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Suriname: Staff Report for the 2014 Article IV Consultation—Informational Annex

Author(s):
International Monetary Fund. Western Hemisphere Dept.
Published Date:
October 2014
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Fund Relations

(As of May 31, 2014)

Membership Status: Joined: April 27, 1978;

General Resources Account:

SDR Millions% Quota
Quota92.10100.00
Fund holdings of currency (Exchange Rate)85.9893.35
Reserve Tranche Position6.126.65

SDR Department:

SDR Million%Allocation
Net cumulative allocation88.09100.00
Holdings81.2792.26

Outstanding Purchases and Loans: None

Latest Financial Arrangements: None

Projected Payments to Fund 1/

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

Forthcoming
20142015201620172018
Principal
Charges/Interest0.000.010.010.010.01
Total0.000.010.010.010.01

Implementation of HIPC Initiative: Not Applicable

Implementation of Multilateral Debt Relief Initiative (MDRI): Not Applicable

Implementation of Post-Catastrophe Debt Relief (PCDR): Not Applicable

Nonfinancial Relations with the Authorities

Exchange rate arrangements: The national currency is the Surinamese dollar (SRD), which replaced the Surinamese guilder in January 2004 at a conversion rate of 1,000 guilders per SRD 1. The de jure exchange rate arrangement is classified as floating. In accordance with a July 1994 presidential decree (Resolution and Besluit of 1994), the exchange rate is determined based on the demand and supply of foreign exchange. With the amendment in 2000 (“Wijzigingen Resolutie”) the Central Bank of Suriname was mandated to establish, at its discretion, maximum and minimum rates. The exchange rate of the Surinamese dollar vis-à-vis the U.S. dollar in the official market remained stable until January 20, 2011, when the authorities devalued the currency by 20 percent to SRD 3.3 per U.S. dollar and set a band of SRD 3.25–3.35 per U.S. dollar, within which all official and commercial market transactions may take place. Accordingly, the de facto exchange rate arrangement is classified as a stabilized arrangement. Suriname is an Article VIII member and maintains two multiple currency practices (MCPs) arising from the spread of more than 2 percent between the buying and the selling rates in the official market for government transactions and also from the possible spread of more than 2 percent between these official rates for government transactions and those in the commercial markets that can take place within the established band. Staff does not recommend the approval of these MCPs as there is no clear timetable for their removal.

Last Article IV consultation: The last Article IV consultation was concluded by the Executive Board on September 7, 2013 (IMF Country Report No. 13/340). 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 2011:

CARTAC

  • Mission in 2011 on improving insurance supervision.

  • Missions in 2011 on PEFA assessment and developing a PFM Action Plan.

  • Missions in early 2012 on improving fiscal projection and budget preparation capacity.

  • Mission in June 2012 and April 2013 to discuss Treasury Single Account and Chart of Accounts issues.

  • Mission in August 2012 to conduct a seminar on Central Treasury Management.

  • Mission in October 2012 to provide support during post VAT Implementation.

  • Mission in October 2012 on Banking Supervision and Securities Regulation.

  • Missions from July 2012 through July 2013 and February 2014 on National Accounts and expenditure based GDP.

  • Mission in January and June, July 2013 on Deposit Insurance Scheme.

  • Mission in October through to November 2013 to review existing reforms including the Chart of Accounts and IFMIS implementation.

  • Mission in November 2013 on Capital Market Development.

  • Mission in January 2014 to deliver Electronic Auditing Course.

  • Mission in February 2014 on Balance of Payments Statistics Assessment.

  • Mission in June 2014 to provide assistance on MTEF and the Budget Process also present at the ICAC conference.

  • Mission in June 2014 to discuss Financial Stability needs with Central Bank Officials.

  • Mission in June 2014 to assist with improvements to macroeconomic projection frameworks and train staff in forecasting techniques.

FAD

  • Mission in February 2011 on revenue administration assessment.

  • Mission in August 2012 on public financial management.

  • Mission in May 2013 on IFMIS design and implementation.

LEG

  • Mission in August and November 2011 on fiscal law.

MCM

  • Mission in March 2011 on banking system assessment.

  • Mission in June 2011 on the introduction of indirect monetary instruments.

  • Mission in December 2011 on bank resolution.

  • Mission in February 2012 on technical assistance results management.

  • Mission in September 2013 on central bank modernization.

  • Mission in November 2013 on T-bill auctions.

  • Mission in December 2013 on central bank accounting and treasury account rationalization.

  • Mission in January 2014 on establishment of a single treasury account and improving financial reporting.

STA

  • Mission in Jan 2012 on workshop on national accounts.

  • Mission in July 2012 on national accounts.

  • Mission in Feb 2014 on national accounts.

  • Mission in March 2014 on BOP and external sector statistics.

Consents and acceptances: Suriname has consented to the Executive Board reform and 2010 quota increase.

Resident Representative: None.

Relations with the Inter-American Development Bank

(As of May 31, 2014)

1. In 1980 Suriname joined the Inter-American Development Bank (IADB), the country’s largest multilateral lender. As of May 2014, Suriname’s outstanding debt to the IADB stood at US$388 million.

2. Through the IADB Country Strategy with Suriname 2011–2015, the government of Suriname expanded its partnership for development. The strategy calls for a notable increase in lending, from US$103 million (in the previous Country Strategy period, 2007–2010), to about US$300 million. The main focus is on modernizing public governance structures, diversifying the economy, and expanding social benefits. The priority areas include: (i) agriculture, (ii) energy, (iii) education, (iv) financial sector development, (v) public investment management, (vi) social protection, and (vii) transport. Dialogue will continue on other areas in need of strengthening: water and sanitation, disaster risk management, tax administration, health, private sector development, and natural resources and environmental management with a view to possible additional lending support.

3. The active investment loan portfolio, of which 52.9 percent is disbursed, consists of 10 sovereign guaranteed loans that total US$200 million. The median age of the loans in the entire portfolio is 2.4 years. The 2014 pipeline will support reforms in agriculture and the business climate while collaboration in the energy and financial sectors continues. The 2014 pipeline includes one investment loan for US$40 million, and five programmatic PBLs for up to US$70 million.

4. The technical cooperation portfolio for Suriname comprises 16 operations (US$13.7 million), of which 19 percent has been disbursed.

Relations with the World Bank Group

(As of June 3, 2014)

The World Bank Group recently re-engaged with the Surinamese authorities after 30 years hiatus. In September 2011, Suriname became the 183rd member of the IFC and 14th in the Latin America Region. In October 2012 the Board of Directors also endorsed the Interim Strategy Report (ISN) which will guide engagement in the country over the next two years. It has been agreed with the government that initial World Bank support would focus primarily on providing knowledge services for institutional strengthening and capacity building for the Government and the Central Bank.

The ISN was successfully implemented. The Government and the Bank Group are currently engaged with the preparation of a Country Partnership Strategy (CPS) expected to be finalized by the end of calendar year 2014.

Lending Activities

IFC financed a trade financing line with a leading local commercial bank.

Technical Assistance

Report on the Observance of Standards and Codes – Accounting and Auditing (ROSC): Based on findings of the ROSC completed in 2012, a $300,000 grant for the Development of Accounting and Auditing Standards and Practices has been secured. The recipient of the grant is the Ministry of Finance and the Central Bank of Suriname.

The Reserves Advisory & Management Program (RAMP) first initiative was completed. A proposal for further work was submitted for Government’s approval.

Statistical Issues

I. Assessment of Data Adequacy for Surveillance
General: Data provided to the Fund are broadly adequate for surveillance purposes, but has shortcomings, reflecting capacity constraints and limited resources. The authorities are making efforts to improve the quality and dissemination of economic data, notably through the central bank’s website. In 2014, the Central Bank publishes an Advance Release Calendar (ARC) for monetary and external sector statistics, and updates regularly the National Summary Data Page (NSDP) on its website, although timeliness remains an issue with some important data, such as GDP and labor statistics. The authorities also need to compile social indicators for enabling social policy design to support inclusive growth.
National accounts: With extensive support from CARTAC, the General Bureau of Statistics (ABS) has improved the quality and coverage of production-based GDP and has made progress in the reconciliation of the national accounts with the Balance of Payments and the compilation of expenditure-based GDP. One milestone recently accomplished by the ABS was the compilation of household final consumption expenditure. ABS has also reconciled the data on imports and exports in the expenditure-based GDP estimates with the Balance of Payments for 2012. ABS will carry out the exercise back to 2007 in consultation with the Central Bank and plans to publish expenditure-based GDP in 2014. ABS has also published on its website the component weights of the CPI sub-indices as recommended by the 2013 Article IV report.
Government finance statistics: The Ministry of Finance (MoF) primarily compiles the fiscal data in national definition and concepts which could lead to confusion in analyzing in GFSM formats. By the same token, although the effort that Central Bank of Suriname (CBvS) made to convert the fiscal statistics into 2001 GFSM format is welcome, the estimates are often different from what MoF provides. The operations of central government data (in 2001 GFSM format) on a monthly basis are available in the CBvS website, often with a few months lag. Staff notes that the limited data are generally due to capacity constraint, and strongly encourages publishing the detailed fiscal data on a timely basis for a thorough analysis. The MoF is upgrading the IT system to help collect detailed fiscal data. Separately, the authorities provide public debt data on a regular basis. However, the available public debt statistics cover only debt contracted or guaranteed by the central government, and as a result, it is difficult to capture the buildup or payoff of arrears in the current debt recording system.

Public finance statistics are limited to those for the central government. The institutional coverage of fiscal statistics needs to be broadened to the nonfinancial public sector so as to better assess the fiscal risks associated with total 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.
Monetary and financial statistics: The Central Bank (CBvS) uses the standardized report forms (SRFs) to regularly report data for the central bank and other depositary corporations (ODCs) on a monthly basis. The CBvS does not report the SRF for other financial corporations. There have been important improvements to quality and timeliness of monetary and financial statistics. The surveys for the central banks and ODCs and depository corporations are disseminated on the CBvS’s website within five weeks of the reference month.

Suriname does not report financial soundness indicators (FSIs) to the Statistic Department (STA) for dissemination on the IMF’s FSI website. The authorities are encouraged to adopt the FSI methodology for reporting Suriname’s FSIs to STA on regular basis.
External sector: The Central Bank has made important progress in the compilation of quarterly balance of payments and International Investment Position (IIP) statistics. The current classification and methodology of the Balance of Payments Manual, Fifth Edition (BPM5) is adopted to the extent that national data sources have permitted and the authorities are looking forward to the transition to the sixth edition of the Balance of Payments and International Investment Position Manual (BPM6). With the aim of embracing new statistical initiatives, the CBvS reported for the first time in 2013, quarterly IIP pertaining to 2012 for dissemination purposes in the Fund’s International Financial Statistics (IFS) and national publications. The authorities also reported to the World Bank in June 2014 for the first time the Quarterly External Debt Statistics (QEDS), which are available on its website.

Going forward, the CBvS should formulate a medium term strategy to improve the compilation and coverage of: a) foreign direct investment; b) services (freight, insurance and pension services, financial, and other business services), with particular emphasis on travel through the implementation of a recurrent survey in coordination with the Suriname Tourism Office, and; (c) remittances through non-formal channels, using the annual household survey by Suriname Statistics Office (ABS). 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.
III. Reporting to STA
Suriname currently does not report fiscal statistics for inclusion in either International Financial Statistics, or the Government Financial Statistics Yearbook.
Suriname: Table of Common Indicators Required for Surveillance(As of June 30, 2014)
Date of latest observationDate receivedFrequency of Data7Frequency of Reporting7Frequency of publication7
Exchange Rates6/146/14DDD
International Reserve Assets and Reserve Liabilities of the Monetary Authorities15/146/14MMonthly Less than 1 month lagM
Reserve/Base Money5/146/14MMonthly Less than 1 month lagM
Broad Money5146/14MMonthly with 6-7 weeks lagM
Central Bank Balance Sheet5/14614MMonthly Less than 1 month lagM
Consolidated Balance Sheet of the Banking System4/146/14MMonthly with 6-7 weeks lagM
Interest Rates25/146/14MMonthly with 6-7 weeks lagM
Consumer Price Index5/147/14MMonthly Less than 1 month lagM
Revenue, Expenditure, Balance and Composition of Financing3 – General Government4NANANANANA
Revenue, Expenditure, Balance and Composition of Financing3 – Central Government45/146/14MII
Stocks of Central Government and Central Government-Guaranteed Debt54/146/14MMM
External Current Account BalanceQ1/146/14QQQ
Exports and Imports of Goods and ServicesQ1/146/14QQQ
GDP/GNP20126/14AAA
Gross External Debt4/146/14QQQ
International Investment Position6Q1/20146/14QQQ

Any reserve assets that are pledged of otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

Including currency and maturity composition.

Includes external gross financial asset and liability positions vis-à-vis nonresidents. The authorities have commenced reporting quarterly data on a regular basis, starting with the 2014Q1 data.

Daily (D); Weekly (W); Monthly (M); Quarterly (Q); Annually (A); Irregular (I); Not Available (NA).

Any reserve assets that are pledged of otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

Including currency and maturity composition.

Includes external gross financial asset and liability positions vis-à-vis nonresidents. The authorities have commenced reporting quarterly data on a regular basis, starting with the 2014Q1 data.

Daily (D); Weekly (W); Monthly (M); Quarterly (Q); Annually (A); Irregular (I); Not Available (NA).

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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