Suriname is on the ground and can no longer pay interest

The Surinamese government announced this last night. The blame for the financial malaise is placed on the previous government led by Desi Bouterse.

It has left an economy that is “in extremely bad financial conditions,” writes the Ministry of Finance. The corona crisis has pushed the country even further towards the financial abyss, leading to a budget deficit of about 20 percent this year.

Because the bottom of the state treasury has been reached and Suriname cannot borrow money at the moment, it has to ignore an interest payment. It concerns a payment of $ 26 million on a $ 550 million loan. Every year, Suriname pays interest at 9.25 percent on that loan.

30 days respite

The government is taking advantage of the 30-day grace period that the bond provides. The country will need that time to make agreements with creditors and international authorities in order to find a solution.

Suriname is already in consultation with the International Monetary Fund to obtain loans there. It wants to get it in exchange for far-reaching reforms that should ensure more economic growth and more tax revenues, so that the country can meet its obligations in the future.

Civil servants salaries

How deeply the Surinamese state is in trouble, was also evident when the country could no longer simply pay civil servants’ salaries. To do this, it had to borrow money from local banks, Minister Blok of Foreign Affairs wrote to the Lower House earlier this month.

In order to get cheap money, the Surinamese government is also investigating whether the money can be collected from entrepreneurs, including Surinamese entrepreneurs in the Netherlands, Blok writes.