Report No. 7635-SUR Suriname A Proposal for Economic Reform August 31, 1989 Latin America and Caribbean Region FOR OFFICIAL USE ONLY Document of the Wor;d Bank This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS Currency Unit: Suriname Guilder Exchange Rate Prior to December 27, 1971 US$1.000 = Sf 1.885 Sf 1.000 = US$0.531 Exchange Rate From December 27, 1971 to Present US$1.000 = Sf 1.785 Sf 1.000 = US$0.560 This report is based on. the findings of a World Bank economic mission to Suriname in Apr.*l 1988. The mission comprised: Hilarian Codippily (Chief of Mission); Alberto Herrou-Aragon (Macroeconomist); Jeno Malatinszky (Public Enterprise Specialist); Jean Loyer (Bauxite Consultant); Johan Moes (Agriculture Sector Consultant); Thorkil Bojlund (Transport Consultant); Miss Dorla Humes (Public Investment Specialist); Miss Barbara Ossowicka (Research Assistant) and Miss Saskia Roskam (Translator and ecretary). Messrs. R. Maharaj (UNDP), I. Dessalegne (UNDP) and R. Rodriguez (UNDP) also assisted the mission in compiling and reviewing the technical assistance needs of the country. The draft version of the report was sent to the Government in March 1989 and was updated and discussed with the Government in June 1989. FOR OFFICIAL USE ONLY TITLE : SURINAME - A PROPOSAL FOR ECONOMIC REFORM COUNTRY : SURINAME REGION : LATIN AMERICA AND THE CARIBBEAN SECTOR : COUNTRY ECONOMIC REPORT : TYPE CLASSIF NUMBER LANGUAGES CEM RESTRICTED 7635-SUR ENGLISH PUBDATE : August 31, 1989 ABSTRACT : The report reviews the performance of the Surinamese economy over the past five years--a period characterized by deteriorating economic performance owing to external and domestic factors. Real GDP has declined at an average rate of about 3.5% per year in 1982-87, and unemployment reachad 34% in 1987 from 21% in 1982. Meanwhile, the overall fiscal deficit (before grants) climbed steadily from about 15% of GDP in 1982 to about 27% in 1987, cau&ing heavy borrowing from the Central Bank. The Central Government current account deficit stood at 25% of GDP in 1987. The balance of payments position weakened severely during the past five years, causing cutbacks on imports and resulting in shortages of inputs, spare Varts and machinery needed in the economy. The report highlights the importrnce of creating a macroeconomic policy framework conducive to sustained export-led economic growth through the use of a consistent and adequate set of exchange rate, fiscal, wage and monetary policies aimed at reducing external and internal imbalances. To become fully effective, these policies would need to be complemented by removing restrictions and impediments to trade. Sectoral issues and recommendations relate broadly to: the need to restore competitiveness in the bauxite sector; improve agricultural performance through a phasing-out of price controls; reduce state intervention and provide a major role to the private sector; and rehabilitate transport and other infrastructure. The report reviews the proposed public sector investment program amounting to about US$207 million during 1988-90. The report also discusses the possibilities of recovery and longer term economic growth provided the key demand management and supply-side issues are addressed. This document has a restricted distribution and may be used by recipients only In the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. SURINAME TABLE OF CONTENTS Page No. COUNTRY DATA EXECUTIVE SUMMARY MAP (IBRD 3718R1) SUMMARY AND CONCLUSIONS............................ ....... ..... I. BACKGROUND.............................................1 A. Overview .........................................1 Country Background...............................1 The Political System.............................1 Challenges Ahead................................. 2 B. Recent Economic Performance........................ 2 Economic Growth................................... 2 Public Sector Finances............. ............. 3 Money and Credit................................. 4 Prices and Wages................................. 4 Balance of Payments.............................. 5 Internal and External Balances................... 6 II. MACROECONOMIC ADJUSTHENT AND RECOVERY PROGRAM.......... 8 A. Government Objectives.............................. 8 B. Current Macroeconomic Issues and Priorities........ 8 The Incentive System............................. 8 The Fiscal Deficit............................... 10 Unemployment..................................... 12 C. Macroeconomic Policies............................. 13 Incentive Policy................................. 13 Fiscal Policy.................................... 14 Wage and Employment Policy....................... 15 III. SELECTED SECTORAL ISSUES AND POLICIES.................. 16 A. The Bauxite Sector.................................. 16 Competitiveness.................................. 16 Investment....................................... 17 Labor Costs...................................... 17 Taxation......................................... 18 Restructuring of the Sector...................... 18 B. The Agricultural Sector............................. 20 Background....................................... 20 Rice............................................. 21 Fishing.......................................... 21 Forestry........................................ 22 Sectoral Issues.................................. 22 Table of Contents (Continued) Page No. C. Thq Transport Sector................................ 23 Roads............................................ 23 Water Transport.................................. 25 Air Transport.................................... 26 IV. PUBLIC SECTOR ENTERPRISES.............................. 27 A. The Role of State Enterprises....................... 27 Organization of the Sector....................... 27 Financial Performance............................ 29 B. Reform Program for the Sector....................... 30 C. Issues on the Size and Scope of the Sector.......... 30 Restructuring.................................... 31 Management.................................... 32 V. THE PUBLIC SECTOR IVESTMENT PROGRAM................... 34 A. Background.......................................... 34 Overview......................................... 34 Development Strategy............................. 34 B. Composition of the PSIP ............................ 35 C. Financing........................................... 36 D. Implementation...................................... 37 E. Technical Assistance................................ 38 VI. MEDIUM TERM GRON AND BALANCE OF PAYMENTS PROSPECTS... 39 A. Overview............................................ 39 B. The Marginal Real Growth Scenario................... 39 C. The Rising Real Growth Scenario..................... 40 ANNEX I: PROJECTIONS 1988-95 ANNEX II: ANALYTICAL NOTES ANNEX III: PUBLIC SECTOR INVESTMENT PROGRAM ANNEX IV: TECHNICAL COOPERATION PROGRAMS STATISTICAL APPENDIX Page 1 of 2 SIAME - COUNTRY DATA AREA POPULATION DENSITY 163,820 km2 0.405 mIlIIon (mid-1987) 2.6 per km2 Rate of Growth: 1.1 (1977-87) POPULATION CHARACTERISTICS (1987) HEALTH (1978) Crude Birth Rate (per 1,000) 32.0 Population per Physician 1,680 Crude Death Rate (per 1,000) 7.3 Population per Hospital Bed 160 INCOME DISTRIBUTION (1986) ACCESS TO ELECTRICITY (1965) S of National Income, Highest quintile 42.0 U of Population 51 Lowest quintile 9.3 NUTRITION (1979) EDUCATION (1978) Calorie Intake as % of Requirements 119 Adult Literacy Rate 66 Per Capita Protein Intake (grems per day) 683 Primary School Enrollment (%) 103 GNP PER CAPITA .N 1988: US12,450 G/ GROSS DOMESTIC PRODUCT IN 1987 ANNUAL RATE OF GROWTH (X, CONSTANT PRICES) US$ Million _M%} 1975-83 1983-87 GNP at Market Prices 1,086 100.0 0.3 -3.3 Gross Domestic Investment 71 6.5 -9.8 -22.4 Gross Domestic Savings 56 5.2 Current Account Balance -8.2 -0.8 F%ports of Goods, NFS 869 83.9 -5.2 0.4 Imports of Goods, NFS 883 35.3 0.6 -15.5 OUTPUT LABOR FORCE AND PRODUCTIVITY IN 1987 Value Added Labor Force (1987) V. A. Per Worker USI Million - '000 % USi % Agriculture 69.4 9.9 14.9 16.7 4,657.7 69.6 Mining ,4.7 5.0 3.6 4.0 9,688.9 123.3 Other Industry 6/ 128.0 18.8 12.1 18.6 10,578.5 135.3 Services 466.7 66.8 68.8 65.8 7,937.1 101.5 Total/Average 698.8 100.0 89.4 100.0 7,816.6 100.0 GOVERNMENT FINANCE Central Government Sf Millions U of GDP 1984 1988 1987 1984 1986 1987 Current Receipts 499.6 505.9 627.8 28.6 28.0 27.2 Current Expenditure 741.3 937.4 1010.9 42.5 51.8 52.1 Current Surplus -241.7 -431.5 -483.1 -13.9 -23.8 -24.9 Capital Expenditures 83.3 39.0 36.7 4.8 2.2 1.9 o/ World Bank Atlas methodology. .. = not available. b/ Includes construction. . - not applicable. Page 2 of 2 SURINAE - CONTRY DATA MONEY, CREDIT AND PRICES 1982 1988 1984 1985 1988 1987 ------(SF Million; Outstanding On December 81)------ Money and Quasi Money 882.6 978.0 1,105.6 1,446.2 1,788.4 2,809.9 Bank Credit to Public Sector 187.5 477.8 804.0 1,150.7 1,607.9 2,095.8 Bank Credit to Private Sector 624.1 648.8 627.5 689.8 727.6 778.0 ----------Percentage or Index Numbers---------- Money and Quasi Money as 9 of GDP 47.7 54.8 88.4 8.1 102.1 119.1 Consumer Price Index (4/68 - 8/89=100) 282.0 295.8 806.0 889.2 402.6 817.8 Annual Percentage Changes in: Consumer Price Index 7.2 4.8 8.7 10.9 18.7 68.4 Dank Credit to Public Sector 127.8 184.9 68.4 48.1 89.7 80.8 Bank Credit to Private Sector 14.2 8.2 -2.5 9.9 6.5 6.2 SALANCE OF PAYMENTS MERCHANDISE EXPORTS (AVERAGE 1984-1987) 1986 1986 1987 US$ Million (S) ----(USi million)---- Export of Goods, NFS 380.2 864.8 868.6 Bauxite 28.5 8.4 Import of Goods, NFS 422.1 885.6 888.1 Alumina 187.8 55.2 Resource Cap (Deficit--) -41.9 -21.8 -14.6 Aluminum 28.0 8.8 Rice 87.1 11.0 Bananas 10.0 8.0 Factor Payments (net) -8.6 0.8 0.4 Shrimp 86.9 10.9 Current Transfers (net) -4.0 -0.5 6.0 Processed Wood 2.e #%.8 Balance on Current Accou..t -52.6 -21.2 -8.2 Raw Lumber 0.7 0.2 Others 7.4 2.2 888.5 100.0 Public Capital 16.2 4.6 6.2 (M & T Disbursements) 16.1 2.7 8.0 (M A LT Amortizations) 4.0 1.7 2.1 (Grants) 4.1 8.5 4.8 EXTERNAL DEBT, DECEMBER 81, 1987 us$ Mil. Other Capital 8/ 17.8 -18.0 -12.4 Public Debt, Incl.Ouaranteed bT 7-.3 Non-Guaranteed Private Debt .. Change in Reserves -18.6 -29.7 -15.4 Total Outstandinp A Disbursed 73.3 Gross Reserves (end-year) 70.0 72.2 69.0 RATE OF EXCHANGE DEBT SERVICE RATIO FOR 1987b/ c/ Since December 1971 USS1.00 = Sf 1.78E Public Debt, Incl.Quaranteed 6.7 Sf 81.00 = US30.680 Non-Guaranteed Private Debt .. Total Outstanding A Disbursed 6.7 e/ Includes financial capital, errors and omissions, and changes in arrears. 6/ Medium- and long-term debt. Does not include arrears. c/ Ratio of Debt Service obligation to Exports of Goods and Non-Factor Services. EXECUTIVE SUMMARY 1. This report reviews economic developments in Suriname since 1982, focusing on external shocks and domestic factors which have negattvely affected economic performance. Real GDP dropped by about a fifth from 1982 to 1987; over one-third of the labor force is currently unemployed, and living standards have suffered accorAingly. The fundamental macroeconomic malaise affecting the Slirinamese economy has been the breakdown of the incentive system, the oversized and inefficient public sector, and a rise in real wages substantially beyond the economy's capacity to sustain it. Taking into account the currently depressed domestic economic situation, the report recommends the rapid implementation of an adjustment program to halt the economic deterioration and place the economy on a path of sustainable, longer-term growth. 2. The report's medium-term scenario envisages achievement and maintenance of viable financial balances and reasonable real economic growth starting with 2.0% in 1989 and averaging about 3.02 per year between 1989 and 1993. It also envisages improvement of living standards with consumption per capita rising by about 1Z per year on average during this period. To attain this scenario, S-ariname should create a macroeconomic policy framework conducive to sustainable economic growth through the use of a consistent and adequate mix of exchange rate, fiscal, monetary and wage policies and adopt adequate sectoral policies related to the bauxite, agriculture and transport sectors and to the public enterprises. These policies, summarized below, are elaborated in Chapters II, III and IV of the report. 3. The main macroeconomic measures suggested include: a. Increase of the rerl exchange rate,1 which together with the adoption of a flexible exchange rate policy, would contribute to the achievement of both internal and external balance. b. Phasing-out price controls on basic consumer goods (i.e. sugar, cooking oil, rice, milk and beef), services (i.e. housing and electricity rates) and timber products; removing exchange controls and providing automatic access to foreign exchange once an adequate real exchange rate adjustment is undertaken, and phasing-out import and export licensing tc strengthen the incentive framework and obtain a sustainable supply response from the productive sectors. c. Implementation of the Investment Code for local and foreign investment; specification in the Investment Code of areas for foreign investors, incentives applicable and investment guarantees; development of export infrastructure and an institutional framework to support foreign investment; streamlining entry and exit requirements; intensive investment promotion activities abroad; and the elimination of external arrears. d. Achievement of a surplus in the current account of the central government operations and reduction of the overall fiscal deficit to an 1/ The exchange rate is defined as units of domestic currency per unit of foreign currency. -2- amount not greater than net foreign financing, together with the elimination of access to Central Bank credit, are needed to achieve internal balance. e. Increase of revenues and reduction of current expenditure through direct measures. The measures proposed below are designed to eliminate the current account deficit (25Z of GDP in 1987) and achieve a small surplus. The Government has estimated that a sales tax of 5% (exempting food and medicines) would yield about 1% of GDP in revenues. Other measures include augmenting the effective rate of taxation by convertiag specific taxes into ad valorem ones (e.g. vehicln license tax, import duty on petroleum -- 0.3Z of GDP); replacing quantitative restrictions with tariffs oa imports once the real exchange rate has been adjusted (an exchange rate adjustment of 100% together with an import tariff of 40X, would yield additional revenues equivalent to 4.2% of GDP if applied to E.A. imports (based on foreign exchange acquired from the parallel market] and an additional 6.61 of GDP if applied to imports financed by Dutch Government aid [US$90 million]); increasing taxes on fuels and beverages (0.3? of GDP); and strengthening revenue assessment and collection procedures (0.3? of GDP). f. The 1989 budget proposals do indicate some positive steps on the revenue side along the lines mentioned above. Current revenue for 1989 is estimated at Sf780 million, which is achieveable, up from Sf620 million in 1988. The revenue increase is predicated on sharp increases in income taxe., import duties, excise taxes on beer and tobacco and a new excise tax on soft drinks. Current expenditure, on the other hand, is optimistically estimated at Sf1050 millioa--lower than S1100 in 1988. If steps are taken to maintain these revenue and ei.penditure estimates, the resulting current account deficit would amount to Sf270 million or 14? of GDP, which, is substantially lower than the 1987 deficit equivalent to 25? of GDP. Nevertheless, further steps in revernue raising combined with expenditure reduction measures mentioned above are needed in order to eliminate the current account deficits as rapidly as possible. g. Wage restraint, combined with a freeze on hiring and the gradual reduction in the size of the civil sQrvice, would be the key to controlling current expenditures in the public sector and substantially reduce the current account deficit in the Government's operations (a 25? cut in the payroll and in goods and services would yield savings equivalent to 10% of GDP). h. Introduction of cost recovery in the health and education sectors, the users of w'ich currently receive subsidies equivalent to nearly one-half of central government transfers (equivalent to about 2.5? of GDP in 1989), and water charges for irrigation facilities. i. Improvement of the operations and financial situation of the public enterprises by: raising real tariffs of public services; substantially reducing the burden of financing social services and consumer subsidies; (i.e. sugar. timber, rice); increasing both the accountability and the freedom of action of managers; and introducing an efficient monitoring performance system. Given its managerial and financial constraints, it is recommended that the Government leave the role of establishing new businesses to the private sector, and rapidly divest -3- selected public enterprises, improve the efficiency of other enterprises (e.g. electricity) and only invest in infrastructure to support private sector-led economic growth. j. Elimination of legal restrictions on private sector employment decisions. The improved incentive framework would encourage increases in domestic production and exports, and the private sector's demand for labcr. 4. For the main sectors of the economy, the following policies and investment priorities are proposed: a. In bauxite: negotiations with t4e industry should be brought to an equitable and rapid conclusion (on which future costs and productivity gains should also be predicated) by addressing 'he sources of the loss in competitiveness. It is essential that alumina continue to be produced at the maximum present level of 1.5 million tons per year. Aluminum production should be increased to the maximum level compatible with the availability of hydropower -- 30,000 tons per year. The difference in cost of production in Suriname and that of its most efficient competitors needs to be narrowed further by US$20 a ton. This will require the permanent replacement of the counterproductive levy system and bauxite tax by taxation based on earnings and treating the two companies in the sector equally in the long-term. Such reforms will reduce the Government'e tax income and the net foreign exchange earnings from the sector in the short-term. However, in the absence of these reforms, the alternative is the continued involution of the sector and considerably more adverse effects on government revenues and the balance of payments within the next two years. b. In agriculture, restructuring the sector will require addressing the issues of export competitiveness, price controls, import licensing, unavailability of the most essential inputs and spare parts, and the high cost of labor, together with those related to technological aspects such as crop varieties, mechanization and organization of production. In the area of divestment, those enterprises which have performed worst should be the prime candidates for privatization. In this connectiov, the issue of the debt position of the enterprises most immediately concerned should also be addressed. Divesting these enterprises would first require their net worth to become positive. c. In transportation, there is a need to organize maintenance activities and also to develop an appropriate incentive mechanism to carry out this function with a smaller staff. Some of the immediate project actions include the reconstruction of the existing wharves at Nickerie and the rehabilitation of handling facilities at the Wageningen rice processing unit. It is also necessary to re-establish the functioning of the sluices of Arawarra, Uitkijk, and Doorsteek, and especially to clean the Saramacca Canal in order to avoid damage to river vessels and loss of cargo. Consideration should be given to opening the rice transportation monopoly, where rice is transported abroad by Scheepvaart Maatschappij Suriname N ' (SMS), to private sector competition. The Government should also consiJ:' fully privatizing public transportation, together with the maintenance garage and ferry services, in order to end losses on their operations. -4- The Public Sector Investment Program (PSIP) 5. With the re-establishment of Dutch Government aid during the second half of 1988, about US$450 million in grants are expected to flow into the country in the medium-term. However, in the absence of a viable macroeconomic framework and a judicious utilization of these resources, the country still may find itself worse off over the medium-term than it is today. This makes it all the more important for the country to undertake the necessary adjustments of the economy. 6. The 1988-90 PSIP emphasizes rehabilitation at.d expansion of infrastructure for the productive sectors. Its composition is appropriate for the present. However, the PSIP would need to be expanded over the medium term to ensure economic recovery and sustained growth and would require increased external financing. The PSIP is pre' -:A4 to rise from 2% of GDP in 1987 to about 8Z by 1990. The success of 'orts to intensify project implementation during this period will depend :he availability of adequate supplies of equipment, spare parts and in . Among the projects proposed is the Multi-purpose Corantijn Proje (MCP), including a distribution system to irrigate water to rice polders in the Nickerie District; a Banana Expansion Program to bring 1,500 hectares into production and an Oil Palm Project which would increase the cultivated area to 5,000 hectares from 3,500 hectares currently under cultivation but not harvested. The project also includes the construction of an oil refinery. Both the Banana Expansion Program and the Oil Palm Project should be undertaken by the private sector. 7. Special priority should be given to ranking projects on the basis of economic criteria and to securing the necessary technical assistance for their implementation. In the short-term, those projects which were suspended or delayed because of inadequate financing and have the potential to generate or save foreign exchonge and which have an adequate rate of return should be given priority. This should be supported by technical assistance to complete them and strengthen institutional and managerial capability. SUMMARY AND CONCLUSIONS 1. This report reviews economic developments in Suriname since 1982, focusing on external shocks and domestic factors which have negatively affected economic performance. Real GDP has dropped by about a fifth from 1982 to 1987; over one-third of the labor force is currently unemployed, and living standards have suffered accordingly. The fundamental macroeconomic malaise affecting the Surinamese economy has been the breakdown of the incentive system, the oversized and inefficient public sector, and a rise in real wages substantially beyond the economy's capacity to sastain it. Taking into account the currently depressed domestic economic situation, the report recommends the rapid implementation of an adjustment program to halt the economic deterioration and place the economy on a path of sustainable, longer-term growth. ii. In January 1988 a new Government assumed office in Suriname. In its recent economic policy statements the Government has declared that its objectives are economic recovery and sustained growth, rising per capita consumption, and declining unemployment and inflation. The Government has indicated its intention to carry out a comprehensive program of economic reforms to attain these goals. The need for such a program is urgent given the severity of Suriname's economic situation. iii. The country's rate of economic performance has deteriorated steadl1y since 1982. Initially, the economy was affected by lower world demand for bauxite and bauxite derivatives, which account for over 702 of Suriname's export earnings. In January 1983 Dutp Government aid, which accounted for 34% of government revenues, amounted to 33% of exports and equalled 10% of GDP, was suspended. Rather than adopting policios to offset the impact of these external shocks over the long term, the Government persistently pursued counter-cyclical fiscal and monetary policies and allowed the real exchange rate to appreciate substantially. P.eal GDP declined at an average of about 3.5% per year in 1982-87 and the rate of unemployment climbed to about 342 in 1987 from 21% in 1982. As revenues stagnated the Government increased current expenditure. Consequently, central government savings became increasingly negative, falling from -42 of GDP in 1982 to -25% of GDP in 1987. The overall fiscal deficit (before grancs) climbed steadily from the equivalent of about 15% of GDP in 1982 to 272 in 1987. Virtually all of the deficit was financed through credit from the Central Bank. As a result inflation, as measured by changes in the consumer price index (CPI), rose to about 532 in 1987 from 72 in 1982. iv. The enormous fiscal deficit and attendant money creation, together with a 952 appreciation of the official real exchange rate by 1987 coalpared to its 1980 level, exerted severe pressures on the balance of payments. Shrinking export volumes and falling prices of bauxite and its derivatives, together with declining volumes of rice, wood and lumber exports lowered he value of exports of goods and nonfactor services from 51% of GDP in 1982 to 34Z in 1987. In response to the growing shortages of foreign exchange, the authorities introduced tight import licensing procelures and other foreign exchange controls. This led to a reduction in foreign exchange inflows to the Central Bank, in imports and a dearth of indispensable inputs, spare parts, and machinery needed for domestic - ii- production. The persistent scarcity of foreign exchange caused the parallel market rate to vary from about three to five times the official rate. The balance of payments deficits were initially financed by the utilization of international reserves and, since 1984, by the accumulation of external payments arrears. The country's public and publicly guaranteed external debt climbed from 2.6% of GDP in 1983 to 15% in 1987. Likewise, debt service obligations (principal and interest) rose steadily, from under 3% of the value of exports of goods and nonfactor services in 1985 to about 7% in 1987, and amounted to about 82 of central government revenues in 1987. At the end of 1987, the stock of external payments arrears reached US$87.5 million or Rpproximately 8% of GDP. Macroeconomic Issues v. The foremost task the Government confronts is the creation of a macroeconomic policy framework conducive to sustainable economic growth through the use of a consistent and adequate mix of exchange rate, fiscal, monetary and wage policies. An increase of the real exchange rate, together with the adoption of a flexible exchange rate policy, would contribute to the achievement of both internal and external balance. It would help formalize a considerable amount of transactions currently taking place in the parallel market. Central government revenues would increase via trade taxes, provided a substantial depreciation of the currency is achieved in real terms. The allocative efficiency of imports would improve through a more realistic pricing of foreign exchange, and the administrative need for and burden of import and export licensing would be eliminated. In the bauxite sector, gains in competitiveness would require a major reduction in real wages, achleveable only by a real depreciation of the currency. Non-bauxite exports would receive a major boost. In agriculture, incentives to expand production and exports would be dependent largely on a realistic exchange rate. vi. The incentive framework needs to be strengthened substantially to enable the private sector to operate efficiently. This requires implementation of the Investment Code for local and foreign investment; phasing-out price controls on basic ionsumer goods (i.e. sugar, cooking oil, rice, milk and beef), services (i.e. housing and electricity rates) and timber products; reforms of labor legislation which presently restrict private sector employment decisions; removing exchange controls and providing automatic access to foreign exchange once an adequate real exchange rate adjustment is undertaken; and phasing out import and export licensing. Unless these actions are undertaken rapidly, a sustainable supply response from the productive sectors is not likely to be realized. vii. The fiscal imbalance reflects to some extent the declining trend in central government revenues, especially taxes on domestic and international trade, but more importantly, a steady increase in the Cintral Government's own current expenditure, and in transfers to public enterprises. The current account of the central government operations needs to turn into a surplus and the overall fiscal deficit needs to be reduced to an amount not greater than foreign financing; within this framework, access to Central Bank credit should be eliminated. Immediate steps need to be adopted to increase revenue and reduce current expenditure through direct measures, as well as through the exchange rate adjustment -iii- that will expand government income. The measures proposed below are designed co eliminate the current account deficit (25% of GDP in 1987) and achieve a small surplus. The Government has estimated that a sales tax of 5% (exempting food and medicines) would rield about 1Z of GDP in revenues. Other measures include augmenting the effective rate of taxation by converting specific taxes into ad valorem ones (e.g. vehicle license tax, and duty on petroleum imports--0.3% of GDP), replacing quantitative restrictions with tariffs on imports once the real exchange rate has been adjusted (an exchange rate adjustment of 100%, together wit an import tariff of 40X would yield additional revenues equivalent to 4.2% of GDP if applied to "E.A. imports" [based on foreign exchange acquired from the parallel market) and an additional 6.6Z of GDP if a;plied to imports financed with Dutch Government aid (US$90 million]), and increasing taxes on fuels and beverages (0.3% of GDP). Revenue assessment and collection procedures need to be strengthened (0.32 of GDP). Together, these revenue measures would yield an equivalent of 12.7% of GDP. On the expenditure side, since the wage bill has grown rapidly and now comprises nearly one- half of central government current expenditure, wage restraint is the key to controlling current expenditure in the public sector. This should be combined with a freeze on hiring and the gradual reduction in the size of the civil service (a 25% cut in the payroll and in goods and services would yield savings equivalent to 10% of GDP). Another area which warrants early attention is the introduction of cost recovery in the health and education services, the users of which currently receive subsidies equivalent to nearly one-half of central government transfers (equivalent to about 2.5% of GDP in 1987), and water charges for the use of irrigation facilities. Thus, the total impact of the above-mentioned revenue measures and expenditure cuts would amount to over 25% of GDP--required to eliminate the current account deficit and produce a small surplus. viii. The overall performance of public enterprises, has been poor. Several (i.e. petroleum, shrimp processing, telecommunications) are profitable and efficiently managed, but the majority sustain huge losses and cannot operate without enormous government subsidies (i.e. sugar, timber, rice production). The losses of public enterprises :at least Sf40 million per year) and consequent government subsidies (about Sf25-30 million per year) constitute a severe burden on %;he budget, equivalent to 5% of GDP in 1987. These losses arise primarily from inadequate pricing policies, lack of operational autonomy, poor management, high real wages and inadequate maintenance. The Government could improve their operation and finances by: increasing real tariffs of public services; substantially reducing the burden of financing social services and consumer subsidies (i.e. sugar, timber, rice); increasing both the accountability and the freedom of action of managers; and introducing an efficient performance monitoring system. Given its managerial and financial constraints, it is recommended that the Government leave the role of establishing new businesses to the private sector and rapidly divest selected public enterprises, improve the efficiency of other enterprises (e.g. electricity) and only invest in infrastructure to support private sector led economic growth. Sectoral Issues ix. In the bauxite sector, export value decreased from US$425 million in 1980 to US$206 million in 1987 as a result of the collapse in the volume - iv- of exports from 1.7 million metric tons in 1980 to ^.3 million in 1987 and to a lesser extent owing to a price decline. In addition, this deterioration resulted in decreases of 50% in the sector's contribution to GDP, 42% in terms of balance of payments current account receipts impact, 85% of total current revenues and 52% in export revenues. The main factor responsible for the long-term deterioration of the industry has been its lack of competitiveness in world markets arising from increasing labor costs, a counterproductive tax system and the real appreciation of the currency. Government negotiations on the former issue with the two subsidiaries of foreign companies which operate in the sector began in 1985 and have not yet been fully concluded. Despite progress made in the suspension of the bauxite levy, capital investment by the producing companies in 85-87 dropped to less than one fifth of its 1980-82 level in real terms. La.,r costs are extremely high for the region and for the country. No mine development work took place during 1983-88. The lack of investment has affected the sector's efficiency through higher mining costs, the postponement of significant cost reduction programs, higher consumption of caustic soda and higher production costs in the refinery- related operations because of the use of marginal ore. However, in 1988, the companies decided to propose investment flows mainly owing to very favorable prices for their alumina and aluminum exports as a result of a tight situation in the world market for these commodities. The industry will be facing a potential production crisis in 1990-92 if these investments are not continued, as the abovementioned effects will be felt more strongly and further worsen the country's competitive position. x. While bauxite exports are not expected to resume in the foreseeable future for technical and economic reasons, it is essential that alumina continue to be pr6duced at the maximum present level of 1.6 million tons per year. Aluminum production has to be resumed and rapidly brought to the maximum level compatible with the availability of cheap hydropower, (30,000 tons per year), without which it is uneconomical. Maximum alumina output cannot be secured unless the product is rendered competitive. Hence, negotiations with the industry should be brought to an equitable and rapid conclusion (on which future cost and productivity gains should also be predicated), by addressing the sources of the loss of competitiveness. xi. The difference in the cost of production in Suriname and that of its most efficient competitors has narrowed considerably in the past two years, in part because of lower input costs owing to declining international petroleum prices. But the cost difference is still at least US$20 per metric ton of alumina, or 18% of operating costs. Apart from a significant reduction in real wages (to be competitive internationally, the industry requires at least a 200% devaluation and wage restraint--see paragraphs 3.10 - 3.13), further reduction of the costs of production in Suriname will depend on the permanent replacement of the counterproductive levy system and bauxite tax by taxation based on earnings and treating the two companies in the sector equally in the long term. Such reforms will reduce the Government's tax income and the net foreign exchange earnings from the sector in the short term. In the absence of these reforms, the alternative is the continued involution of the sector and considerably more adverse effects on government revenues and the balance of payments within the next two years. -v- xii. The agriculture sector is in large part export oriented. Parastatals are the sole producers of sugar, bananas and palm oil, and play an important role throughout the sector. SML-Wageningen (rice) and Bruynzeel (timber) are among the largest enterprises in the country. The severe financial crisis following the political events of 1982 was reflected in the stagnation of rice production until 1986; in both 1987 and 1988 production declined. Timber production was influenced by the hostilities that started in 1986. Tt.e same is true of palm oil, whereas sugar production also has been severely curtailed because of the high production costs. Livestock, fisheries and other crops have stagnated. xiii. The greatest constraint to agricultural growth is the lack of ccmpetitiveness resulting from high real wages. This, together with the price controls and cumbersome import licensing procedures, unavailability of the most essential inputs and spare parts, overshadow other problems in the parastatals. Most of these parastatals have never been profitable operations. When government transfers had to be curtailed in the train of the severe fiscal crisis, their equipment could not be maintained leading to highly inefficient operations. Agriculture also has began to suffer from a marked infrastructure deterioration consequent upon the depression of public investment and maintenance expenditures. xiv. Restructuring the sector will require addressing the above issues, together with those related to technological aspects such as crop varieties, mechanization and organization of production. To pursue the option of divestment, its exact modality should be determined depending on the specific circumstances of each enterprise. Obvious ones for early privatization in agriculture are SML Wageningen, Bruynzeel and Marienburg (sugar). The first two are regarded as potentially profitable after restructuring; in the case of the sugar estate, diversification into other export crops is needed. Successful diversification, however, would depend on securing and disseminating export marketing information to producers. For SML Wageningen a detailed study focusing on these areas has been prepared at the Government's initiative. xv. Another issue that needs to be addressed is the debt position of the enterprises most immediately concerned. Should these debts remain on the books, no fresh start can be made on a sound basis while maintaining the parastatal form. Turning over these enterprises to the private sector would require their net worth to become positive. xvi. The transport sector faces serious difficulties. Over the past five years the infrastructure has deteriorated to a state where reconstruction is urgently needed. All means of transport (road, air, river) suffer from lack of spare parts. Spare parts are often obtained from inoperative vehicles. Although some new vehicles are being imported for private transportation, their efficient operation is constrained by the lack of technical personnel to provide adequate maintenance services. Inadequate cost recovery in the sector and the consequent lack of maintenance on roads, wharves, sluices, canals and port facilities has reduced the efficiency of transport operators, leadl.ng to excessive transport and handling costs, and the loss of foreign exchange earnings from rice and other exports. Availability of public transportation also has been reduced because of the lack of operative equipment. -vi- xvii. Most of the road, wharf and canal infrastructure are built with local materials (e.g. forestry products), and reconstruction work could be undertaken by local labor with existing equipment. Many of these problems would never have reached the serious and costly stage they have, had maintenance been carried out on a regular basis. Unclear responsibilities, insufficient budgets, poor decisions, shortage of foreign exchange and lack of priorities have played a major role in the deterioration of the infrastructure. In addition, poor management and lack of coordination of resources have emerged as major impediments to infrastructural development. The management and coordination of maintenance activities are very weak. The Government needs to carry out a rationalization process in the respective departments in order to organize maintenance activities. It also needs to develop an appropriate incentive mechanism to carry out this function with a smaller staff. xviii. Some of the immediate actions which need to be undertaken include the reconstruction of the existing wharves at Nickerie and the rehabilitation of handlimg facilities at the Wageningen rice processing unit. Preliminary investigations indicate that dredging of the mouth of the Nickerie River is feasible and profitable and should be given serious consideration. At the same time, it is necessary to re-establish the functioning of the sluices at Arawarra, Uitkijk and Doorsteek and especially to clean the Saramacca Canal in order to avoid damage to river vessels and loss of cargo. Consideration should be given to opening the rice transportation monopoly, where rice is transported abroad by Scheepvaart Maatschappij Suriname N. V. (SMS), to private sector competition. xix. Public transportation is at present carried out primarily by private license holders. Few public owned buses are operative and a limited number are rented. In order to end government losses on unprofitable public transportation, these services should be privatized. An early decision on this matter could avoid public investment in new buses, which currently is under consideration. The maintenance garage for government vehicles, buses, dumptrucks and heavy equipment suffers from inefficiency and inadequate organization. Ferry services are inefficiently run by SMS at unprofitable fares. Privatization of these services also should be considered by the Government. The Public Sector Investment Program (PSIP) xx. With the re-establishment of Dutch Government aid during the second half of 1988, about US$450 million in grants over five years are expected to flow into the country. However, in the absence of a viable macroeconomic framework and a judicious utilization of these resources, the country still may find itself worse off over the medium-term than it is today. This makes it all the more important for the country to undertake the necessary adjustments of the economy. xxi. The 1988-90 PSIP emphasizes rehabilitation and expansion of infrastructure for the productive sectors. Its composition is appropriate for the present. However, it would need to be expanded over the medium term to ensure economic recovery and sustained growth and would require increased external financing. The PSIP is projected to rise from 22 of GDP in 1987 to about 8% by 1990. The success of efforts to intensify project -vii- implementation during this period will depend on the availability of adequate supplies of equipment, spare parts and inputs. Among the projects proposed is the Multi-purpose Corantijn Project (MCP), including a distribution system to irrigate water to rice polders in the Nickerie District; a Banana Expansion Program to bring 1,500 hectares into production and an Oil Palm Project which would increase the cultivated area to 5,000 hectares from 3,500 hectares currently under cultivation but not harvested. The project also includes the construction of an oil refinery. Both the Banana Expansion Program and the Oil Palm Project should be undertaken by the private sector. xxii. Other proposed projects include continuation of programs to increase production and efficiency. For example, the construction of a 70-meter concrete pier (intluding storage facilities) at Nickerie to facilitate the loading and shipping of rice and bananas. A major project in the mining sector concerns the exploration of the Gros Rosebel Operations including the industrial recovery of gold. Some technical issues including the gold content of the ore have yet to be resolved before the feasibility of the project can be assessed. Another major proposal is the Tambaredjo Slow-Speed Diesel Generatois (co-generation) Project which would increase energy generation by using crude oil. xxiii. The major constraint to the successful undertaking of the PSIP will be the availability of foreign financing and relatedly, a sound portfolio of economically and financially viable projects. An average of Sf.88 million per year in external assistance is required mainly to cover foreign exchange costs, of which only 56% of the financing has been identified so far. Given the poor performance of the parastatals, the public sector will be unable to meet the local financing requirement averaging Sf35 million per year unless drastic measures are taken to increase its savings. xxiv. Special priority should be given to ranking projects in the PSIP and to securing the necessary technical assistance for their implementation. The former will require the use of a relevant set of economic criteria for project evaluation and selection. In the short-term, the criteria should give priority to those projects which were suspended or delayed because of inadequate financing and have the potential to generate or save foreign exchange; nonviable projects on the other hand should be eliminated. This should be supported by a technical assistance package which provides the manpower resources required to complete these projects and strengthen the institutional and managerial capability to undertake the proposed investments. Medium-Term Growth Prospects xxV. The country's medium-term growth prospects will be influenced largely by the extent to and speed with which key macroeconomic and sectoral issues are addressed. These relate to: (a) the creation of a viable macroeconomic policy framework through a consistent set of exchange rate, fiscal, monetary, and wage policies; (b) removal of price controls, import and export licensing procedures and other quantitative trade restrictions; (b) agreement with the private bauxite companies to restore competitiveness; (c) rapid implementation of a divestment program; (d) improving public enterprise performance through greater autonomy and price -viii- adjustments; (e) incentive schemes for agricultural and early completion of irrigation works; (f) rehabilitating transport and other infrastructure; and (g) execution of an adequate PSIP. xxvi. Real GDP growth is projected under two alternative scenarios. The first scenario, of marginal real growth, assumes a growth of real GDP of 0.42 per year on average during 1989-93 in the absence of a coherent program of policy reform. The second scenario, of rising real growth, assumes a gradual increase in annual real r7P growth, starting with 2.0% in 1989 and averaging 3.0% per year during the same period. xxvii. In the marginal real growth scenario, per capita consumption is projected to decline by 1.9Z per year on average during the 1989-93 period. The balance of payments position could be sustained only through a cut-back on imports. The economic decline eventually would lead to lower levels of donor support and affect the import capacity necessary to permit growth in the economy. The balance of payments current account deficit is projected to be 12 of GDP at the end of the period while the debt service ratio is projected to reach 5.52 in 1993. Similarly, there would be a reduction in investment: the investment to GDP ratio is projected to average 6.32 per year compared with an estimated 102 in 1988. xxviii. The rising real growth scenario reflects the adoption of policies to halt the decline in real GDP and create conditions for gradually rising real GDP growth, starting with 22 in 1989 and averaging 32 between 1989 and 1993. Achievement of this scenario is predicated on the rapid implementation of the recommendations in paragraph xxv above. Total investment is projected to increase from 102 of GDP in 1988 to about 13.5% in 1993. Living standards would be expected to improve with per capita consumption rising by about 1% per year on average during the projection period. The current account deficit of the balance of payments is projected to increase to about 2.32 of GDP in 1991 because of the projected increase in imports of raw materials and equipment urgently needed to increase capacity utilization. Beyond 1991, the current account deficit is projected to fall further as investments in previous years would be substantially completed and would yield higher output and exports. The current account deficit is projected to be financed largely from grants (US$450 million) from the Netherlands and concessional loans during 1989-93. The debt service ratio is projected to decline to 2.92 in 1993. xxix. A major problem related to the country's creditworthiness is the accumulation of external payment arrears. The rising real growth scenario assumes that these arrears would be gradually eliminated by 1993. The marginal real growth scenario, on the other hand, assumes the gradual elimination of arrears by 1995. In the absence of the actual implementation of an appropriate macroeconomic framework to address the issues highlighted in this report, Suriname cannot be considered creditworthy for Bank lending. Chapter I BACKGROUND A. Overview Country Background 1.1 Situated in the northern coastal belt of South America, Suriname covers an area of 163,820 sq. km. and is bordered by Brazil on the south, Guyana on the west and French Guyana on the east. The country has a population of 405,000, of which two-thirds live in the capital city of Paramaribo and its environs. The country is endowed with a good natural resource base - substantial bauxite reserves, vast hydroelectric power potential, large tracts of arable land and forest reserves. Agriculture accounts for 10% of GDP, industry including bauxite processing, for 23% and the other two-thirds by services. Suriname's GNP per capita stood at US$2,450 in 1988. The Political System 1.2 Suriname obtained its independence from The Netherlands in 1975. But during the two previous decades, the population exercised self- government in partnership with The Netherlands. It thus, had acquired considerable civic experience in government by 1975. A multi-party system of parliamentary democracy had governed the country during the pre- and immediate post-independence periods. The major political parties tended to be organized along ethnic lines. In contrast to other South American countries, the population is composed mainly of: Hindustanis, Creoles, Javanese, and Bushnegroes combined with a minority of Amerindians, Chinese and others. Superimposed on this ethnic composition is a strong Dutch influence, evident in culture, education, consumption habits and standards of public services, engineering and construction. Dutch is the country's official language although English is widely spoken along with local languages. 1.3 Suriname received substantial amounts of concessional assistance from The Netherlands both before and after independence. The flow of assistance in the form of grants expanded to an average of about US$93 million during 1978-82. In 1982 it accounted for 34Z of government revenues, was equivalent to 33Z of the value of exports and equalled 10% of GDP. Soon after independence the country was governed by a coalition of several parties. However, increasing dissatisfaction with slow progress in resolving social inequities and domestic turmoil culminated in a military takeover in February 1980. Following the political events of December 1982, the Dutch Government suspended its concessional assistance. After nearly eight years of military rule, Sur*.name regained democracy in November 1987 through free elections. It is now governed by a national coalition of the three main political parties (the Front of Democracy and Development) which holds 40 of the 51 seats in the National Assembly. -2- Challenges Ahead 1.4 The new administration, which reflects the aspirations of the main ethnic groups as well as the interests of labor unions and the private sector, has expressed its commitment to a program of economic reconstruction, social justice and consolidation of the democratic system. However, the new Government has inherited an economy which has deteriorated steadily since 1982, a human resource base affected by a massive brain drain, and dislocations in the production structure caused by insurgent activity in Eastern Suriname. Whilst coping with these problems, the Government also is faced with the expectations of the Surinamese population, who have a strong desire for peace, stability and a steady improvement in their living standards. To meet these challenges, the Government has outlined a development strategy consisting of three phases: (i) an "Urgency Phase", to halt economic aeterioration through external assistance to meet the country's urgent import needs; (ii) a "Recovery Phase" designed to generate significant economic growth as well as some reductions in macroeconomic imbalances; and (iii) a "Long-Term Growth Phase" designed to achieve sustainable economic growth, elimination of macroeconomic imbalances and a significant improvement of the country's production base. Rapid implementation of this strategy, especially the "Long-Term Growth Phase", is all the more necessary considering the serious economic crisis experienced since 1982, particularly because of the urgent need to eliminate macroeconomic imbalances and improve the incentive system. B. Recent Economic Performance Economic Growth 1.5 Suriname's economic performance has deteriorated steadily since 1982. Real GDP dropped at an average rate of 3.5% per year in 1982-87, partly owing to external shocks but largely because of internal factors. Rather than adopting policies to offset the impact of external shocks over the long-term, the Government persistently pursued counter-cyclical fiscal and monetary policies and allowed the real exchange rate to appreciate substantially. The bauxite sector's contribution to GDP fell by about 20% during 1982-86, mostly because of the loss of competitiveness arising from increasing labor costs and the appreciation of the currency. The increase in the producticn and export of alumina and bauxite since 1982 failed to offset the overall world price decline for these commodities. This was followed by a precipitous drop in output of nearly 30% in 1987 as a result of the insurgent activity that forced the closure of the Moengo bauxite mines for 10 months. The alumina refinery was closed for one month during 1987 after its power supply lines were blown up. Agricultural output fell in 1982-83 following a drop in rice production (which accounts for 60% of agricultural output) but recovered in 1984-85 as the planted area increased. In 1986, however, agricultural output declined as rice, sugar cane and palm oil production fell sharply. The main palm oil plantation in the eastern part of the country had to be abandoned since 1986 owing to insurgent activity. Other subsectors, banana, shrimp and meat production, did not experience major output fluctuations during 1982-87. In the services sector, value added in commerce, restaurants and the hotels - 3 - subsector experienced a steady decline, but was compensated for by increases in transport and communications and public services. 1.6 Investment declined steadily during 1982-87. Initially, the drop in investment was triggered by the suspension of Dutch Government aid in 1982. Although some of the projects cortinued to be financed from government resources for a few years, the deterioration of public finances precluded the possibility of maintaining an adequate public investment level. Private sector investment also declined as state intervention in the economy increased and the incentives to invest and produce were eroded. The resumption of Dutch Government aid during the second half of 1988 has, however, enhanced the possibility of restoring investment to levels commensurate with economic growth. Table 1.1: GDP GROWTH AND INVESTMENT, 1982-87 (in percent) 1982 1983 1984 1985 1986 1987 GDP Growth -5.9 -4.1 -2.4 -0.9 -2.9 -7.8 Agriculture -3.1 -8.8 3.8 1.5 -1.5 4.7 Bauxite Sector -31.0 -22.1 11.7 10.3 11.3 -16.4 Services -0.3 -9.4 -6.9 2.0 -0.1 -4.7 Investment (Z of GDP) 27.4 15.4 11.6 7.9 5.2 6.5 Source: Statistical Appendix Tables 2.2 and 2.3, and General Bureau of Statistics, Suriname. Public Sector Finances 1.7 Central government finances deteriorated rapidly during 1982-87. While current revenue stagnated at around 28% of GDP (see Table 1.2), current expenditure increased steadily from 31% of GDP in 1982 to 52% in 1987. This expansion mainly reflected rapid wage increases (government wages rose from 17% of GDP in 1982 to 252 in 1987), and also increases in current transfers to public enterprises. Consequently, the Central Government's current account deficit increased dramatically from -4% of GDP in 1982 to -25% in 1987, which precluded maintaining the level of development expenditures achieved prior to 1982 (see Statistical Appendix Table 5.1). Despite major cutbacks in development expenditures, the overall deficit (before grants) as a proportion of GDP almost doubled during 1982-87, increasing from 15% of GDP in 1982 to 27% in 1987. Virtually all of the deficit was financed by creation of Central Bank credit. Table 1.2: CENTRAL GOVERNMENT FINANCES, 1982-87 (Z of GDP at market prices) 1982 1983 1984 1985 1986 1987 Current Revenues 27.6 28.7 28.6 27.5 28.0 27.2 Current Expenditure 31.4 40.9 42.5 46.2 51.8 52.1 Current Surplus -3.8 -12.2 -13.9 -18.7 -23.8 -24.9 Overall Balance -14.5 -18.0 -18.6 -21.8 -26.0 -26.8 Source: Statistical Appendix Table 5.1. Money and Credit 1.8 During 1982-86, the money supply (money and quasi-money)1 grew 16% per year on average, or far in excess of nominal GDP growth, which averaged 1Z per year. As a percentage of GDP, it reached an all time high of 102% in 1986, compared to 48% in 1982. The extraordinary growth of the money supply was generated by the expansion of credit to the public sector. In 1983, the money supply increased by 11%, despite a 32Z increase in credit to the public sector, because of the depletion of international reserves. With the exhaustion of Central Bank international reserves in 1984, monetary imbalances were eliminated through higher inflation and an increase in external arrears. Since 1985, the growth in the money supply has reflected the Central Bank's financing of the fiscal deficit. Prices and Wages 1.9 Fueled by Central Bank borrowing to finance the fiscal deficit, inflation, as measured by movements in the consumer price index (CPI), rose to 532 in 1987 from 192 in 1986. Inflationary expectations, ignited by the persistent excess creation of credit to finance public sector operations, also contributed to the acceleration of inflation, as real cash balances fell by almost 16% Ouring 1987 while the price of foreign exchange in the parallel market rose sharply. Central Bank accommodation of the enormous public sector deficit pushed up infLation both directly and indirectly, through the parallel foreign exchange market. The Government authorized imports of goods (E. A. imports) if the importer had available the foreign exchange to finance them or could acquire it in the parallel market. When the growth of the money supply and expectations pushed up the price of foreign exchange in the parallel market, the domestic price of such imports also rose.2 1/ The money supply, broadly defined, includes currency in circulation and demand, time and savings deposits at the end of the year. 2/ An econometric analysis shows that the fiscal deficit began affecting the domestic rate of inflation after 1984, following the Government's decision to allow E. A. imports. The analysis also shows that, before 1984, the domestic rate of inflation tended to reflect the US inflation rate (See Annex II). - 5 - 1.10 After rising by about 342 during 1980-82, average gross labor cost increases have moderated reflecting job protection concerns by trade unions. Nevertheless, real wages have been increasing in mining and manufacturing. Although in 1987 economy-wide average real wages were only 61% of their 1980 level (when deflated by the consumer price index), the real average cost of labor in mining was 542 higher in 1987 than in 1580, and 30% higher in manufacturing.3 Balance of Payments 1.11 The enormous fiscal deficit and attendant money creation, together with a 95% real appreciation of the currency by 1987 compared to its 1980 level, exerted severe pressures on the balance of payments. Both the value of exports and of imports as a percentage of GDP declined sharply in 1982-87 (see Table 1.3 below). Exports of goods and nonfactor services declined from 51% of GDP in 1982 to 342 of GDP in 1987. This in part reflected the difficult wor)d market conditions which prevailed for Suriname's main exports--bauxite, alumina and aluminum--which account for 70% of the country's export earnings. However, the large contractions in the volume of these exports far outstripped the decrease in world demand during that period. They resulted mostly from the competitive pressures which squeezed out high cost producers like Suriname. Rice exports recovered sharply in 1985, after being curtailed by excessive rainfall in 1984, but declined in 1986 and 1987 because of Suriname's inability to compete in world markets. Shrimp and banana exports performed well, but not enough to offset the declining volumes of wood and lumber exports (see Statistical Annex Table 3.3). 1.12 In response to the growing shortages of foreign exchange, the authorities tightened import licensing and other foreign exchange controls. These measures led to a further reduction of foreign exchange inflows to the Central Bank, and a dearth of indispensable inputs, spare parts and machinery needed for domestic production. The persistent scarcity of foreign exchange caused the parallel market rate to vary from about three to five times the official rate. The balance of payments deficits were initially financed by the utilization of international reserves and, since 1984, by the accumulation of external payment ar'ears. 1.13 The country's public and publicly guaranteed external debt climbed from 2.6% of GDP in 1983 to 15% in 1987. Likewise, debt service oblgations (principal and interest) rose steadily, from under 1% of the values of exports of goods and nonfactor serv.Lces in 1982 to about 72 in 1987, and amounted to about 82 of central government revenues in 1987. At the end of 1987, the stock of external payments arrears reached US$87.5 million, or approximately 82 of GDP. 31 The real average cost of labor in each economic sector was estimated by deflating the nominal average cost by the corresponding GDP deflator (for the rice subsector the average cost of labor in the service sector was used instead because of the lack of data). -6- Internal and External Balances 1.14 Table 1.3 below relates Suriname's external current account balance to its internal balances. In l9C2-87, the falling deficit in the external current account balance reflected the sharp drop in private investment and the decline in public investment following the suspension of Dutch Government aid. Declining investment caused capital goods imports, particularly machinery, electrical g,ods, transport equipment, and industrial inputs to drop significantly. However, lower external imbalances were achieved at the cost of rising inflation produced by large public sector imbalances. In 1987, for example, the current account deficit was only about 12 of GDP while the fiscal deficit reached 27Z of GDP. TABLE 1.3: KEY MACROECONOMIC BALANCES, 1982-87 (% of GDP at current market prices) 1982 1983 1984 1985 1986 1987 Current Account Balance -14.8 -17.6 -8.5 -5.4 -2.1 -0.8 Exports of GNFS 51.3 45.0 43.8 39.0 35.9 33.9 Imports of GNFS -66.6 -60.7 -51.3 -43.3 -38.0 -35.3 Net Factor Services 0.7 -1.1 -0.2 -0.7 0.1 0.0 Private Transfers -0.3 -0.8 -0.8 -0.4 -0.1 0.6 Equals: Central Government Balance -14.5 -18.0 -18.6 -21.8 -26.0 -26.8 Revenues 27.6 28.7 28.6 27.5 28.0 27.2 Current Expenditure 31.4 40.9 42.5 46.2 51.8 52.1 Capital Expenditure 10.7 5.8 4.8 3.1 2.2 1.9 Plus: Private Sector Balance -0.3 0.4 10.1 16.4 23.9 26.0 Privat' Investment 17.4 8.7 6.8 4.7 3.0 4.9 Private Savings 17.1 9.1 16.9 21.1 26.9 30.9 Source: Statistical Appendix Tables 2.3 and 3.1. 1.15 Private investment was significantly discouraged by the Government's policies despite a significant increase in forced private savings. Had Suriname's exports remained competitive, the higher volume of exports would have generated an increased private sector investment demand. Higher private sector investment would have led not only to rising levels of output and employment, but also would have achieved permanent increases in the country's capital stock and in its rate of return. In the absence of such investments and of satisfactory real growth of the economy, a small external balance resulted at the cost of ..aerutilization of the country's -7- productive potential. Attainment of satisfactory real growth of the economy while achieving sustainable internal and external balances is, however, a formidable task given the magnitude of the imbalances. It will depend on an adequate choice of policies needed to raise the level and productivity of investment and improve the country's ability to penetrate extra-regional markets. CHAPTER II MACROECONOMIC ADJUSTMENT AND RECOVERY PROGRAM A. Government Objectives 2.1 The new Government which assumed office in January 1988 has, in its recent economic policy statements, declared that its objectives are economic recovery and sustained growth, rising per capita consumption, and declining unemployment and inflation. The private sector is to be assigned a major role ia the economy. The Government has indicated its intention to carry out a comprehensive program of macroeconomic reforms to attain these goals. In particular, it has indicated its intention to reduce the fiscal and balance of payments deficits and public debt to sustainable levels, and to reduce state intervention in the economy. The need for such a program is urgent given the severity of Suriname's economic crisis. However, as outlined below, the Government's overall strategy needs to be translated into specific and timely policy actions. B. Current Macroeconomic Issues and Priorities The Incentive System 2.1 The fundamental macroeconomic malaise affecting the Surinamese economy has been the breakdown of the incentive system. Given the large overvaluation of the Surinamese guilder and a parallel exchange rate at over five times the official rate, the private sector has no incentive to earn and/or surrender foreign exchange to the Government. The overvaluation of the currency has encouraged underinvoicing oi exports and holding of expert proceeds abroad. It also has encouraged the misallocation of resources as the Government introduced severe import controls to bring the demand for foreign exchange to levels commensurate with the reduced capacity to generate foreign exchange. To deal with the increasing scarcity of imported goods the Government introduced a system of "E. A. imports". "E. A. imports" pressure on the parallel market rate as a result of an increased demand for foreign exchange was one of the factors responsible for the rise in inflation during 1987. 2.3 Price controls Lave discouraged domestic production and increased the demand for imports, augmented subsidies and the overall fiscal deficit, and encouraged the inefficient operation of services and the scarcity of foreign exchange. Since December 1984, the Ministry of Transportation, Trade and Industry has fixed prices or profit margins on a number of goods and services. Althoagh the system of E.A. imports liberalized prices on imported items, price controls on a number of domestically produced goods have remained and have further dampened producer incentives. Producer prices in the directly productive sectors of the economy have declined since 1982 (see Table 2.1). The controls have their main impact on basic consumer goods (i.e. sugar, cooking oil, rice, milk, and beef) and services (i.e. housing and electricity rates). Commodity items not available at offici&lly fixed prices are imported by the Government and distributed to consumers using coupons (consumer cards). Price controls have contributed - 9 - to ..ncrease the fiscal deficit: subsidies to sugar and milk amounted to about 1% of GDP in 1986; prices for timber products have not changed in seven years and add to the losses of the state timber company. Price controls also have created an excess import demand for basic consumer items and foreign exchange. In the housing area, the regulations state that prices can only be adjusted when landlords charge more than 72 of their property value as annual rent. Table 2.1: KEY INDICATORS OF INCENTIVES, 1982-87 Indicators 1982 1983 1984 1985 1986 1987 Real Exchange Rate (1980=100)al 117.1 123.6 131.9 145.9 144.3 195.4 Real Exchange Rate (Z change) - 6.5 8.3 14.0 -1.6 51.1 Average Labor Cost (Z change) 14.5 5.3 4.9 4.4 1.5 -0.5 Consumer Price Index (Z change) 7.2 4.3 3.7 10.9 18.7 53.4 Peal Interest Rate (deposits) -2.2 0.5 0.1 -11.0 -21.2 -32.9 Relative Prices (1980=100) Agriculture (rice) b/ 92.3 88.5 92.1 80.3 73.9 n.a. Mining c/ 117.4 99.6 64.4 60.8 44.1 65.0 Manufacturing di 82.4 77.0 75.2 67.7 72.5 77.9 a/ The real exchange rate is the nominal exchange rate (Sf per US$) multiplied by the ratio of foreign to domestic price levels. b/ Farm gate price deflated by the average labor cost in the services sector. c/ GDP deflator for mining deflated by the average labor cost in the bauxite sector. d/ GDP deflator for manufacturing deflated by the average labor cost in the manufacturing sector. Source: IMF, Bank staff estimates. 2.4 Relative prices have been misaligned in the mining, agriculture and manufacturing sectors. In mining alone, the misalignment has been in the order of 50% in 1987 relative to 1978. In the bauxite sector, the misalignment has been the result of continuous wage increases granted since the late 1970s. This, in turn, occasioned wage increases in the other two sectors. When the relative price of mining began declining in 1983 (as measured by a fall in its GDP deflator), real wages were not adjusted accordingly and the misalignment in prices spilled over to the other sectors. 2.5 Incentives in the financial sector have been distorted by the prevalence of negative real interest rates since 1985. Notwithstanding the high level of deposits in the commercial banking system, the maintenance of interest rates below inflation has encouraged capital flight. - 10 - The Fiscal Deficit 2.6 The above distortions are related to macroeconomic imbalances, the major one being the fiscal deficit. Central Bank financing of the deficit has generated systematic monetary disequilibria. From 1982 to 1984, Central Bank financing of the deficit resulted in a reduction in Central Bank foreign exchange reserves. From 1985 on, Central Bank financing of the deficit has resulted in an inflation tax.4 The full iipact of the deficit on inflation was initially avoided by restricting credit to the private sector. Once net international reserves became exhausted in 1984, the Government resorted to inflationary financing of the deficit, accumulated arrears on imports of goods and services, and delayed payments on the foreign debt (see Table 2.2). The inflation rate increased because of successive increases in the parallel market exchange rate. Both the fiscal deficit and inflationary expectations were responsible for changes in the parallel market rate. Moreover, increases in the parallel market rate raised the domestic price of imported goods under the E.A. regime. Following the general elections late in 1987, expectations changed favorably, bringing about a fall in the price of foreign exchange in the parallel market. This produced, in turn, a fall in the annual inflation rate in 1988. Table 2.2: INDICATORS OF MONETARY DISEQUILIBRIA, 1982-87 (in percent) Indicators 1982 1983 1984 1985 1986 1987 Change in Central Bank Claims to the Public Sector/M2 11.7 32.4 30.7 30.4 28.2 25.4 Change in International Reserves of the Banking System/M2 -8.1 -22.3 -17.4 -6.6 -4.9 -1.7 Change in Bank Credit to the Private Sector/M2 9.7 2.2 -1.6 5.6 2.6 2.5 Change in M2 (Money and Quasi-money) 11.0 10.8 13.0 30.8 23.5 29.3 Inflation 7.1 4.3 3.7 10.9 18.7 53.4 Source: Central Bank of Suriname. 4/ Inflation, like any other tax, is a transfer of resources from the private sector to the Government. It represents a tax on real money balances. Inflation depreciates real money balances at the rate at which prices rise. To avoid depreciation of their money balances, money holders need to increase them by increasing savings. These savings are then transferred to the Government in exchange for additional money balances when the Government finances its deficit by t1h r ticn nf r nfr I " nk rr dit - 11 - 2.7 Although an overall fiscal deficit of the magnitude experienced in Suriname (27Z of GDP in 1987) has led to hyperinflation in other countries,5 the fiscal deficit represented only 25Z of the stock of broad money in 1987. The fiscal deficit generated an excess supply of money which in turn, generated a deficit in the overall balance of payments. In this respect, a 25% annual devaluation would have generated, through the inflation tax, the necessary demand for cash balances required to eliminate the balance of payments deficit created by the fiscal deficit.6 2.8 Central Government revenues have experienced a continuous declining trend, particularly taxes on domestic and international trade. Tax revenues have fallen particularly sharply in real terms. The fall in real tax revenues originated from a fall in bauxite tax receipts. Non- bauxite tax revenues in real terms responded negatively to increases in inflation because of lags between accruals and realizations and the policy of fixing the exchange rate.7 2.9 Rising real wages in excess of productivity increases and rising expenditures on goods and services increased government expenditure from 30% of GDP in 1977 to 522 in 1987. These were the major causes of the increase in the deficit. The public sector labor force grew by 1,500 in 1987 despite a hiring freeze. Between 1977 and 1987, it increased by over 4,000. A decrease in current expenditures would require a decline in real wages and/or a smaller labor force. This may not necessarily increase the unemployment rate, since shifts to the informal sector are common and changes in real wages may accommodate increases in the labor supply. 5/ Bolivia experienced a fiscal deficit of 30% of GDP in 1983 previous to its 1984-85 hyperinflationary episode. However, the fiscal deficit was 280% of the average stock of money in that year. 6/ A 25% annual inflation rate would generate an equivalent increase in the demand for nominal cash balances. The latter would offset the Central Bank's financing of the deficit. In this sense, the 252 ratio of the fiscal deficit to the broad stock of money was equivalent to the equilibrium inflation rate in the absence of real growth of the economy. Since the Central Bank also needs to increase its foreign exchange reserve holdings, an annual devaluation above 252 would be needed to achieve both objectives. 7/ An econometric analysis on the behavior of tax revenues (see Annex II) has shown that real non-bauxite tax revenues respond negatively to increases in inflation as measured by changes in the GDP deflator. The results also indicate that a 522 inflation rate would have resulted in a tax revenue loss of four percentage points of GDP. Although the analysis was not disaggregated for different taxes to identify which of them responded negatively to inflation, the negative relationship between tax revenues and inflation are likely a result of lags between accrual and realizations. Because of these lags, the tax base was eroded by inflation. In addition, the fixed exchange rate, given the ongoing inflation, precluded import prices from adjusting in terms of the domestic currency (E.A. import prices are not adjusted for fiscal purposes). - 12 - 2.10 Another important cause of the fiscal deficit has been the poor performance of some public enterprises. Although several are profitable and efficiently managed (i.e. petroleum, shrimp processing, and telecommunications), the majority sustain huge losses and cannot operate without sizeable government subsidies (i.e. sugar, timber, rice production [SML - Wageningen]). The losses of public enterprises (at least Sf40 million per year) and consequent government subsidies (about Sf25-30 million per year) constitute a severe burden on the budget, equivalent to 5% of GDP in 1987. They arise primarily from inadequate pricing policies, lack of operational autonomy, poor management, high real wages and inadequate maintenance. These issues are discussed in Chapter IV. Unemployment 2.11 Tha unemployment rate is estimated to have increased from 21% in 1982 to about 34% in 1987.8 Most of the unemployment is concentrated among the younger population with 82% of the unemployed in the 15 to 29 age group. Attempts to reduce unemployment through increases in aggregate demand would generate further inflationary pressures and a deterioration in the trade balance, given the high real wages and legal restrictions to retrenchment. The latter has made hiring expensive and reduced labor demand. Table 2.3: AGE AND SEX DISTRIBUTION OF THE LABOR FORCE AND UNEMPLOYED, AND UNEMPLOYMENT RATE, 1986 Age Labor Force Unemployed Unemployment Rate (Z) 15-29 43,897 12,785 29.1 30-40 39,561 1,990 5.0 50-59 10,770 255 2.4 60-65 1,308 167 12.8 Unknown 873 318 36.4 Total 96,409 15,515 16.2 Males 62,755 8,420 13.4 Females 33,654 7,167 21.3 Source: Government of Suriname, Statistical Yearbook. 8/ The calculations originate from labor requirements estimates of the productive sectors made for national accounts purposes and from labor force estimates. They do not take into account estimates of employment in the informal sector. - 13 - C. Macroeconomic Policies 2.12 The key components of the macroeconomic policy framework which need to be reformed to arrest economic deterioration and move the economy to a path of sustainable growth over the longer-term ares incentive, fiscal, monetary, wage and employment policies. An essential feature of the recommended policy package is the interdependence of its elements, which highlights the critical need to carry out these policies simultaneously. Incentive Policy 2.13 An increase of the real exchange rate, together with the adoption of a flexible exchange rate policy, would contribute to the achievement of both internal and external balance. It would help formalize a large volume of transactions already taking place in the parallel market. Central government revenues would increase via trade taxes, provided a substantial depreciation of the currency is achieved in real terms. The allocativ2 efficiency of imports would improve through a more realistic pricing of foreign exchange, and the administrative need for and burden of import and export licensing would be eliminated. In the bauxite sector, gains in competitiveness would require a major reduction in labor costs, achieveable only by a real depreciation of the currency (see Chapter III). Non-bauxite exports would receive a major boost. In agriculture, incentives to expand production and exports would be dependent largely on a realistic real exchange rate. Econometric analyses of rice exports for the 1974-86 period show that the short-run elasticity of rice exports with re3pect to their price is 0.95. A real devaluation would therefore increase rice exports (see Annex II). The increased exports generated by an adequate exchange rate would increase the foreign exchange flows required to increase imports. 2.14 The incentive framework needs to be strengthened substantially to ,enable the private sector to operate efficiently. This requires the implementation of the Investment Code for local and foreign investment; phasing-out price controls on basic consumer goods (i.e. sugar, cooking oil, rice, milk and beef), services (i.e. housing and electricity rates) and timber products; removing exchange controls and providing automatic access to foreign exchange once an adequate real exchange rate adjustment is undertaken, together with fiscal restraint; and phasing out import and export licensing. Unless these steps are taken, a sustainable supply response from the productive sectors is not likely to be realized. 2.15 The proposed macroeconomic adjustment and reform program would need to be supported by external financial flows to cover the balance of payments financing gaps. A major focus of the Government's effort should be directed to attracting foreign investment. Success in this task would require: the speedy implementation of the Investment Code specifying areas for foreign investors, applicable incentives and investment guarantees; development of export infrastructure; an institutional framework to support foreign investment; streamlined entry and exit regulations for foreigners; intensive investment promotion activities abroad; and the elimination of external arrears. - 14 - Fiscal Policy 2.16 The current account of the Central Government operations needs to turn into a surplus and the overall fiscal deficit needs to be reduced to an amount no greater than net foreign financing; within this framework, access to Central Bank credit should be eliminated. Immediate steps need to be taken to increase revenues and more importantly, to reduce current expenditure, through direct measures as well as through an exchange rate adjustment that will increase Government income. The measures proposed below are designed to eliminate the current account deficit (25% of GDP in 1987) and achieve a small surplus. The Government has estimated that a sales tax of 5Z (exempting food and medicines) would yield about 1% of GDP in revenues. Other measures include augmenting the effective rate of taxation by converting specific taxes into ad valorem ones (e.g. vehicle license tax, import duty on petroleum 0.3%), replacing quantitative restrictions with tariffs on imports once the real exchange rate is adjusted (an exchange rate adjustment of 100%, together with an inport tariff of 40%, would yield additional revenues equivalent to 4.2% of GDP if applied to E.A. imports and an additional 6.6% of GDP is applied to imports financed with Dutch Government and [US$90 million]), and increasing taxes on fuels and beverages (0.3% of GDP). Revenue assessment and collection procedures need to be strengthened (0.3% of GDP). Together, these revenue measures would yield an equivalent of 12.7% of GDP. On the expenditure side, since the wage bill has grown rapidly and now comprises nearly one- half of central government current expenditure, wage restraint is the key to controlling current expenditure in the public sector. This should be combined with a freeze on hiring and the gradual reduction in the size of the civil service (a 25% cut in the payroll and in goods and services would yield savings equivalent to 102 of GDP). Another area which warrants early attention is the introduction of cost recovery in the health and education sectors, the users of which currently receive subsidies equivalent to nearly one-half of central government transfers (equivalent to about 2.5% of GDP in 1987), and water charges for irrigation facilities. Thus, the total impact of the above-mentioned revenue measures and expenditure cuts would amount to over 25% of GDP--required to eliminate the current account deficit and produce small surplus. 2.17 The 1989 budget indicates some positive steps on the revenue side along the lines mentioned above. Current revenue for 1989 is estimated at Sf 780 million, which is achieveable, up from Sf 620 million in 1986. The revenue increase is predic&ted on sharp increases in income taxes, import duties, excise taxes on beer and tobacco and a new excise tax on soft drinks. Current expenditure, on the other hand, is optimistically estimated at Sf 1050 million--lower than Sf 1100 in 1988. If steps are taken to maintain these revenue and expenditure estimates, the resulting current account deficit amounts to Sf 270 million or 14% of GDP, which is substantially lower than the 1987 deficit equivalent to 25% of GDP. Nevertheless, further steps in revenue raising combined with expenditure reduction measures mentioned above are needed in order to eliminate the current account deficits as rapidly as possible. 2.18 The Government could improve the operations and financial situation of the public enterprises by: raising real tariffs for public services; substantially reducing the burden of financing social services and consumer subsidies (i.e. sugar, timber, rice); increasing both the accountability - 15 - and the freedom of action of managers; and introducing an efficient monitoring performance system. Given its managerial and financial constraints it is recommended that the Government leave the role of establishing new businesses to the private sector and rapidly divest selected public enterprises, improve the efficiency of other enterprises (e.g. electricity) and only invest in infrastructure to support private sector-led economic growth. Wage and Employment Policy 2.19 Wage policy should focus on increasing private sector employment. This would require wage restraint and the elimination of legal restrictions on private sector employment decisions. The improved incentive framework would encourage increases in domestic production and exports, and the private sector's demand for labor. Government retraining programs may be required for workers who would become redundant as the retrenchment program is implemented if their skills mix were not to match the private sector's demand. - 16 - CHAPTER III SELECTED SECTORAL ISSUES AND POLICIES 3.1 This chapter focuses on selected issues in the bauxite and agricultural sectors--the main productive secto:s in the economy -- and on transport which plays a dominant role in supporting their activitied. The manufacturing sector in Suriname is relatively small, accounting for about 9Z of GDP in 1987. It was discussed in the previous economic report (Report No. 6526-SUR of December 31, 1986). A. The Bauxite Sector 3.2 The mining of bauxite and its processing into alumina and aluminum is the principal industrial activity in Suriname. The sector's three products dominate the country's exports, accounting for about 70Z of its export earnings. They are produced and sold by two subsidiaries of foreign companies, Suralco (Alcoa) and Billiton M. S. (Billiton/Shell). These two formed two joint ventures in 1984, the mining joint venture (MJV) and the refining joint venture (RJV). Separately, Suralco also owns exclusively the Moengo mining center and the Paranam aluminum smelter. 3.3 The sector went through a major deterioration during 1980-87,1 with decreases of 50Z in its contribution to GDP, 372 in balance of payments current account receipts impact, 85% in related government income and 52% in export revenues. Future prospects cannot realistically include a reversal of the trend, but only the maintenance of the present maximum production and export of about 1.6 million tons per year (MTPY) of alumina and the resumption of aluminum production and exports at the 30,000 TPY level. 3.4 The decline reflected in part the difficult world market conditions and price deterioration for all aluminum-related products. However, the large decreases in export volume were not commensurate with the relatively mild contraction of world demand during that period. In the case of bauxite exports, they resulted mostly from competitive pressures which squeeze out high cost producers under unfavorable conditions. The high production costs in Suriname, in turn, resulted mainly from high labor costs and a counterproductive tax system. Competitiveness 3.5 The major problem facing the sector is its lack of competitiveness. Compared to the world's most efficient producers of alumina, namely the Australian plants which now dominate the world market, 1/ Data for 1987, although included in the calculations, should be interpreted with caution given the non-economic disturbances which occurred, including a 10 month production interruption at Moengo, one month interruption at the alumina refinery, and the shut-down of the aluminum smelter. - 17 - Suriname has a cost disadvantage of US$20 per ton. The weighted average cost of alumina for the six Australian plants, which serve as a benchmark for international transactions, is US$110 per metric ton, in mid 1988 prices. Against this benchmark, the weighted average cost of production for the two Surinamese companies is about US$130 per ton. 3.6 The decline of competitiveness of Suriname's bauxite industry vis- a-vis Australian competitors can be traced back to the initial imposition of a bauxite levy on foreign companies. The inception of the bauxite levy system in 1974 more than doubled the cost for bauxite producers, which subsequently relocated some of their production to Australia, and to a lesser extent, Brazil. These structural changes, once implemented, became irreversible despite the relaxation of the bauxite levy in 1984-85; the levy was not negotiated since then. Australia, now has the most modern and efficient alumina plants in the world, and provides more than a third of the world's total supply. Moreover, the forced switch from Suriname to Australia also contributed to the shutdown of aluminum smelters in the Gulf area of the US, thereby cancelling or reversing the freight advantage that the Caribbean countries once had. The Australian suppliers cannot be dislodged from their present position in the foreseeable future. The issue for Suriname is whether or not it will survive the next round of market pressures--to be competitive when the present market upturn is over. Investment 3.7 The industry will be facing a potential production crisis in 1990-92 as a result of the drastic reduction in capital investments in recent years. During 1983-88, no mine development voik took place because of the length of the negotiations between the Government and the industry, as well as the 1986-87 disturbances. This led to: (i) the present lack in mining flexibility at Moengo and thus the pressure on mining marginal ores in Paranam which causes high caustic soda utilization and production costs at the refinery, (ii) the import of bauxite and (iii) the time pressure on the negotiations themselves. However, in 1988, the companies decided to propose investment plans mainly owing to very favorable prices for their alumina and aluminum exports as a result of a tight situation in the world market for these commodities. Labor Costs 3.8 Labor costs in the sector are still the highest compared to the average for the economy, despite the wage freeze of 1985-87. The bauxite sector cost per employee in dollar terms in 1987 was significantly higher than that in Guyana and Jamaica, the two neighboring countries which have bauxite related activities. Regarding productivity, one study showed that productivity dropped 17% from 1980 to 1983. The creation of the two joint ventures and the resulting 1984 consolidation only barely restored the low 1980 productivity level in 1985. It is not until 1986 that the first significant productivity improvement over the 1980 level materialized, 60% of which was lost again in 1987 because of the Moengo mine and smelter shutdowns. In 1988, employment in the sector was further reduced, and output of bauxite, alumina and aluminum increased substantially. Total labor costs declined by 6%. Although productivity could still be improved, even further gains in this area would not be sufficient to provide the necessary impact. - 18 - Taxation 3.9 The taxation system, although improved through the absence of levies in 1986, still includes a counterproductive bauxite tax applicable to one of the companies, which no longer reflects current realities since bauxite exports have stopped. The major features of the tax system for the industry are as follows: (i) while the bauxite levy applied equally to both companies, the bauxite tax (Brokopondo tax) applies only to Suralco which in turn is taxed at only 35% on income compared to the 45Z income tax rate for Billiton. Suralco is exempt from any import duties on most of the capital goods and spare parts it brings in for its operations under a provision of the Brokopondo agreement, a benefit which is also transferred to the RJV but does not apply to the MJV and the Moengo operation; (ii) the Brokopondo tax is an important element of the system but has been distorted by 28 years of escalation without exchange rate adjustments which makes the benchmark unrepresentative of actual prices; and (iii) the probable accumulation of very large tax loss carry forwards for both companies, which will probably prevent any income tax revenues for the Government. Restructuring of the Sector 3.10 While there is no possibility of restoring the sector to its former status in the foreseeable future for economic reasons, it is possible to prevent its further degradation by the removal of major structural, fiscal and financial handicaps through appropriate economic adjustments and negotiations between the Government and the sector. To render the Suriname bauxite industry competitive, significant reductions of local costs are necebsary, mostly in the areas of labor and taxation since other costs such as those of energy, material supplies and spare parts could not be realistically reduced to any significant extent. TIa.3,: IMPACT OF A 1001 DEVALUATION ON THE OPRATINO COSTS IN CONSTANT TERMS (coste in US$ per ton of alumina) 1988 1989 1990 191I 198a 19, 1990 1991 1992 Alumina Price (USS) 150.0 130.0 180.0 180.0 180.0 150.0 180.0 130.0 130.0 130.0 Drokopondo Price (Sf) 73.2 67.3 67.8 67.3 67.3 73.2 67.3 67.3 67.3 67.3 Rrokgpondo Ta Mairtomn_A praktpon6o Tax Repealed Efficiency Factor! 1.00 105.4 103.8 09.4 95.2 93.1 101.6 100.8 96.5 91.8 89.6 0.75 106.9 109.0 108.3 106.2 106.0 103.2 106.6 106.2 103.7 103.6 0.50 108.8 114.2 114.6 111.8 110.8 105.2 112.8 118.2 109.8 108.9 0.25 111.6 119.4 118.4 113.9 111.9 108.3 118.0 117.3 112.1 110.1 0.00 126.7 124.5 114.7 114.2 112.0 124.4 123.8 118.7 112.4 110.1 gorc: Mission estimates. 3.11 Since alumina is sold on a US$ basis, a real devaluation of the local currency would reduce local costs expressed in dollar terms provided that local inflation does not increase these costs again to the full initial value expressed in dollars. Different scenarios were constructed - 19 - to determine the potential of a devaluation on increasing competitiveness. A 100% nominbl devaluation is sufficient from the industry standpoint to provide competitiveness (i.e. to bring the cost down to US$110 per ton) if the real devaluation or efficiency2 is of the order of 75% or better (see Table 3.1 above), which means that the inflation factor cannot exceed 1.25. This is extremely unlikely. A 200% nominal devaluation, on the other hand, appears to be viable. For the industry as a whole, such a devaluation yields an average price better than or equal to the Australian price if its efficiency or real devaluation is 50% or better, which means that the average inflation factor does not exceed 2.0 in 1989 and 1.25 in 1990. This would appear to be feasible with strong wage restraint. Finally, it should be noted that under both of these scenarios, Suralco and Billiton fare very differently; the 200% nominal devaluation may not be sufficient to insure competitiveness for Billiton, even if it is sufficient to help the industry as a whole. 3.12 Concomitant with the real devaluaticn should be a tax normalization. The devaluation effects explored above have a drastic effect on the Brokopondo tax, which is calculated in Suriname guilders. The 200% devaluation with a probable 50% efficiency would bring the tax down to practically nil. This is the reason why Suralco fares much better than Billiton in a devaluation. Accordingly, the opportunity arises to rationalize the tax system without losing any revenues since the Brokopondo tax revenues are already eliminated with the devaluation. The suggestion could then be made to Suralco for a removal of the Brokopondo tax in exchange for an increase in the income t= rate from 35-40% to the industry rate of 45%, a tradeoff which should be acceptable to Suralco. Such a normalization of taxation should be very desirable to the industry in general. The scenario of a 200% devaluation and 50% efficiency would mean a loss in tax revenues for the Government of about 35-40%, without taking into account the tax loss carryforwards which would erode government revenues even further. However, the choice is not between a devaluation or the maintenance of the status quo; it is between keeping a bauxite sector or losing it, in the longer term. 3.13 It is clear from the above that in order to achieve long-term competitiveness, a devaluation and a normalization of the tax system are necessary. Given the long lag time required for the actual implementation 2/ Efficiency is defined as (d-i)/(d-1) where "d" is the devaluation factor and "i" is the inflation factor. Assuming that a 150% devaluation takes place and changes the exchange rate to US$1=Sf4.425: in that case, a local cost of Sf4.425 was equivalent to US$2.50 prior to the devaluation, but only US$1 immediately after it. If there is domestic inflation exactly to the extent that it fully cancels the effect of the devaluation (in this case a 2.5 inflation factor), the efficiency is zero and the local cost expressed in dollars has been left unchanged by the devaluation. More generally, if the devaluation factor is d (2.5 in the example) and the inflation factor is i (1 and 2.5 successively in the example), the local costs expressed in dollars will change by the factor i/d. The importance of the inflation factor varies with the devaluation factor; what is critical is the efficiency ratio (d-i)/(d-l). Efficiency - 1 implies that real devaluation = nominal devaluation. vffic4ency = 0 implies that real devaluation = 0. - 20 - of either of these changes, the investment decisions for the development of the new mines must be triggered without any delay. It is therefore appropriate to negotiate a temporary agreement to brieSe the time gap, with the focus on: (i) the normalization of the tax system as bauxite exports have stopped; and (ii) the issue of tax loss carryforwards. After that, broader issues could be brought in, including the increase in the production of aluminum atd the question of the further consolidation of the industry. On the latte. subject, Moengo, MJV and RJV should be combined into a single enterprise. Should this full restructuring not be achieved, cooperation should be carried out further by regrouping similar operations like hauling, laboratories, etc. Also, the interpenetration of the two managements would probably yield significant benefits. Finally, it should be kept in mind that the Australian benchmark, though in the analysis it has been considered stationary, would in fact move. What is imperative is therefore a framework which monitors competitiveness, for which the openness of the companies and the full cooperation between them and the government would be absolutely necessary. B. The Agricultural Sector Background 3.14 Agricultural activities are concentrated in the coastal plain with the exception of the oil palm estates and timber production. Rice is by far the most important crop, occupying in 1982 an estimated 42,600 hectares in the main season and 29,900 hectares in the dry season, whereas the total for all other (mainly permanent) crops was 13,830 hectares. In 1987 the agricultural sector was responsible for about 92 of GDP, 17% of total employment and 28% of total exports of goods. 3.15 The State has assumed a predominant role in agricultural production through the establishment of parastatal enterprises. Bananas. palm oil and sugar (with distilled products) are produced solely in parastatals: all milk and shrimp processing (as well as part of the catch) are also the exclusive preserve of parastatal enterprises. Bruynzeel, the countr;'s largest company outside the bauxite sector, occupies a predominant place in forestry production whereas SM1L - Wageningen is by far the largest enterprise in rice production, responsible for some 25% of total output. 3.16 The employment picture in the sector is complicated owing to the employment of a significant number of foreigners, not all of whom are registered; part-time involvement of a large number of workers, many of whom also hold other jobs on small family farms; and successive waves of emigration to Holland causing a decline in the latter category, the size of which is not accurately known. 3.17 In reviewing the more recent economic performance of the sector, two periods may be distinguished. The first period, the early 1970s, (fully covered in the previous World Bank report), is one of steady growth and gradual structural change. This came to a halt in 1983 with the abrupt termination of the bulk of Dutch Government aid, the predominant factor in . financing projects that made this expansion possible. The severe financial crisis that ensued initiated a period of stagnating production and exports because of the non-execution of expansion and rehabilitation projects. - 21 - Rice 3.18 Rice is by far the most important crop for domestic cc-nsumption and exports. Exports are primarily directed to the EEC under a preferential arrangement yielding a varying advantage over sales at world market prices. A smaller proportion of exports goes to the Catibbean, mainly the French Islands, which also provide the sole market for the parboiled rice produced by SML-Wageningen. The completion of the Multipurpose Corantijn Project (MCP), the implementation of which was disrupted at a fairly advanced stage by the curtailment of foreign assistance in 1983, would make an important contribution to augment exports. Conceived to supply irrigation water from the Corantijn river to the Nickerie rice-producing area, this would involve, in a first-phase, construction of the distribution works at the end of the MCP canal. As a result, it would become possible to raise the cropping intensity in the existing polders to 1802. A number of rehabilitation projects in other areas, iticluding the Coronie polder as well as SML-Uageningen with the adjacent autonomously developed polders, are also envisaged. Shortage of water supply resulting from the development of rice production on concessions allocated to private farmers has affected the attainable cropping intensity in the entire Wageningen area and elsewhere. The result has been that new production has been offset by losses in the o'der areas. Thus, the net result has been an overall increase in the cost of production. Table 3.2: AGRICULTURAL, LIVESTOCK AND FISHING OUTPUT GROWTH, 1977-86 (in percent) 1977 1978 1979 1980 1981 1182 1983 1984 1985 1986 Rice 17.6 10.3 5.3 9.2 8.9 7.3 -11.0 12.7 -0.9 0.3 Bananas -25.4 8.4 -4.2 19.1 19.7 -7.3 -12.1 16.2 -3.9 3.8 Sugar -7.8 -11.5 37.0 -10.8 -0.7 -14.3 2.7 1.4 -9.5 -6.1 Palm Oil at -22.0 169.3 73.6 -16.1 15.4 20.5 15.2 8.9 11.5 -24.3 Livestock -3.8 26.6 -8.0 7.5 10.2 4.2 0.7 5.2 2.4 -14.6 Shrimp 0.3 -34.0 16.8 -2.1 22.0 -1.8 -11.3 -16.3 -12.4 36.3 a/ Fresh fruit bunches. Source: Ministry of Agriculture, Animal Husbandry and Fishery. 3.19 There are other factors that can contribute to the efficiency of rice production and some of these require collective action. Water charges for irrigation need to be introduced. There is a need for the creation of water management units, which, with the participation of the farmers concerned, would guarantee fair and systematically conceived sowing schedules. Fishing 3.20 During the past seven yuirs a fluctuating number (between 138 and 165) of largely foreign-owned (85-90%) trawlers have been fishing for shrimp in Surinamese waters with an overall catch fluctuating between 2,400 and 3,400 tons. It is estimated that the industry's economic potential is - 22 - reached at around 3,000 tons. The locally owned vessels belong to the parastatal company SUGAM. SAIL and SUJAFI are the two shrimp processing and exporting companies. SAIL is a parastatal while SUJAFI is a private joint venture of Japanese and Surinamese investors. SUJAFI is, on average, just about covering its costs. However, in the absence of the means to exercise control of the industry's activity, shrimp fishing by unlicensed trawlers occurs at the expense of licensed ones. 3.21 There is some fish production from inland waters but far more important are the coastal fisheries. Most of the fin fish catch is brought in by at least some 1,500 small "artisinal" fishermen whose overall produztion in the early 1980s was in the order of 3,000 tons. But, under the impact of restrictions on fish imports such as salted cod and canned products, and because of the scarcity resulting in high prices of meat products, there has been a strong demand in the domestic market and fishing has become profitable. Forestry 3.22 Timber production is based on forest reserves comprising an estimated 2.5 million hectares of exploitable forest, nearly all of which (2.2 million hectares) has been allocated in the form of concessions of wi4ely varying size. On the whole these concessions are grossly underutilized and the Government's Forestry Management Program envisages an initial reduction of their total area to some 500,000 hectares, with the degree of actual exploitation the holder is deemed capable of as the principle criterion to be applied. Sectoral Issues 3.23 Agricultural Pricing. Price controls have been imposed on a number of basic agricultural commodities with the objectives of checking inflation and protecting the consumer. These included rice, sugar, milk, and meat. For all these items and in the case of rice, for broken varieties for mass consumption, minimum farmgate prices and retail prices are set jointly by the Ministries of Trade and Agriculture. Such an environment appears to have dampened producer incentives, particularly to expand output. Unless price flexibility is introduced, neither adequate production levels nor the production targets set out by the Government for the subsectors discussed above are not likely to be realized. 3.24 Import Licensing. The import licensing process for obtaining agricultural inputs is a disincentive for production. Import licenses are issued by the Miristry of Trade based on the advice of the Ministry of Agriculture. At present, it takes at least two to four weeks to obtain a license. Thereafter, if no foreign exchange is required from official sources, the producer can obtain his imports relatively quickly through the E.A. imports. On the other hand, if foreign exchange is required from the Central Bank, it may take one to six months for the importers to obtain the required foreign exchange allocation. The elimination of import licensing (para. 2.14) would be required for the economy to operate efficiently and ensure speedy supplies of agricultural inputs. 3.25 Unemployment has been significantly affected by the lack of competitiveness resulting from high real wages (although lower than in - 23 - other sectors) which favor capital intensive production methods. The problem is compounded by the fact that in the parastatals and governmental services a sizable part of the labor force is redundant. In any exercise involving the rehabilitation and securing the future of parastatals, whether featuring divestment or not, addressing the labor issue will be of central importance. C. The Transport Sector 3.26 The transport sector plays a dominant role in the production and export activities in Suriname--a country over four times the size of The Netherlands, but containing less than one-thirtieth of its population. Moreover, this low population is unevenly distributed. Paramaribo and its environs--an area of only 2.5% of national territory--contains 72% of Suriname's population. Whereas, the productive regions in Western and Eastern Suriname contain only 10% and 5% respectively of the total population. Consequently, haulage of raw materials to production centers and finished products to the main consuming or export centers tends to unduly inflate unit costs. 3.27 Several factors have adversely affected the efficiency of the transportation sector. First, Suriname is somewhat culturally and linguistically different from its neighboring countries--a factor that has not encouraged trade and transportation with its neighbors. Second, the physical geography of the country, which is roughly rectangular in shape is not readily amenable to land or water transportation. The northern border is firmed by the Atlantic Ocean with the coastal waters being dominated by currents fed by the vast quantities of water flowing from the Amazon River into the Ocean. The northern coastal region of the country is thus characterized by swampy and muddy conditions. On the other hand, the southern border is dominated by almost impenetrable rain forests of the Amazon Basin and high mountain ranges. Both the western and eastern borders with Guyana and French Guyana are demarcated by two large rivers, the Corantijn to the west and the Marowijne to the east. The southern two- thirds of Suriname is largely unexplored and is heavil vegetated by thick rain forests and traversed by numerous rivers and tributaries which generally flow northwards from the highland southerly border with Brazil and eventually access in the Atlantic Ocean. In addition to these factors, extensive government involvement in the sector has also led to non-optimal patterns of transportation. The Government is involved in sea transport, ferry, river and coastal passenger boat services, as well as in public passenger transport. Moreover, the maintenance of transport facilities has suffered owing to inadequate cost recovery and user charges as discussed below. Roads 3.28 Road Network. The total road network in Suriname has a length of 8925 kms. of which 262 is paved (asphalt, brick) and 74% is unpaved (crushed stone, shells, sand). The division between primary, secondary and tertiary roads is shown in Table 3.3 below. Many of the infrastructural difficulties in Suriname are physical while others are related to planning pr.>blems and providing cost effective transport services. Some of these difficulties have a large impact on the overall economy. - 24- 3.29 The responsibility for maintenance and improvement of primary roads and all roads in the Paramaribo district is with the Ministry of Public Works. The responsibility for secondary and tertiary roads in other districts is with the Ministry of Regional Development, while agricultural roads are maintained by the Ministry of Agriculture. However, little coordinated responsibility is exercised. Plans, cost figures or budgets for maintenance and improvement of the road network are unavailable. All maintenance work is carried out by private contractors. Major projects are put out for tender, but are contracted out based only on unit prices, rather than on fixed prices and terms. Maintenance and improvement of the road network is complicated by the lack of foreign exchange, inefficient organization and lack of responsibility within the ministries concerned. The prevailing contracting procedures often result in uncertain and costly maintenance, if any. Table 3.3: - ROAD NETWORK CLASSIFICATION, 1986 (in kilometers) Road Classification Asphalt/Paved Unpaved Primary 542 1038 Secondary 1370 4110 Tertiary 465 1400 Total 2377 6548 Source: Ministry of Finance and Planning. 3.30 Agricultural roads, particularly, in the Nickerie area suffer from lack of maintenance and improvements. The condition of these roads has been aggravated because of the use of overloaded trucks. As the worn-out rural and secondary roads have an enormous impact on the deterioration of vehicles, aggravated by the shortage of spare parts, it is critical to, without delay, improve the road conditions in order not to affect the rice export activity. However, the maintenance and improvement of the road network call for more budgetary resources through a system of user charges and possibly contributions from some of the major enterprises served. At present, the only user charge generated from the system is the vehicle license fee which is totally inadequate. There is no contribution by way of a gasoline tax s:knce this item is retailed below cost. The Government needs to institute a system of cost recovery to maintain, improve and develop further the assets of the subsector. 3.31 Public Transportation. Public transportation is at present carried out principally by private license holders under the umbrella of a directorate under the Ministry of Public Works. This directorate is responsible for public bus services, sewerage services, central garage for state owned vehicles and the servicing of heavy equipment. In the late sixties, public transportation was a state monopoly. Increased inefficiency and poor service is claimed to have set off unauthorized private bus operations, which, in the seventies, became legalized with the present bus licensing system. Even after the acquisition of 20 new state buses in 1982, this trend has continued. The efficient operation of the - 25 - central garage and services is complicated by: (i) the limited degree of freedom given by the Ministry of Public Works; and (1l) responsibility for services which the organization is not prepared to provide. Priority for the operation of the remaining bus services is often based on social rather than economic criteria. State bus services (about 5% of total) should be targeted for privatization. In addition, the operation of the central garage should be reviewed in order to remove services which, from an economic point of view, would improve if operated privately. Water Transport 3.32 SurJ ame is enclosed between two major rivers, the Corantijn river as the westvrn border with Guyana and the Marowijne river as the eastern border with French Guyana. In between, the Coppename and the Suriname rivers run north into the Atlantic Ocean. The rivers cross the coastal plain through the large and deep estuaries with shallow muddy bars across their mouths. These mud and shifting sand bars limit the access to the rivers for seagoing vessels. The total volumes shipped through the harbours in Suriname are shown in Table 3.4. Shipments through Paranam, Smalkalden and Moengo relate entirely to the bauxite industry. Table 3.4: - TRADE VOLUMES HANDLED THROUGH SURINAMESE PORTS G.R.T. Number of Imports Exports Year (000)1/ Ships (t/000) (t/000) Paramaribo 1985 1595 634 554 86 1986 1718 545 551 84 1987 1459 507 475 90 Paranam 1985 2684 276 520 2388 Smalkalden 1986 3111 261 605 2248 Moengo 1987 2912 186 1194 1652 Nickerie 1985 226 189 28 114 1986 282 167 17 86 1987 225 160 13 86 1 Gross registered tons. Source: Harbour Office of Paramaribo, de "Loodsdienst Administratie". 3.33 Access to Nickerie and Wageningen from the sea is limited due to a mudbar across the mouth of Nickerie River. Seagoing vessels of 4000-6000 tdw are presently only able to enter and leave the river loaded with less than 502 of their capacity. Dredging of the river mouth and maintenance of the Nickerie River channel would allow fully loaded seagoing vessels to leave directly for export destination points, thus eliminating the costly transfer to Paramaribo. However, the economic and financial viability of a dredging program needs to be established. * 26 - Air Transport 3.34 Suriname is connected to the Caribbean, US and Europe by airline services provided by Suriname Airways (SLM), operating two DC-8 airplanes on international routes and two twin-otter airplanes on regional and domestic flights. In addition, KLM (Royal Dutch Airlines), ALM (Antillean Airways), and Cruzeiro Do Sol (Subsidiary of the Brazilian airline, Varig) serve Suriname. Domestic demand for air transport is partly covered by SLM. There are two private companies that serve the interior on a charter basis, Gum Air and Gonini Airways. Gum Air operates three small airplanes, whereas Gonini presently operates one; the other was hijacked during the period of internal conflict. The Missionary Aviation Fellowship, a church owned operation, serves the interior with medical services flights. Gum Air operates with the Government by flying civil servants to and from the interior. As an essential means of developing trade and tourism between Suriname and other countries, it is impo!.tant to develop regular air traffic services. The clarification and planning of future development is a pressing need for SLM. The existing equipment is wearing down and immense investments are needed. A least cost and more efficient solution to these issues is to privatize the services. - 27 - CHAPTER IV PUBLIC SECTOR ENTERPRISES A. The Role of State Enterprises Organization of the Sector 4.1 State enterprises play a dominant role in Suriname's economy. Non-financial state enterprises number about 30-35.11 They produce about one-third of GDP and employ close to ten thousand people, equivalent to 10% of the jobs in the formal sector of the economy. The State owns the 12 largest firms outside the bauxite and financial sectors. The State is heavily involved in agricultural and food processing activities. It provides all sugar, edible oil, processed milk, a part of processed shrimp and commercial banana production and a large part of timber and rice production. The State also is the sole producer in crude oil, telecommunications, water and sewerage. It operates the largest airline and shipping company. Two state enterprises (SUREXCO and CIS) have an important role in foreign trade. State involvement in manufacturing, other than timber and food processing, is negligible. 4.2 There is a certain division of labor between the public and private sectors. The public sector provides the basic infrastructure, satisfies a significant part of the electricity and crude oil demand of the courcry and produces the majority of the non-bauxite (mostly agricultural) export commodities. Private entrepreneurs operate mainly in services (commerce, banking, transport), in the mediuh and small scale agriculture, and in manufacturing. In a number of areas (rice and timber production, transportation, foreign trade), both sectors operate. 4.3 The private sector in Suriname is moderately developed, much less concentrated than the state enterprise sector and less self-assertive than private sectors of other countries at similar levels of income. During the 1980's both the public and private sectors have been affected adversely by external shocks and internal domestic economic policies. In addition, the development of the private sector also was hindered by political uncertainties. One of the challenges of the Government is to define properly the relative roles of the two sectors, restructure the public sector and create conditions that foster private entrepreneurship in agriculture, transport and manufacturing industry. 4.4 State enterprises are controlled by sectoral ministries. The main overseeing ministries and the most important enterprises controlled by them are listed in Table 4.1 below. The ministries are responsible both for the elaboration and implementation of the Government's policies and for the 11/ There is some uncertainty about the exact total of state enterprises, partly because of lack of clear distinction between non-commercial "parastatal bodies" and enterprises, and partly because no government agency keeps track of the activities of all of state enterprises. - 23- overall control of the state enterprises in their respective sectors. The sectoral ministet appoints the general managers and the boards of the enterprises. The ministries exercise their authority partly through direct monitoring of the activities of the firms, and mostly through their boards. The M aistry of Finance and the Planning Bureau have overall responsibility in controlling the borrowing, subsidies and investments of state enterprises. Table 4.1: REVENUES, EMPLOYEES AND NET PROFITS OF SELECTED STATE ENTERPRISES, 1987 (sales and profits in Sf million; employees in number) Net Profits Enterprise Activity Revenues Employees (Loss) Ministry of Natural Resources and Energy EBS electricity 92.3 844 1.8 Staatsolie petroleum 21.3 203 1.9 SW4 water-Sewerage 17.4 511 1.0 Bruynzeel timber 20.0 1,057 (8.5) Suriname Timber timber 0.9 170 (2.9) Grassalco crushed stone 1.2 n.a. (2.5) Ministry of Agriculture, Animal Husbandry and Fishery SAIL shrimp 75.1 n.a. 6.6 Wageningen State Farm rice 27.9 760 (14.0) Surland NV banana 20.8 900 1.5 Matienburg State Farm sugar 10.4 1,200 (7.7) and Sugar Mill (+300 temporaries) GPOV NV oil palm 13.1 310 (6.5) (+400 temporaries) De Melkcentrale milk 10.9 88 (6.3) Tropica canned fruits 3.2 50 0.1 and vegetables Ministry of Economic Affairs Suriname Airlines (SLM) 63.8 444 3.7 SMS shipping 24.0 263 (5.1) CIS import 50.0 62 n.a. NV Havenbeheer port authority n.a. SurExco rice marketing and export 4.0 93 0.6 Ministry of Public Works, Telecommunications and Construction Telesur telecom- 55.4 1,180 9.3 munications Landbusaienst bus service n.a. n.a.: data not available. Sourcei Ministry of Finance and Planning. - 29 - 4.5 The present Government inherited deficient monitoring and control systems. Although the government agencies, especially the sectoral ministries, are rather well informed on the achievements and problems of the enterprises, none of them has full, concrete, quantitative information on the physical and financial performance of the sector as a whole nor of the individual enterprises. Currently the Government does not have a complete list of the state enterprises or consolidated profit/loss statements, cash flow, and equity data of the sector or of the flow of funds between the state bu4get and the state owned enterprises. Improving these information flows is thus an urgent task. Financial Performance 4.6 It is difficult to determine the exact amount of losses and subsidies of the state enterprises because of inadequate iaonitoring, and because financial assistance is provided in a variety of forms (producers' and consumers' subsidies, non-repayable government loans and bank loar.s with government guarantees). It is estimated that the Sfl5-20 million per year consolidated net profit of the profit-making enterprises reduces the net loss of the identified state firms to about Sf40 million per year, or 3-4% of GDP. 4.7 All the utility companies (water, electricity, telecom), the state airline, the petroleum, tropical fruit and shrimp producers are profitable while the rest of the agricultural, food, forestry and transport firms are loss-makers. Beyond the financial problems, unsatisfactory maintenance and unreliable operations are characteristic for the whole sector, including most of the well managed enterprises. In many enterprises production has stagnated or even declined considerably (sugar, timber, rice, and bus transportation). 4.8 There are several factors that have contributed to this situation. The facilities and equipment of many enterprises are in poor condition. In addition many facilities were destroyed by insurgent activities. The marked deterioration and/or breakdown of equipment led many firms to a severe drop in capacity and to the further deterioration of their financial situation. The shortage of foreign exchange and the resulting scarcity of imported inputs and spare parts was another factor leading to sharp decreases in capacity utilization. 4.9 For some enterprises (domestic passenger transport, milk), tariffs and prices are established below their operating costs with the resulting subsidy being financed out of the enterprises' cash flow. Because of the overvaluation of the Surinamese guilder, the export oriented enterprises suffer serious revenue losses. Some (e.g. Wageningen state farm and Marienburg sugar mill) are required to finance fully or partially various social services (health, education, housing, infrastructure) normally financed by the Government. 4.10 The extremely adverse financial situation of a number of enterprises has led to leniency from their supervisory ministries and to acceptance of weak financial discipline. In several cases (Marienburg, Wageningen, Bruynzeel Timber Company) the enterprises could not restructure their operations without Government financial assistance, and therefore, the supervisory ministries have had no other choice than to allow them to continue with inefficient and loss-making activities. - 30 - 4.11 There are also serious problems in the management of the sector. The information flows to the Government are fragnented and erratic. Since the Government does not have reliable information on the sector's financial and economic performance nor of most of the individual enterprises, a performance assessment of managers is difficult. Yet, the managers freedom of action is limited. Many of the prices and tariffs are set by the Government; virtually all investment decisions are made or approve4 by government agencies; officials of the supe)visory ministries have tended to interfere in the day-to-day decisions of the firms; the labor legislation makes retrenchment of redundant staff almost impossible and in many cases strong trade unions demand salaries beyond the enterprises' capabilities. 4.12 A number of enterprises perform well in spite of adverse external conditions. Some of them, with strong management and potential for earning foreign exchange, have special financing arrangements to import urgently needed inputs and spare parts. Others have made extraordinary efforts to keep their equipment functioning, and some have been capable of increasing their output while keeping their cost increases below inflation. B. Reform Program for the Sector 4,13 The Government is aware of the need of a thorough reform of the sector. There is a consensus that the reform should lead to radical improvements in: (i) the efficiancy, reliability and growth pattern of production and service activities undertaken by the enterprises; (ii) the financial performance of the enterprises and in their contribution to improve the finances of the Central Government and the country's balance of payments position; and (iii) in the use of manpower currently in the public sector. 4.14 There are, however, different views on the proper way of carrying out the reform program and on the desirable size and role of the sector. There appears to be a consensus that given the shortage of managerial cadre and scarcity of investment resources, the Government should not establish new businesses. Instead it should: (i) provide a larger scope and incentives to the private sector; (ii) concentrate on infrastructure development and in operating a few key state enterprises; and (iii) rehabilitate some of its badly deteriorated firms. The key issues are: (i) from which areas of economic activity should the Government withdraw; and (ii) how to improve the performance of the remaining public sector enterprises. These issues should be addressed on economic grounds. 4.15 There is no evidence to suggest that state enterprises can improve the welfare of the workforce in a given area. Although state ownership has prevented companies from going bankrupt and the salaries of the workers are paid entirely from Government transfers, this is a very costly, inefficient, and unsustainable way of alleviating income and employment problems. Although this provides temporary relief, it cannot be sustained indefinitely. C. Issues on the Size and Scope of the Sector 4.16 The Government should promote private participation in state enterprises wherever feasible (e.g. domestic and regional flights, petroleum related complementary activities, fruit and vegetable production - 31 - and processing). It seems reasonable that the state retain ownership of the utility comp&jaies: EBS (electricity), SWM (water-sewerage) and Telesur (telecommunications). These perform reasonably well. 4.17 There are some small and medium size presently unprofitable enterprises (Grassalco, GPOV palm oil producer, Suriname Timber, etc.) that could probably perform better in private hands. Private owners would be able to pay more attention to their problems and the elimination of the continuing financial assistance of the Government would exercise a strong and healthy pressure on the new management. Therefore the Government should consider offering these companies to the private sector. 4.18 The situation in the transport sector is complex. Public bus transportation was developed originally by the State and had been for a long time a state monopoly. In the seventies and eighties strong private competition developed. Meanwhile, ineffic:iencies in the operation of the public bus company have led to its decline. Today its share in bus transportation (the main means of urban and interurban passenger transport) is less than 5Z. There have been some efforts to purchase new buses and increase the State's share in the bus transport system. A better solution would be to sell the few remaining state owned buses and liquidate the company. Evidence shows that the relevant Government agencies do have the necessary tools to regulate effectively the mass passenger transport service and promote competition with participation of a large number of independent bus operators. 4.19 The shipping company, SMS, has sustained large losses as a result of its uneconomic service mix and size and the very low tariffs charged for its domestic services. The company operates in three completely different areas: deep sea shipping (one owned vessel), ferry services and river passenger transport. All three branches are too small to be run as a state company. Consideration should be given to the privatization of the three branches separately. Since the Government intends to keep the tariffs of the ferry transport in Paramaribo at a low level because of their social considerations, a tightly controlled subsidy system linked to the number of transported passengers might be elaborated and introduced for the private ferry operators. Restructuring 4.20 The most urgent task in the restructuring of the sector is to resolve the problem of the largest loss-makers: Wageningen state farm (Sf14 million per year), Bruynzeel wood processing factory (Sf8.5 million, Marienburg sugar mill (Sf7.7 million), GPOV palm oil producer (Sf6.5 million) and Melkcentrale (Sf6.3 million). Their total losses are more than Sf40 million per year, which is roughly equal to the total consolidated loss of the whole sector. 4.21 Divestment would be the best solution for GPOV. GPOV's three estates could be sold separately. The deficit of the Melkcentrale could be eliminated by phasing-out the consumer and producer price subsidies. The elimination of the subsidies on fresh milk, accompanied by the increased availability of reconstituted milk produced from cheap imported powder milk, would not have a significant effect on low income milk consumers or on domestic milk producers. - 32 - 4.22 The Wageningen state farm and rice mill is one of the largest enterprises in the country. Its annual loss is equal to about 50% of its sales. Part of its losses originate from financing of costly social services which are the Government's responsibility; however, most of its losses result from operational inefficiencies. The company has incurred these huge losses for several years without showing any sign of improvement. The sale of the company as one unit does not seem to be a viable option, since it would be difficult to find a buyer for such a large, loss-making estate. The sale of the rice fields in medium and small size plots could be feasible, but would pose two problems: (i) the farmers operating these plots would not need more than a small fraction of the present workforce; and (ii) the remaining rice mill would have to bear the burden of most of the overhead and, social costs of the present compan). As an alternative, the Government might consider selling the company as a whole to its employees. This would force the company to survive without a government subsidy. Under these conditions, the company would find ways to operate profitably particularly since hundreds of private farms flourish profitably around Wageningen. 4.23 The performance of the Bruynzeel wood processing firm has been declining steadily for several years. To improve it the Government should strengthen management and elaborate a physical and financial restructuring plan, including a strict implementation schedule. Assistance of outside consultants would be required. Ae an alternative option, the Government should consider the privatization of the firm. Although the company is very large, it consists of many plants which could be sold separately to private investors. 4.24 The Marienburg sugar mill is in a desperate overall situation. Its buildings and equipments are run down, old (some of them 90 years old) and irreparable. Sugar production fell to 1,196 tons in 1987 from 8,117 tons in 1981. The cost of 1 kg sugar, estimated at Sf2.50 a few years ago, reached Sf10.00 in 1987 while the price of imported sugar was Sf0.67 CIF Paramaribo. The company has prepared a feasibility study for the rehabilitation of the plant, which shows that the only way of "rehabilitation" is to build a virtually new sugar mill. Such an investment would not be justified, because the production cost of the sugar after the rehabilitation would be Sf1.50/kg. Neither the location of the sugar mill nor the climate of the area are suitable for sugar cane production. In particular, the dry season is too short, which makes the sugar content of the cane too low (historically 4.5-6.7%, and in 1987, under 3Z, compared to 12-15% in sugar exporting countries). It would be highly advisable to close this operation. At the same time the present cane fields should be diverted to the production of other crops (mainly coffee and tropical fruits). Implementation of the above recommendations would result in a leaner and more profitable state enterprise sector. Management 4.25 The most important factor determining the success or failure of public enterprise management would be the improvement of the economic environment in which the state firms operate. Among the sector-specific actions the most urgent one seems to be the upgrading of the information system and the development of physical and financial performance indicators. Public enterprises need to be monitored continuously in terms nF thoSp 4nd4r tnre. Tho rnVarn aint n1n nede a fsill 4nventnrv nF its - 33 - enterprises' investment needs. The Government should consider establishing a monitoring department in either the Ministry of Finance or Planning Bureau for this purpose, whose responsibility would be to determine together with other sectoral ministries, the scope of information required. The regular (monthly or quarterly) reports would be sent from the enterprises to the central unit through the relevant sectoral ministry. The central unit would check, consolidate and process these data and distribute their i.,formation to all interested government agencies. The Government also needs precise information on the flow of funds between its enterprises and the central budget and also on the size and character of financial obligations of the enterprises. All the above information should be used: (i) to assess the performance of enterprises and their managers; and (ii) as basis for central government decisions on macroeconomic issues and on strategic issues of individual enterprises. 4.26 The operations of the state enterprises will not be successful in the absence of freedom of their managers to make decisions on all aspects of their day-to-day operations (production program, personnel, pricing, salaries and wages, and maintenance expenditures). The Government should intervene (through its representatives on their Boards) only on strategic issues such as medium and long term plans, expansiom, and opening of new lines of business. 4.27 The Government should consider increasing the accountability of managers and introduce a regular system to assess their performance, particularly the financial situation and the trend of the profitability of the enterprises. The differences in performance of individual enterprises suggest the need for strengthening their management by removing inefficient managers. At the same time, a bonus system could be attached to the performance evaluation in order to reward competent managers. 4.28 Price setting is inevitable for enterprises operating under monopolistic conditions (electricity, water, telecommunication, ferry). In these cases, it is important to establish prices and tariffs at a level that covers the long-run marginal cost of production. If the Government decides that certain goods or services need to be sold at prices below that level, the difference should be financed from the bud-et through transparent and explicit consumer subsidies; but price controls should be phased-out. - 34 - CHAPTER V THE PUBLIC SECTOR INVESTMENT PROGRAM A. Background Overview 5.1 The suspension of Dutch Government aid in 1982 had an adverse effect on Suriname's public sector investment program. Project execution was either halted or severely curtailed. Hardest hit were projects with a large foreign exchange component since aid from the Netherlands accounted for about 90Z of capital inflows between 1976 and 1982. The shortage of foreign exchange led to a forced cutback in imports and precipitated a shortage of key inputs, machinery and equipment needed to sustain productive sector activity. Development Strategy 5.2 The Government's development strategy focuses, in the short-term, on the restoration of domestic production to pre-1982 levels by rehabilitating infrastructure for the major productive sectors. Over the medium-term, the authorities seek to achieve sustained growth through the diversification of the economy. 5.3 The new Government has not yet designed a comprehensive package of projects to support these broad objectives. It has solicited technical assistance from the IDB to undertake the preparation of the portfolio of projects for possible external financing as part of an effort to develop a realistic public sector investment program (PSIP). The Bank mission identified an extensive list of projects at varying stages of preparation during discussions with Government officials. The PSIP therefore, is a listing of some of the major ongoing and proposed capital projects for the 1988-1991 period. Its composition is appropriate for the present. The PSIP discussed below is thus a limited one and is likely to be expanded in the medium term to fully reflect emerging government priorities. Final decisions regarding the continuation or commencement of some projects are expected to be made during the investment programming exercise.1 The projects included in the Government's catalogue concentrate on the rehabilitation of existing assets and promotion of activities which can earn or conserve foreign exchange. A sound development strategy will 1/ Since the time of the mission, the Government has been preparing a comprehensive PSIP within the framework of a multi-annual development plan (MADP). Ongoing and new projects during the first year of the MADP are estimated to cost Sf277 million in comparison to an estimate of Sfl61 million for 1990 for the limited PSIP examined by the mission (see Table 5.1). The largest shares of the Government's PSIP are assigned to agriculture (15%), energy (23%) and industry (11%). - 35 - require that the Government undertake only infrastructure investment in support of private sector-led economic growth. 5.4 With the reestablishment of Dutch Government aid during the second half of 1988, about US$450 million in grants are expected to flow into the country in the medium-term. However, in the absence of a viable macroeconomic framework and a judicious utilization of these resources, the country still may find itself worse off over the medium-term than it is today. B. Composition of the PSIP 5.5 Between 1988 and 1990, the Government proposes to spend an estimated Sf370 million on public investment. Given the program's emphasis on rehabilitation, considerable attention is being paid to the agricultural sector. In addition to developing new rice polders in the Nickerie District, Phase II of the Multi-purpose Corantijn Project (MCP) will focus on installing a distribution network and increasing the capacity of the pumping station from 30 meters to 50 meters per second in order to fully irrigate old and new rice polders. 5.6 Insurgency activities together with spearrot disease -retarded the development of the oil palm industry. Because of the unrest the expansion of the estate at Patamacca was halte' and 3,500 hectares of oil palm trees are not being harvested. The immediate concern of the Oil Palm Project at Patamacca is to renew operations and expand production capacity to 5,000 hectares. There is also a proposal to construct a refinery to process the oil produced on this estate. Consideration should be given for the private sector to undertake the project. 5.7 Under two Banana Expansion Programs 1,500 hectares are to be cultivated. The current high prices for banana exports, together with the fact that production is currently below the amount Suriname can export to the United Kingdom under contract with Fyffes Group Ltd., is primarily responsible for plans to increase production. This decision should, however, be carefully re-evaluated against the background of the uncertainties surrounding the continuation of this preferential access beyond 1991. Consideration should be given to the private sector undertaking this project. 5.8 The Aquaculture (Brackish water fish) Project is being funded by the IDB and involves the establishment, over 2 years, of a 30 hectare pilot farm. In addition, funding also is being sought to improve the artisanal fis:.ing fleet and fishing techniques through the Artisanal Fisheries/Boat- building Project, which is estimated to cost Sf17.8 million. 5.9 Insurgency activities in the interior resulted in a considerable loss of output capacity in the forestry sector. The Government proposes to rehabilitate Suriname Wood Processing Industry (Bruynzeel) at a cost of Sf26.3 million by rebuilding the sawmill destroyed by fire in 1983. The Suriname Timber Company Project would improve the company's logging and saw milling activities. However, the company has been experiencing considerable losses and the Government is in the process of deciding whether to liquidate the company or to consolidate activities in the forestry sector. Consideration should be given to the private sector undertaking this project in the context of privatization of the enterprise. - 36 - 5.10 Projects in the energy sector offer considerable potential for import substitution and foreign exchange savings. The IDB is financing a feasibility study of the Tambaredio Energy Project, which would increase energy generation by combining heavy crude oil with imported diesel oil for use as boiler fuels. Assistance is also being sought to examine alternative energy sources, including solar energy and the burning of rice husk. The State-Oil Company Project which is estimated to cost Sf74.5 million, would augment oil production from 3,000 to 5.000 barrels of crude oil per day. However, it would be critical to examine the economic and financial viability of the project through further studies, given its relatively small size, existing refinery capacity in the Caribbean Region, and the lack of local technical expertise. Financing also is being sought to construct a transmission line from Paranam to Paramaribo at a cost of Sf40 million. 5.11 In the transportation sector, the emphasis of the PSIP is on improvement of the efficiency of agricul'ural production. Priority is being given to securing financing for the construction of an Export Loading Wharf. Plans are to replace two wooden piers which are in an advanced stage of deterioration with a 70-meters concrete pier (including storage facilities) at New Nickerie to facilitate the loading and shipping of rice and bananas. 5.12 The Gros Rosebel Gold Exploration Project includes the industrial recovery of gold at a cost of Sf39 million. While the project offers an opportunity to generate foreign exchange earnings, the gold content of the ore should first be determined before it can be established that the project is justified. C. Financing 5.13 With the proposed intensification of project activity, public sector capital expenditures are projected to increase substantially. Expenditure will rise from an estimated Sf70 million in 1988 to Sf161 million in 1990. About 48Z of the proposed expenditures would be on ongoing activities as the public sector increases efforts to restart a number of projects. Financing for all the new projects except the IDB- financed Aquaculture project is still undetermined. 5.14 Many of the projects with a large foreign exchange component, in particular those with a long gestation period, will have to be fully financed through external assistance. An estimated Sf88.4 million per annum will be required in external assistance. A number of non-traditional donors are being approached for financing. 5.15 The proposed level of local financing will require the pursuit of an aggressive fiscal program to ensure that local counterpart funds are available. Such a program should: (i) aim to improve the performance of the non-financial public enterprises, particularly in view of the Government's policy to restrict transfers to these institutions; and (ii) give priority to short gestation projects with a high rate of return. - 37 - Table 5.1: FINANCING Of THE PUBLIC SECTOR INVESTMENT PROGRAM, 1988-90 (Sf'000) 1988 1989 1990 TOTAL PSIP 63,899 145,222 160,841 Central Government 13,364 38,683 11,140 External 9,829 37,513 10,261 Grants 5,282 9,087 4,050 Loans 4,547 28,426 6,211 Local 3,535 1,220 979 Rest of Public Sector 50,535 106,539 149,701 External 38,427 73,832 98,260 Grants 119 962 0 Loans 38,308 72,870 96,460 Local 12,108 29,407 47,741 Source: Ministry of Finance and Planning; Bank staff estimates and projections. D. Implementation 5.16 The PSIP may be constrained by the limited availability of human resources to prepare and manage the projects. It also contains a number of projects, for example, the Restructuring of the Sugar Cane Industry and Suriname Timber Company Improvement, the viability of which are highly questionable. 5.17 The major challenges facing the Suriname Government over the planning period is to ensure that the projects in the PSIP are consistent with overall development objectives, that the resources mobilized to finance the program are used efficiently and that the institutional framework for investment programming is in place. Accepting these challenges requires two major sets of decisions. First, projects included in the PSIP must increasingly be based on a rigorous set of selection criteria, including rates -f return. In the short-term, the criteria also should give priority to economically and financially sound ongoing projects which were suspended or delayed because of inadequate financing and have a relatively high potential to generate or save foreign exchange. The identification of projects on the basis of such criteria also will serve to focus energies on those projects which are of highest priority and form the core of the PSIP. - 38 - 5.18 Second, attention should be paid to the institutional framework for investment programming. Responsibility for formulating and monitoring the PSIP and identifying macroeconomic policies which can enhance program performance must be clearly established. The Planbureau can assume responsibility for economic policy formulation and planning; however, this will require a broadening of the responsibilities of the Unit which was originally set up to monitor the performance of the Dutch Government-funded development aid. 5.19 The shortage of inputs, spare parts and equipment which affected implementation of many of the ongoing projects in the PSIP can be traced to the acute scarcity of foreign exchange. Equally responsible are the generally poor maintenance practices which have contributed to a marked deterioration in infrastructure over the last five years. This problem may be attributed either to inadequate allocation of resources to cover maintenance costs or, where several ministries are involved in the project execution, a lack of clear lines of responsibility for maintenance activities. If capacity utilization and consequently the returns on investments are to increase during this phase of the PSIP, adequate provisions for maintenance should be made either in the recurrent budget during the annual budgeting exercise or in estimated project costs. E. Technical Assistance 5.20 Technical assistance programs, both ongoing and proposed are focused largely on the productive sectors. Accordingly, considerable emphasis has been placed on the assessment of mineral resources, provision of electricity, exploration of alternative forms of energy and training in industrial management and project preparation. Some programs also have been prepared for the social sectors, including the development of a vocational and technical training institution and studies on the provision of potable water. The ongoing and proposed technical assistance programs are listed in Annex IV. - 39- CHAPTER VI MEDIUM-TERM GROWTH AND BALANCE OF PAYMENTS PROSPECTS A. Overview 6.1 This chapter discusses the medium-term prospects of the Surinamese economy. Two alternative illustrative policy scenarios are presented. The scenarios do not represent forecasts per se, but rather quantitative indications of the range within which key economic variables could probably lie, depending on the extent to and speed with which the recommended economic reforms are carried out. These scenarios also provide a better understanding of the factors affecting growth and their inter- relationships. The projections utilize the World Bank's commodity price forecasts. A summary of the projections is shown on Table 6.1. 6.2 Suriname's medium-term growth prospects will be influenced largely by the extent to and speed with which key macroeconomic and sectoral issues are addressed. These relate to: (i) the creation of a macroeconomic policy framework conducive to sustainable economic growth through the use of a consistent and adequate mix of exchange rate, fiscal monetary, and wage policies; (ii) removal of Trice controls, import and export licensing procedures and other quantitative trade restrictions; (iii) agreement with private bauxite sector companies to restore the industry's competitiveness; (iv) rapid implementation of a divestment program; (v) improve incentives in agriculture and complete irrigation works; (vi) rehabilitation of transport and other infrastructure; (vii) price adjustments and greater autonomy in the public enterprises; and (viii) execution of an adequate PSIP. B. The Marginal Real Growth Scenario 6.3 The marginal real growth scenario assumes an insufficient domestic policy response. Performance of the economy is projected to be only marginally better than in the preceding five years. Such performance would be related to the ongoing recovery in the bauxite sector originating from favorable world market prices and ongoing agreements with companies in the sector. Agricultural output is projected to increase because of the completion of irrigation works, while the services sector is projected to achieve marginal value added incr.eases. Such a performance, however, would not be sufficient to eliminate the stagnation in per capita income and consumption over the medium to longer term. The country would eventually be overwhelmed by the inherent weaknesses of the economy. The bauxite sector would stagnate after an initial recovery and then decline. Inadequate incentives would deter expansion in the other exports, while growth in the agricultural sector would barely exceed population growth. 6.4 Real GDP is projected to grow by 0.5% per year on average during 1989-93, while real per capita consumption is projected to decline by 2.1' per year on average. The balance of payments position would be only sustained through a cut-back on imports, since the economic decline would eventually lead to lower levels of donor support. This would affect the import capacity necessary to sustain growth in the economy. The balance of payments current account deficit is projected to be 2.3Z of GDP in 1993 while the debt service ratio is projected to reach 5.5Z in the same year. - 40 - Similarly, there would be a reduction in investment: the investment to GDP ratio is projected to average 7.3% per year compared with an estimated 10% in 1988. Lower levels of investment would also imply lower absorption of grant assistance from the Netherlands amounting to about US$214 million as against a possible maximum of about US$450 million during 1989-95. Table 6.1: KEY MACROECONOMIC INDICATORS, 1987-93 (annual average growth rate and percent of GDP and GDY; US$ million) 1987 1988 1989-1993 Rising Marginal Actual Estimated Growth Growth Domestic Balance Real Gross Domestic Product -7.8 -0.6 3.2 0.5 Real Consumption -4.8 4.3 3.1 0.2 Per Capita Consumption -6.8 1.5 0.9 -2.1 Real Gross Domestic Savings (Z of GDY) 5.2 8.4 9.1 3.3 Real Investment (% of GDP) 6.5 10.0 11.7 7.3 External Balance Exports (GNFS) 1.2 36.0 7.3 1.0 Imports (GNFS) -0.6 29.2 6.6 2.5 Current Account Balance US$ million -8.2 -2.5 -15.4 -45.1 Z of GDP -0.8 -0.2 -1.1 -2.9 Debt Service Ratio 2.0 4.4 6.6 7.0 Population (thousands) 0.41 0.42 0.44 0.44 Source: Annex I. C. The Rising Real Growth Scenario 6.5 The rising real growth scenario reflects the halting of the decline in real GDP and creation of conditions for real GDP to gradually increase starting with 2.0% in 1989 and averaging 3.2% per year between 1989 and 1993. This scenario assumes the implementation of policy recommendations included in this report. Total investment is projected to increase from 10% of GDP in 1988 to 13.5% in 1993 as a result of the execution of the PSIP and an upsurge of private investment. Total investment is projected to increase in 1989 because of the accelerated implementation of ongoing projects and large increases in capital goods imports. This would allow agricultural production to achieve its 1986 level in 1989 and increase at an annual average rate of about 4% during the projection period. Increases in rice production and exports would depend on adequate levels of input supplies and spare parts. Shrimp production and exports would be governed by biological limits to fishing in coastal waters, but has potential for growth through aquaculture. Increased production and export of wood and lumber would depend on the supply of - 41 - spare parts and logging machines in the short term. Over the medium term it would depend on the reorganization and privatization of the sector. 6.6 Living standards are projected to improve with per capita consumption rising by about 0.9% per year on average during the period. In 1991, however, the growth of consumption per capita is projected to become negative because of a projected deterioration in the terms of trade. The current account deficit of the balance of payments is projected to increase to about 2.3% of GDP by 1991 mainly because of an increase in imports needed for reconstruction of the economy and to increase capacity utilization. Beyond 1991, the current account deficit is projected to fall, as investments in previous years would be substantially completed and would yield higher output and exports. The deficit is projected to be financed largely from grants (US$450 million) from the Netherlands and from concessional loans during 1989-95. The debt service ratio is projected to decline to 3? in 1993 as exports respond to the improved incentive framework. Table 6.2: PROJECTIONS OF EXTERNAL FINANCING REQUIREMENTS, 1989-93 (US$ million) Rising Growth Marginal Growth Scenario Scenario Resource Balance (cumulative) -45.30 -198.3 (Average as 2 of GDP) (-1.7) (-3.9) Current Account Balance -77.1 -225.7 (cumulative) (Average as Z of GDP) (-1.1) (-2.9) Public Capital Requirements 503.7 147.6 Source: Bank staff projections. 6.7 Assuming rapid agreement is reached with the companies, the bauxite sector is projected to recover in 1989 and alumina production is projected to rise gradually from 1.4 million metric tons to 1.6 million metric tons over the medium term. Aluminum production is projected to reach its maximum capacity of 30,000 tons in 1991. The service sector would also expand in line with the expansion of other sectors and grow from 1.0% in 1989 to 3.5? in 1993. 6.8 A major problem related to the country's creditworthiness is the accumulation of external payment arrears. The rising real growth scenario assumes that these arrears would be gradually eliminated by 1993. The marginal growth scenario, on the other hand, assumes the gradual elimination of arrears for 1995. In the absence of the actual implementation of an appropriate macroeconomic framework to address the issues highlighted in this report, Suriname cannot be considered creditworthy for Bank lending. ANNER I - 42 - Page 1 of 4 TABLE 1: SURINAME - ACTUAL AND PROJECTED NATIONAL ACCOUNTS, 1987-1993 MARGINAL GROWTH SCENARIO (in constant 1987 Sf million) ACTUAL PROJECTED 1987 1998 199 1990 1991 1992 1993 Gross Do@. Product 1940.00 1928.95 1941.04 1951.07 1959.76 1966.85 1972.22 Terms of Trade Adj. 0.00 164.61 42.40 24.81 14.45 23.70 33.18 gross Do. Incose 1940.00 2093.56 1983.44 1975.89 1974.20 1990.55 2005.40 Imports GNFS 693.80 943.55 773.01 779.65 783.11 787.23 784.25 Exports 8NFS TTADJ -657.80 -825.94 -712.65 -698.14 -690.73 -703.22 -717.11 Resource Gap 26.00 17.61 60.36 81.51 92.38 84.01 67.14 Total Resources 1966.00 2111.17 2043.90 2057.39 2066.59 2074.57 2072.54 Consumption 1840.00 1918.28 1907.93 1918.87 1925.48 1929.02 1922.65 Investment 126.00 192.99 135.87 139.53 141.10 145.55 149.89 Public 37.00 63.90 63.26 62.63 62.00 62.00 62.00 Private 89.00 128.99 72.61 75.90 79.10 83.54 97.89 Gross Dos. Savings 100.00 175.29 75.h1 57.02 49.72 61.53 82.75 Net Factor Payments 0.71 -24.32 -23.78 -21.56 -19.37 -16.11 -13.80 Transfers 10.71 10.19 10.07 10.41 10.55 10.70 10.84 Gross Nat. Savin, 111.43 161.16 61.80 45.87 40.91 56.12 79.79 Gross Nat. Product 1940.71 1914.99 1927.33 1939.92 1951.95 1961.44 1969.26 Gross Nat. Incose 1940.71 2079.42 1969.73 1964.73 1966.39 1985.14 2002.44 RMur RATMs IN cOWStAt PRICS GDP -0.57 0.63 0.52 0.45 0.36 0.27 Total Resources 7.38 -3.19 0.67 0.45 0.39 -0.10 Investment 53.09 -29.56 1.95 1.86 3.15 2.99 Consumption 4.25 -0.54 0.57 0.34 0.18 -0.33 Bauxite 8.01 -1.00 -2.00 -3.00 -4.00 -4.50 Agriculture -13.94 6.60 3.50 2.60 2.60 2.58 Industry 1.00 1.30 -1.00 -0.50 -0.50 -0.55 Services 0.10 0.73 0.70 0.60 0.51 0.40 Consumption per capita 1.81 -2.87 -1.79 -1.62 -1.79 -2.28 panawrGESOF ODP MN GDT Based in constant Sf IlGDP 6.49 10.00 7.00 7.10 7.20 7.40 7.60 @DOSDY 5.15 8.37 3.81 2.99 2.47 3.09 4.13 GNS/mOY 5.74 7.70 3.12 2.32 2.07 2.82 3.98 C/6DY 94.95 91.63 96.19 97.11 97.53 96.91 95.87 SOURCEs Nission Estimates. ANNE I - 43 - Page 2 of 4 TABLE 2: SURINAME - ACTUAL AND PROJECTED BALANCE OF PAYMENTS, 1987-93 MARGINAL GROWTH SCENARIO (US$ million) ACTUAL PROJECTED 1987 1988 1989 1990 1991 1992 1993 Exports, SNFS 368.37 500.92 459.44 456.83 468.21 493.79 521.62 Imports, GNFS 382.93 494.69 482.54 497.25 518.69 541.53 558.19 Resource Balance -14.56 6.23 -23.11 -40.41 -50.48 -47.74 -36.57 Net Transfers 6.00 6.18 6.49 6.91 7.15 7.51 7.89 Net FSY 0.40 -14.71 -15.33 -14.11 -12.45 -11.31 -10.04 Interest -5.30 -13.63 -14.25 -13.02 -11.35 -10.20 -0.91 Current Balance -8.16 -2.35 -31.95 -47.71 -55.77 -51.54 -38.72 Private Capital -27.40 -10.00 -7.00 -4.90 4.00 6.50 9.00 Grants 4.30 41.00 35.00 38.50 42.35 46.59 51.24 Disbursements KLT 3.00 17.00 15.50 9.45 5.67 3.40 2.04 Amortization HLT 2.10 7.12 24.62 24.62 17.12 17.12 18.62 Net NLT 0.90 9.88 -9.12 -15.17 -11.45 -13.72 -16.58 Errors and Omissions 15.00 -46.53 0.00 0.00 0.00 0.00 0.00 Changes in Reserves 15.40 8.00 13.06 29.28 20.87 12.18 -4.95 Bross Reserve Level 69.00 61.00 47.94 18.66 -2.21 -14.39 -9.45 RESLEV AS NONTHS OF N 2.16 1.31 1.19 0.45 -0.05 -0.32 -0.20 DSilGNFS 2.01 4.30 9.72 8.50 6.34 5.77 5.51 CBIDP -0.75 -0.18 -2.31 -3.27 -3.63 -3.18 -2.27 DID/GDP 1 15.98 14.04 12.63 10.93 9.61 8.28 6.99 SOURCE: Nission Estimates. Al=NE I .44 - Page 3of 4 TABLE 3: SURINAME - ACTUAL AND PROJECTED MACROECONOMIC INDICATORSo 1987-93 RISING GROWT SCENARIO (in constant 1987 Sf Millions) ACTUAL PROJECTED 1987 198 1989 1990 1991 1992 1993 Bross aea. Product 1940.00 1928.94 1968.05 2032.Z1 2101.42 2173.77 2253.65 Terms of Trade Adj. 0.00 164.61 182.78 232.49 122.95 214.05 309.10 Gross Dos. Income 1940.00 2093.55 2150.84 2264.80 2224.37 2387.92 2562.74 Imports GNFS 683.80 843.94 848.76 868.36 941.39 953.57 951.03 Exports SKFS TTADJ -657.80 -825.94 -793.32 -833.84 -874.86 -932.36 -978.15 Resource Gap 26.00 17.90 55.43 54.52 66.53 21.22 -27.11 Total Resources 1966.00 2111.45 2206.27 2319.32 2290.90 2409.04 2535.63 Consumption 1840.00 1918.55 1989.78 2075.44 2080.75 2148.19 2231.39 Investment 126.00 192.99 216.49 243.8 210.14 260.85 304.24 Public 37.00 63.90 100.00 110.00 120.00 130.00 145.00 Private 89.00 128.99 116.49 133.88 90.14 130.85 159.24 Bross Dos. Savings 100.00 175.00 161.05 189.35 143.61 239.63 331.36 Net Factor Payments 0.71 -24.32 -23.94 -21.72 -19.42 -17.92 -17.35 Transfers 10.71 10.19 9.97 10.31 10.55 10.90 11.36 Gross Nat. Savings 111.43 160.87 147.08 177.94 134.74 232.61 325.37 Gross Nat. Product 1940.71 1914.81 1954.08 2020.90 2092.54 2166.75 2247.66 Gross Nat. Income 1940.71 2079.42 2136.86 2253.38 2215.50 2380.80 2556.76 SW*TB_AMS In eitant Prices GDP -0.57 2.03 3.27 3.40 3.44 3.67 Total Resources 7.40 4.49 5.12 -1.23 5.16 5.25 Investment 53.09 12.23 12.65 -13.83 24.13 16.63 Consumption 4.27 3.71 4.30 0.26 3.24 3.87 Bauxite 9.00 6.00 5.80 4.00 3.50 2.50 Agriculture -13.94 5.00 4.90 3.90 3.50 3.50 Industry 1.00 3.50 4.60 5.00 4.80 4.50 Services 0.10 1.00 2.50 2.80 3.00 3.50 Consumption per capita 1.83 1.29 1.96 -1.71 1.22 1.84 PERC:AR OF GDP and GDY Based in constant Sf I/88P 6.49 10.00 11.00 12.00 10.00 12.00 13.50 GIGS6DY 5.15 8.36 7.49 8.36 6.46 10.04 12.93 ONS/6BY 5.74 7.68 6.94 7.96 6.06 9.74 12.70 CIGDY 94.85 91.64 92.51 91.64 93.54 89.96 87.07 SOURCE: ission estimates. AlNEX I - 45- Page 4of 4 TABLE 4: SURINAME - ACTUAL AND PROJECTED BALANCE OF PAYNTS, 1987-93 RISING GROWTH SCENARIO (In US$ million) ACTUAL PROJECTED 1987 1988 1989 1990 1991 1992 1993 Exports, 6NFS 369.37 500.92 511.45 545.63 593.03 654.69 711.50 Imports, SNFS 382.93 494.83 531.12 567.81 625.12 657.25 680.29 Resource Balance -14.56 6.09 -19.67 -22.18 -32.10 -2.57 31.22 Net Transfers 6.00 6.18 6.43 6.75 7.15 7.65 9.27 Net FSY 0.40 -14.75 -15.43 -14.22 -13.17 -12.59 -12.62 of which Interest -5.30 -13.63 -14.25 -12.94 -11.79 -11.09 -10.98 Current Balance -8.16 -2.48 -28.68 -29.65 -38.11 -7.49 26.87 Private Capital -27.40 -10.00 5.00 5.50 6.05 6.66 7.32 Grants 4.30 41.00 85.00 88.00 90.00 92.00 95.00 Disbursements NLT 3.00 17.00 21.50 25.35 32.96 42.84 55.69 Asortization NLT 2.10 7.12 28.99 28.99 28.99 28.99 8.62 Net HLT 0.90 9.8 -7.49 -3.64 3.97 13.86 47.07 Errors and Omissions 15.00 -46.40 0.00 0.00 0.00 0.00 0.00 Changes in Reserves 15.40 8.00 -53.84 -60.21 -61.91 -105.02 -176.26 Gross Reserve Level 69.00 61.00 114.84 175.05 236.96 341.97 518.24 RESLEY AS NONTHS OF N 2.16 1.48 2.59 3.70 4.55 6.24 9.14 DSIlSNFS 2.01 4.38 8.69 7.90 7.08 6.30 2.92 CD/6SP -0.75 -0.19 -2.05 -1.95 -2.31 -0.42 1.38 DOD/GOP Z 15.98 14.04 12.57 11.36 10.70 10.63 12.18 SOURCE: Nission estimates. - 46 - ANNEX II PAGE 1 OF 11 ANALYTICAL NOTES A. INFLATION IN SURINAME, 1970-87 1. Introduction The purpose of this note is to analyze the main determinants of inflation in Suriname during 1970-87, and in particular, to examine how inflation was affected by fiscal imbalances after the change in the import regime in 1984. In 1984 the Government authorized importers to import goods if they could provide their own foreign exchange or acquixe it in the parallel market. The source of most private holdings of foreign exchange is the parallel market. A devaluation of the parallel market exchange rate would increase the price level through an increase in the domestic price of imported goods. Hence, an increase in Central Bank financing of the fiscal deficit would increase the rate of inflation through the devaluation mechanism in the parallel market, as the recipients of the additional money supply increase their purchases of foreign exchange in the parallel market. In addition, an increase in inflationary expectations, in so far as they are reflected in a devaluation of the parallel market exchange rate, would also increase inflation. The results of the econometric analysis indicate that the substantial deviations of domestic inflation from US inflation after the change in the import regime can be satisfactorily explained by the behavior of the fiscal deficit. The results also indicate that domestic inflation followed US inflation very closely up to 1984. 2. Econometric Methodology Suriname inflation is regressed on a constant tezm, US inflation, the fiscal deficit and a dummy variable taking the value of one in 1987 and zero elsewhere. The dummy variable is intended to capture the effects of a huge increase in the price of foreign exchange in the black market on inflation in 1987. The inflation equation is estimated by ordinary leest squares (OLS) and by instrumental variables (I.V.). The estimation of the equation by instrumental variables is performed to cope with the effects of the possible simultaneous determination of inflation and the fiscal deficit.1 To test the hypothesis that the change in the import regime in 1984 made inflation sensitive to the fiscal deficit, an additional dummy variable was included in the inflation equation to capture any shift in the coefficient of the fiscal deficit. The second dummy variable took a value equal to the fiscal deficit during 1985-87 and zero elsewhere. The coefficient of this dummy variable indicates if there was a significant structural change in the response of inflation to the fiscal deficit following the change in the import regime. The second specification of the inflation equation is also estimated by ordinary least squares and by instrumental variables. 1/ The presence of simultaneity between inflation and the fiscal deficit produces inconsistency in the estimator of the coefficient of the fiscal deficit. The instrumental variable estimation solves this problem if the instruments are predetermined. - 47 - ANNEX II PAGE 2 OF 11 3. Empirical Results The variables are defined as follows: (i) Domestic inflation: the rate of change in the Consumer Price Index; (ii) US inflation: the rate of change in US Wholesale Price Index; (iii) Fiscal Deficit: the ratio of the change in Central Government bonds held by the Central Bank to the stock of money broadly defined at the beginning of the period. The results of the least squares estimation indicate (see Table 1 below) that the coefficient of US inflation is statistically significant at the usual significance levels. In addition, the coefficient of the dummy variable for 1987 is positive and statistically different from zero, astd it reflects the inflationary effects of the huge devaluation of the exchange rate in the black market. However, the fiscal deficit appears as only marginally significant. The Durbin-Watson test (D-W) indicates no autocorrelation of residuals. Table 1: SURINAME - DETERMINANTS OF INFLATION, 1970/1987 OLS I.V. 7(t) 2(t) Constant 2.4286 -.6956 (.8813) (-.1607) rUS(t) .6710 .9348 (2.4701) (2.3647) d (t) .2233 .3951 M (1.8838) (1.8333) D1 43.4948 41.5441 (8.6381) (7.2248) R2 .8420 .8182 D-W 1.4887 1.6438 Note: t-statistics in parenthesis. i (t) : rate of change in Suriname C.P.I. 1US (t): rate of change in US W.P.I. d (t) : change in Government bonds held by the Central H Bank as a proportion of the money supply at the beginning of the period. D1 : dummy variable with value of one in 1987 and zero elsewhere. The instrumental variable for d (t) is its lagged value. M - 48 - ANNEX II PAGE 3 OF 11 The results of the instrumental variable estimation (see Table 1) indicate that 'he coefficient of US inflation is statistically significant and that the hypothesis that the coefficient is equal to one cannot be rejected.2 This indicates that US inflation is fully transmitted to domestic inflation. The Durbin-Watson test also indicates that the hypothesis of residual autocorrelation can be rejected. The results of testing for structural change in the coefficient of the fiscal deficit (see Table 2 below) indicate that this coefficient is highly ignificant during 1985-87 in both the least squares and the instrumental variable estimations. This contrasts with the absence of statistical significance of the coefficient of the fiscal deficit for the whole period. Thus, the hypothesis that a structural change occurred after 1984 cannot be rejected on the basis of these results. Table 2: SURINAME - DETERMINANTS OF INFLATION, 1970/1987 OLS I.V. I.V. Jr(t) r(t) T(t) Constant .8166 1.8434 .8831 (.4372 (.5593) (.5318) WUS(t) .8577 .7946 .8729 (4.6232) (2.6806) (4.8284) d (t) .0936 -.0652 - M (1.1115) (-.3222) d! (t) .4433 .6512 .6260 M (4.3280) (3.8270) (5.0564) D1 (87:1) 36.6374 34.5346 34.2679 (9.8997) (7.4637) (8.1661) R2 .9303 .8999 .9181 D-W 1.8959 1.6567 1.7690 Note: Instruments for d (t) and dl (t) are their lagged value and the M M lagged rate of inflation (Y (t-1)), respectively dl (t) is a variable equal to zero for 1970-84 and to d (t) H H for 1985-87. 2/ The value of the t-statistics is (.1649) and its marginal significance I v 1 to ( 071) ANNEX II - 49 - PAGE 4 OF 11 DATA: INFLATION EQUATION (%) Year d/M US 1969 1.00 -0.50 3.90 1970 1.75 -2.00 3.66 1971 -0.59 -0.60 3.26 1972 2.44 -0.30 4.48 1973 12.09 7.00 13.10 1974 15.96 3.50 18.86 1975 7.49 -1.40 9.24 1976 9.31 2.30 4.62 1977 8.83 15.80 6.12 1978 7.99 -5.50 7.77 1979 13.95 -2.40 12.56 1980 13.21 -3.00 14.01 1981 8.71 7.30 9.09 1982 7.29 11.60 2.15 1983 4.39 32.40 1.28 1984 3.69 27.10 2.24 1985 10.89 28.90 -0.43 1986 18.69 28.40 -2.69 1987 53.40 25.40 2.69 Source: Central Bank of Suriname and IMPs International Finance Statistics. ANNEX II - 50 - PAGE 5 OF 11 B. RICE SUPPLY RESPONSE TO RELATIVE PRICES, 1974-86 1. Introduction The purpose of this note is to estimate the price elasticity of rice supply in Suriname during 1974-86. The period was chosen on the basis of data availability. This study will help to address the question of what will the response of rice production be if a devaluation of the real exchange rate is achieved. In addition, the price elasticity of rice exports is also estimated. The results indicate a short-run price elasticity of rice supply of about (.60) and a short-run price elasticity of rice exports of about (.95). Data availability has precluded this study from a proper evaluation of the long-run elasticities. 2. Specification of the Supply Function Let the production function be: (1) Y = F (X,Z) where X is a vector of variables inputs; and where Z is a vector of fixed inputs. By definition, the firm can choose the amounts of variable inputs according to their relative prices. Let the demand for variable inputs take the following form: (2) Xi = hi (Pxi; I ; Pxi ; Zi ; Zj ) p p p 'Where Pxi is the price of input Xi Where Pxj is the price of substitute ani complement inputs to xi P is the price of final output Y p is the numeraire (i.u.s the general price level). By definition, the amounts used of fixed factors change only through time. The dynamics of the adjustment of the fixed factors to their des.red long- run levels can be specified ass (3) Zi(t) Zi s (t-1) + gi (-Pi (t); 1 (t; Wa (t)...) p P P where 0 is the coefficient of adjustment of the stock of input Zi to its long-run value. Inserting (2) and (3) in (1) we get: (4) Y (t) = F(PA (t) ; P (t); PAJ (t); Zi (t-1)) P p p - 51 - ANNEX II PAGE 6 OF 11 The short-run supply price response is evaluated as: n n m Y(t) E OF .OXi(t) + E E OF Oxilt 8(Pip)(t) i=l OXi(t) (P/p) (t) i=1 j=i OXi(t) Oz(t) m 82i + E OF . 0Zi O(P!p(t) i=1 OZi O(P/p)(t) The long-run response is derived once the full effect of a change in the relative price on the demand for Z factor is taken into account: n n m E OF .Oxit + E E OF .ejimt . 1 6 + i=1 OXi(t) 0(P/p)(t) i=1 j=i OXi(t) OZj(t) (1-OL) OP/p(t) m 1 E Ogi (1-0L) J=1 OP/p(t) where L is the lag operator (Li x (t) - X(t-j)). 3. Empirical Results A log-linear version of equation (4) is estimated for 1974-86. Only the planted area was included in the estimation of equation (4) as fixed input because of data availability. In addition, data on the formation of price expectations. A dummy variable was also included to capture the effect of unfavorable weather conditions in 1983. The results of the least squares estimation (see table 1) indicate that the short-run price elasticity of supply of rice is (.60) and it is statistically significant. In addition, the coefficient of one period lag of the planted area is also highly significant. The lack of data with respect to other fixed inputs has not allowed us to make any inference on the long-run price elasticities. The values of the Box-Liung statistic to test the hypothesis of serial correlation of the residuals at several lags indicate that it can be rejected. The response of rice exports to price incentives was also estimated. The specification is based on some ad hoc reasoning. It includes lagged rice production among the explanatory variables. This variable attempts to capture the effect of rice stocks policy on rice exports. The res:Ats (see Table 1 below) indicate that the response of exports to a contemporaneous change in the relative price of rice is almost one (.9540) and highly significant. This result indicates that, as rice supply responds only to a one-period lag of its relative price, most of the response of rice exports to changes in its price is a result of changes in the domestic consumption of rice and stock accumulation. ANNEX II - 52 - PAGE 7 OF 11 Table l RICE SUPPLY AND EXPORTS FUNCTIONS, 1974-86 in Qr(t) in Xr (t) Constant -2.1225 -13.5485 (-1.5160) (-2.7786) in Pr (t-1) .6044 CPI (2.2672) in Pr (t) - .9540 CPI (2.0700 in Hr (t-1) 1.8321 - (5.5720) D1 -.1634 - in Qr (t-1) - 2.5584 (4.7270) R2 .9357 .8871 Q (2) .8276 .6818 (.6611)a (.7111)a Q (3) 2.9568 .6818 (.3983)& (.8775)A Q (6) 6.1573 3.0014 (.4058)a (.8087)4 Notes: Qr(t) = volume of rice production Pr (t) = real price of rice CPI Hr (t) - area devoted to rice production Xp (t) = exportd of rice D1 = dummy variable taking a value of one in 1983 and zero elsewhere Q(x) - Box-Liung statistics to test residual autocorrelation up to x lags a - marginal significance levels of the calculated Q(x) statistics ANNEX II -53 - PAGE 8 OF 11 DATA: RICE SUPPLY FUNCTION Year Pr Qr Hr Xr ($)/ton ('000 tons) ('000) ('000 tons) 1973 160.0 164.1 45.0 1974 190.0 162.4 44.9 1975 210.0 174.8 47.5 1976 221.0 172.5 48.4 1977 259.0 202.9 49.7 54.7 1978 204.0 223.9 55.2 74.7 1979 247.0 235.8 58.9 103.0 1980 243.0 257.6 65.0 101.1 1981 233.0 280.7 70.8 112.9 1982 244.0 301.1 72.6 130.8 1983 245.0 268.0 73.3 127.4 1984 248.0 302.0 74.8 94.7 1985 250.0 299.2 74.9 127.5 1986 250.0 300.0 75.1 108.1 Source: Tables 3.2 and 7.1, Statistical Appendix. ANNEX II - 54- PAGE 9 OF 11 C. SOME DETERMINANTS OF TAX REVENUES IN SURINAME, 1975-87 1. Introduction The purpose of this note is to analyze the sensitivity of non- bauxite real tax revenues to inflation. If the tax base is not adjusted for inflation, inflation erodes the tax base because of legs between accruals and realizations of tax revenues. In addition, if there are specific taxes fixed in nominAl terms, inflation diminishes their revenues in real terms. The erosion of real tax revenues caused by inflation produces a feedback between inflation and money creation. Once inflation rises as a result of previous increases in money creation, so does the fiscal deficit as tax revenues decline in real terms. In the absence of corrective measures (i.e.: measures reducing government expenditure in real terms), higher fiscal deficits imply, in turn, higher rates of money creation to finance the gap. The main finding here is that non-bauxite tax revenues are, in real terms, quite sensitive to inflation. It is estimated that an annual inflation rate of 502 would cost about four percentage points of GDP in terms of tax revenue losses. 2. Empirical Results Non-bauxite real tax revenues (deflated by GDP at current prices) are regressed on a constant, the rate of inflation, a trend variable and a dummy variable. The inclusion of a trend variable is intended to capture the impact of trend components (i.e.: economic growth) on tax revenues in real terms; the dummy variable is included to deal with an apparently anomalous observation in 1980. The non-bauxite tax revenue equation is jointly estimated with an equation for bauxite tax revenues by the seemingly unrelated regression (SUR) technique. The reason for using this technique is that common shocks to both equations are possible. These shocks make the residuals of both equations contemporaneously correlated, and, this being the case, ordinary least squares estimators are no longer efficient. Efficiency gains can be achieved through the SUR technique. Bauxite revenues as a percentage of GDP at current prices are regressed on a constant, a trend variable and two dummy variables. The estimation covers the period 1975-87 because of data availability. One of the dummy variables is defined as before for 1980, and the other one takes values equal to one in 1975 and zero elsewhere.3 3/ The reason for including the dummy variable for 1975 is, again, the existence of an anomalous observation. The dummy for 1980 is included to have the same number of regressors in each equation in order to perform the correction for degrees of freedom of the estimate of the covariance mAtrix of the residuals of the two equations. The estimation of that matrix is needed to estimate the two equations jointly and the correction for degrees of freedom is needed because of the size of the sample. The inclusion of an irrelevant variable in the bauxite tax revenue equation, makes the power of the tests of hypothesis lower than otherwise. ANNE II - 55 - PAGE 10 OF 11 The results are as follows TNB - 17.9165 - .0853 9 + .1367t + 1.9474 dl GDP (24.2200) (2.3516) (1.9749) (2.C02) R2 - .3969 D-W -1.3940 Q(6)-5.6097 (.4683) TB - 9.5899 - .6579t + .8156 D1 + 4.5400 D2 GDP (14.2998) (9.1037) (.8827) (4.9407) R2 = .9317 D-W - 1.9454 Q(6)- 3.3179 (.7680) Covariance/Correlation Matrix of Residuals TN8 TB GDP GDP TNB .5954 -.7344 GDP TB -.4336 .5854 GDP The number above the diagonal of the Covariance Correlation Matrix of Residuals is the correlation between residuals. Where:s TNB: Non-bauxite tax revenues Tg s Bauxite a revenues GDPs Gross d. 4tic product at current prices r : Rate of uhange in GDP deflator t s Trend variable D1 : Dummy for 1980 D2 s Dummy for 1975 Q(6): Box-Liung statistic to test for serial correlation of residuals up to six las (the numbers in parenthesis are the marginal significance levels) D-W: Durbin-Watson statistic to test for serial correlation of residual of degree one The results indicate that inflation has a negative Impact on tax revenues and that this effect is statistically significant. The mgnitude of the coefficient indicates that an annual rate of inflation of 502 vould reduce non-bauxite tax revenues in real terms by four percentage points of GDP. This suggests that a reduction in money creation through a reduction in the fiscal deficit will be achieved as a lower rate of inflation will reduce, in turn, the fiscal deficit. In addition, the significant coefficient of the trend variable in the bauxite tax revenue equation is not surprising since it reflects the decline in bauxite exports and the elimination of the tax levy in 1987. ANNEX II PAGE 11 OF 11 - 56 - DATA: TAX REVENUES EQUATION (Sf million and percentages) Years GDP TNB TB 1975 937.0 144.8 126.2 12.9 1976 1030.0 183.9 71.5 6.5 1977 1282.7 235.0 64.8 6.3 1978 1471.0 271.5 103.6 6.4 1979 1565.3 334.1 88.3 15.1 1980 1602.3 385.7 92.6 9.6 1981 1798.3 395.2 96.4 5.1 1982 1848.8 441.1 68.7 9.3 1983 1786.9 438.4 74.5 0.8 1984 1744.8 440.2 59.4 0.0 1985 1741.3 515.9 51.7 0.7 1986 1810.3 578.3 20.2 7.1 1987 1939.7 624.2 0.0 16.2 Source: Tables 2.1, 2.2 and 5.1, Statistical Appendix. - 57 - ANNEX III Page 1 of 8 SURINAME PUBLIC SECTOR INVESTMENT PROGRAM LISTS This annex contains lists of ongoing investment projects and proposed investment projects. Each list contains the name of the projects; the total cost, amount, source and conditions of external financing, if any; and the duration and status of the projects. Estimated costs are to be regarded as indicative. Data for these projects, which will be presented for consideration at the ninth meeting of the Caribbean Group for Cooperation in Economic Development, were prepared by the Government of Suriname with the assis;ance of the Bank mission. - 58 - ANNEX III Page 2 of 8 SURINAME - SECTORAL DISTRIBUTION OF PSIP (in thousands of Sf) ---------------------------------------------------- ---- ------------ 1988 £989 1990 Total x Total x Total % SFSft SF*929 SFING ---------------------------- -------------------------------------- --------- TOTAL PSIP 63,899 1W.0 145,222 1W.9 160,841 10.9 ECONOMIC S=RVICES 58,348 91.3 132,272 91.1 156,041 97.0 ........a........a ------ --- ------- ---** ..-- - ------ Agriculture, Forestry & Fisheries 13,526 21.2 29,160 28.1 40,159 25.0 anufacturing 4ft 0.6 24,419 16.8 25,491 15.8 pIning 0 9.0 13,7W0 9.4 2,18W 12.5 Power 23,670 37.0 41,050 28.3 45,200 28.1 Transportation 1,860 2.8 11,642 8.0 6,200 3.9 Vater 952 1.5 1,510 1.0 18,980 11.8 Telecosunications 18,08N 28.2 10,80N 7.4 0 0.0 SOCIAL SERVICES 5,551 8.7 12,950 8.9 4,80 3.0 ............... --..... ----- ------- --* **--- ------ Education 2,375 3.7 1,250 0.9 1,700 1.1 Health 3,176 5.0 11,760 8.1 3,100 1.9 ---------------- ---------------------------------------- --------- ----------- - 59 - ANNEX III Page 3 of 8 SURINAME - PSIP BY SOURCE OF FINANCING (Sf' 000) 1988 1989 1996 TOTAL PSIP 63,699 143,222 160,841 Central Governsent 13,364 38t63 11,148 External 9,829 36,598 10,161 Grants 5,282 9,067 4,850 Loans 4,547 27,511 6,111 Local 3,535 2,225 979 Rest of Public Sector 3,35 136,539 149,781 ------ ------ -----******- ------ ------ External 38,427 73,832 96,469 Grants 119 962 6 S1 Loans 38,308 72,870 96,468 Local 12,168 32,707 53,241 ----- ---- --- ---- --- ---- --- ---- --- ---- --- ---- --- ---- --- ---- --- - 60 - ANNEX III Page 4 of 8 SURINAME - FINANCING GAP (Sf' 000) 1988 1989 1999 Total requirements 63,899 145,222 16, 841 External coasitents 47,886 66,149 33,84@ Local contributions 15,643 34,792 54,229 Financing gap 379 44,281 72,781 ------------------------------------------------------- SURINAME - PUB1LIC SECTOR INVESTHENT PROGRAN, 1988-90 fin thouaands of St) Total Lotal EterNal imateism Ter Codiutius 1988 1519 M1 ro bet Cost --- - .--- .-- .-.------- ................... ...................... ... Cost ast Sorm let. erae kr. Total hter. Lemal Total ste/. oeal Total uater. Local Fate briod Period I (trø) lyn? mål, Isi 163.119 1,2 1 ,60 1 4m 111,43n 34.192 16,841 16,11 4m2! - ~83,13 41.189 5.423 11,952 81,82 1.269 42,239 33.849 1.316 IC 9in1C1 11.311 4, L23 13, W0 83.193 12,92 9.39 31,431 *,1111 11,31 Ariaultere, Forettry I Fåiheries 2.91 6,3T 1 4.626 31,61 119,15 3.311 1,239 $,9M 1.3 feestor @briep projet 3,8 2,100 i,11 lep. Chisa - - 1,160 559 630 1.4M 1,369 840 0 1 Flås. mestre . pier 3,433 514 1.18 £ m - - . 1,9 808 418 ,893 1,981 I 19 1 1t ba~ma apss. prg. I18 ba) 1,5111 189 1,1*1 mi - - - e 0 e 1 1,251 s2 131 Fia~erlus (lpet$ I eqtp.) 11,331 1,811 3,41 Tenesela - - - 6 I 1,38M 11,36 9 e e 0 eælk. - rice pre~e (Dieerie) 1,311 14 1,31 In - 1, t 1,317 540 1 6 1 ø 1 I kaibility tudi -eat aas 1 9 n11 m - - - 3131 1 1 1 1 e 0 0 Iksare lOGfa eb~alsatin 3$ I 3lIkthelasde - - - 53 1 13 31 6 1 1 L 1a1bilit stdy - CP 3,46 IH 1,15" IN - - 1,1 196 3JI 611 631 10 1 I e §let lde (Coroie) 1,8 9 11.19 b11 . - - it l i 3 9 t a 1 1 . lgrie. de, pIa C =Ceseuljs) 4,135 4,195 - ktberlgads - 913 I 93 8 c e 1 1 e ffificiai inaatio lecattle) 1,110 51 1 6 !in - - - 3,69 lA.1 I 3 6 311 4111 496 1 Fret I egetable pr0J. Ibo~la) 1.60 1,60 1 Iettelads - - - 18 9 36 1 363 262 0 1 t 0 aa apslos prog. (1m bal 9,11 : 3,61 tifte# - 3,22 1,313 1.381 3.61 827 1,249 2,325 139 1,39$ iel project (atasceal , 12,145 - - letherlasds - 16 1 16 2 1 V6 21 6 2 Lim1 of eredit larie ber Bak) 8,40 0 8.499 let i 1 30 1,$00 1,09 2,009 ,000 0 3,119 3,090 0 Fielå trials (rim)> 1,418 - - letterlnds - - - 0 0 9 12 129 9 159 Ise 0 oufeaunlag 400 410 0 IM 1,009 0 3.69 1,09 0 ................................ ......--------...... ...... ...... ...... ...... glebil imduutial losn t1,81 - - a 1 - - - 409 410 9 1.101 1,100 0 2,8 2.96# 0 mer 23,300 11,363 4,136 1,lIH 15.346 4.369 24,11 11,640 1360 ..............................--- ---..... ...... ...... ...... ......---...... Nssesies o1 State oil Co. 14,611 32.509 42,99e nI - - - 21,00 16,8162 4.938 19.08 14.049 4,259 2*1,uø ;*19* $1,36 eat- faeoredjo eme pro) 2,281 269 2990 #e@ - - 1,10 1,509 9 1e 190 0 9 I 1.800 09 1,00e 9,342 8,211 1,125 4,2i 3,4N g9 - lleil I id/asiegesn 36,891 19,000 16,800 0l - - - 1,500 10 1,111 4.15 3,31$ 1.125 2,11 1,200 899 5 fem rstree(Gspasa/Sorisaee 24.250 24.20 mi1 - 30 300 e 4,842 4,043 I 2,303 2,390 1 .................................................................................................................... ....... SURINAME - PUBI TC SECTOR INVESTMENT PROGRAM, 1988-90 thousands of Sf) Total Local Itterual fliaset" erms i Colditioms 1196 løse 10 Iroject Co.t ------------ ----- ---- ---- - ---- ---------------- ------ Cost iount Source lit. trace lepal. Total liter. Local Total Ister. Local Total lhter. Locel late Period Period i (fra) (frs) biter 812 220 12 1 0 0 e Ø i hstersIp (CoSIJN) - -tberlauds - - -oaJe 0 412 0 0 0 1 0 1 Fesib. es tetter sector) 2.70 1.609 1.100 508 - - - 140 220 120 0 0 0 0 e e telee ceatao 18,000 15,500 2,500 10,888 9,300 580 0 I 1 eletlessiattons espaosiom 36,0ø ,000 31,e88 Drall I 3 8 1,10 11.50 2,500 1011e t30i 1500 R e 0 SCIOL SIIICS 5,551 3.925 1.02 12,150 12,950 0 4.800 4,80g 0 £dustioe 2,315 1.925 450 1,21 1,21N 0 1,700 1,100 0 teelal sehool lleterie) - lii - ter - 1,15 1,1 0 0 0 0 0 0 0 kea for crrlcøl% deilop. 3.008 0 3,000 kEtherlaads - . 300 0 300 500 500 0 500 500 0 Ialt edcation - fl8 - metherlands - - 150 0 190 150 150 0 200 200 0 EanÆii S ;I:000 $ :N N1* - - - MI~ II 0 s00 00 0 1,000 1.008 0 N b,11 2,009 1,116 11,100 11.700 0 3,100 3,100 0 - - -. -.--... ...... ...... ...... ..... . .. . . . .. . . . .. . . . Upital etesioa/llproe,emts 1.200 0 1.200 letherlands - - - 150 0 7150 600 600 0 600 600 0 BIonul osital (eleterie) 14,90 0 14,900 1 - - - 2,000 2,000 0 10.400 10,400 0 2.500 2,500 0 0" leproue. uureblatrie hospital 8,836 0 8,838 letberlads - - - 426 0 426 100 700 0 0 0 0 0 SURINAE - PUBLIC SECTOR IVESTHET PROGRAK, 1988-% &ft thoueands of Sf) Total Local Esternal Finafang teros a Condåtaffs 19m 599 1990 Project Cost --------------- ----- ----- ----- ---- ----------- -- --- Cost Benant ource lnt. Grace bpay. Total Exter. PM! !:!z [.4@. .ocas lotal Etter. Loua fate Period Period I lyrli lyfri ---------------------------- I------------------------------- ----------------------- ---------------------------- .------------- m JECIS 969 749 221 70.170 44,570 25,592 110,611 72,781 45,930 fgriceltore, Forestry i Fåsheries 599 378 221 7,900 2,047 5,853 32,920 14,530 1,390 P Phm Il 79,300 30,300 49,000 Uk - - - 0 0 0 2,700 1,400 1,300 25,500 13,000 12,500 quael - frackish »ater fish 1,110 435 615 108 - - - 599 37 221 4% 297 199 0 0 0 Artismal fisberansllat bidial 17,926 12,826 5,00 Unknomn - - - 0 0 0 4,704 350 4,354 5,420 1,530 3,90 estrctriq bagarca indMs. 24,800 9,920 04,611 0 nk.es - - - 0 0 0 0 0 0 ?,000 0 2,000 Naelactoran 0 0 0 23,410 13,825 9,585 23,491 14,211 9,2^0 -..--------..- ---- --- ---- ---- ---- - --- --- --- --~-- Epas% - nilk processiom plant 10,000 4,000 6,000 Unknomn - - - 0 0 0 7,500 4,000 3,500 4,500 2,000 -,500 Intram. Sarigane libet Co. 7,068 3,060 4,001 Unknom - - 0 0 0 2,200 1,400 900 4,500 2,900 1,600 0eb.ieeteos. of Irepica IN 4,420 1,670 2,550 Unknom - - - 0 0 0 1,035 875 160 1,3M 900 450 leda. iffrasträc. (Saraacca) 300 60 240 unknamn - - 0 0 0 300 240 60 0 0 0 Feasmi. stady - kaolin produc. 4,691 1,412 3,279 Unknomu - - - 0 0 0 1,865 1,000 965 1,311 1,311 0 lehab.-Ser. Uhnd Process. 1~ls 26,295 10,514 t5,771 Unknown - - - 0 0 0 10,510 6,310 4,200 11,930 7,100 4,130 Pa~r 370 370 0 21,350 1,600 2,750 21,200 10,400 2,900 feas. - emergy rice bsk 270 0 210 unknom - - - 270 270 0 0 0 0 0 0 0 Pretsen. . solar collectors 225 25 200 unknomn - - - 0 0 0 250 200 50 0 0 0 os. of "non-conventinal, energj l,000 250 750 Unknoun - - - 100 100 0 100 500 0 200 100 100 Street libtiaem 2,000 600 1,400 Unknon - - - 0 0 0 1,000 700 30 1,000 700 300 ramseission line 60,000 7,000 53,000 Unknon - - - 0 0 0 20,000 17,600 2,400 20,000 17,600 2,400 yra~sortation 0 0 0 2,300 300 2,000 2,000 1,200 00 comsträt. of fhrf-ftm Sickere 7,000 2,800 4,200 Ukown - - - 0 0 0 2,300 300 2.000 2,000 ,200 900 nater 0 0 0 1,510 906 604 18,900 11,340 7,560 lter pply elpansion- Ph l 37,240 14,820 22,420 Unkom 0 0 0 1,510 906 604 59,900 11,340 7,560 mitig 0 0 0 13,700 8,900 4.000 20,100 13,100 7,000 Gel enploration - ero losebel 39,900 13,600 25,200 Unkonm - - - 0 0 0 13,700 O,900 4,900 20,100 13,100 7,000 ........ --------------.--------------------------------------------------------------------------------------------------------- ANNEX III Page 8 of 8 - 64 - SURINAME - PROJECTS IN IDEA STAGE (in thousands of Sf) Total External Financing Project ---------------- Cost Amount % Idea Agriculture, Forestry & Fisheries Improvement of forestry induc*ry 99,06 56,8n 56 Forestry training programme 39 129 46 Oil palm pro3 .(ill & refinery) - Patasmacca 21,000 12,600 68 Manufacturing Infrastructure for industrial estate 3,000 3,000 160 Power Oil Refinery 59,69 34,669 68 Power project - small diesel plants 1,400 1,160 79 Power project - small diesel plants (EBS) 8,666 6,668 75 Diversion of Jaikreek to Brokopondo Lake 66,606 22,996 37 Electricity supply to the interior 1,200 89s 67 Solar collectors 250 266 86 Tabaredjo Project 65,000 55,66 85 Processing of rice husk (Mickerie) 2,200 1,86 82 Kabalebo hydro project 325,000 225,68 69 Vater Five-year dev. plan for rural water supply 29,837 5,854 29 aining Prospecting (Greenstone Belt)- minerals 7,646 5,472 72 - 65 - ANNEX IV Page 1 of 23 TECHNICAL COOPERATION PROGRAMS, 1987-90 (US$'000) The data provided in Annex IV was compiled by a UNDP mission -t.rking in close collaboration with the World Bank team, the Planbureau of Suriname and various technical Ministries and Departments. It is intended that this technical assistance identification process will be an ongoing activity which will provide updated information from time to time. In the course of the development of an economic plan for Suriname during the coming months, it is anticipated that Government will seek to establish priorities among the various technical assistance projects listed. Pages 1 to 11 of Annex IV reflect the ONGOING Technical Cooperation Programs between the Government of Suriname and various donors, with an estimated total cost of LS38.3 million. Pages 12 to 22 reflect the PROPOSED Technical Cooperation Program totalling US$23.8 million. It should be noted, however, that several proposals are only ideas at this stage for which cost data is not yet available. URIAM TRCHNICAL CODPFRATIO1 PROGRAmN i. IS? OF ONODIS/COHNITTED TECHNICAL COOPERATION PROMRAR 187-90 III Date .f Proposed disbursement - (2) Date of terminal disbursement (in US9*000) (3) Project Related (PR)/Inostitutitels Supprt(IS) Training(T)/Nard peIinelRP)/ott PipelIne(SP)/Advisory Service(AS) (4) Donor Approw- ZDAPW)/To be Approached (TOW/ Donor Aproached (DAPCM$/Source Unknowh(SU)/ Project Design Stage 008) Not determined. unknown - None I Estimated 0 values Amount Unknown(0) I I reRAL tWANCR ILCCAL PINANCE DURATION I : !----------------I -------------I-------------- I I TITL/SOwCT ITOTAL ANf GURCR I LOAN I AITIRECUTINGISTARTCIP.IDURAICLASSF- ISTATSU CommaT8 I T/A: I ORANTI IAGENCY I 2 ITIONSICATIO I I I CSTI I (L/il I () 1 (2) lethal (3) I I -----------------------------------------------------------------------------------------------------r............ b011NIC SERtICRB Agrieulture (A*R) CN' Pre-feathillSP study 20 Is liCA a T NA.AR.P AT te IV AS DAPW Preparatio of a feasibility C,% airy Prodweties study to increase eilk Project, production of 2.700 Small Dairy Ferms. Omergene, Asesitece 13 13 tICA 0 0 NDA.Al,V O? ST AS SAPf Evaluatio of the oil pate and Programse "spear Rat' coconut post and disease DIce of Ot1 Poal * research ta Suiarme. Strewthente the as 0B ItCA 0 0 MDA,AN.F 86 s9 A9 DAPV Halny asseting the CO to Atwal Production meet the needs of improving diviera of the Him. Dairy Production by training of Agriculture 6 and demonstration. fiaheries Gupport to Aftleelture 233 233 IICA 0 0 NOA.AN.F 84 69 46 AS DAPT Assistance to 0 to d -elop & Rural Development and operate an effective Planning sector Police Analysa Process. 0 Support Programme for 131 1.31 IICA 0 0 NOA.AR.F 66 89 24 AS DAP? To increse the production & the control of Pots & productivity of oil palsa Diseases of Coconut & coconut cultivation In O < Oil Palm trees Suriname through pest and t Troft"g I" packaging 6 6 INDIA 0 0 KOA.All.F 86 87 4 T DAY disease control. of Agricultural products EXT iNAL FlNA~CE I CAL nA~cm : muATm i ---------- ------ -------------- : ---------: TIT8O/SUBJECT 10TAL: Am SOU1CE 1 LOAN ANTIEECU :STr' COMP.OD UA:CLssmF. ISTAT wnsuNT tia T/AM 1 tRT !AUEMC I .07T100i1CATION : 1 COST: tL/0),4 !: :m :2)eths (3) 1 gere*ce Cea Rehmb. 00 700 OA a 0 Ity P. A 60> På DAPT Pr-freltbillty et*dr of the Programa rehabilltaLloo of &h* Barmmacca Camel Fleanced rder 3 biennium progr=e 84/I8. SS/81.8/89. Project fommo part of Surumame River Basta Prjact. Agrieultere Soetor s. se InB 0 0 M0A.AN.F t 7 et e PR DAPV Analarel/evaluatton of St~ agriculturl sector rampastom of =creae 40 40 D? a 0 MMA.AN.F 88 PR PAPT ProJect seeka ta inarese ~nder Dennaes etrese by &.00 heetere. Ane. ta Fikreser P 0 0oA 0 0 MA.AR.W 8 89 As DAPT Project fmdified to del with refutee roeettlamt vrot in the Interlor. Artårselal 0 0 gDr 0 0 DA.AN.r 8 S9 PR DAPT To Improm dålr cattle Imtesetattm prgrem~ quallty for &nerasaed milk . påip cattle produetiof. Inelodes *qipment. esports. Part of t- US920 oaptiel project. &teblieh~et of a 128 120 ~hDPIW 0 0 NDA.AR.W 8T 9 20 AS. ApT gtabligshmat of 9 ehoi bened Famel*s osta MS fleherr data collemetim Collection b fo* IFAO) seten. reerch sorver S8stem proe*ak. offshore observer prog. iomuteriaotion of fisheep date amt.. emelvei and eportag. fånhor gn%. plan. short term comsultantg S-5 */m kraleina. muip. Projet 0 0 99el1u/ 0 0 0A.M.F 83 90 10 AS.T Ateed at i8provin artistnal Napsger/Coordleator USAS flhing Industrp la Boskemp. gask~mp village Fisheries ProJoeh J4Wreultare 58 398 UND/IPF 0 260 MA.Af,f SS 90 42 A.T DAP Orieiaollv tinaed uder cooperetIve GCS WrAWP Progr . Peveloment Leeeee (R) 44 44 OAS 0 0 m0~11 8? et 24 AS DAPT Research on leeeemna plant for energy prod. Ifåreood. charcoai and födder. Biennium S6/81, S8/SS. 9BUIRo tR) 60 60 oAs 0 0 MA.AN.F ST 89 24 AS DAPV Research on tropteal plants for modicånal purposes. Project coordfnator .öpartd proj. g/o7. No now coordinator assigned. *********------------------------**-**------------------------***-***-****-----****---------------------------------------*r I ISKTERNAL FINANCS tLOCAL FINANCSI DURATION I I ----....-.--.........-----*--------------------- TITLB/SUBJCT ITOTAL A S 6URCE 1A LOA I ANT:ZJECUTINGISTARTICOMP.IDURAICLASIF- IBTATUSI 00IMNTS ?IA: ORANTI IAGENCY : 1TION:ICATIO costI I (/0) I I (1) 1 (2) letha: (3) -- - -------------------------------------------------------------------------- -Aqueentere 95 05 OAS 0 0 B4rland 67 so 24 AS DAPT Establihment of a shrimp had caseedure hatchery. 12 ponds established and 4 stocked to date. After 89 will be sif-suppertiag project. Vterinary Public 21 2t PARO 0 0 NOA.A%.F O-00 AS DAPV Strengthening of the public Health Programme ING Health and animal health programme to redrece human mortality & morbidity arising from Zoonosis. Director Ceneral of PAHD donated an additional US911.5 to progreme for control of ovine rabies. Prawn Propogation 30 20 JAPAN 0 0 HDA,AH.F 88 6? 9 T DAPT Training to Prawn techniques. Techniques (IICA) CN A4sculture 15 15 JAPAN 0 0 NOA.AU.F 87 7 ? DAP oa AMM.S-mTAL 2323 2056 Industry (twol axport Prometion 500 500 Ec 0 0 NMTC as 9 T DAF To be completed I 80. Strengthening of TS is Io 0 0 P.3. 66 69 12 IS DAP Awaiting Execution. National Development Bank toustrial Credit 60 60 ID 0 0 N03 81 s8 12 iB DAPV Industrial Adviser 134 134 TP UMIDO 0 0 P,HOTCI s so 15 PR DAPT Dutch Trust fud. UNDP/IPF QCS INDUBTYw UB0-7OAbS T92 792 fourism (TW0) a Assistance Is Teartis 400 400 OAS 0 0 HOTCI s 69 46 1S DAPV Consultants inatitutional 90U SU1-16MI 400 400 o < Mting. Quarrying (M) w Geological 3600 3600 Belgium 0 0 ORE 82/86 03 24 IS DAPT 2 geologists - ongoing and Study-lineral Resource eompleted;2 geologists assessment Study proposed to undertake training and exploration;2 chemical MWIN BU9-IUTAL: 3000 3600 1 EI9TENAL FAuC IWCAL VIWACE U R ATIMoi : -------------------- :--------------------- TIl/miJCT VOtAL; At? 60URC 1 LAN 1 ANffIRECUTINMSTART:CwMIlMlcLaSSIV- :STATUS: comm~ : t/Al 1 ORANT: SASENC 1 1 ITI0IICATION 10T1 1 cL/Gf 1 (L(1M (2) Inthgu 43> - PeasibiIlt 6 final 83 23 Ear a 0 OPI.T 87 el 3 PR DAP9 Ph§** 1 of rood projoet Design Sd . onpletl d by O0T. Phase tt to D eigd / agr hen start ta IS with DM unds (1.61 een's). renstbility and Tima 0 0 EDF 0 0 NP.? 87 SI 3 PR DAP? EEC afglona proJact - Part of Besig. Gudr - Ferry a 12.3M Ea project. Service beteen Gupana 6 Surknne Tria s l shigging 6 b JAPAN 0 0 NyrCI el 8? 2 1 DAr¥ Adminiet'ation - iUNOR UB-MD?ALI 2? 21 Cemuicatione (CORI) Te1e mu.Isoationg 28? 28 ~ DllP/IPP 0 0 TELEU sa 89 48 AB.T DAPT (1) atabliehment 6 Develowmnt GCS implementation of a Managemmnt (11) Info sstem. projet ada~. 6 ON controI es,te;(1k planina 6 ord. of a national telecom. progrfse inoladas 2 am's of consultane4 grvic *quipment 6 fellowmhgem emtal Trallg 9 INDIA 0 0mP 8 el 9 T DA?? g.8UD-10A.' 298 29m Uaergy (MIT) Tr ming TOd 10 80 OLADR 0 20 ~W09RE 5? BS 38 IS DAP9 Tehnicans trelning. gIodigestars åsibiliti Strd, 1160 1008 1D L 142 Eloctri- 88 se 12 PR DAP9 Peasibilitp Study 25-408 glop Tambaredje Dieel ity speed disael plant to generat* proje,t utility electricity of Saraacca and ca,(H~l) 1610U tranmesweom lin* fr«ma BaPera n/rmribo. ( M Trålning an hav, fast 3 3 OLADR 0 0 1mOR 88 Sn 1 IS DAPT Techalonias traalag 0k produetcom, atorage (Petrobrag 9~ra§. and ~seent Trålnings Coure ta 13 10 OLADE 0 s e8 1 18 DAP" Tralning course In solar tera a nC O" Energ and installation of Solar collectore for hot aternupply. Trainling In oferg 3 3 OLADE 0 0 OnR~ S8 SI 1 IS DAP Technåctans tranina In the auditg execution of enc;rgy audite. 2~T MD-M0TALt 1239 1019 f ~KTAL INANCM ILOCAL FAC ' DURATION i i i : ------------------i--------------i----------------i i i TITU~ C !%TOAL: A~T SORC I LOA i ANTIIEECUTI.BTARTC~P.IOGRACLABSIW- ISTATUSI coT~ i T/A: I GRANTI IAOENCY I TI09ICATIN 9 , om?: I L/(b) i (1) i (2) lathes (3> i l Water Bappip e3UASI Peeoib611ty sted 000 000 10 L 0 Burinewe og PR DAKT Lme to be arrened tor fmproement Water Wateg lmplemntetton. suppg opitcæ ka Company ørenter Pereemribo erend Vntør/nødrolomv B0 B0 OAS 0 0 KONA 0? 8 24 PR DAP9? 6 m/m conultente finaned from 2 yeerg allocation Suriname 198/89 of 700.000. *ATMR M ^T.SU O-TTAL: 900 9m 0 te.de. oean in traåning. hoviion of 195S 360 V90 0 160 NATIO eS eS t DAPT 1 year eRteneio likelv. Tehniolem Cteachr) (selgium) (tech. School> fravifon of Lturer 3429 20 v9m a 209 Univ. of 85 68 3 t tgeolouy) 1Be9gim> Suriname tellemhip und Short 0 0 betgiu 0 0 Uma T9 T DAP? Biee ?*. 60 fellowships term trining *arded. Prently 20 persons in trainimf. eotmGeo of TM 30 9900 0 30 PAT1N SS 8 24 T 1 yer e~cnion Ilikely. TUehnicibam teacher) (Ielgium) (Tech. School) Provigion of Molis9 O0 45 "906 0 45 Univ. of S5 sS 3 T DAPM 1 pecr ext*nsiom likelp. Surimese Pr~villom of 90 45 "08 0 45 univ. of SS 88 36 DAPT 1 ytar extengion likoly. Aericaltoal eninee IBelgium) Surisae SLecturr) c a~r programimg 14 14 OAS 0 0 mS la Bs 24 T DAP? Conmultants/quigant. cours for lnagere mad Tacher* of Techoleel mnd Tosational Schoole Ogrdian th peaity 6 a OAS 0 0 OS a6 Se 24 Is DAPM Consultmnts/equigae.t. of nams Imoelas Adig viauel Tråninmg 1 11 OAS 0 0 S et 88 24 t DAP Felleeship/onsultant. finmposer Tråkdaag lm 44 44 OAS 0 0 nuS S8 S9 ta t DAPT Consultmt/Bemmtar. fihortes. Agricultur. med forectry forvmmnt ad 12 12 OAS 0 0 mS 88 B9 12 IS DAPT Consutaent«/uip~snt/tellowgh o < Develomt of ip. Teaching nmtrtialc ouidm~c ~nd 4 4 OAS 0 0 MDE ST 8? T DAPT troinlng and *quivment. eeunmellag tralaing proga Tretning i 9 S OAS 0 0 wc e7 SS t DAPT deveop~mt of enesament mterils : i ZXTAL VINMCE ILOCAL tlACE buATIN t i S ------------------ -------------- ----------------t t3TI/SUBJtCT i?0TAi MT 0UDCE : LOAN i AMTITEECUIN:sABTCaP. BURAiCLAss,v- osTATUS: WmBmNTS T /A1 i ORANT: I*GENCT i i iTOuA:~ICATIOK l Sm : I (L/)i I i (1) l (2) lathet (3) 1 pmradlag Cortriefim 5 0A 0 0 HDS og TS t DAPV Døvelopment Pegreemel training and 10 10 oAm 0 0 Og se Sg 12 18 DAP Coneuttent Md Traeing. Up-gredlag of poe0~ In os pmiaU educet ton Developmnt at 1 OAS 0 0 Mg 88 og 24 16 DAP9 Traling and 1quiplment. Ansegumnt Testing ebterial Ta»Intng and 5 5 0 0 Km sS o9 12 18 DAPV Training. Up-grading of counell.ig and gukdance oft icer &ducetton Progr4me l ? OAS a 0 M Is DAPT Trating. for ~oe Cemputer Centre et 14 14 OAS 0 0 HO 1 DAP9 Conuultant and Equ0t9mnt. umiverslty ot mortasse #sg adia and Adul 5 ~ OAG 0 0 wDB SS 8 2 18 DAP Trainag and Equismlp t. ucattom %v&*e~et of 2T 27 AS I 0 se S s SS 12 18 DA?, Consultent, tretiing and dbildreslo Literature equeff"t. 90d So Ptaim s et Agr. B0 45 f90l 0 45 Univ. es sS 39 1 DAr¥ 1 Peer estensto grated. Suriname Provaom ot Chautet 125 125 lelalum 0 0 NATIN Se St "O T DAPT 2 peare øutemeton grønted. tetur P~eselon et 00 45 ý90g 0 45 Dniver- OG Sg 38 T DAP l lear entenotom Greted. Aørliultural Eaigaer Ielgtium) gity of (Leturer) Suriae~e Ive~egsentet u 9000 000 10 L 00E8 0 38 erraculn for Primarf Eduatin le Buriname Breø he~tua øf 393 154 mSC~ 0 239 mg O? SS 24 IS DAP Phago le 198? US9 7.500;Phae audio-vIsua div. II: 1988 U988.500.Tralaine Advi*er md equipeet. O Calturnt eritge l4 10 UNESCO 0 0 MNESCO 57 1 DAP9 Preervotton et the Pet.Co~m. traditionel head-draes of the Surinaamese Creole. the qnjls*'. Litareture ot Surtnae 31 31 UNESCO 0 0 mot se 81 24 DAP9 Pr*paration of literature of Surlaeme from 1970-85. - - ---*-------------r EXTERNAL FINAC ILOCAL 7INA1CE : DURA?I I ----------------- --------------: I-------- 93L=/SIIBJECT 1TO?AL: AN? SOURCE LOAN | ATZXECUTING:STARTICOMP.:DORA CLASSI- SSTATUS: COMMS I ?/A I GRAn AGEUCT 1 :TIOMICA?ION I : s C t: (L/; I 1 (1) 1 (2) latha, 43) 1 Istablishmeat of a 41 41 mUSCo 0 0 UNEscO 6e a? 24 tS DAPV Stre-rthoning secretariat of National lateratee Nat.Come. Nat. Iomm. nAoFI M W-tMAD 1ates lt Popalation. Wealth. Nutrito (P ) Doctor IN.$. 45 0 VV9/00s 0 45 NM/PHS as 88 36 IS DAPV I year extension A I further year extension. PAND Country Progreasme 0 0 PARD 0 0 Rpideoology 66 66 PANO 0 0 NOR ONW0ING AS.T DAPY PANO assistance for 0?/88 surveillonce & trowd consultanc service (ehort sesoeant term) disese control training esseined of blood sempLes LATUC. Devslopment of 123 123 PANO 0 N ONWING AS.? DAP? Aimed at 0tr00th01l health Health Services care delivery programe veins the primary health care approach. Coatrol of 37 37 PARD 0 0 WOH ONGOING ASJ DAPV Prore aimed at the control Communicable d1loes of diseases such on S.I.D. diarrhoaa disceases. *cute respiratorC diseases short-term consultants. equipment. training. Maternal & Child 39 39 PAND 0 0 M0 098ING AS. DAPV Progrms aimed at the ROOar delivery of a comprehensive range of promotion preventive and curative services for mothers and children through health education and medical auppie. gowlyeaceto so so PARO a 0 WN0 O ING AS.? DAPV Programme aimed at Health stresathening. organis g and developing rm enoironmentel health services through No. Post of eneirolmental health engineer to be filled shortly.(3 . Feibility 4 final 0 0 10B L/O 0 NO Deskgn study, Mickerto Hospital Chief PhArmacist 0 0 Belgium 0 0 Mickerle 80 69 100 IS DAFV 24 oths. extension likely. Mo Hospi tDl local replacement available. do training programme In petce. .........----.-----------.-------------------------------------------------------------------------------------- .---------:r & EETENAL FINANCE itCAL INANCE : DURATICO i i i I -- --------------------------------:-- TITiE/UJECT :M'fAL: AMT SOURC3 : LOAN 1AMTIEECUTINGSTARTCOMP. DUALASSIP- ISTATUS: Co0m0flT I t/A; 1 GRANT: SAGENChT : TtIONICATIO i t : 00s: I (L/)* t lAt (1) B (2) Imnet 3) 1 .........-----..------- ------------.------------------------------------------------------------ --------*-------------------- .Chiof Pharmacit 0 heelgtuf a 0 4 Landa 00 80 10 1 DAPT Further 24 uthe. eatenaioh Hospital lkely. No local reptacement avallable. No training proc. an place. har~ecaat 0 0 DelgIum 0 0 KON S? 89 24 IS DAPY 24 athe. oatenios to bo roquestod. wegth sconostat 0 0 Delgium 0 0 KOn e3 89 12 te DAPT 24 athe. oitoneton granted et 3/8. General Surgof tn 0 9908/0g0 d 0 Academtc 85 en 38 1 DAPT No local replacement Nospital avgalabla. I rear extenslon lik*kr. I-rav Toehnlein 45 0 909/00 0 45 Acadeaml 85 en 30 18 DAPY t ear extension gratd b i Hospital roar further extension likelv. -4 42- Savsloemnt of U~en 120 120 PAt0 G 0 moN 87 88 T DAPT Amed &t monitorinc the Beoureco vational Public oeaAth manpower mtuation in the panning and develovmnt of human remourceo an relation to the neede of progrems and GorvOG. Pellowahipl/comultaney oerviceu. Cetrol a Loprogr 45 45 MAOS 0 0 MOU 1/8 12/88 12 AS DAPT Complimnts PA11s control of dmseaes (PARO) com unicablo dieeace project con*ultancy services equipment, modicel suppliI. r~TMt sU0-t0TALO 884 054 Denasm amd Comemity Services (ICS) -------------------------------- Aelitasce ta Ioelig 40 40 UNPDP/IP 0 HISAN De se 0.b PR OAPP 'k CHADITAT? Social saertv 104 104 UPOP 0 KOSAN 89 PR DAPP Duration to b. detormned. IPF/ICU - (OLOI Prodection Unit for 150 83 UNIFEM 0 95 National 18 90 30 PR DAPT pregnrved frukte and -Wmen's by-producta "nvement MS6t dUS TMALs 302 207 MiSc0l1neouG IMIC) petionel school ct 13 13 OAS 0 0 MO[ 87 80 8 ES DAPV Trtning and equipment. Ponce E ETERNAL VlIANiCE $CAL PINANcE I DURATION i i -----------------------------:----------------- -i i T1rLE/uSJECT ? AL: ANT SOURC I A0 i ANTIEXECUTIN:STArTICOP.:DURA:CLABSI- ISTATUS' C~0I0ITS IA: 0 1Ai AGOCY : I TIONICATION g COST: I (L/Gli I (1 : (2) luthao (31 0 I Introductiom to. the 2 2 SAS G 0 NDE Si SS 8 tS DAP? Research and equipamt. iale o1 Surtae Caribbeom Art# and 12 12 OAS 0 0 mE al Se 12 ta DAP¥ Training &Md øquipaent. Crotte Tratning and 5 5 SAS G 0 11>E 8 88 t DAPT Tretning and equipwnt. Up-cradinø in vissm Acsuitp and Visual funettoning KISC. 80-10TAL: 32 32 OCIAL SMU9CU TOTALt 1vi9 11999 GEN~AL UBLIC SEICRC Administrettom & Plasta (AD Nattonal Accounte 435 285 UD1P/1Pr G 150 HOP eS o9 48 16 DAPV Advisorv Service* completed ta Døvelopment SUm/821008 GCS 1986. Peliomship compo.ent being Implementod. fat,tuttonfat 0 0 OAS 0 0 Pa es og 48 to DAP Coneultant financed under Stremthening of 188/9 bienntum allocation of Planbureaum 98700.000. Non-projectø releted 3000 3000 Betelgu 0 0 p 18 DA 10 esperte - Ingtitutional EalmrtEd. Prog Sren. of Pubie Sorvice. dvISer Project £wal. 0 0 Beistu 0 0 pa al 8 84 IS DAP Est. granted froim 8/8 to end 1progr~kng nst. e/a. Str. Prog. Gootologflet 0 D bølgtu 0 0 HOL es 8 48 1e DAPM Org. oppr. 2 prø. Add. 2 pro. Inst. granted Skocologtot attached supp. division *f ML. Prog. Imprøvesmt of 47 47 OAS I 0 e 87 09 24 T DAPT taformatto~ spe~Q Greduate Sagt. anpport 360 360 Noe 0 0 N1E. HOL et 18 DAPM Vlaeao erenioing voor Prograe Opledingo programmas In het gultenland provides activitteg. ingtekkatton cost etc. est. U815.000 per person. Tretning In te te INDIA 0 0 univ of 84 O6 4 IS DAPV Traning for 4 uth. for 2 w Partamentary Surtiname persons In India. Procedurea PH,s office Training In flanpoer 6 5 India 0 0 Planbo- 87 87 3 IS DAPV Traning for 3 eths for l -. •reau person In IndIW. EXMTNAL PrWAKCM 13CAL tInACE . DUWATIOO : 1 ------------------ -------------- :---------------- T3TLE/UBJECT 0TAL AMT SCUCE I LOAN ANT gCuU :START:COMP. IURAICLASSIP- ISTATU! 00GMENTO i T/A: ~RANT I SASCY i t ITIONICATION i : 006T; I /O I I()IM 2l lnmth < (3> i I Data procekmi for 10 10 U~lP/iPP 0 30 pa s 89 24 is DAPV Short tørn coumltants. stettøtte *ad GCS fellomshp ønd ewlpænt. Plamang - SUi8/03 (UNDTCD) bm 0o Deveopment D a l 1%0 UUDP/IPP 9 0 pø SS 8 4 is DAPY hort-term omaultamte. Planetas - SUR/Se/004 CGS 119RD) Ombrelle proect to 118 11S UNDP 0 0 pø SS 90 36 IS TDA Short-torm cosultente. promote TCDC IPF/CS falloahips under TCDC activitine SUR/S/00^ UNDP errangement. tops) Formulation of public 135 138 tIDB 0 0 PS 8 8 12 IS DAPV Dsvolop~nt of public otor aoetor Investa~t invetoent pipelan. pipQliin. AMI"U. ~ M-tiA*' 4480 420 I.PULIC MITICU: 4480 4260 -----------------------------------------e TUPAL W-GOINDS PNCUB 6 356293 32649 ----------------------------------------- 0> 00 1t to t: SUUINME TECHICAL COOPRATiIOl PRoGCae~ LIST O PWMs~ TCICAL COPERATION PIOGRA~HZS 1989-90 tit Date of proposed diabor*meat ...... (2) Date of tefinal dieburvmae t (la M0100 <3) Project Related OPR/Iastituttoaa SppofttM> TrealagIT>/PipeiimetUiP/Uef6 Pipeiae8Pl/Advieu U.evieteAgI (4) 0em.r Apprved 4DAPTI/To b. Appsaøeed IT~A/ Gonor Appffrohed I 0A /osee atm~stwi/ Projeot Doase Stage MI .. et deteffald. ham 31 Ilatimtad B value ~set 09~am t0l , RENt iAC !Ct IAC NRT0 i -i -- i TIM/SUECT :tAL! AIT 1018C I LMas I 1StITaECT1tSTARTICWB. .ISmA:CLASSIt. STATUB: Wmf6 i T/a: g omal': :AGECT t I M01:io1CATIMi i COST: t I/0) I Wt 1 2ithet 3 i sph, NIisC omgimCE thortealt*ro 4hOS e iterkettag Stup 40 40 atP o 0 50A.A.t 9/10 90/91 24 AS.m DAPCM Iisted to felleap ern rice predotien. MI pro~detin 0 0 IDBs 0 MAII.A I DAPCR Fell8-ar to fiCa 9e.aseetaemt etedt pret.amsibility. Amalstee to 2I0 200 eNWl "iO 0 0 INA.A".r 88/8 90/91 24 PR SU develomt of Prø m 4m1turo, C-op. Agiatec - it8o 10 NNO 0 0 NOA.AB, De/e 90/ØM 24 As 60 Asletame to small rormøre SleSm 6edling drylng Co-op. In rice handling drying storge Mtørket5ng. . storege and arketiag. Stdp pre 0 ORRN 0 0 A.A.P e8/lg 89/90 As SU atabitteation progren for agr1i4trat predee Foretep Seetoa Pla 120 100 IDB 0 0 n~IRE og o9 1z AS IA Preparstien ot forestry eeetor plan & the Identiiertion of projeote. stoblihment of a 0 0 ZDF G 0 NOA.AH.V 98/09 99/90 12 PR.AS DAPV EC Regional Pipeline. Rico Research Centre in taøinti. Suriname opdettag eo 80* 0 0 UNKMA.ÅR 0 0 0,A. SS/IS 88/89 N/A B Literature to updste kno~ledge .ibrer ot reearchere and ønable them to keep trisa et mm. develenv~t*. Twa"itel Vrut jule 0 0 ~ c TOPICAL 8 og 1 As.PR eg Iaoregee the quality ot the pro.essing FUI? frut julens to International IUSTRIE9 standards. NV Preduettaa Coe 0 0 GUM~ 0 0 00 8889 / S/S 3 AS.PR su gart Coneattane SørvIces Detter 0eivatton for mdettakig a feasibility study for the prodetion of c@oo hatetr derivetton out ot o11 pels prOduct. 'V -edetioe0of CaSfter 0 0 FAO 8 0 0109 59/90 89/90 8 PR.AS TBA Veasibilit study to determine 00 ae Oil v/i vlability of muitivettom nd *a oil procesmg of tha Castor ,. Soms. '-4 Vroduetion of lie* 0 0 FAO 0 0 OPOV 89/90 e9gg 6 PR,AS TA raemIility study to detormine er*" Oil /S feastbility fotr the production of rica bran oil. Cultsvtion of 0 0 FAO 0 0 CPOV 89/90 89/90 8 PR.AS TDA Consultancr services for Processne of OSiner fe*otbilitY study for the 1/S cultivation and proceslns ot ginger. m EXTVinAL FImAeC ILOCAL rINACE DURATION 1 1 ------------------: ------- - ------------- MUTI/SUBJECT ITAL. AIT 60URCU LOA: ~ ANTtmERCUTING:TABrT:IP.Cm-MRAICLASSV- ISTATUs CoumuNs 1 T/A: 5 GUANTI IAGNCT ITION1iCATIOM i : omT: 5(L/)i l l (1) l (2 1LKG (3) 1 1 r lIte of lsho 0 0 FAO 0 0 0ge g e/50 SS/go PR.Au TIA Consulta~er Serviced !or toömålIgfeast d for prod~elcoe of sho poligh out of olå vela products. Cageie etlvettom 0 0 Fao 0 0 0e0t SS/ 90 6 PR.As TIA roelIblity stmär to determime and Proceassin V/S amrel tatien of procesgång or gop-beam. e 9iso Olle. P/s 0 0 NAO 0 0 om ~90 S 9/90 e PR.AS TA VeeIbltt etedC for caltIvation ud prodnettom of esscnttal gläm. 9~1e~% of 0 0 UUnI 0 0 WA,Al.V 10/SS 1/SI 3 As 80 Reneereh *ork or lseheataed =aenmll op cultivation of eöp bema. celtivtom ar- e änd ettua ope. #ela prkcesmtg study 0 0 VN*29090 0 0 MA.An.r 0S 68 2 AS 0 htvälumtinet quelåtr or betce*~ at @alk jprocesslås. and proposed eseere for tapru~een.l COestemtle.of f ei 0 ghUNISn Lo 0 oN 90/91 #1/52 6 PR 80 en /8 ta dotermie %ether estattn esser feetorg should mor/ehbLItte be rhbltatod or eentest p~ecut, rep~.ce rmelhllt ld of 0 A 0 GAS0 fA.A, SS 8 12 tS TBA taAS IIT dum AMSCULTURE Aricultare school SCHOM. Tretala taee • t 12 OAS 0 aSIma.AU.V 6 6 * ts TBA ee cultaru. Leboratorr 100 100 FAO/tCA 0 0 8MA.A.IV a SS 12 1 TIA Estebli~tient of a c loeatton lmboratory. Irm mchier 100 100 FAO 00 NA.AR.W N s om9 12 29 TA Asesesment of the needs of tarm achlear änd semiffent. teIrdtwgpttolUrr 100 100 FAO 0 0 MA.AR.V SS 9 12 IS TIA Sadpdrtitem r scoaoelet, leal »dl =ter. > ivarming treae 100 100 FAO/11CA 0 0 WA,AN. SS S9 12 1 TIA Vem Sutem Specialet. Rural Research Zconomist and Reral RenerchSocioloast. Betabklstgmt of b 200 200 FAO 0 0 M)A.AN.r 88 90 24 1S IDA Inrtitute directed to Sunu NvSo~ocrgiculturål noeödr of Intertor *uret DOV4lo0~n of Surtnomö. Institute Iehabalitttion of 230 230 10 9/L 0 NOA.AN.r 88 PR 1 V HCP- ric4åandg In CP oroa EXTEIFAL FINAMCS lWCAL FINAUCK UiRATICE ------------------- ------------------------------ 12UE/BUDJECT . 1TAL: AMT SOURCI : LOAN S NAUIEXECUJTING:STARTiCOIP. RA:CLASSIF- ISTATUsD canutET i T/A: GRT: AGECY l # ITION: ICATIO8 i 01T : iL/O> 1 (1 l (2) Imtha (3) 1 AB.bolit&a&ion ut rita 0 0 0/L 0 tM.AN.V Pr MIA pollod-op to Ie S lands Phag. I I mr pipeline. Area phae 11 Amgiitauce to Mo's soa o00 is a 0 m.AR.r D/m PR.AS. T A T/A a Capital Asetanfe for UC0 projeote • Fiherie heveogment Agr. Nen-ale., LIvEtoch ctor. Forentry REi Irch b 20 20 UNKNO~ 0 2851 KOA.AN.J 88/S9 92/03 60 PR.AS.T If 36 a/mat *aparta, equiment. Nature Conai. .-tion trainingitellowhips. To metatan *Uateo of natural econoei slatem in aurInamm through congarvatio. Improvement of 40 40 UID0/ O L 0nfRE SS/SS 92/93 60 PR.ArlT TA Feastbilty tudies, oamåll forecer ledagtrp I/VS MR vuiment. louing equIvmt 38 a/a of Gamåtllång emporte. TraaiIng Programas - 0 0 Blgum 0 0 WA.Af.r SS T TA 9 feilouhlip/hort-t M Docka~p Tile traninc;(2*0 IVdmries Project Electrical/NMchanteal aeuitsent repair;130> look tuIdIag;liap boet Degg. skolfftiemå eepomittom 100 to OAS 0 0 m~awRK SS S9 AS TA Chomrb o ecopc of project of the &stuarine Area hkep. tratningEducation 150 10 9IiNO~ 0 0 Min~ 89/90 91/92 24 AS BU lexpetåe 12 a/m. Ioprovemont Awar«oenm/atnteon of the Boretry equiseent Servicec - Iormerr 05206. training facIlities Comwervation and the development of ourrieula & eatengion programmes for rural oomenttte-feloshlpe. Föregt 180 10 UNDPWFAO 0 0 K01 l/Sg 92/90 18 AB.T TBA fej f6est management expert mnagement/ a gtitu atiom n2 a tth l; & f örest buildiag månagement assoc. epert for 0 e uthe. Equipment. 0 >¢ Wood techo~ ogy 0 0 UNIDO/As 5 0 MlfRE/UOS 12 TIA To determine futtable tpes of H CGFAO/B un~r-u*lllsed hardvork for teralmt outtable area of use. AGR. MUB-TTAL: 6603 6465 Industry IND Pre-investuent Studies 0 0 108 0 0 Pe PR DAPP Pre-Investment Fund. Inttuatinn4l Supgrt 660 680 IDS 0 0 PR IS DAPIN 1 EXERU~AL FIAI ILCAL rimA i ~1TIO8 i 1 i 1--- I--------------- -------------- ----------------I i TITLEW/UJECT J11TAL: AnT SOURC 1 LAUf 1 An?IIXICUTING:BTAI?cWIP. JUACLABi- ISTATUS; 0 iTS 3 TiA: 1 0ANTI lA0ENCT , 1 ;TION:ICATION 1 * COT: IL/ID 1 (1) i(2) Inthet 43) l i xdustriaI Parke 1400 1800 IC OCI te DAPC DetuaM. to be developed. Debrolla project for 8 0 ffl 0 se 90 24 PR TBA Pronlvestent studies. pr-iavestment studie~ Development of smäll 0 0 Govt. of 9 NOL PR DAPCR and medMum SIa *raal1 Enterprises turver Igood Proceseing 10 10 0 lEX PR 80 Appro. 1 alm contsf ner. Induntry Sarvey of 10 10 o fogE PR SU Appron. 1 e/ consulataer. Agro-lnddstry småner ow Technology 17 15 0 INMEX .1 PR SU Consultanta. Acquialtion etublighment of 0 0 0 lDu 1 su inagement, Trakinn Centre euffort. tarketint tud. 2~ 3 S0e-M0ALI 2515 2515 Teurles (TVS> Pertictpation im Trade 12 12 nEC 0 0 WOT,C,I 88 @a i RP DAPCN Partiotetioen of offlciala in vaå London trade Far. *Im U09-IO?ALa 12 12 91191v4 & @urrpiag NO oLa reaetb1ity 3511 2680 oUN~U 0 035 1n~E S9 l0 24 A,T 80 Kolin for export. Studr avelmtion of 1871 300 U r40~N 0 1371 m~RK SS St 3S AS.T 5U Development of phogbåte for phophete Resccees export and agro-Lndustrial applicetton. Stegtheng of ail 500 NN0M~N 0 1311 mORE 9 SI 36 AS.T u Upgradag of lebetorr. Geologlcel end minine laberatorr Djecoson Stone s78 350 §ININONN 0 228 MMNRE 89 90 24 AS.? su Promotion of dimension ston* Dovelotment Industry. KINI ~0-0ALI 073 30 t sKEETUAL Flu~C ILOCAL VIK~NC i MUaTI0W - - - ------------------ --------------l---------------- TITLR/su^JECT IIOTAL: A~T D0URC I LOA AUTkI~ECUTIN0:STAhTCCMP.10URACLAS8IV- ISTATUS CNBCINTS V T/A: i omn: IAuENCY i : :TIONiCA i T 0I I ML/) I i () 1 (2) lautt 3) i Trønsportat VIRPi Stmdy - 1.esrovementf 0 080f 0 0 MP~ T Sø/S PR DAP Part gt . o0.3 oe prje Forry Service Forry gje facilities on both Ser./Franch ~man (R) Oldeo. RO egtonal Projeet. Stud on dreding ad 0 0 UDr 0 0 NOPW.? 0/89 PR DAPCN Pert er 0.88m om project. costreetien of depeos harbe~r Surine/Frnech au3a6 stremhtbetai of Civil 0 0 oNKNDN 0 0 NOM.T e9/90 AS.? au aviation Servicea 6 lacilities IeaIbilIty & Vinal 0 0 DF 0 0 MPL. SS/S9 PR DAPC 9esign Study Ond Project manasmet. -Ne WLckorte Doep fator llrbour DAMgM. CD-1@tm 0 0 Ceanettaa ()8 Spectal Educ"tten 13 8 UNCZCO G 5 IME se 88 l t TBA Training for 2 offlciele. Prog. for woen Nisib Medie and Adolt 9 8 UNESCM G 3 MOE 88 88 I T TPA Training for 2 officialo. Educettonl EETERilAL rim~ CI LOCAL VIUMC i DURATIOM --------- : -------- - l --------- TITIL/UJEMC 110AL NT saU.CE IAT0N LO i AIx2UT100:8TARTIamP. IDURA1CLAss1v- ISTATMI 00u18 I T/Al GRANT: iAOLEC I t TION:1CATION I M00T 61 IL/G> I l (1) 1 (2)lffthat (3) I I -------------- . ---------------------------------------------------------------------------------------------- --------- Culturel Iprltae 6 « Prit~8 0 NOE 88 oS 12 T TBA Traii t d quImefnt. Cultural Devetonment t$ t5 om=1C I 0 NE OG 89 24 T TaA Tratata@ and eutemnt. traIne le Corarles 10 10 UVEAC~ 0 0 NmE og 8 4 T TOA Treaing ecurse or restoratlon for ceramløs. Strenøthenag of tho 5 5 UWSCO 0 0 ONEUO se S9 24 1e TUA Trainan and equlmnt. activitte ot UiSCO Comias Comlgion ion AseItance to 9 9 6nSC 0 0 se o9 24 T TA Astletene* to e~nd, p~seallt bandeeped Iounmdttom equIFet. children tratalag. ek. Archøelog m 5 9USC88 89 21 1 Tgj% Consrveio ad regtoratida of Archeøleotest Leboratofr. O L prodtiom of s0 0 m UNEC0 0 sIT Sn SS 24 S TDA Aiste * to the &trina~ e TølevisIon Prgra Televite Stichtim tsTvs) 4quipast. As. Aseteace to 28 2 UNESC0 I 0 9W1 Sf SS 24 lS hqutme T and AM. Fundatio of Artf mnd Services nghe~ge er I 8 gmE»CO 0 0 88 es l 18 T"A enchow of vereo~el. aurakanute re*earch and tesching atertet l the field of 0m~1,catløns. EUbibitio of 20 20 UNEKCM 0 0 mE se Sg 24 le Tok eualms,t and traning. produetio 9sterial 00~flm SW-TALI 143 135 Populstien. memith. Nutrittaa (Mn) ------------------------------- Emergency UespeCe to 15 78 ? NØK i 0 0 11N9 88/8 90/91 24 80 Proviston of nødleal supplies =alerk* ~tlvitlen In for blood testing, co~sultamor the Interior services. outboard m~tors and o cenoe9. Tod proteettan gevtaW 0 0 0 0 m"1t 88/89 90/91 24 As su It ls pr«s"ed that manr food Stud, Iteet are prepared under les than hy«Lonte conditkons. consultante empected to examine food productton packagtng conditions prevolling In Surinaa. 8 s XTEisAL PinAllCa IWACA*. ISNAIC 8 BURA?Tie 1 . --------------- ------------------------.. TfLE/aUJECT l'OAL:i *. T 60U :AS IbECUTmUB.A8TICOI.:wURACLAU8sI- ISTATUS: Mh1~1n8 l T/A B GAKfti tamuc M I :ToulCATION i Gest: I (VL/ 1 M :Gi< m: 1 ( e 3) 1 --------**---------------- ............-----------------------------.----------------- - - -----.. .. .. ............ fstiona JAL 1863 N In a 0 IuM .g/n sn/gt 24 a 60 Atued .t edeeati genereI Pkgras pobia of terelack effete ad prev~atiive behavlour. Lah ets.ent end chemAcele. srve? ~ high righ urof trataår4. Neeith d~eter • 0 P SIni 4/88 10/88 6 As DAPT Ida,uti *e41era "ubli@ ef A306 Programe Lefmispl *f*fect of Ajo* ägd pravetativo practioes md trala pesemasel HOM. effleatasm of efe e 0 G 0A8 0 0 MlM-M 8/81 s/S c A A DP patemisttof of pettern of tierm ta Metera Vllag* Sett~efe of bak ta~ negr creol 1o atera Suriae und propaets foe roffttlanat. T/Ata 51-putria~Ie of 0 0 HeN 0 9NA.OI- so/a S/ 3 As DAPC1 Idei0stime of 'hodag nrmcus pregmtIp Gr ~l etes for refuege Ca~enne . låtreatreetere wsdtcal/fcel O reuremets. fpeltteå oas. 0 0 Upl 0 0 MILA.I- 08/89 i/S0 a As 50 e mP r~aegi ndvior Hl asliteac la drawing p 13q for estetå~c. isfieer Planag- 0 0 gU ma 0 5 99 SS/Ss 89/90 5 AS sa Kampeume mee esse.m.sat NiIstry eof Recth etadf for the heat* Dector ad @alpete of the orcaftetäo*a nd *Mnagemamt struetare of MR. Malth laformatlem 0 0 015001 5 5 l ii/SS 55/505 As S r To estcbålsh b full-ftadg spete= bealth Ifforumtlow *v~tm and he.ith cere mat. eth 9~«aa o 0 euIU 0 0 SS e/s 9/91 ae.dem amiuton of bealth Progrene ducatie dvierg and tratlala • Pals eaMsttt4 ta identifråfg fearces of fincce. Development of 130 130? ukiii; a 0 MNR SS/ S 90/91 24 PWAs en Rehabllitattena facilittee for *ddlets (Dru a Atcoh.I Madeel equisment 0 0 U~NOSN 0 0 MI S0 8 8 PR.AS s Wdical eGuiemut ta state et MGåatemence Programe direper shortage of techaic4l maltennce permonnel. Reqtra * review study to determine ~'.ether Ren facilltles shouid be cetratetad und R&P wtecialist EXTMAL FINACE ;LOCAL FIKANCE DUSATION TITK/SUBJECT :TOTAL: AM? SOURCK LOAN ANTECUTING;START COMP. DURA"CLASSI- STATUS! CO~TNTS TIA: GRANT: AGENCY ?IN: ICATIO# COST * (L/16 1I (1) s (2) :athqI (31 to trale. Oewlomedtdr • 0 Ulrini 1 0 OW AGAP SS/OS 1 A 0a I.e99irød a0 *oaen s poss1b1e. »tabls"l» Of lith care *stem to katørtor beltb care erste«1 ham collp~d. e to e iøtorie deterekne the otat and gondittom of the **lating prisery/age~dary booth. Infrastrtacture and reoamnad operetieng et to health cere aystem to the tatartor. oaalth mase~:t 0 0 UiNN 9 0 MW s/S sS/s tt Am 0 Conøulta~e earviceo reeurad oretem to rvtu and enalro the rol. fumtion & Doøftantømal atretate of the halth lngatiløtone ta rart%eoler;411 Ae&dl %øspictl; 1egisnael ~a1 Service. 0' åflTi uB-NFAL. 3841 3049 Ieuslas I Deseety hurete.g (808) Femi Peeesreetl.aei If . I 0*19US . I UAT1(MAf SI 60 6 60 DAP1 GsauSe la teelulques et V.sd preseUea UMBNEs feed pr.eoslet. Se lam41 a 99 a 0 UU1lmN I 0 M11.A5,? 6 e S 14 nI TBA D upMu la the fleld of t e~ao fe~liltty a~Ø of TA t Duvølemaat. trainang and prtjecta sa4 stegast. r »ee$oa beildie tia de le the fteld of n In d~wlom~.s letteoakd 0 F0/TCA 0 A.A0r se 0 24 19 M TB et t mth flild etA r. feas bllty atdy of Toeth *erk. "*å~*et and Orgwalastt~ btidlag 0> mad areiming ta tI m. #id ec Age. Te«th 1 4 Uama l øeaeiepaeen a 0 0 88U 0 0 rA I IS SSort-ter advier 3ural Auras seeiatence, OSIEG GWI-10ALI 0 0 ONIAL OM. TUTALs 3166 5115 we一一――一－一一－一－－一－－一－-－一一－-& 。：：二：::；二；二呂甚：屆t呂甚呂二二tt呂：寫二鑒皂當寫為寫忽為：騙：騙二二：二二寫屆 •二，露CC•召’二。細口綢間馴刈U。目，唱閱口O鸞鬍編 ，二寫寫二蠶鄙認唱寫名：二．屆挪呂蘿S藝膠：二二：：二二：二呂呂二呂‘：二。呂中：寫呂屆寫 個•，開開‘&，一勵閱悶叫鬨闖口馴閱山闐騙個舊U騙 一娥•一州．．■•一•勵－-．•－---．。。。一•－一•－一。－-------- &O讓I必01露，哺攔騙必圍口）I馴閱U口口• 必O露I必0亂驪•，攔騙．劇細’•屆開神 幼．，轉開•．，州細0.00召0O召••••，a•必唱t•門 e〕 N開•！••彎臘馴•．00馴陽奮審闖唁 騙•―－·一－-－一－一－ 石•啊”開，•，馴•＿胛曼 》！＿個戲••甲州馴•．0．馴“騙閱嚇．“•審•，••甲 卜磚l妒〕－--－一一一＿ 江戶J一－－一••當•自． 話―,&&&,&“•．。。．’寫，唱汗不騙龍編遝 2 IOD-－一＇ 馴勰＿_____________＿蠱豐豐坐墮 →’一“韶劉州潤000口開網唱騙購審妒口州卹 開紹細．物 開勰馴口闕00•戶．口馴馳奮•藝馴唱 個J劉口潤••O•””甲•叫闢口a．向叫自啊 ．畸州個••寫悲•．騙奮取唱 館臼·屆誠臘潤00•．哺唱神•啊雙－妒叩 必“畸劇洶奪鬥 卹勰屆日口開000•勿•騙口，藝鰓 －口無閑 觔臼奮闢00總O開馴寫間陽唱調•唱馴•略 屆細甲審0 o,t卹0 ••“，。．,&.“一•臘．，。•“鄴向•。擭，•．歸神’．戶明· r& 蔔一，網戶網戶•口，. 個馳，騙蓄訪閱際寥•口•，馴閱•由閱膚 ，啊”自，•“甲網碼開吋劊哺馴闖閱勰：’以細．•，’•“口．•觔，留叫唱電“•魚•馴 ．向調奮”易祠昌勰，颼開啊闕••蔥奮馴開口00•．奮妒翅閱•馴閑州 ’曲，’闢 劇向．•啊•調啊細奮啊“矗開昌臼．戲開馴闢O•t奮•“自•0州細日••調細 ．細寥．馴開基彎點臼．•露••馴潤O•t審•啊口00&t馴．觔•露．“悶門 細奮啊“必，開•馴•鳥電開•唱開昌勰．佻開奮潤••，’•”口00細胛言馴唱r鬨•奮開口略 ．向唱啊開毛•••馴啊嗚，開•唱惆矗臼，.，開馴闢O•，詞“唱O••奮馴開•闢馴開•“可．唱 •一個．口••。個•個叫口••個州•一中個•個開•．馴．個•．•••一••••．．•．-- l開購二網個•開中購•闕馴閱騙胛，馴 一••一•一••••••••••－-－一•••纏 綢訪，d口口．’個開闢個驪馴戶 . •－一•－．一••。•••，•。•一••－一•．一•••．••－一。•。。。•－一。•一••．一，一•。•••－-－一•一•－一••一••一。•。．。－-．•一••••－.－一•一。•。•一•。一•．•－一••－．•一••－一•一。•一•。••－－一••• 豐•《C》瞭•開，.11露丰寫It取寫痲11配，珍露讓名織勵： ______&l卹I勰〕蘿：卹1昌日寫呂I.J闕屆附•瞌名闢綢勵名：留j名審 •“•“勵徑劍騙，”名二l&”。！，豳瀾：二織勵：&&“言臘，j亡勵中需“•痲一齡面i觔劉闐•“•f物勵絡低“，州叫幼‘I。 I露寫州龍昌切豳口叢讓幽網開l邊，審煩n讓劉闖柑綢t』，留闔馴臨開：當 -．••一，•－一•－-.-－一••••••。。－一•••一••••．－一•一•．--－一••。••一。－一，，•一。－-－一。－.．一•一•••一•－一。••一•一••．－一••一•二•••••－-－一•一。－一•。一•一•．•。－－一•一•，•‘．•－ - 88 - SURINAME STATISTICAL APPENDIX Table of Contents Table No. I. POPULA:7ION AND LABOR FORCE 1.1 Population Trends, 1977-87 1.2 Number of Available Positions by Sector, 1977-87 II. NATIONAL ACCOUNTS 2.1 Sectoral Origin of Gross Domestic Product at Current Factor Cost, 1977-87 2.2 Sectoral Origin of Gross Domestic Product at Constant Prices, 1972-87 2.3 Expenditure en GDP at Current Prices, 1977-87 III. BALANCE 3F PAYMENTS 3.1 Balance of Payments, 1977-87 3.2 Exports by Value, Volt,.me and Unit Price, 1977-87 3.3 Merchandise Imports by Fconomic Use, 1983-87 3.4 Imports of Oil Products, 1978-87 IV. EXTERNAL DEBT 4.1 External Debt Outstanding, 1983-87 V. PUBLIC FINANCES 5.1 Central Government Operations, 1979-87 5.2 Central Government Subsidies, TrRnsfers and Lending, 1981-87 VI. BANKING SYSTEM 6.1 Summary Accounts of the Monetary Authorities, 1975-87 6.2 Summary Accounts of the Commercial Banks, 1975-87 6.3 Summary Accounts of the Banking System, 1975-87 6.4 Commercial Bank Credit by Sectors, 1977-87 6.5 Commercial Bank Interest Rates, 1977-87 - 89 - STATISTICAL APPENDIX (Continued) VII. PRODUCTION STATISTICS 7.1 Agricultural Production, 1977-86 7.2 Livestock and Fisheries, 1977-86 7.3 Bauxite, Alumina and Aluminum Production, 1977-87 VITI. PRICES AND WAGES 8.1 Revised Consumer Price Index for Paramaribo and Surrounding Area, 1977-88 8.2 Index of Average Gross Labor Costs per Employee, 1978-87 8.3 Average Increase of Wages Covered by Collective Bargaining Agreements, 1979-87 Table 1.1: SURINAME - POPULATION TRENDS, 1977-87 *----------------------------------------------------------------------------------------------------------------------- 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 ------------------------------------------------------------------------------------------------------------------------------- Total Population (beg. of year) 368480 365707 368943 361040 351990 368549 367523 374115 382650 392609 401060 ------------------------------------------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Total births 11099 10673 10586 9848 10094 11206 11823 11603 11704 10176 9660 Total deaths 2516 2730 2899 2192 2441 2506 2811 2873 2674 2791 2487 Natural population increase 8583 7943 7887 7656 7653 8699 9012 8630 9030 7386 7193 Net migration -1358 -4707 -15790 -16708 -1094 275 -2420 -95 929 1065 611 Net population Increase 7227 3238 -7903 -9050 6569 8974 6592 8535 9959 8451 7604 4, 0 Crude birth rate (per 1000) 80.7 29.1 29.0 27.6 28.4 80.9 31.9 30.4 30.2 26.7 23.9 Crude death rate (per 1000) 6.9 7.4 7.4 8.1 C.9 8.9 7.8 7.8 6.9 7.0 8.1 Rate of natural Increase (3) 0.0 -7.6 -0.7 -2.9 0.0 13.7 3.6 -4.2 d; 6 -18.2 -2.6 Rate of population growth (W) 2.2 1.4 -0.6 -2.8 -0.8 2.2 2.1 2.0 2.4 2.4 2.1 Memo Item: Mid-year Populition 362094 887825 884992 385616 856270 38086 370819 878383 387630 396835 404982 ./ Preliminary figures. Sources: Bureau of Civil Registration of Surinama. Table 1.2: SURINAME - NUMBER OF AVAILABLE POSITIONS BY SECTOR, 1977-87 a/ - ------- ------------------------------------ ------------------------------------------------------------ 1977 1978 1979 1980 1981 1992 1983 1984 1986 1986 1987 ----- ----------------------------- -------------------- ---------- ------ - - ----------------- -- ----- (Average number of jobs) Tota 98400 102300 102100 98300 98800 98400 96900 96200 9w000 91600 89400 ----- ----- ----- Agriculture, Livestock and Fisheries 14600 14200 13900 13900 14000 14000 13900 13800 18300 16600 14900 Forestry 1900 2600 3200 3200 3100 8200 3200 2900 - - - Mining A Bauxite Processing 8700 8200 6000 6000 6000 6400 6100 4600 4400 3900 8600 Manufacturing 10100 10600 10400 11200 11000 11100 11200 11000 1000 10100 9600 Construction 6200 4200 3600 3600 3800 3600 3100 2800 3000 2800 2600 Gas, Water A Electricity 1100 1100 1100 1300 1300 1400 1400 1400 1400 1400 1400 Trade and Tourism 15000 16300 14900 14600 14400 14800 14000 12800 11700 10200 8700 Transportation A Communication 2800 3600 3800 3700 3700 3800 3700 3800 3800 3800 8800 Financial Institutions 1900 2000 2200 2000 2100 2200 2200 2200 2300 2000 2000 % Government 36900 39000 39600 36200 36400 36300 36400 37100 37900 38300 39600 Other Services 3400 3700 3700 3800 3600 3600 3700 3800 3600 3600 8400 Agriculture, Livestock and (Share by sector) Fisherles 14.7 13.9 13.6 14.1 14.2 14.2 14.3 14.3 17.2 17.0 16.7 Forestry 1.8 2.4 3.1 3.3 3.2 3.3 3.3 3.0 Mining A Bauxite Processing 8.8 6.1 6.9 6.1 6.1 6.6 6.3 4.8 4.6 4.3 4.0 Manufacturing 10.3 10.3 10.2 11.4 11.2 11.3 11.6 11.4 11.2 11.0 10.6 Construction 6.3 4.1 3.4 3.t 3.9 3.7 3.2 2.9 3.2 3.1 2.9 oas, Water A Electricity 1.1 1.1 1.1 1.8 1.3 1.4 1.4 1.6 1.6 1.6 1.6 Trade and Tourism 16.2 16.0 14.6 14.8 14.6 16.0 14.4 13.3 12.3 11.1 9.7 Transportation A Communlcation 2.8 3.5 3.6 3.8 3.8 8.9 8.8 4.0 4.0 4.1 4.3 Financial Institutions 1.9 2.0 2.2 2.0 2.1 2.2 2.3 2.3 2.4 2.2 2.2 Government 86.6 8.1 36.8 36.8 36.0 86.9 36.6 38.6 39.9 41.8 44.2 Other Services 3.6 3.6 3.6 3.9 3.6 3.7 3.8 4.0 3.8 L.8 3.8 - - ---- - --------- - ------------- ---------- ---- s/ Classification In this table does not correspond to that used in DP by sector tables. Source: Planning Bureau, Suriname. Table 2.1: SURINAME - SECTORAL ORIGIN OF GROSS DOMESTIC PRODUCT AT CURRENT FACTOR COST, 1977-67 (Sf million) - -------------------- ------- ---- -------- ----- ---------- - ---- - ------------------- ---- 1977 1978 1979 1980 1981 1982 1988 1984 1985 1986 1987 ---- ------ - --------- - -------------- ------- --- - - ---- - -------------- - - Agriculture, Animal Husbandry, Forestry and Fishing 92.1 91.7 110.0 122.7 140.1 144.3 126.9 134.5 142.7 184.2 206.1 M1ning and Quarrying 108.2 118.8 125.0 96.8 128.6 182.8 9S.7 92.7 94.6 78.0 58.7 Manufacturing 202.9 225.3 289.8 249.1 271.2 225.8 195.3 10).4 206.6 226.8 210.6 Construction 127.2 104.2 102.8 88.6 106.8 110.2 99.7 106.5 97.2 104.9 115.6 Sas, Water A Electricity 84.2 46.7 62.1 87.1 78.4 69.7 92.9 88.0 66.4 50.4 65.8 Trade, Restaurants A Hotels 200.9 213.8 270.9 278.8 286.7 814.5 310.6 271.2 287.8 278.0 267.1 Transportation A Communications 81.4 82.5 77.8 84.1 98.6 100.2 106.2 111.4 127.7 188.9 158.8 Financial Institutions 57.2 75.5 89.9 102.7 142.8 140.0 118.6 117.7 147.4 170.8 208.5 Housing, Other Real Estate and Business Services 54.6 62.9 70.4 78.8 78.9 82.1 88.9 86.7 92.8 102.8 184.1 Public Admin. & Defence 182.3 210.9 221.6 226.9 278.1 846.8 878.9 374.1 383.8 408.7 488.8 Personal, Social A Other Community Services 14.6 17.4 19.1 21.9 26.4 29.5 82.1 26.2 21.0 82.7 88.8 Imputed Bank Service Charge (-) 28.4 41.2 56.0 71.8 98.9 92.5 76.8 74.7 59.8 108.6 112.6 GOP (Factor Cost) 1102.1 1235.9 1889.0 1854.7 1628.6 1608.7 1560.6 1580.7 1558.8 1643.0 1788.9 Net Indirect Taxes 180.6 285.1 226.8 247.8 289.6 245.1 226.4 214.1 188.0 167.8 156.8 GDP (Market Prices) 1282.7 1471.0 1565.8 1602.8 1798.8 1848.8 1786.9 1744.8 1741.8 1810.8 1989.7 Source: General Bureau of Statistics and IMF. Table 2.2: SURINAME - SECTORAL ORIGIN OF GROSS DOMESTIC PRODUCT AT CONSTANT PRICES, 1977-87 (1980 Sf million) 1977 1978 1979 1980 1981 1982 1983 1984 19ps 1986 1987 Agriculture, Animal Husbandry, Forestry and Fishing 115.4 110.2 121.8 122.7 1389 184.7 122.9 127.6 129.4 127.4 133.4 Mining and Quarrying 145.3 151.1 134.4 96.8 102.6 80.6 60.4 77.3 87.3 104.0 85.8 Manufacturing 277.3 295.0 278.4 249.1 2568.1 214.0 198.6 187.5 199.6 206.9 188.3 Construction 153.6 116.8 106.0 88.6 106.3 104.5 94.4 98.1 87.0 91.7 78.7 Gas, Water A Electricity 70.7 77.3 88.0 87.1 78.0 683.8 64.0 63.9 59.0 53.7 46.5 Trade, Restaurants A Hotels 279.8 318.5 308.8 273.3 268.8 269.7 255.2 214.9 191.3 166.1 104.3 Transportation & Communications 88.9 95.6 83.6 84.1 82.4 84.1 90.6 93.0 105.0 105.4 99.0 Financial Institutions 76.9 95.0 95.3 102.7 139.9 119.3 95.8 89.7 110.0 114.5 134.0 Housing, Other Real Estate and Business Services 88.6 71.6 73.0 73.8 76.3 77.9 79.3 80.5 84.5 87.5 84.2 Administration & Defence 224.2 259.5 221.6 225.9 278.1 298.5 257.8 251.1 249.2 247.7 252.4 Personal, Social & Other Community Services 20.3 22.3 21.7 21.9 24.3 25.4 26.3 20.0 15.0 19.7 18.9 Imputed Bank Service Charges (-) 40.0 52.5 59.7 71.3 90.1 75.6 56.2 52.6 62.4 75.8 85.1 GDP (Factor Cost) 1479.0 1569.8 1467.9 1354.7 1454.6 1396.4 1284.1 1250.9 1254.9 1248.9 1118.2 Not Indirect Taxes 242.4 296.3 248.1 247.6 256.6 213.4 186.3 175.0 147.4 127.2 97.7 GDP (Market Prices) 1721.4 1856.1 1716.0 1602.3 1711.2 1609.8 1544.2 1507.3 1493.5 1450.4 1337.1 Source: General Bureau of Statistics and IMF. Table 2.8: SURINAME - EXPENDITURE ON GDP AT CURRENT PRICES, 1977-87 (St million) 1977 1978 1979 1980 1981 1982 1988 1984 1985 1986 1987 Consumption 891 1028 1213 1268 1491 1624 1792 1872 1679 1764 184.0 Public a/ 282 385 848 889 431 520 613 583 624 753 799 Private b/c/ 809 693 870 929 1060 1104 1179 1089 106 1001 1041 Investment d/ 479 477 8 420 555 507 275 203 137 94 126 Public 138 139 136 128 176 185 119 85 58 39 37 Private 841 338 222 292 879 822 158 118 81 55 89 Resource Balance -88 -84 -5 -86 -248 -282 -281 -131 -75 -8 -26 Exports 707 814 917 1094 1044 949 803 784 679 650 658 Imports 795 848 922 1180 1292 1231 1084 895 754 888 684 GDP at Current Market Prices 1282 1471 1568 1602 1798 1849 1786 1744 1741 1810 1940 Net Factor Payments Abroad -61 -55 -74 -80 23 18 -20 -4 -12 1 1 CNP at Current Market Prices 1221 1416 1492 1572 1821 1882 1768 1740 1729 1811 1940 Indirect Taxes less Subsidies 181 235 226 249 270 245 228 214 183 167 156 ONP at Current Factor Cost 1040 1181 1268 1823 1551 1617 1540 1526 1546 1644 1785 Gross Domestic Savings 391 448 858 884 807 225 -8 ? 62 56 100 Gross National Savings e/ 384 395 291 316 337 28 -40 55 43 56 111 a/ Government wage bill and purchases of goods and services. b/ Includes public sector other then Central Government. c/ Private consumption is residual. d/ Includes changes in stocks. e/ Equals GNP less Consumption plus/minus Net Unrequited Transfers (see Table 3.1). Sources: General Bureau of Statistics, Central Bank and IMF. Table 3.1: SMUINAME - BALANCE OF PAYMENTS, 1977 - 87 (USS million) ---- --------------------------------------------------------------------------------- */ 1977 1978 1979 1960 1981 198. 1988 1984 1985 1986 1987 ------------------------------------------------------------------------------------ Exports of Goods and NFS 896.2 455.8 518.6 618.0 584.8 581.5 450.0 427.9 380.2 884.3 868.5 -- - ----- -------- Merchandise Exports 848.2 898.5 444.1 514.4 492.9 460.8 882.8 872.6 388.1 328.8 816.2 Non Factor Services 50.0 62.3 89.5 98.6 91.9 90.9 87.7 56.2 44.1 35.6 52.8 Imports of Goods and NFS 445.1 474.8 518.3 660.9 721.9 38e.4 607.1 501.1 422.1 885.8 888.1 Merchiidive Imports 860.1 881.7 410.9 604.4 587.0 588.1 478.8 884.7 885.6 804.8 81 Non Factor Services 85.0 98.1 105.4 156.4 186.9 151.8 128.8 116.4 86.5 81.3 66. Resource Balance -48.9 -19.0 -2.7 -47.8 -189.1 -167.9 -157.1 -78.8 -41.9 -21.8 -14.6 Factor Services and Traefers -82.2 -27.0 -84.8 -10.5 18.8 4.8 -19.1 -9.5 -10.6 0.1 6.4 Net Factor Service Payments -84.8 -80.9 -41.8 -17.0 12.9 7.2 -11.1 -2.1 -6.6 0.6 0.4 Net Unrequited Transfers 2.1 8.9 7.0 6.5 8.7 -2.6 -8.0 -7.4 -4.0 -0.5 6.0 Current Account Balance -81.1 -46.0 -87.0 -68.8 -122.5 -158.4 -178.2 -82.8 -52.6 -21.2 -8.2 Private Capital -11.8 -4.6 -17.1 18.5 40.0 18.9 85.1 -14.8 8.9 -46.4 -27.4 Medium A Long-term (net) -11.9 -6.2 1.1 8.1 45.0 22.7 10.1 27.5 -7.9 -0.7 0.8 Short-term b/ 0.1 1.6 -18.2 15.4 -6.0 -8.9 25.0 -41.8 11.7 -45.7 -28.2 V! Public Capital 75.0 76.2 80.8 71.4 98.8 96.6 26.7 26.0 21.9 84.8 12.8 Grants 77.5 55.5 80.7 78.7 94.7 96.9 8.9 6.0 4.1 3.5 4.8 Medium & Long-term Disb. 0.0 22.4 0.0 0.0 0.0 0.0 11.6 4.7 18.1 2.7 8.0 Medium A Long-tern Amort. 1.8 1.1 1.6 1.6 2.5 1.2 1.0 2.8 4.0 1.7 2.1 Other Capital (net) 0.0 -0.2 0.0 0.0 -1.0 -0.6 -0.5 0.0 0.0 12.7 6.1 Short-tern (net) -1.2 -0.4 1.2 -0.7 2.6 1.6 12.7 19.1 6.7 17.6 1.0 Capital Account Balance 68.2 71.8 8.2 89.9 188.6 115.4 61.8 11.7 25.8 -11.8 -15.1 SDR Allocation 0.0 0.0 8.4 8.8 8.8 0.0 0.0 0.0 0.0 0.0 0.0 Gold Revaluation c/ 0.0 0.0 0.0 0.0 0.0 0.0 17.4 -4.7 1.0 2.9 5.0 Errors,0missions A Unclassified 0.6 14.0 -0.5 0.8 0.4 1.7 -1.4 1.0 7.2 0.2 2.9 Change in Reserves(- increase) 17.4 -89.8 -29.1 -86.7 -15.0 88.2 98.4 74.8 1A.S 29.7 15.4 -------------------------- - ----- ----- ------------ ---------------- a/ Preliminary figures. b/ Includ;eog changes in working balances between the Surinamee bauxite companies and their parent companies. c/ Gold was revalued from US842 per troy ounce ot US8867 per troy ounce in August 1988, since then has been adjus*ted in line with the market price. Source: Central Bank of Suriname and IMF. Table 3.2: SURINAME - EXPORTS BY VALUE, VOLUME AND PRICE, 1977-87 (value-USS million; volume-tons'000; price-USS/ton) -- ------------------------------------------------------ ---------------- ----------------------------------------- 1977 1978 1979 1980 1981 1982 1983 1984 1986 1986 1987 ---------------------------------------------------- ------------------------------------------- Bauxite Value 85.8 72.1 65.8 73.6 83.0 29.4 24.9 40.7 35.9 26.9 10.4 Volume 2172.0 2241.0 1787.0 1775.0 1288.0 497.0 449.0 957.8 992.5 839.8 322.6 Unit Price 80.2 32.2 87.8 41.6 49.7 58.7 55.6 41.2 34.6 30.8 78.8 Alumina Value 152.0 176.0 200.8 279.4 265.5 281.0 215.9 201.5 175.6 177.4 194.8 Volume 1059.4 1124.8 1184.4 18329.7 1165.8 1043.7 1143.3 1098.5 1265.2 1842.8 1842.1 Unit Price 143.5 158.5 189.5 210.3 227.8 221.3 180.8 183.8 138.8 132.1 145.1 Aluminum Value 59.4 80.8 74.8 62.0 49.0 69.5 34.6 42.8 80.9 84.9 3.5 Volume 57.7 55.0 83.5 43.8 81.6 60.8 28.7 29.4 28.1 29.5 8.2 Unit Price 1029.1 1105.5 1178.4 1418.6 1549.5 1152.0 1206.8 1465.8 1098.5 1183.1 1102.9 Rice Value 17.1 28.4 38.0 42.2 36.8 89.4 87.0 31.8 43.3 35.7 37.8 Volume 54.7 74.7 103.0 101.1 112.9 130.8 127.4 94.7 127.5 108.1 112.6 Unit Price 313.3 813.3 3868.9 417.4 824.5 801.5 290.7 886.0 839.6 380.6 384.3 10 Bananas Value 3.3 8.9 4.1 5.9 6.8 7.4 7.4 8.9 10.3 11.1 9.5 Volume 27.8 29.0 27.3 84.0 38.5 87.5 82.2 84.9 37.3 86.0 32.4 Unit Price 121.1 135.2 151.9 178.0 187.3 197.2 229.7 255.2 274.9 309.7 292.2 Shrimp Value 28.9 29.8 26.8 31.3 40.9 42.0 386.1 38.0 31.4 88.4 41.6 Volume 8.8 8.7 3.8 3.1 3.7 3.3 8.1 3.3 2.8 2.7 3.1 Unit Price(USS/kg) 7.6 8.1 8.1 10.1 11.1 12.7 11.6 10.9 11.2 14.2 18.4 Processed Wood Value 5.2 8.2 9.8 9.6 8.7 10.1 5.8 4.1 2.5 2.1 1.8 Volume(cu.meter '000) 22.5 24.2 38.5 33.8 27.1 81.8 19.2 14.3 9.6 7.3 4.9 Unit Price(USS/cu.meter) 281.7 254.7 266.9 288.8 322.5 818.9 274.8 286.0 262.6 288.9 377.3 Raw Lumber Value 1.0 0.7 1.1 2.1 1.7 1.3 1.2 0.8 1.1 0.6 0.8 Volume(cu.meter 1000) 15.1 9.1 14.5 25.6 24.9 15.4 18.2 8.9 7.8 6.4 8.7 Unit Price(US8/cu.meter) 68.1 80.1 78.4 88.1 67.5 87.8 89.1 88.1 145.8 96.3 90.8 Sources:----- - - - -- S M s o A Genera Bra o ------ ---------------- Sources: Central Bank of Surinames, Ministry of Agriculture, General Bureau of Statistics, Bauxite Institute of Suriname. - 97 - Table 3.8: SURINAME - MERCHANDISE IMPORTS BY ECONOMIC USE, 1988-87 a/ (Sf million) 1988 1984 1986 1986 1987 b/ TOTAL 798.8 699.0 692.8 571.8 626.4 Hydrocarbons (f.o.b.) 201.9 196.8 176.4 111.4 118.1 Raw materials 291.4 277.6 229.7 281.8 219.6 of which for: Agriculture and fisheries 20.5 18.6 21.6 25.7 18.8 Food processing, beverage, and 85.8 87.9 26.8 22.7 18.8 tobacco industry Construction 89.6 41.8 29.5 80.0 29,S Textiles 26.0 21.2 11.8 11.9 5.0 Other industries 170.0 168.1 141.1 141.6 148.6 Consumer goods 209.0 148.1 108.4 126.6 110.6 Food products 61.0 40.0 34.2 32.2 87.3 Beverages 8.4 8.8 4.2 2.7 4.8 Cigarettes 2.4 1.9 0.7 0.8 0.8 Home appliances 84.8 26.4 16.0 22.6 18.5 Clothes 11.4 8.6 2.8 8.0 2.0 Footwea r 6.8 2.6 8.8 4.1 4.4 Cleaning products 6.2 4.6 8.4 2.6 8.2 Pharmaceuticals and cosmetics 84.4 28.4 14.8 18.2 12.4 Recreational items 17.6 14.4 10.4 9.7 7.2 Bicycles and mopeds 6.1 4.9 0.7 1.1 1.2 Passenger cars and motorcycles 14.0 6.6 10.2 18.0 9.0 Woopons and ammunition 2.8 0.3 0.2 1.1 0.1 Other 15.4 10.8 7.6 10.6 9.6 Investment goods 91.0 78.1 77.8 101.6 82.2 Transport equipment 82.1 19.0 22.5 88.4 21.2 Machinery and parts for 2.5 6.6 7.0 20.8 6.6 bauxite sector Other 66.4 62.6 48.8 47.8 66.6 a/ Net of re-exports. b/ Preliminary. Source: General Bureau of Statistics and IMF. - 98 - Table 3.4: SURINAME - IMPORTS OF OIL PRODUCTS, 1978-87 (volume='000 barrels; value=US$ million) a/ 1979 1979 1980 1981 1982 1983 1984 1985 1986 1997 Vol. Val. Vol. Val. Vol. Val. Vol. Val. Vol. Val. Vol. VIL. Vol. V.1. Vl. Val. Vol. Vae. Vol. Val. Gasoline 374 7.4 394 11.3 355 14.5 378 15.5 409 17.1 419 15.4 430 15.4 449 16.2 453 11.7 457 12.0 Aviation 6asoline 27 0.8 27 1.2 fresing Gasoline 243 4.9 261 7.3 259 11.0 283 11.7 313 13.2 325 12.2 337 12.2 354 13.0 365 9.5 egular Gasoline 104 1.8 106 2.8 96 3.5 95 3.8 96 3.9 93 3.2 93 3.2 95 3.2 0 2.2 erosene 132 2.5 146 4.3 156 7.1 137 5.4 143 6.3 128 5.6 - 110 5.t 140 5.9 137 4.1 143 4.0 Ierosene 26 0.5 22 0.7 19 0.8 18 0.7 16 0.7 16 0.7 1 0.8 17 0.6 17 0.5 Aviation lerosene 106 2.0 124 3.6 137 6.3 119 4.7 127 5.7 112 4.9 92 4.4 123 5.3 120 3.6 Diesel 1255 25.8 1134 28.9 1061 37.8 1126 46.6 1079 44.2 1063 38.4 1185 43.9 1121 41.9 1159 29.6 1119 29.4 Nuav fuel 3396 44.9 3209 55.9 3433 90.0 2707 73.8 2242 57.5 1948 45.3 2107 55.2 1042 50.8 1578 26.4 1466 29.0 Fuel Oil 3384 44.3 3190 54.9 3417 89.5 2687 73.2 2232 57.1 1939 44.9 2092 54.6 1925 50.1 1570 26.2 Asphalt 12 0.6 19 1.0 16 0.5 20 0.7 10 0.3 10 0.3 IS 0.6 17 0.7 8 0.2 Lubrication Oils 42 5.3 42 5.8 41 5.6 44 6.0 44 6.5 40 6.9 3 6.4 38 6.6 39 6.4 39.0 5.5 Liquified gas 143 2.4 192 3.2 106 3.6 109 4.3 113 4.5 132 6.1 132 5.0 131 5.0 149 6.4 136.0 4.6 Total 5342 8.3 5107 109.4 5152 158.6 4501 152.4 4030 136.1 3729 117.5 4001 131.0 3721 126.3 3513 94.7 3360 64.6 a/ On c.l.f. basis. Source: Oil Coapany of Surinase, Central Bank of Surinue and INF. - 99 - Table 4.1: SURINAME - EXTERNAL DEBT OUTSTANDING, 1988-87 (US$ million) End of Period 1988 1984 1985 1988 1987 Total External Debt 25.7 74.4 106.6 189.6 161.1 Mediua and long-term debt 25.7 88.4 52.4 66.0 73.0 Public debt 26.7 88.4 52.4 66.0 73.0 Official sources 1.5 16.6 28.1 84.2 44.4 Internati&nal Institutions 0.0 1.8 2.7 8.7 6.6 EDF/EIB 0.0 1.8 2.7 8.7 6.8 IDB 0.0 0.0 0.0 0.0 0.8 Governments 1.5 18.8 20.4 80.5 87.8 USAID 0.2 0.1 0.0 0.0 0.0 Brazil a/ 1.8 18.7 14.9 14.1 21.1 China 0.0 0.0 5.8 6.9 7.2 Taiwan, Province of China a/ 0.0 0.0 0.2 9.5 9.5 Private sources 24.2 22.8 29.8 81.8 28.6 Financial Institutions 21.8 20.8 22.8 24.8 23.5 ABN, Netherlands 21.8 20.8 19.8 18.4 16.6 ABN, United States 0.0 0.0 2.7 5.6 6.9 ABN, Curacao 0.0 0.0 0.8 0.8 0.0 Other 2.4 2.0 8.6 7.5 5.1 Alcoa 2.4 2.0 1.7 1.3 1.0 Fiat ./ 0.0 0.0 4.0 5.4 4.1 Other 0.0 0.0 0.8 0.8 0.0 Short-tore debt 0.0 0.0 0.0 1.1 0.6 Official creditors 0.0 0.0 0.0 1.1 0.6 Venezuela a/ 0.0 0.0 0.0 1.1 0.6 External payments arrears 0.0 86.0 64.2 72.5 87.5 a/ Excludes arrears. Source: Ministry of Finance, Central Bank and IMF. Table 5.1: SURINAME - CENTRAL GOVERNMENT OPERATIONS, 1979- 87 (St million) 1979 1990 1981 1982 1983 1984 1985 1986 1987 Current Revenues 422.4 478.3 491.6 509.8 512.9 499.6 479.3 505.9 527.8 Tax revenue 867.8 418.2 429.0 401.6 406.6 410.4 385.3 393.4 384.1 of which: bauxite levy (net) 88.3 92.6 96.4 68.7 74.5 59.4 61.7 20.2 0.0 Non-tax revenue 54.8 65.1 62.8 108.2 107.2 99.2 94.0 112.5 143.7 Current Expenditures 427.0 479.8 581.5 580.8 781.2 741.3 804.3 987.4 1010.9 Wages and salaries 245.0 258.0 266.2 319.8 860.4 888.8 414.4 443.8 480.8 Subsides and transfers 60.0 107.6 89.8 94.6 103.0 188.7 139.3 124.0 127.5 Interest 4.5 5.6 6.1 8.6 16.2 24.8 41.4 80.3 84.0 Other 117.6 107.9 170.9 159.6 252.6 199.5 209.2 309.5 818.6 Curr.acct. surplus/deficit (-) -4.8 -1.0 -89.9 -70.8 -218.8 -241.7 -825.0 -481.5 -483.1 0 Development Expenditures */ 182.8 118.3 185.8 198.2 102.8 88.8 54.5 89.0 86.7 Overall surplus/deficit (-) -187.4 -119.8 -226.2 -269.0 -321.1 -325.0 -879.5 -470.6 -519.8 Foreign Financing (ret) 148.2 127.5 174.1 172.3 8.7 31.8 19.8 12.2 32.6 Grants 144.1 181.8 172.0 174.2 4.8 8.4 5.5 6.1 7.7 MALT loan disbursement (net) -0.9 -4.1 2.1 -1.9 8.9 24.9 18.3 4.5 14.8 Arrears -- -- -- -- -- -- - 1.6 10.1 Domestic Financiri (net) -6.8 -8.2 61.1 96.7 812.4 293.7 360.7 468.8 487.2 Banking vystem -21.5 -21.7 53.9 94.0 812.1 293.6 360.6 458.8 487.1 Private sector (net) 15.7 13.5 -2.8 2.7 0.8 0.1 0.1 0.0 0.1 --------------------------------------- ---------------------------------- a/ Include capital transfers and lending. !ource: Ministry of Finance, Central Bank of Suriname and IMF. - 101 - Table 5.2: SURINAME - CENTRAL GOVERNMENT SUBSIDIES, TRANSFERS AND LENDING, l1l-87 (Sf million) 1981 1982 1988 1984 1985 1988 1987 Total subsidies and transfers 89.8 94.8 108.0 188.8 189.4 123.8 127.5 Hospitals 16.8 20.5 21.9 20.7 22.6 21.2 21.2 Education 10.1 18.5 14.7 15.2 18.8 19.8 29.2 o.w.: University - 9.2 9.4 10.2 10.9 10.3 14.4 Social security 31.5 27.8 81.4 45.8 44.9 28.8 22.1 Old age fund 17.9 17.8 22.2 88.2 81.7 14.8 14.8 Child allowance fund 8.6 6.4 4.4 7.0 8.7 8.7 4.8 Social assistance fund 6.0 4.4 4.8 6.6 4.5 5.8 8.5 Welfare 2.4 2.4 2.4 2.4 2.5 2.5 6.0 Producitve sectors 29.7 30.6 82.6 49.5 51.1 56.5 49.0 Electricity company 7.1 9.5 - 8.7 4.9 5.4 6.0 shipping company 8.4 2.2 8.7 4.1 8.6 8.7 2.0 Sugar factory 9.4 12.2 12.7 11.5 8.8 11.5 9.8 Dairy factory 8.7 2.3 4.6 4.5 1.6 - 1.3 others 5.1 4.4 11.6 20.7 32.2 85.9 29.9 Total lending 5.8 4.7 7.7 18.0 19.5 18.8 15.4 S.M.L. Wageningen - - 0.1 0.5 9.7 18.9 9.0 Grassalco 2.9 4.7 1.9 8.6 6.5 4.1 3.5 Bruynzeel - - 1.6 0.7 7.1 5.7 4.9 Pharmaceutical enterprise - - - 2.9 4.0 - - Landbouwbank - - - 1.0 - 7.2 - Other 2.9 0.0 4.1 4.8 -7.8 -12.1 -2.0 Source: Ministry of Finance and IMF. Table 6.1: SURIKAME - SUMMARY ACCOUNTS OF THE MONETARY AUTHORITIES, 1975-87 (St Million) December 31 1976 1978 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 Net International Reserves 172.7 205.9 177.8 223.7 294.8 388.8 870.4 815.0 139.3 5.7 -27.5 -80.6 -108.2 Assets 172.8 206.1 177.4 237.3 804.3 389.2 370.8 815.4 139.7 70.6 70.0 72.2 69.0 Liabilities 0.1 0.2 0.1 7.8 10.0 0.4 0.4 0.4 0.4 84.9 97.5 152.8 177.2 Net domestic Assets -28.9 -28.4 86.9 9.7 -5.4 -48.1 -15.7 69.3 368.3 899.2 1067.1 1485.7 2026.7 Net Claims on the Public Sector 0.6 7.2 70.2 43.9 80.5 8.8 57.3 149.8 435.7 700.8 1040.0 1480.0 1983.0 Net Central Gov't (budget) 0.6 7.2 70.2 54.9 41.8 19.6 70.0 187.8 452.3 716.7 1055.8 1498.7 1991.6 Assets a/ 53.0 124.1 188.5 82.5 55.8 88.9 81.4 181.7 460.8 718.9 1082.1 1494.1 1997.5 Liabillitlies 52.4 118.9 118.3 7.6 18.7 17.8 11.4 14.1 8.3 0.2 6.5 0.4 5.9 Net-Other Central Government 0.0 0.0 0.0 -11.0 -11.1 -11.8 -12.7 -17.8 -16.6 -16.9 -16.6 -13.7 -8.6 Assets 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Liablil;tles 0.0 0.0 0.0 11.0 11.1 11.3 12.7 17.8 16.6 15.9 15.6 18.7 8.6 Official Capital and Surplus -14.5 -22.0 -22.0 -22.0 -22.0 -27.0 -82.0 -84.5 -84.5 -34.5 -84.5 -84.5 -84.5 Credit to the private Sector 0.8 0.7 0.8 0.6 0.5 0.4 0.8 0.2 0.2 0.1 0.0 0.0 0.0 Net Unclassified Assets -15.8 -14.8 -11.9 -12.8 -14.4 -24.8 -41.3 -48.2 -33.1 32.8 61.6 40.2 78.2 Assets 1.0 2.1 1.6 1.9 3.2 8.5 5.0 4.5 4.8 66.2 102.2 142.4 182.8 Liabilities 16.8 16.4 13.5 14.7 17.6 28.8 46.8 50.7 37.7 33.4 40.6 102.2 104.6 0 Asset = liabilities 143.8 177.5 214.2 289.4 288.9 296.7 354.7 884.3 507.6 704.9 1039.8 1405.1 1918.5 Counterpart Unrequited Foreign Exchange 19.7 19.2 17.5 40.9 47.7 58.9 57.0 57.2 86.2 78.1 88.3 92.3 108.1 Allocation of SDRS 0.0 0.0 0.0 0.0 8.1 11.9 16.1 15.8 14.5 18.6 15.2 16.9 19.6 Valuation Adj ustemnet-Fund Accounts 0.0 C.9 0.0 0.0 0.2 -0.8 -1.0 -0.6 0.1 0.8 -1.3 -2.0 -0.2 Valuation Adjustoment-Gold A foreign Exchange 19.7 18.2 17.5 40.9 41.4 42.8 41.9 42.6 70.6 63.7 69.4 77.4 88.7 Liabilities to Commercial Banks 38.1 48.4 89.4 51.9 79.6 58.1 78.9 58.7 152.4 316.1 543.2 808.5 909.9 Currency 8.8 11.9 14.0 14.8 17.0 16.6 20.7 26.1 27.7 28.4 29.4 46.8 49.8 Demand Deposits 25.1 38.8 55.6 87.6 62.9 86.7 68.4 28.8 124.9 28v.9 514.3 781.1 863.1 Other liabilities -0.8 -0.8 -0.2 -0,8 -0.8 -0.2 -0.2 -0.2 -0.2 -0.2 -0.5 -19.4 -2.5 Liabilities to Private Sector 91.0 110.8 127.4 146.6 161.5 188.8 218.6 278.4 270.2 310.7 413.1 504.4 900.5 (monetary liabilities) Currency In circulation a/ 88.6 109.8 125.8 145.1 156.8 177.8 197.0 288.1 285.0 306.2 405.4 451.8 888.0 9emand DeposIts 2.4 1.2 2.1 1.5 5.2 10.8 21.8 5.3 5.2 5.5 7.7 23.4 14.0 Time Deposits - - - - - - - - - - - 29.7 248.5 Reserve Money 124.4 159.8 196.9 198.8 241.6 242.0 297.9 327.3 422.8 627.0 956.8 1302.5 1564.4 ---------------- -------------- --------- ---------- --------- - --- - ------ ----- -- ----------------- a/ Includes government issue of currency. Source: Central Bank of Suriname. Table 6.2: SURINAM - SUMMARY ACCOUNTS OF THE COMMERCIAL BANKS, 1975-87 (Sft liion) December 81 ----------------------------------------------------- ----- ;;-------- ------ 1975 1976. 1977 1978 1979 1980 1981 1962 1968 1984 1985 1986 1987 Net Internpional Reserves 82.5 88.4 88.9 52.2 39.6 58.8 54.1 44.7 28.3 -13.1 -29.0 -72.0 -74.8 Assets 89.4 61.0 51.6 74.4 66.7 92.7 98.8 87.7 55.4 30.0 20.6 9.8 20.7 Liabilities 8.9 14.8 17.7 22.2 27.1 83.9 89.2 48.0 82.1 43.1 49.6 81.8 95.8 Monetary Reserves A Monetary Holdinge 88.4 49.1 70.0 52.2 79.9 58.8 79.1 58.9 152.4 316.1 548.2 827.9 912.4 Net Domestic Assets 175.8 252.5 805.7 887.4 446.7 485.6 588.4 688.8 894.1 731.8 802.5 888.4 920.5 Net Claims on the Public Sector 18.5 11.2 11.4 16.8 9.8 11.8 16.4 17.6 41.8 108.2 110.7 127.8 112.2 Net Central gov't (budget) 8.1 0.4 0.1 2.8 -5.8 -4.8 0.2 1.8 28.0 48.0 65.7 82.0 83.8 Assets 9.8 18.0 7.2 4.0 3.4 1.8 5.8 5.0 85.4 54.9 78.8 98.8 74.6 Liabililtes 1.7 12.8 7.1 1.2 8.7 8.1 5.4 8.4 7.4 8.9 18.1 14.6 10.9 Met-Other Decentr. Agencies 5.4 10.8 11.8 18.8 15.1 18.1 18.2 18.0 13.8 55.2 45.0 45.8 48.8 Assets 5.4 10.8 11.8 18.8 15.1 18.1 16.2 18.0 13.6 55.2 45.0 45.8 48.8 Credit to the Private Sector 156.8 229.8 288.9 380.4 420.6 460.5 548.8 828.9 648.6 827.4 689.8 727.8 773.0 Net Unclassified Assets 6.7 10.8 10.2 10.4 15.8 14.0 20.7 21.5 8.9 1.0 2.0 28.0 85.8 Assets 18.8 18.0 22.5 27.2 88.1 88.2 47.8 67.2 54.7 80.2 56.8 94.1 829.9 > Liabilities 7.0 7.7 12.8 18.8 17.8 22.2 27.1 35.7 45.8 59.2 54.8 66.1 294.7 Net Interbank Float 0.0 1.4 0.2 0.0 0.0 0.0 0.0 0.8 0.0 0.0 0.0 0.0 0.0 Assets a Liabilities 241.7 888.0 409.6 491.8 658.2 597.9 718.6 782.4 869.8 1084.6 1316.7 1839.3 1758.8 MILT Foreign liabilities 7.4 8.9 6.8 6.5 0.6 6.8 6.6 7.0 7.0 7.0 7.0 7.0 7.0 Liabilities to Monetary Auth. 0.8 0.3 0.2 0.8 0.8 0.2 0.2 0.2 0.2 0.2 0.5 19.4 2.5 Liabilities to private Sector 284.1 828.5 402.7 485.1 558.8 591.0 709.8 755.2 482.8 1027.8 1809.4 1812.9 1748.9 Monetary Liabilities 77.7 87.9 92.8 99.5 111.9 105.8 189.4 147.8 184.9 202.3 370.3 624.8 753.8 (demand deposits) Other Liabilities 182.9 211.1 266.8 829.8 880.0 410.4 486.2 511.1 574.7 717.1 814.5 854.5 858.8 Time, Savings A F/C Deposits 124.5 202.2 254.8 808.8 845.5 872.2 487.8 461.4 528.2 598.1 870.5 680.8 689.6 Other Liabilities 8.4 9.9 11.7 21.0 84.5 88.2 48.9 49.7 51.5 119.0 144.0 173.7 189.0 Private Capital and Surplus 28.5 29.5 44.1 55.8 88.4 75.0 84.2 96.8 103.2 108.2 124.8 133.8 188.5 Source: Central Bank of Suriname and IMF. Table 6.8: SURINAME - SIMMARY ACCOUNTS OF THE BAhIXNC SYSTEM, 1975-87 (Sf million) December 31 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1086 1987 -- ------------ ---- - ------------------ -------------------- --------- Not International Reserves 206.2 242.8 211.2 281.9 888.9 897.6 424.5 859.7 182.6 -7.4 -56.5 -152.6 -182.8 Assets 212.2 267.1 229.0 811.7 871.0 481.9 46.1 408.1 195.1 100.6 90.6 81.8 89.7 Liabilities 7.0 14.8 17.8 29.8 87.1 84.8 89.6 48.4 82.5 108.0 147.1 284.1 272.5 Net Domestic Assets 146.9 224.1 842.6 897.1 440.8 442.7 567.7 788.2 1062.4 1430.8 1889.6 2869.2 247.1 Not Cils on the Public Sector 14.1 18.4 81.6 60.5 40.8 19.6 78.7 167.6 477.8 804.0 1160.7 1607.9 2095.8 Not Central gov't (Budget) 8.7 7.8 70.8 57.7 86.8 14.8 70.2 169.2 480.8 764.7 1121.8 1575.8 2056.8 Awsets a/ 62.8 137.1 198.7 66.5 58.7 88.2 87.0 186.7 496.0 771.8 1140.9 1590.7 2072.1 Liabilitles 54.1 129.5 128.4 8.8 22.4 28.4 16.8 17.6 15.7 7.1 10.6 14.9 16.8 Net-Other Central government 0.0 0.0 0.0 -11.0 -11.1 -11.8 -12.7 -17.7 -16.6 -15.9 -15.6 -18.7 -8.6 Assets Liabillties 0.0 0.0 0.0 11.0 11.1 11.8 12.7 17.7 16.6 15.9 15.6 18.7 8.6 Net-Other Decentr. Agencies 6.4 10.8 11.2 18.8 15.1 16.1 16.2 16.0 18.6 55.2 45.0 45.8 48.6 Assets 5.4 10.8 11.8 18.8 15.1 16.1 16.2 16.0 18.6 55.2 45.0 45.8 48.6 Liabilities Official Capital and Surplus -14.5 -22.0 -22.0 -22.0 -22.0 -27.0 -82.0 -84.5 -84.5 -34.5 -84.5 -34.5 -84.5 Credit to the Private Sector 157.4 280.8 284.5 381.0 421.1 460.9 546.6 624.1 648.8 627.5 689.8 727.6 773.0 1 Net Unclasslfied Assets -10.1 -4.0 -1.7 -2.4 0.9 -10.8 -20.6 -24.7 -24.2 88.8 68.6 68.2 113.8 O Assets 14.6 20.1 24.1 29.1 86.8 89.7 52.8 61.7 59.8 126.4 159.0 236.5 512.6 Liabilities 24.7 24.1 25.8 81.5 85.4 50.5 78.4 86.4 88.5 92.6 95.4 168.8 38.8 Not Interbank Float 0.0 1.4 0.2 0.0 0.0 0.0 0.0 0.8 0.0 0.0 0.0 0.0 0.0 Assets = Liabilities 852.1 466.4 553.8 679.0 774.2 840.8 992.2 1092.9 1225.0 1428.4 1813.1 2216.7 2764.8 Counterpart Unrequited Foreign Exchange 19.7 18.2 17.5 40.9 47.7 58.9 57.0 57.2 85.2 78.1 88.8 92.3 108.1 Allocation of SDRS 0.0 0.0 0.0 0.0 6.1 11.9 16.1 15.8 14.5 18.6 15.2 16.9 19.6 Valuation Adjustemnet-Fund Accounts 0.0 0.0 0.0 0.0 0.2 -0.8 -1.0 -0.6 0.1 0.8 -1.3 -2.0 -0.2 Valuation Adjustement-Cold A foreign Exchange 19.7 18.2 17.5 40.9 41.4 42.8 41.9 42.5 70.6 63.7 69.4 77.4 88.7 MALT Foreign liabilities 7.4 8.9 6.8 6.5 6.6 6.8 6.6 7.0 7.0 7.0 7.0 7.0 7.0 Liabilities to private Sector 825.1 489.8 580.1 681.7 719.8 779.6 928.4 1028.6 1188.0 1838.8 1722.6 2117.3 2649.4 Money (1) 168.7 198.7 219.7 248.1 278.4 294.2 358.0 421.2 449.9 507.5 775.7 1075.9 1391.8 Currency in Circulation 98.6 109.6 125.8 145.1 156.8 177.9 197.0 268.1 265.0 305.2 405.4 451.3 688.0 Demand Deposits 80.1 89.1 94.4 101.0 117.1 116.4 161.0 158.1 184.9 202.8 870.8 624.6 758.8 Other Liabilities 182.2 211.1 266.8 329.8 880.0 410.4 486.2 511.1 579.9 722.6 822.3 907.6 1121.1 Quasi-money 124.5 201.2 254.6 806.8 345.5 872.2 487.8 481.4 528.2 598.1 670.5 110.5 918.1 Other Liabilities 8.4 9.9 11.7 21.0 34.5 88.2 48.9 49.7 56.7 124.5 151.8 197.1 203.0 Prli-te Capital and Surplus 28.5 29.5 44.1 55.8 66.4 75.0 84.2 96.8 103.2 108.2 124.6 183.8 1?6.5 -S-ur,:: Cenra--BankofSu n------------ --- Sour..o: Central Bank of Surinaeo mnd IMF. - 105 - Table 6.4: SURINAME - COMMERCIAL BANK CREDIT BY SECTORS, 1977-87 ----- -*--*-*- **-**----------------------- ----------------**------------------------------ 1977 1979 1980 1981 1982 1988 1984 1985 1986 1987 -m------- - -------------- - ------m- -------e-e-----m-m-----e-m-m-o-wm m ---- - ------------------ (St million) Total 802.1 488.7 477.8 667.5 645.0 692.0 788.6 812.8 869.1 895.4 Agriculture 80.8 54.1 68.8 88.6 99.9 119.9 142.6 157.8 171.0 178.8 Fisheries 1.5 0.5 0.6 0.6 0.8 0.9 8.5 5.8 5.9 3.6 Forestry 0.7 1.8 1.6 0.8 0.7 0.8 0.6 0.8 2.1 3.5 Mining 28.8 27.6 24.2 87.0 41.4 85.8 46.4 87.4 40.0 46.6 Manufacturing 80.5 44.3 49.9 51.1 50.8 62.8 59.8 70.8 69.7 89.1 Construction 11.0 21.8 22.7 17.6 20.7 20.2 22.5 20.2 22.6 22.9 Electricity, gas A water 18.4 19.2 24.7 26.2 24.8 28.6 26.1 20.0 12.6 8.5 Comerce 94.7 186.0 160.8 177.6 197.5 189.7 156.1 164.7 157.1 179.0 Tranaport A communications 7.5 12.8 9.8 8.4 10.5 12.0 14.4 18.2 15.0 18.7 Services 10.0 18.6 18.4 21.0 24.8 28.6 82.5 88.2 48.2 48.3 Other (including housing) 74.2 105.0 109.8 188.5 178.6 208.1 284.8 291.8 829.9 296.4 (as percent of totel) Agriculture 10.0 12.8 14.8 15.6 15.5 17.8 19.4 19.4 19.7 20.0 Fisheries 0.5 0.1 0.1 0.1 0.1 0.1 0.5 0.7 0.7 0.4 Forestry 0.2 0.4 0.8 0.1 0.1 0.1 0.1 0.1 0.2 0.4 Mining 9.4 6.8 6.1 8.5 6.4 5.2 6.8 4.6 4.6 5.2 Manufacturing 10.1 10.1 10.4 9.0 7.9 7.8 7.9 8.7 8.0 10.0 Construction 8.8 4.9 4.8 8.1 8.2 2.9 8.1 2.5 2.6 2.8 Electricity, gas A water 4.4 4.4 5.2 4.6 8.8 8.4 8.4 2.5 1.4 0.9 Commerce 81.8 81.0 81.5 81.8 80.8 27.4 21.2 19.0 18.1 20.0 Transport I communications 2.5 2.9 1.9 1.5 1.6 1.7 2.0 2.0 1.7 2.1 Services 8.8 8.8 8.4 8.7 8.8 4.1 4.4 4.7 5.0 5.4 Other (including housing) 24.6 28.9 22.9 24.4 26.9 80.1 31.9 85.9 88.0 88.1 Note: From 1977 to 1983 data Includes the Postal Savings Bank. Source: Central Bank of Surinam. Table 6.5: SURINAME - COMMERCIAL BANK INTEREST RATES, 1977-87 -------------------------------------------- --------------------------- Loans and Deposits Out4standing December 81 Rate in Percent per Annum ------------ 1978 1979 1980 1981 1982 1988 1984 1985 1988 1987 (St '000) Lending Rate 375729 488184 476774 66725 64814 690178 785028 810818 907393 893538 Up to 6 12299 14054 28048 19678 18712 58745 73288 93338 113446 94019 6-7 84468 25785 28891 29629 45060 32880 19850 22095 17778 18488 7-8 69841 6831 78191 84685 67992 70780 40216 46164 66847 82879 8-9 148097 198979 201701 220320 239704 230899 258191 282947 266327 228959 9-10 94347 112988 119831 185817 220579 226910 260276 29818 337827 358249 Over 10 17179 31997 32112 46718 61267 75684 86206 93134 105168 112949 Deposit Rate 445158 516248 545214 681929 690900 792118 989785 1269988 1534388 1656569 Up to 8 115411 183587 124689 188507 180628 227974 311473 5683306 825336 968848 3-4 180887 198584 208987 286075 214570 224575 276554 326783 44773 359802 4-5 21822 88185 45873 58881 425683 55870 585 388863 33553 31380 5-8 28839 28108 28910 23112 39292 44892 37302 45867 59301 72056 8-7 48055 48851 -*8575 47029 456840 41511 57847 78092 80082 b8850 7-8 58287 76588 89641 127827 148814 188087 180171 175322 147538 125881 Over 8 2567 2672 2579 8497 19898 84757 44032 44275 43788 39672 C (as percent of total) Lending Rate Up to 8 8.8 8.2 3.8 3.5 2.9 7.8 10.0 11.5 12.5 10.5 6-7 9.2 5.9 3.9 5.2 7.0 4.7 2.7 2.7 2.0 1.8 7-8 18.5 15.1 10.8 14.9 9.0 10.8 5.5 S.7 7.4 9.3 8-9 39.4 42.7 29.2 88.9 87.3 83.4 84.9 32.4 29.4 25.8 9-10 25.1 25.8 17.4 29.8 84.8 82.9 85.4 88.2 87.2 40.1 Over 10 4.6 7.8 4.7 8.2 9.5 11.0 11.8 11.6 11.6 12.6 Deposit Rate Up to 8 25.9 25.9 22.9 25.2 26.1 28.8 82.8 44.4 68.8 58.6 8-4 40.6 38.1 37.4 85.7 31.1 28.4 28.4 26.7 22.5 21.7 4-5 4.9 7.0 8-4 8.8 8.2 7.1 5.8 2.9 2.2 1.9 5-8 5.4 4.6 5.3 8.5 6.7 5.8 3.8 3.8 3.9 4.4 6-7 9.7 9.4 9.1 7.1 6.6 6.2 6.0 6.1 5.2 3.6 7-8 18.1 14.8 18.4 19.2 21.5 20.6 18.6 13.8 9.6 7.6 Over 8 0.6 0.5 0.5 0.5 2.9 4.4 4.5 3.5 2.9 2.4 Source: Central Bank of Suriname. Page 1 of 2 Table 7.1: SURINAME - AGRICULTURAL PRODUCTION, 1977-86 1977 1978 1979 1980 1981 1982 1988 1984 1985 1986 RICe Physical area ha 1000 29.9 82.5 82.9 35.4 89.9 42.8 43.0 48.7 49.4 49.4 Planted area ha 1000 49.7 56.2 68.9 65.0 70.8 72.8 73.8 74.8 74.9 75.1 Cropping intensity 1.68 1.70 1.79 1.84 1.77 1.70 1.70 1.71 1.52 1.52 Yield Kg/ha 4002 4057 4006 8966 8O4 4149 8658 4039 3995 3992 Volume: dry paddy production a/Tons 202.9 228.9 285.8 257.8 290.7 801.1 288.0 802.0 299.2 800.0 Price Sf/ton 289 204 247 247 288 244 245 248 250 250 Value of paddy production Sf min. 52.6 45.7 58.2 88.6 65.4 78.6 85.7 74.9 74.8 75.0 Volume of milled rice Tons '000 117.4 128.9 186.8 148.4 161.7 178.4 154.8 178.9 172.8 172.8 Bananas b/ Planted area ha 1909 1910 1955 1909 289 2009 1955 2161 2041 1890 Volume o? production Tons '000 88.2 86.0 84.6 41.1 49.2 45.6 40.1 48.6 44.8 46.5 Price Sf/ton 211.0 284 271 804 843 850 876 406 431 490 Value of production Sf '000 7007.0 8409 9844 12509 17101 15942 15081 18905 19310 22770 Oil Palm Planted area ha 1800 2025 2872 2614 2948 4199 4954 5747 6187 8128 Productive area ha 1296 1650 1850 1800 1944 2562 2741 8281 8660 4212 Yield Tons/ha 7.2 9.0 16.0 11.7 12.7 11.0 11.4 10.3 10.4 7.2 Volume of palm fruit Tons '000 10.11 14.84 24.78 21.08 24.66 28.19 81.24 88.89 88.21 30.80 Volume of raw palm oil Tons 1042 2806 4874 4091 4722 6691 6558 7140 7958 0024 Price Sf/ton 980 970 970 1000 1800 1800 1800 205 ... 280 0 Value of production Sf *000 1713 2722 4728 4091 8189 7898 8525 1464 0 1687 Volume of palm kernels Tons 421 784 994 844 880 1188 1180 1530 1987 1609 Sugar Planted area ha 2100 2808 2429 2892 2422 2489 2500 2491 2423 2528 Yield Tons/ha 72 69 80 82 88 64 89 6S 62 64 Volume of production Tons '000 185.8 119.8 184.1 148.4 146.8 125.4 128.8 180.6 118.2 111.0 Volume of raw sugar production Tons 6870 6751 9967 8997 8118 7049 6051 6588 8789 6011 Price Sf/ton 425 425 425 580 800 600 800 600 650 750 Value of production Sf '000 2707 2889 4288 4058 4971 4229 8831 8920 4380 4508 Volume of alcohol production c/lt '000 1871 1897 1695 1250 949 1047 2828 1253 1608 1582 Volume of molasses production Tons 4524 4192 5008 4594 8580 1891 1slf 2062 2900 2715 Citrus d/ Planted area he 2000 1890 1899 1984 2154 1774 1755 1981 2151 2165 Productive area ha 1200 1250 1800 1587 1600 1400 1400 1600 1870 1700 Volume of production Tons 20.1 8.7 9.6 11.1 11.4 9.4 11.1 11.3 12.0 11.8 Value of production Sf '000 7386 8909 4508 5385 5659 4979 5768 5085 882 7508 Page 2 of 2 Table 7.1(contd): SURINAME - AGRICULTURAL PRODUCTION, 1977-86 1977 1978 1979 1980 1981 1982 1983 1984 1985 1988 - ---------------- ---- ----------------- ---------------- Vegetables Planted area ha 485 538 586 719 1780 747 743 869 884 920 Volume of production Tons 8165 8879 8868 4850 10581 5204 4680 5094 4989 4288 Value of production St '000 2950 828 4117 6872 18842 5589 5916 5246 7829 8407 Peanuts Planted area ha 282 245 285 208 889 844 328 485 497 827 Volume of production Tons 880 20 28 210 889 844 257 485 449 467 Value of production Sf '000 800 880 1007 687 1287 1204 1028 1528 1616 1845 Coconut Planted area ha 1110 1000 978 1097 1889 1286 1104 1206 1208 1842 Volume of production '000 unit 5500 6844 6848 5479 6528 7177 8753 8772 8955 8518 Value of production Sf '000 800 784 840 822 979 1077 1018 880 904 1588 Other Food Crope e/ Planted area ha 651 989 1084 1126 1840 987 1121 1419 1156 1157 Volume of production Tons '000 5842 5787 0106 11850 8781 5855 7821 8597 8820 Value of production Sf min. 8547 4019 4798 9511 6e12 5619 6571 5687 4100 Other Cash Crops e/ Planted area ha 750 417 418 402 0864 440 475 487 481 487 Volume of production Tons '000 151 72 142 110 128 74 82 80 88 79 Value of production Sf '000 460 871 854 6 872 864 397 884 442 414 Total Planted area ha '000 81 86.5 70.9 77.7 87.6 87.4 88.8 92.2 92.5 92.9 Value of production Sf min. 79 74.0 92.5 105.1 125.1 120.7 112.7 126.2 129.8 132.6 s/ 14% wet paddy b/ Includes plantains. c/ 50 alcohol volmse. d/ Oranges represent about three quarters of citrus production. e/ Increase in 1978 largely reflects inclusion of crops not covered previously. Note: Prices represent faragate prices. Production value equals volume times faragate price. Source: Ministry of Agriculture. Table 7.2: SURINAME - LIVESTOCK AND FISHERIES, 177-86 Unit 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 Meat and Dairy Products Beef/Milk Number of Livestock number 24000 84495 42289 45480 47997 S160 52554 52739 70376 88850 (of which: milk cowz) number 4990 6178 5748 5922 6850 6180 7020 6960 6280 6800 Volume of meat production tons 948 1194 1096 1180 1800 1366 1365 1486 1470 1255 Price Sf/kg 4.10 5.50 5.50 5.50 5.82 6.50 5.50 5.90 6.00 10.00 Value of meat production Sf'000 8868 8567 6089 8490 8916 7453 7508 8470 8820 12550 Volume of milk production lt.000 7880 7790 8892 7106 7200 8300 8700 9624 10220 12000 Price Sf/It 0.88 0.45 0.45 0.45 0.70 0.70 0.70 0.70 0.70 0.00 Value of milk prodiction $f000 2684 8506 8101 8198 5040 5810 6090 6667 7154 9600 Pork Number of pigs number 18259 18000 20179 20000 17720 18690 21400 21840 20970 19190 Volume of Production tons 811 948 1069 1185 1100 995 1155 1880 1585 1866 Price Sf/kg 4.71 8.40 8.00 8.20 8.50 8.50 3.50 4.50 4.50 5.00 Value of production Sf'000 8820 8228 8207 8682 3860 8488 4043 6210 7043 6775 Chicken/Eggs Number of chickens '000 4400 4500 4500 4500 4600 4700 4700 4800 6600 5000 Volume of meat production tons 8400 7800 8880 8400 8400 8600 8800 8800 10400 9750 Price Sf/kg 2.40 2.70 8.00 8.00 8.00 8.25 3.25 3.50 3.60 5.00 Value of meat production Sf000 15880 21060 25080 25200 25200 27950 27950 80800 37440 48750 Volume of egg production '000 82.0 45.0 52.5 52.8 58.0 58.0 53.0 50.0 61.8 44.4 Price Sf/000 135 130 180 129 180 130 180 160 180 250 Value of egg production Sf/'000 8870 6850 6825 8828 6890 6890 8890 7500 9888 11100 Seafood and Fish Shrimp Trawlers number 190 175 181 188 185 160 167 183 ... ... Production per trawler tons 21.8 21.7 20.7 28.8 22.9 28.2 19.7 16.9 ... ... Volume of production tons 4105 2708 8164 8096 3777 8710 3289 2754 2413 8289 Price Sf/kg 10.55 18.24 17.68 17.01 20.85 24.82 28.26 27.71 33.64 47.04 Value of production Sf aIn. 48 88 56 56 74 84 85 54 50 82 Crab Volume of production tons 26 23 80 81 27 i3 3 40 40 22 Value nf production Sf'000 39 32 50 64 Be 80 54 S9 72 48 Other Fish Volume of production tons 3400 2885 2618 2127 2286 2151 2895 2788 2249 2379 Value of production Sf'000 8864 8894 8142 2901 8268 8094 3431 8784 3612 6618 Souro -. ----------------------------- --------- Source: Ministry of Agriculture. Table 7.3: SJRINAME - BAUXITE, ALUMINA, AND ALAlMI PRODUCTION, 1977-87 (thousand metric tons) 1977 1978 1979 1980 1981 1982 1983 1984 1965 1986 1997 Bauxite 5000.9 5220.1 4837.1 4689.1 3666.7 288.0 2598.8 3261.2 3738.3 3730.8 2510.8 Calcined Abrasive Bauxite 153.1 155.8 1568.8 135.2 158.4 153.7 142.9 0.0 0.0 0.0 0.0 Calcined Refractory Bauxite 25.4 27.9 41.8 41.0 36.4 13.9 0.0 0.0 0.0 0.0 0.0 Alumina 1214.0 1267.1 1306.5 1445.8 1248.7 1136.2 1171.7 1287.2 1241.7 1471.0 1362.6 Aluminum 60.3 58.0 53.9 54.9 40.6 42.6 33.6 23.0 28.8 28.7 1.9 (million metric tons) Bauxite production 5.0 5.2 4.8 4.6 3.8 2.8 2.7 3.2 3.7 3.7 2.7 For Export s/ 2.0 2.0 1.6 1.5 1.0 0.3 0.3 0.9 1.0 0.8 0.3 > For Processing 3.0 3.2 3.3 3.1 2.8 2.5 2.4 2.$ 2.7 2.9 2.4 Index of Output (1977=100) Bauxite 100 104 97 91 77 57 52 65 75 75 50 Calcined Abrasive Bauxite 100 102 102 88 103 100 93 0 0 0 0 Calcined Refractory Bauxite 100 110 186 161 139 55 0 0 0 0 0 Alumina 100 106 108 119 103 98 96 102 102 121 112 Aluminum 100 116 107 109 81 84 67 46 57 57 4 a/ Excluding calcined bauxite. Source: SURALCO and Billiton; mission estimates. - 111 - Table 8.1: SURINAME - REVISED CONSUMER PRICE INDEX FOR PARAMARIBO AND SURROUNDINS AREA, 1977-88 NEIGHTS 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 (annual average, April 1968 - March 1969 - 100) Food and Beverages 40.0 183.9 191.4 214.3 238.6 258.1 266.5 278.5 282.5 310.3 389.7 699.0 731.1 Housing and Furnishings 23.6 160.0 185.6 207.2 238.8 236.3 261.9 276.2 283.2 334.8 387.7 573.2 580.5 Clothing and Footmear 11.0 182.8 208.2 256.9 279.0 345.4 372.2 396.2 432.0 460.2 527.5 693.6 836.9 Other 25.4 166.3 175.4 201.1 235.5 263.6 288.8 '195.0 309.5 336.3 392.7 497.8 556.3 Total 100.0 173.7 187.8 214.0 242.3 264.0 282.7 292.1 306.0 339.2 402.6 617.6 662.7 (percent change) Food and Beverages 4.1 12.0 11.3 8.2 3.3 4.5 1.4 9.8 25.6 79.4 4.6 Housing and Furnishings 16.0 11.6 15.3 -1.0 10.8 5.5 2.5 18.2 15.8 47.8 1.3 Clothing and Footwear 13.9 23.4 8.6 23.8 7.8 6.4 9.0 6.5 14.6 31.5 20.7 Other 5.5 14.7 17.1 11.9 9.6 2.1 4.9 8.7 13.8 30.1 11.9 Total 8.1 13.9 13.2 8.9 7.1 4.3 3.7 10.9 18.7 53.4 7.3 Source: Seneral Bureau of Statistics. - 112 - Table 8.2: SURINAME - INDEX OF AVERAGE GROSS LABOR COST PER EMPLOYEE, 1978-87 (annual percentage change) 1978 1979 1980 1981 1982 1988 1984 1985 1988a/1987b/1987 c/ Total Index 9.7 7.8 14.4 16.0 14.7 6.8 7.0 8.8 6.4 -2.4 14683 Mining 7.1 18.9 7.8 14.0 28.7 12.8 17.0 -4.8 8.9 - 43318 Manufactring 1.0 15.6 19.8 15.0 11.8 2.8 8.9 9.8 -2.6 8.4 15581 Utilities 16.6 2.5 20.8 2.0 14.7 7.7 7.9 7.4 7.5 7.0 28893 Commerce 24.6 7.0 18.2 18.0 6.9 9.7 5.1 11.9 8.1 -2.4 15070 Banking 8.4 10.2 18.2 4.0 17.8 9.0 6.8 0.0 4.2 1.4 28670 Other Services 7.8 9.7 18.6 0.0 7.0 4.7 -2.7 15.8 8.7 2.2 8986 Government 4.1 2.8 7.0 22.A 15.6 2.8 2.8 8.4 7.8 8.6 11588 Consumer Price Index 8.0 14.0 18.2 9.0 7.8 4.8 8.8 10.9 18.7 53.4 - a/ Excluding Construction. b/ Excluding Construction and Transportation. c/ Average gross labor cost per employee in Surinamese guilders per year. Source: General Bureau of Statistics and IMF. Table 8.3: SURINAME - AVERAGE INCREASE OF WAGES COVERED BY COLLECTIVE BARGAINING AGREEMENTS, 1979-87 a/ (change in percent) Number of Employees 6/ Covered in 1979 1960 1982 1988 1984 1985 1986 1987 1988-1987 Total c/ 12.7 13.5 12.8 12.7 12.2 5.0 8.8 2.8 16434 Agriculture A forestry 18.2 15.0 10.8 18.8 ... 8.2 6.4 8.0 1779 Mining 15.0 14.7 12.4 11.8 18.0 - - - 2994 Manufacturing 18.0 18.8 14.0 18.0 10.7 7.1 8.4 2.2 8870 Public utilities 12.6 14.0 15.5 17.9 14.7 10.7 11.0 10.6 1274 Construction 11.1 18.1 18.5 11.2 ... 4.0 8.6 - 121 Commerce, hotels, and restaurants 12.2 18.8 18.0 12.6 12.8 8.2 1.6 - 2666 Transportation 8.8 11.8 10.6 1V.0 ... 0.8 5.2 5.2 1699 Banking 12.2 12.1 18.4 18.4 18.9 8.8 4.8 6.4 1282 Other Services 9.8 9.2 14.6 18.6 10.0 6.7 5.2 2.4 1249 a/ Sectoral averages are unweighted. b/ No figures available for 1981. c/ Weighted average. Source: Ministry of Lab2r ad IMF. . VENEZUEIA 56*$ coL IA t i a n t i c o c e a n '¾T' so0uv00 Spnrngland ro PR 0G B R O O I a,n °P Groningen B AGENTINA URGo"Ota ct (n Poo.bc ta A SA R A A C C A - PROJ it c r IVI N A R O W J N E 4.N I}4 L S i UI SURINAME Main road Eiiisming dam B R A Z I l Secondary road Projected dam ond lake Prjce d Bauxtie mine +-Eistig radirod Bauxite fiidings ----Projected railroad Development of gold rines River 0 Oil palm Swamp 5 Sagar aExploitable forest B Bananas Mountainous are Rice Old caeceetration ares Ctirus I2 4 69 0o 100 New concentrionareas international airport KiLOMETES Center for social Airheld or oirotrip N- - District boundaries MILESno --.-.- - oInternaonal boundaries 0V aq 0*ø 'rns t oSr irn.aon0 fl.ooo.OoMii.ESda