Latin Analysis: Is Suriname About To Become Rich?
Richard Sharrocks
The Republic of Suriname is a small, South American nation located along the Atlantic coast above Northeast Brazil. Suriname is a diverse multi-ethnic and multilingual country. While situated geographically in continental South America, Suriname is culturally considered to be a part of the Caribbean subregion of Latin America, with Dutch being the country’s official language. Historically, Suriname has been an impoverished nation whose small economy has oriented itself around exporting its natural resources, specifically minerals like the aluminum rich bauxite and gold. However, with the discovery of large off-shore oil reserves along the Guyana-Suriname basin, the country can perhaps better its economic prospects and current standing debt default.
Just like other emerging market nations who have had to depend on loans from the IMF, Suriname has a problem paying off its outstanding debt. On March 31st, 2021, the government failed to make an already delayed payment to bondholders. The government claimed default after not being able to convince bondholders to push back their payment for a third time this year, becoming one of many “distressed” emerging market nations who are struggling to pay off debt. The debt currently stands at $675 million, which is a big percentage of the country’s $3.7 billion GDP. The prospect of an oil boom however is making the IMF and bondholders look positively at the long term. While Suriname can’t pay right now, the next five years could bring a debt free country, and serious economic development.
A Year of Discoveries
Up until 2020, oil exploration in Suriname had received no major successes. While oil had been discovered in Suriname as early as the 1920’s, commercial exploration didn’t begin until the 1960’s. Throughout the late 20th and early 21st centuries, the Guyana-Suriname basin was believed to have untapped potential with petroleum and natural gas, which the 2000 U.S. geological survey affirmed when they estimated that the basin held 13.6 billion barrels of oil and 32 trillion cubic ft. of natural gas reserves. However, since the 1980’s offshore drillers had either come up short during their expeditions or decided not to drill.
Major success first hit the Guyanese offshore, which has allowed the country’s growth in GDP to skyrocket and local economies to grow. With the discoveries in Guyana being so extensive it was only time until Suriname hit the jackpot. 2020 proved to be that year. In the past year alone, many major international oil and gas companies have drilled big in the Suriname offshore, including the U.S.’s ExxonMobil and Apache, Malaysia’s Petronas, and France’s Total. Just as with the neighboring Guyana, Suriname now has the greatest economic opportunity ever presented to itself.
An Old Leader and A New Leader
This past year was also significant for Suriname politically, as it went through its general election that takes place every five years. Longtime president and former military dictator Desi Bouterse lost against former police chief Chan Santokhi. Santokhi’s win symbolizes a change toward law and order, and rebuilding, against the context of Desi Bouterse’s polarizing political career, which almost spans the length of Suriname’s sovereignty.
Suriname achieved independence from the Netherlands in 1975. The republic was only five years into its existence when Bouterse overthrew the government in a violent military coup in 1980. Bouterse was the leader of the military government from 1980 to 1988, where he installed a line of puppet presidents that were under his control. Bouterse’s time as military leader during this era is infamous for its violence, human rights violations, and a civil war against guerrilla group Jungle Commando. In December 1982 Bouterse had fifteen prominent opponents of his regime tortured and killed. In what became known the December murders, in December 2019 Bouterse was called to justice, being convicted for murder and sentenced to 20 years in prison. He has since appealed the ruling and is awaiting court. In 1986 Bouterse’s military forces massacred 39 residents of the ethnic Maroon village of Moiwana, the home village of the Jungle Commando’s leader Ronnie Brunswijk.
External pressure for Suriname to return to an electoral democracy and the need for Dutch aid spurred a transition. Suriname’s transition to democracy started in 1987 with implementation of a constitution. In 1990, Bouterse stepped down as military commander, and in 1991 the first free and fair election was carried out. Since then Bouterse has sought out power through elections. In 2010, after three different administrations following the return to democracy, Desi Bouterse won the general election that gave him power as the President of Suriname.
Bouterse is also infamous for his record as a prominent drug trafficker. He was first absently convicted in Dutch court to 11 years in prison in 1999. In 2013 during his first term he was arrested and extradited in the U.S. for smuggling charges. It has also been reported that both of Bouterse’s presidential campaigns received funding from Nicolas Maduro's regime in Venezuela.
Dealing with Bouterse’s criminal record poses only one issue that the incoming Santokhi administration will face, yet it won’t be the only one regarding Bouterse’s influence on Suriname’s political and economic sphere. The economy has been able to recover somewhat from a deep recession from 2014-2016, but there are still significant challenges regarding its financial sector. While the discovery of oil in Suriname will surely have a positive impact on the country’s future economy and finances, it could be years until returns on oil drilling is expected.
A Larger and More Complicated Picture
Suriname is an often overlooked country when it comes to its spot among the international community. However, that is changing due to Suriname’s new position as an oil-rich nation. The country will now have a deeper effect on regional geopolitics in South America and the Caribbean. One hot topic issue is Surinemese-Chinese relations. Like with most of the peripheral world, China is investing in Suriname’s infrastructure and is an important trading partner with the Dutch-speaking country.
Other than its foreign relations, Suriname’s politics is further complicated by another revered political figure, the aforementioned Ronnie Brunswijk. Brunswijk was recently elected as Santohki’s Vice President, but this very influential man has his own controversial political career. Starting out as Bouterse’s very own bodyguard, Brunswijk turned into Bouterse’s greatest political opponent during the military dictatorship by becoming the leader of the oppositionary guerilla forces known as the Jungle Commando. Since the civil war and the massacre of his village, Brunswijk stayed in politics and took to giving the Afro-Surinamese Maroon ethnic group political voice, creating the General Liberation and Development party (ABOP). He also had accumulated tremendous wealth through owning a gold business. Similarly to Bouterse, Brunswijk was also absently convicted by the Netherlands for drug tracking of cocaine in 1999.
In all actuality, it is stated that Brunswijk has a deep control over the Maroon people and much of the interior of the country. Brunswijk has reportedly maintained support from this whole region of Suriname through handing out money to people. He has also collaborated with Bouterse during his presidency, creating a ruling coalition with their respective parties, in which Bouterse ultimately kicked Brunswijk out when the coalition lost some congressional seats in 2015.
In regard to the country’s newfound oil reserves, Brunswijk has already made his play. During the formation of the new government, Brunswijk secured his party’s control over the country’s justice system and its natural resources. As someone who has previously used his political power to increase his wealth, Brunswijk now has the opportunity to control the ministry of oil and gas, all the while controlling the judicial system as well.
What happens next is as good a guess as anyone’s. What is for sure though is that with Chan Santokhi and the long time coming discovery of oil, Suriname is at a historic crossroad in its short history as an independent nation.
