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Suriname: Staff Report for the 2009 Article IV Consultation—Informational Annex

Author(s):
International Monetary Fund
Published Date:
February 2010
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Annex I. Suriname: Fund Relations

(As of November 30, 2009)

I. Membership Status: Joined: April 27, 1978; Article VIII

II. General Resources Account:

SDR Million%Quota
Quota92.10100.00
Fund holdings of currency85.9893.35
Reserve Position6.126.65
Holdings Exchange Rate

III. SDR Department:

SDR Million%Allocation
Net cumulative allocation88.09100.00
Holdings80.6791.57

IV. Outstanding Purchases and Loans: None

V. Latest Financial Arrangements: None

VI. Projected Payments to Fund 1/

(SDR Million; based on existing use of resources and present holdings of SDRs):

Forthcoming
20092010201120122013
Principal
Charges/Interest0.020.020.020.02
Total0.020.020.020.02

B. Nonfinancial Relations with the Authorities

Exchange rate arrangements

The national currency is the Suriname dollar (SRD), which replaced the Suriname guilder in January 2004 at a conversion rate of 1,000 guilders per SRD. Suriname has an official and a commercial exchange rate. The official rate of SRD 2.745 per U.S. dollar is used for official transactions such as debt service. The commercial rate is used by commercial banks and cambios. The commercial SRD/US$ rate has remained very close to the official rate in recent years at the suasion of the CBvS. Suriname maintains two multiple currency practices—one arising from the potential for the spread between the official and the commercial rates to exceed two percent, and the other from the existence of a special rate for imports of baby milk.

Last Article IV consultation

The last Article IV consultation was concluded by the Executive Board on June 2, 2008 (IMF Country Report No. 08/131). Suriname is on the standard 12-month consultation cycle.

Participation in the GDDS

In July 2004, the IMF officially announced Suriname’s formal participation in the General Data Dissemination System (GDDS).

Technical assistance since 2005

CARTAC

  • Mission in January 2008 on revenue forecasting issues.

  • Mission in October 2009 to discuss tax reform and other TA needs.

FAD

  • A joint IADB-IMF needs assessment mission in May 2007 provided assistance in public financial management.

LEG

  • Missions in November 2006 and January and June 2007 provided advice on tax legislation.

STA:

  • A follow-up mission from the Money and Banking Division of the Statistical Department visited Suriname in February 2005 to address issues on reporting of commercial banks’ data.

  • In August 2009, a STA mission visited Suriname to improve external sector data.

Consents and acceptances: Recent two quota increases approved.

Resident Representative: None.

Annex II: Suriname: Relations with the Inter-American Development Bank

(As of November 30, 2009)

In 1980, Suriname joined the Inter-American Development Bank (IADB), which at present is its largest multilateral lender. As of November 2009, Suriname’s outstanding debt to the IADB stood at US$69 million, mostly on Intermediate Fund Financing (IFF) terms.

The most recent IADB Country Strategy with Suriname (2006-10) was approved in 2007 and highlighted three equally important pillars: development of the public sector; development of the private sector; and integration of the interior. The first two pillars consolidate the thrust of the former Country Strategy (2000-05) by continuing to target weaknesses in the policy and institutional framework that constrain Suriname’s development and thereby promote private-sector-led growth. The third pillar focuses on integrating communities living in the interior of Suriname more fully into national development and raising their living standards.

Structural reform projects

Public sector. Given the large size and importance of the public sector, in June 2004, the IADB approved a US$5 million loan to Suriname to support the strengthening of public sector management, which is considered a critical element of institutional reform in the country. Technical Cooperation (TC) resources complement the loan by elaborating a road map to help guide implementation of the public sector reform project.

Decentralization and strengthening local government. A second loan in this area was approved in 2008 to assist certain districts with improving their self-management, including financial and tax systems and management of capital investment. With the approval of a district tax law, the program will support implementation of a simplified tax administration system in certified districts. Committees will be created to engage citizens in the decision-making process as participants—a key factor for achieving greater transparency and accountability in the districts. The program will also support the implementation of community-based basic infrastructure investment projects and services.

Financial relations

The active loan portfolio consists of 10 operations, totaling US$132 million, a year-on-year increase of 136 percent as two new operations were approved for a total amount of US$76 million. The average age of the loans in the entire portfolio is 5.1 years. However, when four operations (Decentralization of Local Government I, Low Income Shelters I, Census and Community Development Fund) exit the portfolio at the end of 2009, the average age will fall to 3.0 years, which is relatively young. The undisbursed portion of the loan portfolio in execution, US$85 million, is entirely from the Ordinary Capital lending window (non-concessional) with IFF subsidy.

The TC portfolio for Suriname (including the Multilateral Investment Fund) comprises 38 operations (US$13.5 million), of which 53 percent has been disbursed. The TC portfolio grew by 9 percent since September 30, 2008, with approvals totaling US$1.2 million.

Pipeline and Portfolio Summary
Project categoryNumberTotal(US$ millions)Disbursed(in percent)
Loans in execution1013236
TCs in execution3813.553
Loans in pipeline (2010)447.0Not applicable
TCs in pipeline (2010)26.1Not applicable

Net cash flow

The total financing inflow has been positive during 2006-08.

Net Flow of IADB Convertibale Currencies(In millions of US$)
Proj.Proj.
20062007200820092010
a. Loan disbursements7.716.87.710.325
b. Repayments (Principal)33.54.15.14.8
c. Net loan flow (a - b)4.713.33.65.220.2
d. Interest and charges1.92.52.732.7
e. Net cash flow (c - d)2.810.80.92.117.5

Annex III. Suriname: Statistical Issues

I. Assessment of Data Adequacy for Surveillance
General: Data provided to the Fund has some shortcomings but is broadly adequate for surveillance purposes.
National Accounts: Difficulties in data collection and long delays in the provision of source data affect production approach GDP estimates. The lack of timely, reliable source data on price indices for tourism services, transportation and communication also adversely affects production-based GDP estimates.

GDP estimates by expenditure approach were compiled with the assistance of the CARTAC. However, the expenditure breakdown of national accounts is still limited, and there is also no reconciliation between the national accounts and the balance of payments, which combine to preclude an accurate evaluation of the savings and investment balance.
Government finance statistics: The only public finance statistics available are those for the central government. Estimates for revenue and expenditure components differ significantly among the Ministry of Finance, the Treasury Department, the Central Bank, and the Central Paymaster data, increasing the uncertainty about the fiscal position. Therefore, a substantial amount of additional information on government finance statistics is needed to derive an accurate and timely picture of the fiscal position from above the line.

The institutional coverage of fiscal statistics needs to be broadened to the nonfinancial public sector so as to get a better indicator of fiscal risks associated with all public sector debt. The actual number of public enterprises remains difficult to determine, and most of these enterprises do not produce accounts on a timely basis. Available public debt statistics cover only debt contracted or guaranteed by the central government.
Monetary and financial statistics: Monetary and Financial statistics are broadly adequate for surveillance, and more recently, timeliness has been improved to two weeks for the central bank accounts and two months for the accounts of other depository corporations.
External sector: External sector statistics are broadly adequate for surveillance. Although the data compilation of balance of payments statistics is good in general, there still remains some shortcomings such as weak data collection, under coverage, misclassification, and deviations from the balance of payments manuals. While trade data are relatively reliable, data on services and private capital inflows suffer from poor compilation systems. Estimates of the components of the financial account (especially private external debt) also need to be improved.
II. Data Standards and Quality
Suriname participates in the GDDS.No data ROSC is available.
III. Reporting to STA
Suriname does not report fiscal statistics for inclusion in either International Financial Statistics, or Government Financial Statistics Yearbook.
Suriname: Table of Common Indicators Required for Surveillance December 21, 2009
Date of latest observationDate receivedFrequency of Data7Frequency of Reporting7Frequency of publication7
Exchange Rates9/0911/09MMM
International Reserve Assets and Reserve Liabilities of the Monetary Authorities19/0911/09MMQ
Reserve/Base Money10/0911/09MMonthly Less than 1 month lagQ
Broad Money9/0911/09MMonthly 2 month lagQ
Central Bank Balance Sheet9/0911/09MMonthly Less than 1 month lagQ
Consolidated Balance Sheet of the Banking System9/0911/09MMQ
Interest Rates29/0911/09MMonthly 2 month lagQ
Consumer Price Index10/0911/09MMonthly Less than 1 month lagM
Revenue, Expenditure, Balance and Composition of Financing3 - General Government49/0911/09MMA
Revenue, Expenditure, Balance and Composition of Financing3- Central Government9/0911/09MMA
Stocks of Central Government and Central Government-Guaranteed Debt59/0911/09MMA
External Current Account BalanceQ2/0910/09QQA
Exports and Imports of Goods and ServicesQ2/0910/09QQA
GDP/GNP200710/09AAA
Gross External Debt9/0911/09MMA
International Investment Position6NANANA

When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.

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