Macro-Economic review of Suriname

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1 EUROPEAN COMMISSION Public Private Partnership Support to the Domestic Private Sector Suriname Business Forum (SBF) Macro-Economic review of Suriname International Technical Mission to Build up a socio-economic profile of the DPS, including demographic and regional profile Suriname Business Forum European Commission Delegation Socio-economic study (Final Report)

2 Table of Contents Index of tables 4 Index of graphics 5 List of acronyms 6 1. Introduction The working methodology Working Methodology 8 2. National policies for the social and economic development The Diagnos report: Main constraints and recommendations The SBF: National Strategy for the Development of the Domestic Private Sector The Multi-Annual Development Plans The Multi-Annual Development Plan The Multi-Annual Development Plan International cooperation programs European Union The Country Strategy Papers The Country Strategy Papers The Netherlands cooperation Multinational organizations cooperation The economic analysis: weaknesses, strengths and priorities Macro-economic performance Period Period Period Consequences and conclusions of these macro-economic performance results Economic sectors and products in which Suriname has a comparative advantage Mining sector Agriculture, animal husbandry and fisheries Tourism sector Forestry and timber sector The domestic products by sector and their importance in the GDP of Suriname Consequences, conclusions and measures to take from these results Suriname trade relations General trade balance situation Trade markets by sectors Trade markets by origin and destination Trade markets by countries Trade markets by regions Main conclusions and measures to take from the trade analysis Issues and platforms for discussions on regional and global trade Suriname performance face to the CARICOM challenges Main challenges of Suriname in the regional integration 63 2

3 Reasons for the integration Suriname weaknesses within the CARICOM regional integration Investment priorities for public, domestic and foreign direct investment Domestic investment Period Period Conclusions and measures for the future Foreign investment Legal commercial framework The information system Net Foreign Direct Investment in Suriname and other Latin America and 76 Caribbean countries 7. Financial sector Financial services: limited supply Unfavourable financial environment for doing business Irregular success of the revolving funds Lack of monitoring system Unknown rates of performance to determine the competitiveness of the banking sector Comparison with the financial sector of other caricom countries Conclusions and future measures The social and economic entrepreneurial domestic private sector profile Entrepreneurial structure Registered enterprises by types and groups Turnover, average nominal labour and total number of employees at large enterprises Main constraints of the private sector Conclusions and future measures Competitiveness, transparency, economic freedom and doing business indexes Suriname presence in the competitiveness index Suriname presence in the corruption perception index Suriname face to the economic freedom index Suriname s presence in the doing business index Conclusions and measures for the future Current situation with respect to the diagnostic report recommendations Public-Private sectors dialogue Traditional misunderstandings The Suriname Business Forum The business center Conclusions and measures for the future Summary of the main conclusions and future measures Final conclusions Some actions that could be taken by suriname Final observation Annexes 117 3

4 Index of tables Table 1. Population by age group and sex, 2004 and Table 2. Total education (except 3rd level education) - Table 3. Statistical data on 3rd level education. Academic years in period Table 4. Non-institutional population 15 years and older by sex and activity status - (in Paramaribo and Wanica, 2006) Table 5. Employed and unemployed population (15-64 years) by sex and age group - (in Paramaribo and Wanica, 2006) Table 6. Comparative figures of economic performance 36 Table 7. Comparative figures of public external debt with other CARICOM countries Table 8. GDP by sector of origin at constant prices and variations in different periods 50 Table 9. Suriname exports by economic use in percentage of total. Period Table 10. Suriname exports by major categories. Period Table 11. Imports by economic use in percentage of the total. Period Table 12. Suriname destinations of exports in percentage of total. Period Table 13. Suriname origin of imports in percentage of total. Period Table 14. Domestic investment in millions of SRD ( ) 71 Table 15. Domestic investment relative weights in percentage ( ) 71 Table 16. FDI in eight CARICOM countries Table 17. Average exchange rates for the USD as fixed by Central Bank of Suriname 83 Since 1994, at December 31 st Table 18. Comparative analysis of financial sector of Suriname with other Latin America 87 and CARICOM countries Table 19. Number of registered enterprises by type, in Table 20. Number of registered enterprises by groups, in Table 21. Suriname competitiveness index 97 Table 22. Ten economic freedoms and scores obtained in Table 23. Ranking doing business in Suriname and target

5 Index of graphics Graphic 1. GDP variation years Graphic 2. Yearly inflation percentage 33 Graphic 3. Public debt (in percentage of GDP) 34 Graphic 4. Tourism evolution years Graphic 5. Annual trade balance in millions of dollars 53 Graphic 6. Net foreign direct investment 77 Graphic 7. Suriname comparative economic performance 78 Graphic 8. The most problematic factors for doing business (percentage of responses) 98 Graphic 9. Heritage Foundation Suriname ten economic freedoms - Graphic 10. Ease of doing business-global rank - 5

6 List of acronyms Acronyms: Institution ABS General Bureau of Statistics ADEK Anton de Kom University of Suriname AHKCO Academy of Art and Culture Education ASEAN Association of South East Asian Nations ASFA Association of Surinamese Manufacturers ASYCUDA Automatic System for Customs Data CARICOM Caribbean Community CCF Country Cooperation Framework COVAB Institution for Centralized Training of Nursing and Practitioners of Related Professions CPI Corruption Perception Index CSME Caricom Single Market and Economy DPS Domestic Private Sector EC European Commission ECG Economic Commodity Group ECLAC Economic Commission for Latin America and the Caribbean EDF European Development Fund EPA Economic Partnership Agreement EU European Union EURO European Union Currency FDI Foreign Direct Investment FTBPS Fonds Technische Bijstand Particulieren Suriname GDP Gross Domestic Product GLO Primary School HAVO Senior Secondary General Ordinary HS Harmonization System IADB Inter-American Development Bank ICT Innovation, Communication and Technology IMF International Monetary Fund IOL Advanced Teachers Training College KKF Chamber of Commerce and Industry LBGO Junior Secondary Vocation School LOBO Training College for Teachers of Vocational Education MBO Mid-Level Vocational Education MDG Millennium Development Goals MERCOSUR South America Common Market MOP Multi-Annual Development Plan MTCT Ministry of Transport, Communication and Tourism 6

7 MTI MULO NAFTA NDP NFPlus NOB PIF PLOS PPP PTC RAVAKSUR SBC SBF SITC SME SRD STF STTC TFC UNDAF UNDP USD VFR VMO VSB WB WTO Ministry of Trade and Industry Junior Secondary General School North American Free Trade Agreement National Democratic Party New Front Plus National Development Bank Production Investment Fund Ministry of Planning and Development Cooperation Public-Private Partnership Poly Technical College Council of Trade Union of Suriname Suriname Business Centre Suriname Business Forum Standard International Trade Classification Small and Medium Size Enterprises Suriname Dollar Currency Suriname Tourism Foundation Suriname Tourism Training Centre Technical Cooperation Facility United Nations Development Framework United Nations Development Programme United States Dollar Currency Visitors, Families and Relatives Pre-University Education Suriname Trade and Industry Association World Bank World Trade Organization 7

8 1. Introduction 1.1. The Working Methodology The present study was commissioned by the EC project in Suriname entitled: Public Private Partnership Support to the Domestic Private Sector Suriname Business Forum (SBF). The aim is to review the performance indicators of Suriname for the period and is coherent with the main objectives of the EC-SBF-PPP Project, which are: to develop a competitive Domestic Private Sector in Suriname that can contribute to a sustainable development; and to facilitate the gradual integration of Suriname into the regional and world economy. In accordance with the terms of reference, the analysis incorporates the latest economic and social issues currently in Suriname and contributes to update the Diagnosis Report produced in This study reviews also the country s strategy and the profiles of the main economic sectors. This study contributes to identify issues and platforms for discussions on regional and global trade; to define investment priorities for FDI 1 and domestic investment; and to build up a socio-economic profile of the DPS, also reviews the results of other previous socio-economic studies; provides policy recommendations to SBF based on the outcome of the socio-economic findings; and analyses in which products/sub-sectors Suriname has a comparative advantage. Outcomes as offers a macro-economic real vision of the weaknesses, strengths and priorities of the situation based in the interviews held and in the existing statistical data; and supports the SBF/SBC implementation of the EC-SBF-PPP Project for strengthening the public-private sectors dialogue and the reinforcement of the DPS. 1.2 Working Methodology This macro-economic review has followed different phases. First, to analyze the general socio-economic information about Suriname and to prepare an inception report with the working methodology to be used. Second, to gather statistical data, monographic papers and other information and documentation needed for this analysis. Third, during the fieldwork 40 meetings were held; and finally, all the information collected was again analyzed in detail at the moment of writing this document. The meetings held in Paramaribo were from 16 th August to 16 th September 2008 and were structured in 6 blocks of institutions in order to have a global and a multi-sectoral view of the macro-economic situation of the country (see in annexes 4 and 5 the list of contacts and weekly working methodology). 1 FDI: Foreign Direct Investment 8

9 - Interviews i) From the public sector The Ministry of Trade and Industry The Ministry of Finance The Ministry of Planning & Development Cooperation The National Planning Office The Central Bank of Suriname The National Development Bank The General Bureau of Statistics The Ministry of Agriculture The Suriname Tourism Foundation ii) From the private sector The Chamber of Commerce and Industry (KKF) The Suriname Trade and Industry Association (VSB) The Manufactures Association of Suriname (ASFA) iii) From the Trade Unions The Labor Unions Association (RAVAKSUR) iv) From the NGO The Women s Business Group (WBG) v) From the Academy The University of Suriname (ADEK) vi) From the donors and International Organizations The European Commission Delegation in Suriname The Embassy of Netherlands The United Nations Development Programme The Inter-American Development Bank After the systematization process of the information obtained from the documents read and meetings held, the main previous conclusions and recommendations were submitted in an open conference held in Paramaribo with the SBF members and the institutions involved in the public and private dialogue. - Data gathering This macro-economic review has used monthly official statistical data produced by the General Bureau of Statistics, although other sources on public and private information have also been considered, like: the Central Bank, the Ministry of Planning and the National Planning Office, the Ministry of Finance, and the Suriname Tourism Foundation. 9

10 The General Bureau of Statistics has published statistics from 1947 and uses the Harmonization System (HS) in which the information is classified in 22 sectors. For the purpose of this study, the following ABS statistical books have been consulted 2 : Statistical Yearbooks, 2003, 2004, 2005 and 2006 Handelsstatistieken (Trade Statistics) and Selected Economic Statistics of Large Enterprises Statistics on Wages and Prices in the Construction Industry Statistical Papers nº5 and nº6 Algemene Bedrijventelling in Suriname (General Establishment Censuses) Selected Gender Statistics of Suriname, 2007 Suriname Basic Indicators, 2008 The first Statistical Yearbook published with the new statistics system registration is from 2004 and includes information from 2003 and from previous years. ABS was collecting the statistical information of 2003 from several different sources due to the fire of the ABS building in 2003, which destroyed the previous statistical information 3. Every November, the ABS publishes the Statistical Yearbook. The last one was published in November 2007 and contains the statistical information of These Statistical Yearbooks include statistics in population, household surveys, social and cultural statistics, traffic and transport statistics. But also, enterprises and trade statistics, national accounts statistics and consumer price index. The Yearbooks comprise also data on employment, GDP, inflation, trade, labor market and other social statistics and sectoral data, like statistics on transport and traffic. The statistical information on other sectors, like energy, water, and telecommunication, is not unified but dispersed in diverse sources. The Handelsstatistieken books contain specific trade information. The ABS has published two of these books: the first one covers the period from 1996 to 2001 and the second one from 2001 to The Selected Economic Statistics of Large Enterprises, Annual and Quarterly Figures, shows statistical information of period , on turnover, cost of employment and labor and it was published in April The Statistics on Wages and Prices in the Construction Industry offers information about the hourly wage per occupation; the prices of construction materials, electrical and waterworks installation materials; and the official exchange rates. Statistical Papers nº5 and nº6 contain census information about the population of Suriname, in 2 All this information is accessible to public and can be bought at the ABS Public Relations Information Office. 3 Nevertheless, a copy of the statistical information was available at the National Archives of Suriname. Thanks to that, a big part of the statistical information could be recovered. 10

11 accordance with their religions and cultural origins and other miscellaneous information. The Algemene Bedrijventelling in Suriname has information on business establishment s censuses, the number of persons employed and the number of employees. The Selected Gender Statistics of Suriname 2007 has statistical data on education, population and health, employment, crime and public services. Finally, the Suriname Basic Indicators, 2008 has information on economic, financial, monetary and social indicators. In addition, the ABS publishes statistics sheets on the evolution of the inflation and GDP figures from The Central Bank has provided for this study statistics on the monetary and financial indicators, like the exchange rate or the monetary base (MI, M2 and M3) data. The Ministry of Finance publishes information on taxation. The National Planning Office conducts projection models on the evolution of the economic indicators with the official information submitted by the ABS.. The macro-economic research section of the NPO is also in charge of preparing the yearly Capital Investment Plan and the five years Multi-Annual Development Plan. Finally, many international organizations present in Suriname have made in the last decade several social and economic analyses on Suriname and they have published general and sectorial statistical data. These were the main sources used to prepare this review, although the existing information collected seems abundant to make this analysis, in reality Suriname system of collecting, analyzing and disseminating information is not efficient. 11

12 2. National policies for the social and economic development 2.1. THE DIAGNOS REPORT: MAIN CONSTRAINtS AND RECOMMENDATIONS The Diagnose study was prepared in August 2001 with the financial support of the EC and it was completed in 2003 by a technical assistance of NEI/ECORYS, considering the Suriname Business Forum National Strategy produced at the time. The outcome of the NEI/ECROYS mission to Suriname was essentially the project activities mentioned in the SBF Financing Agreement. The guidelines of this document were integrated in the EC financial proposal and into the current EC project for the privatepublic partnership-support to the DPS-SBF. The document is just a proxy of the economic situation made in a period in which the economy of Suriname was passing through difficult moments with deteriorated macro-economic indicators until the Government took some measures for the stabilization of the economy. Many of the recommendations of the Diagnose report have been implemented a few years ago. The merit of this document is to be the start point of mentioning the main problems of the economy at that moment and to give some streamlines about how to solve them in the future. In the elaboration of this document many relevant people from the public and private sectors of Suriname were involved. The document establishes the strategy for strengthening the power and influence of the private sector in the economy through the analysis of seven main topics. In each of these topics this document mentions some short and long run missions, as well as some policies and recommendations for the future. The seven topics treated were the following: Macro-economic policy Legal and justice sector Enterprise financing Business development services Administration and institutions Tax system and other incentives Infrastructure and utilities. 12

13 (i) Macro-economic policy, the monetary and fiscal policies, the policy and planning, the liberalization and privatization, the social and labor policies and the regional integration were reviewed. The document considers that the monetary policy should focus on sustained exchange rate stability and recommends adopting additional market oriented instruments, to maintain international reserves at an appropriate level and to liberalize the foreign exchange rate. The Report considers that the fiscal finances have been characterized, among other things, by excessive weight of salaries with low wages and shortage of professional civil servants. The policy should be: improving qualification and eliminate overstaffing. The recommendation is to reduce the fiscal deficit, and prepare a public sector reform. The document considers that the process of policy and planning is unclear and recommends organizing the planning process according to the Central Planning Act (1973) and assessing the need for adaptation. With respect to the liberalization and privatization, Diagnose considers that the public sector is overextended and State-enterprises are inefficient. The policy has to be to formulate an overall privatization policy. It recommends to prepare a State-enterprises privatization plan and to eliminate the State monopolies. In relation with the social and labor policies, it notices that the social and labor legislation has not yet implemented and considers that the policy should be to adopt a new social security system and its recommendation is to introduce the necessary social security measures. In the regional integration, the Diagnose report observes that insufficient efforts have been made to prepare the economy for globalization and regional integration. The policy has to be to continue with the negotiations of the regional and bilateral agreements and the recommendation is to set up the National Negotiating Machinery for trade negotiations. (ii) The legal and justice sector, the Diagnose report analyses the company law and registration, the general regulatory framework, the free movement of persons, the land law, the law application and the judiciary. With respect to the company law and registration, the document considers that the establishment of a company is subjected to inappropriate obligations. The policy should be to discuss and adopt a new Companies Act and make innovations in the Register of Commerce. The main recommendation is to define new procedures for company registration. In relation with the general regulatory framework, the main aspect is that many commercial laws are outdated. The policy should be to prepare new legislation in accordance with the WTO agreements. The recommendation suggested is to adopt a new legislation in several issues. 13

14 The visa and other legal requirements to foreign citizens hamper the free movement of persons. New legislation to ensure free movement of persons is needed. The document recommends abolishing the visa requirements for citizens coming from Europe, USA and Canada. The labor law is rigid in respect to strikes and workers dismiss regulation. The document believes that is necessary to introduce labor law improvements in accordance with CARICOM law. The land law conflicts are an obstacle for the land security. The Diagnose report observes that an efficient system to ensure registration of land titles has to be implemented. The recommendation is to adopt legislation on Aliens Landhold and creates a new legislation in land titles. In the law application, considers that there is corruption and lack of independence in the judiciary system. The policy has to adapt an anti-corruption legislation; and also has to take measures to ensure independence and transparency in the justice system. The judiciary system lacks of important jurisdictions. A comprehensive reform of the judiciary system is needed. In this sense, the Diagnose report believes that the Arbitration Institute Foundation has to be revitalized. (iii) In the enterprise financing, Diagnose analyses the financial sector, the regulatory framework, the corporate finance and the foreign exchange. It believes that the financial sector is underdeveloped with only a few banks. The policy should foster competition in the sector with new laws on banking. The proposed recommendation is to stimulate competition with the entry of new banks and new financial institutions. The document considers that the regulatory framework of the financial system is very old and obsolete. The policy should be to adopt a new regulatory framework. The recommendation is to revise the legal and regulatory framework of the financial sector, looking at the CARICOM rules. The corporate finance lacks important financial instruments. An action plan should be elaborated. The suggested recommendation of this document is to promote new instruments and financial services. The foreign exchange regulations restrict the loans in foreign currency and the free movement of capital. The liberalization of the capital flows is needed. It recommends adjusting foreign exchange laws and regulations and liberalizing capital flows. 14

15 (iv) In the business development services, place attention in the Government support and the private sectors organizations. With respect to the Government support, considers that the public institutions providing services to foster business development are not providing the proper attitude. The Government should pursue policies accordance with the best practices. The recommendation is that the Government should support the creation of the Business Centre. The private sector organizations have not managed to cooperate in the provision of support services to their constituency. Private sector should be more pro-active and help their members in having access to the international Business Development Services and other mechanisms. (v) In administration and institutions the report focuses the analysis in trade, authorizations, investment promotion, administrative procedures, organic structure, interface with private sector and private sector organizations. Diagnose assesestrade and customs procedures and regards them as obsolete. A high level Committee should set up to prepare an action plan to strength the customs capacity, and to be sure that the appropriate software (ASYCUDA) is installed and the customs staffs are trained. The document considers that some authorizations, permits and licenses are given in error, in part due to the confusing procedures. The policy should be to make simpler these procedures, and recommends to review the licensing requirements and to improve procedures. As far as the investment promotion Diagnose observes that is hampered by administrative chaos. Government s role in the investment and trade promotion needs to be defined. They suggest organizing an one-stop shop to provide services to investors. Administrative procedures are applied with many arbitrary applications. The objective has to be to simplify the procedures and modernize the administration and establish electronic exchanges with the private sector. The organic structure of the public administration doesn t corresponds with the role that the State should play. It is suggested to redefine the role of the State and implement a new, slim, efficient Government structure. Interface with private sector. The document thinks that there is an uneasy dialogue between the private sector and the Government. The most important policy is to institutionalize this mutual dialogue, and recommends establishing a central body that represents the private sector. 15

16 The document points out that the private sector organizations, which defend the interests of the private sector, are weak and have difficulties in working together. The main policy should be that these institutions mobilize funding for the capacity building of private sector organizations. (vi) In tax system and other incentives, Diagnose analyses the tax system, the procedures, the tax incentives and the labor taxation. It considers that there is a bad negative tax system perception and responds mostly to the Government needs of collecting money. The policy should be to simplify the tax system, and suggest revising the tax reports regulations and making them simpler. Procedures for tax filing and for customs are not user-friendly. The goal should be to simplify and rationalize the administrative tax filing procedures and costumes clearing. Tax incentives for investments are geared mostly towards new investors. A better investment climate should be improved. The recommendation is to enact a new Investment Act. Labor taxation is discouraging and discriminatory. Distortions in labor taxation should be eliminated. This document recommends the elimination of the distortions and the increase of transparency for fiscal incentives. (vii) In infrastructure and utilities, the report talks about the overall policy, the regulation framework and the private participation in infrastructure. The overall policy has failed to maintain and to improve the infrastructure of Suriname. The Government s role should be strengthen in infrastructure planning, in policy formulation and in investment promotion. The present regulatory framework allows inefficiencies. A modern regulatory framework should be set up. The document considers that the private participation in infrastructures is needed, because the Statecompanies provide poor services. Public and private sectors should work together in reviewing the legislation and in defining a strategy for promoting the private participation in improving the infrastructures. In chapter 11 of this study these seven key subjects with respect to the diagnostics, policies and recommendations made in the Diagnose report, are review to contrast with the current situation. 16

17 2.2. THE SBF: NATIONAL STRATEGY FOR THE DEVELOPMENT OF THE DOMESTIC PRIVATE SECTOR The National Strategy for the development of the Domestic Private Sector was prepared by the Suriname Business Forum, following its mandate, with the objective to encourage sustainable development of the private sector taking into consideration the main priorities of the Diagnose analysis. This National Strategy is an in-dept analysis of the possibilities, challenges and bottlenecks with regard to the functioning of the Suriname business community. This National Strategy is a point of departure of choosing priorities for the Diagnose report that were included in the plan of action to be taken with the support of the international cooperation, and the Public-Private Partnership Project of the European Union. The strategy goal of this National Strategy is based in a business and supporting goals, which means: the creation of a climate that is conductive to business (business goal) ; and a culture of involvement among policymakers; willingness to undergo and carry through changes and a general awareness, to use the highest standards of quality for service to the business community (supporting goal). The business goal is composed by the following six sub-goals: 1. Generally strengthening competitiveness by improving the environment of the business community and mineralizing their costs and expenses. For achieving this sub-goal, the SBF considers necessary, between other things, to identify the threats and opportunities of the business community; to comply with the international obligations, and to contribute to the formulation of a Government policy more balanced with the regional development. 2. Raised the level of direct foreign investment. For accomplishing with this sub-goal, the SBF considers necessary to attract more foreign investments, as a way to encourage and to stimulate the local Surinamese business community. 3. Strengthen the performance and competitiveness of individual enterprises, particularly local enterprises. For carrying out the sub-goal, the SBF will list the existing and future auxiliary services among individual eligible enterprises; and will encourage the development of a variety of auxiliary services. 4. Create a climate and a programme of supporting services to ensure a dynamic and growing sector of small enterprises. For achieving this sub-goal, the SBF considers necessary, between other things, to diminish the financial barriers, to increase the liberalization of the permits system, and to stimulate the development of the human resources within the small enterprises. 5. Actively encourage the growth of the part of the business community that generates foreign currency. For doing this, the SBF proposes, between other aspects, to stimulate the exports, to start up the process of industrialization, and to support the Integrated Tourism Development Programme. 17

18 6. Encourage legislation favorable to the business community. That entails to select a number of laws to be reformed, as a priority. The supporting goal is composed by the following three sub-goals: 7. Strengthen and expand the involvement of policy makers during the implementation of the strategy. The goal is to involve the policy makers at the highest level in this strategy, with the intention of increasing the mutual trust and understanding. 8. Encourage changes in the ways of thinking and acting among Government, business community and business organizations. The intention of the SBF is to engage the stakeholders in drafting annual plans, in implementing action plans, in developing a good code of conduct, and in encouraging patterns of production. 9. The individual actors must adhere to the highest standards of quality when servicing the business community. That entails to have transparent processes and procedures, and to offer professional and quality services to the business community at reasonable fees THE MULTI-ANNUAL DEVELOPMENT PLANS By law, the Government has to prepare an Annual National Budget Plan that has to be submitted and approved by the Parliament. In addition, each five years, the Government has to prepare a Multi-Annual Development Plan (MOP). The last Multi-Annual Development Plans approved were for periods and These MOP are prepared by the Government on the basis of an extensive consultation process, in which are consulted a wide range of state and non-state actors. These MOP are very important because they establish the key guidelines of the national development strategies and policies and are very much taken into consideration by the international donors at the moment to determine their cooperation projects for Suriname The Multi-Annual Development Plan In the MOP , the key objectives of the Government s national development strategy were growth and poverty reduction. This MOP was based in the following axes: Strengthening the principles of good governance and democracy, through the entire Government Macro-economic stability, public sector reform and rationalization of the State enterprises Reform of social sector policies and programs (education, health) and ensuring that growth is inclusive with adequate protection of the poor Creating a conductive environment for private sector development to generate growth and employment Ensuring sustainable development, including establishing an explicit link between economy and environment, stimulating environmental cautions mining, agricultural and tourism development. In addition, the regional integration is considered as a very important issue to guaranty the success of this strategy. 18

19 The Multi-Annual Development Plan The Government national development strategy is set up in the MOP of taking into consideration the experiences, results and lessons learned in the previous MOP The MOP uses the Millennium Development Goals (MDG s) as a guideline for determining, developing and evaluating its development strategies and programs and establishes the following four pillars: Governance, including democracy, constitutional state and security Social and human development Economic development Fair distribution. Within the three first pillars (governance, social and human development and economic development) are included 9 policy areas and 33 secondary policy areas. In addition, the MOP gives the highest priority to the crosscutting issues of environment, gender and youth. Each policy area and secondary policy areas are provided with a matrix of activities and indicators. In the Governance pillar, the policy areas are related with the democracy, constitutional state and security; public sector reform; and international framework and foreign policy. Within the democracy, constitutional state and security, the goal is to maintain the law and public order, the legal protection and security; but also to strengthen the judiciary system and to reform the legislation. Other measures are related with the legal protection of human rights; the policy on youth and domestic violence and accommodating policy and institutional strengthening. The MOP document recognizes that the public sector has serious structural problems, like: high personnel costs; excessive number of civil servants; unstructured public administration; outdated legislation, rules and procedures; and lack of qualified professionals and good management. In accordance with this MOP, the public sector reform implies reorganization of the Government s machinery; decentralization of the public administration; and institutional strengthening. But it means also, to strengthen the domestic private sector; to rationalize the State-owned companies; to strengthen the planning framework; and to improve the macro-economic climate. That signifies: the enhancement of the efficiency in the management of the Governmental finances; and to get a more efficient fiscal and debt policies. Another aspect of the public sector reform is to foster the decentralization of the public administration and to have a more coherent and clear international framework and foreign policy, which includes the involvement of Suriname in the regional integration process. The social and human development pillar is related with four main policy areas: poverty reduction, education and community development, health care; and social protection. The main objective of the poverty reduction is to reduce the poverty 4.4% per year and 22% by 2010 in line with the MDG. In this sense, it is important to eliminate the structural factors, which contribute to create and maintain the poverty situation. 19

20 In relation with the education and community development, the main goal of the MOP is that by 2015, all children, boys and girls, have access to high-quality education; and to adapt the educational and training system to the changing world of employment and lifelong learning. For achieving this goal, it is necessary to have universal access to education and pre-school development programs; and to restructure the education system in order to make it more effective and efficient. Other objectives are also related with the improvement of culture and sports. With respect to the health care, the main objective is to guarantee the availability, accessibility and quality of health care and to maintain the state of health of the entire population. That implies, between other things, to reach the basic health care for every citizen; to foster health institutional strengthening; to improve the accessibility and service of the health care; and to reduce the number of HIV/AIDS and malaria cases and the effects that these illnesses causes in the population. In relation with the social protection, the goal is to guarantee the basic securities to persons and households that are temporarily or structurally not able to generate their own income. In this sense, the intention of the MOP is to stimulate sustainable system aid care and financial benefits, addressed to poor, disable, children, senior and other citizens needed of social protection. Finally, the economic development pillar comprises all development policies related with the economic sectors, utilities and spatial planning. The objectives of this sustainable development strategy are to realize a doubling of the GDP per capita in At the same time, the intention is to pursue an annual real growth of the 6% of the GDP; and to get a fair distribution of prosperity. In the mineral sector, the general goal is to generate and mobilize sufficient resources to finance the development of this sector with the own strengths and to provide equal development opportunities. The intention of the MOP is to increase the national share in mineral exploitation and processing; to reduce the strong dependence of the international prices; to enhance the capacity building; to determine the right mix of tax and non-tax facilities; to foster the mineral production process inside the country; and to make that the mineral sector can contribute to the development of other productive economic sectors. In the agricultural sector, the general objective is to guarantee the national food security and food safety in such a manner that Suriname is not so import dependent. Between the big amount of agricultural goals established in this MOP, it can be mentioned the intention of strengthening the farmer s associations; the modernization of the agricultural education; the development of the agricultural enterprises; and the improvement of quality control, statistics, technology and innovation. In the forestry and wood processing, the general goal is to increase the contribution of the forests to the national economy and to the welfare of present and future generations with due regard for the conservation of the biodiversity. Its focus is related with the strengthening of this sector and the protection of the environment. 20

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