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Quick Facts
- Population:
- GDP (PPP):
- $7.9 billion
- 0.1% growth
- -1.4% 5-year compound annual growth
- $13,988 per capita
- Unemployment:
- Inflation (CPI):
- FDI Inflow:
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Suriname’s economic freedom score is 48.1, making its economy the 166th freest in the 2018 Index. Its overall score has increased by 0.1 point, with significant improvements in scores for the investment freedom, government integrity, and government spending indicators barely offsetting a very steep drop in monetary freedom. Suriname is ranked 29th among 32 countries in the Americas region, and its overall score is below the regional and world averages.
Already severely constrained by a burdensome and inefficient regulatory framework in the context of pervasive corruption that undermines the judicial system and the rule of law, the government must grapple with the need for ongoing currency and fiscal adjustments in response to weak commodity prices. Privatization has been slow and uneven. Direct state involvement in the economy through ownership or control remains considerable, and management of fiscal and monetary policy has been weak.
Background
Desire “Dési” Bouterse of the National Democratic Party, a convicted cocaine trafficker, was elected to his second consecutive five-year term as president in 2015. Bouterse first took power in a 1980 military coup and ruled until 1987. In 2012, the legislature gave him amnesty for the 1982 murders of 15 politically prominent young men who had criticized the military dictatorship. Bouterse’s son Dino is serving a long prison sentence in the United States after pleading guilty in 2015 to drug trafficking and terrorism charges. Suriname remains one of South America’s poorest and least-developed countries. The economy relies on extraction of natural resources and has been hit hard by lower international commodity prices and the shutdown of bauxite and alumina production.
Procedures for registering property and enforcing contracts are weak, and property rights are not well protected. The judiciary is poorly resourced, lacks professionalism and adequate physical space, is intimidated by criminal narco-gangs, and is subject to heavy political influence. Corruption is pervasive throughout the government, especially in procurement, licenses, land policy, and taxation.
The top personal income tax rate is 38 percent, and the top corporate tax rate is 36 percent. Other taxes include property and excise taxes. The overall tax burden equals 11.1 percent of total domestic income. Over the past three years, government spending has amounted to 28.1 percent of total output (GDP), and budget deficits have averaged 7.6 percent of GDP. Public debt is equivalent to 64.6 percent of GDP.
The lack of regulatory transparency harms the business environment. There is a large informal labor market. Employers need permission from the government to dismiss formally employed workers, and unions generally negotiate severance packages for laid-off workers. The government is still spending too much on fuel and electricity subsidies. Inflation, which spiked near 80 percent in 2016, has begun to decline.
Trade is significant for Suriname’s economy; the combined value of exports and imports equals 94 percent of GDP. The average applied tariff rate is 7.6 percent. Nontariff barriers impede some trade. Government openness to foreign investment is below average; the onerous and nontransparent investment regime deters much-needed long-term foreign investment. The financial sector is underdeveloped, and credit decisions are subject to state influence.