comes as no surprise that the government is now asking for a suspension of the payment, says NOS correspondent Nina Jurna. “The loans have been agreed under such strict conditions that the debt grows every time late payment is made. Santokhi cannot meet those conditions, and he now wants to negotiate them. rating to decrease if no repayments are made. The government is now hoping for a so-called ‘stand still’, so that the repayment will be suspended for a longer period of time and intensive negotiations can take place with the creditors. “
If the creditors approve the request, there will be a postponement for the payment of interest and principal amounts that should be paid in 2020 and 2021. In a statement from the Ministry of Finance and Planning, the government writes that it expects creditors to agree to a deferment of payment.
“If that works, it will provide more financial breathing room and take the pressure off the government,” Jurna said. And that is badly needed, because the financial situation is in Suriname is getting more and more painful. the country is struggling with inflation, government subsidies for gasoline have recently been cut and foodstuffs are becoming increasingly expensive.
Low point not yet reached
Meanwhile, Santokhi’s government is trying to get help from the International Monetary Fund (IMF). French financial consultancy Lazard has been hired to negotiate the debts and assist with the application for the IMF aid program.
But this will take time and for the time being the end of the financial problems in Suriname does not seem in sight, says Jurna. “The low point does not seem to have been reached, because it cannot be ruled out that there will be another round of austerity. And nothing is yet clear about the conditions that the IMF will set for any aid to Suriname.”
Oil as a perspective
When he took office as president of Suriname, Santokhi already warned that the country will get heavier before things get better. This has consequences for the daily lives of many Surinamese and some have regret that they voted for the new president. Still, the long-term outlook seems hopeful when the oil wells found earlier can actually be exploited.
“The expectation is that this will only pay off in five years, but the hope is that the oil will have a pull-in effect on international investors sooner,” says Jurna. “The question remains whether Santokhi can maintain the confidence of the Surinamese population, while heavy sacrifices have to be made.”
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