Suriname Looks to IMF

Last month, Surinamese officials requested help from the International Monetary Fund after a worldwide drop in commodity prices drained their international reserves and slowed growth. On Friday, an IMF delegation finished its visit to Paramaribo, the country’s capital, to discuss the provision of financial assistance in order to fortify Suriname’s homegrown economic program. Mining, an important industry for Suriname

The global drop in prices has rattled Suriname’s economy in particular because of its heavy reliance on extractive industries, such as gold, oil, and bauxite, a mineral used to produce aluminum oxide. The slowing of industry-heavy economies like China has reduced global demand for commodities, and the price of oil continues to fall. As recently as mid-2014, oil soared to $100 a barrel, but as of October of 2015 it had fallen to $50 and has since plunged to under $30.

Its current crisis marks a departure from a decade of impressive growth for the Dutch-speaking South American nation. According to a report published by the World Bank in September of 2015, Suriname was regarded as an “upper-middle-income country with a strong performing economy,” one of the best economies, in fact, of the past decade in the Caribbean region, with which the country is traditionally grouped. Its strong GDP growth rate—an average of 4.5% from 2004-2014—resulted from a previous boom in commodity prices, but as markets fluctuate, so does growth.

The IMF delegation has not yet prescribed policy to the Surinamese government, but since returning to Washington has promised to work with its partners at the World Bank, the Inter-American Development Bank, and the Caribbean Development Bank to devise a strategy for sustainable growth.

Some observers predict that the fall in commodity prices could have more widespread effects throughout Latin America, leading larger economies in the region to seek IMF support. Many blame IMF-led policies following the Latin American debt crisis of the 1980’s for the region’s “lost decade,” making present-day leaders hesitant to seek help.