Caribbean & Central America - December 2023

In a somewhat unusual role, the International Monetary Fund (IMF) has been demanding that the government of Suriname should do more to protect the poor from high energy costs.

At a press conference on 9 November, IMF representative Anastasia Guscina said the government should implement a more effective social protection programme. Under an IMF-funded economic adjustment programme that has been running since December 2021 the government has begun to phase out fuel and electricity price subsidies. But Guscina said that in doing so, it was neglecting to protect the poor from adverse impacts. “I don’t know if people realise, but this is the area where the fund asked the government to spend more. It is a different [budget] line item compared to all the others. In others we say, ‘let’s consolidate’. This one we say, ‘let’s spend more.’”

In some respects, Guscina’s comments were unusually outspoken. She said that government “inaction” on social protection was contributing to “social instability”. Existing social protection measures were “disappointing and inferior” and should be more transparent. She called for major efforts to improve performance, along with faster and more efficient streamlining of the civil service. However, the Fund did acknowledge that the government had achieved a degree of stability in its management of the economy, with the exchange rate and domestic inflation on their way down.

Bauxite plan

Major mining companies from India, China, and the Middle East were said to be among those expressing interest in a major new bauxite mining project in western Suriname. Government officials said that they hope to award a bauxite mining concession there by late 2024. In an interview with Reuters published on 7 November, Daniel Lachman, the chair of the presidential commission created to evaluate bids for the Bakhuis region, said that between US$10bn and US$12bn would be needed in investment to develop the concession over the next ten years. He said that there’s 324m tonnes of bauxite reserves in the Bakhuis region. Since the 1970s, various attempts to develop these deposits have failed, but the officials say the situation is now more favourable, with the global energy transition boosting demand for aluminium, the metal derived from refining bauxite ore.

Bauxite mining

Bauxite mining came to an end in Suriname in 2015 when Alcoa, the US multinational, shut down its operation citing rising costs and falling reserve levels. President Chandrikapersad Santokhi said the concession would open up a new era in the country. He committed the government to help build transport infrastructure to make the area more attractive to mining companies. The development also envisages close cross-border cooperation with Guyana, which also has significant bauxite reserves. Development costs would be shared across the two countries.