The deal with the International Monetary Fund (IMF) can be seen as a first milestone, which will help Suriname to take the next steps for the stabilization of the economy. In this case, the money from the IMF is purely balance of payments support, to support the international reserves of the Central Bank of Suriname (CBvS). Suriname’s international reserves at the CBvS will therefore increase very steadily in the coming years, says economist Karel Eckhorst in conversation with Financiën Actueel.
He discussed the negotiation process with the IMF. Eckhorst leads the negotiations with the IMF. He indicates that Minister Armand Achaibersing of Finance and Planning is actually the chief negotiator, but that he has had the mandate to negotiate on behalf of the minister. “A program with the IMF offers a basis of confidence and discipline in macroeconomic policy, which means that other financial institutions are also willing to give their (budget) support,” says Eckhorst.
“Applying for an IMF program is a serious matter, because you are asking a lot from the people,” says Eckhorst. “As a country you have to be very serious if you want to work with the IMF.” It is about enormous commitment and conditions that are laid down on paper. According to Eckhorst, one must therefore be prepared from the start to take ‘ownership’ of what one agrees with the IMF.
In the next month and a half, after the Staff Level Agreement has been reached, the conditions will be implemented. According to Eckhorst, there is now an agreed package. He emphasizes that the Staff Level Agreement is a so-called ‘gentlemen agreement’ to get the mutually composed and agreed package of macro-economic measures ready for approval by the Executive Council and implementation by Suriname. The eyes are now on the political-administrative to carry out the ‘prior actions’. Eckhorst indicates that this will not be an easy job, but believes that we will get there.