Published On: Mon, Sep 26th, 2016

Suriname not withdrawing from IMF loan agreement, says president

desi_boutersePARAMARIBO - The Suriname government has refuted claims made in an article published by the Associated Press (AP) that the country may move to withdraw from a multi-million dollar loan agreement signed earlier this year with the International Monetary Fund (IMF).

According to the AP report, President Desi Bouterse allegedly said during a press conference last Tuesday that his administration might cancel the deal with the IMF and seek financial support from other sources such as the Islamic Development Bank (IsDB).

The Office of the President released a statement on Friday night saying that the comments of the head of state were "taken out of context and presented in a way that is at odds with the position of the president and the government."

The government noted that in recent months it has begun with the implementation of economic reforms with the support of the US$478 million stand-by arrangement (SBA) with the IMF.

"We are seriously and wholeheartedly implementing the program, which has so far resulted in achieving all except two 'hard' objectives of the SBA,” the statement said.

Bouterse and his economic team said they are aware that the economic slowdown and adjustments are taking a heavy toll on society and it was therefore decided to spread out the increase in fuel tax and electricity tariffs over a longer term than was agreed upon with the IMF.

At Tuesday’s press meeting, Bouterse said that the IMF is “cold and calculating, thinking only in numbers and the deadlines we had agreed to”. According to the government leader, the IMF suggested that he increase the fuel prices to about US$1.20 per liter at once.

“If I do that, the minister of finance will be a happy man, but then I will be out of office,” the president argued, suggesting that the electorate will dump him due to the steep fuel price hike.

While the price hike is necessary, the implementation, according to Bouterse, would be political suicide.

The president disclosed that negotiations with the IsDB have resulted in the allocation of a massive US$1.8 billion financing portfolio. Over the next couple of years Suriname has the opportunity to submit projects in several economic fields for financing. Nearly 75 percent of the resources is earmarked for investments in the energy sector.

“We need to invest heavily in the energy sector, because without reliable and sufficient energy there could be no development,” Bouterse said.

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