By Ivan Cairo
Caribbean News Now contributor
PARAMARIBO, Suriname — Over 5,000 disgruntled citizens took to the streets in Suriname’s capital Paramaribo on Friday to protest against a steep price hike for electricity. The move to increase the price came just days after the International Monetary Fund (IMF) advised the Bouterse-administration to cut back on subsidizing electricity bills.
The government subsidizes the national power company annually by over 1 billion Surinamese dollars (US$160 million). The higher rates took effect on May 1 and people will have to pay higher bills starting late June. From the beginning, the opposition, the private sector, trade unions and part of the coalition in parliament were against the increases.
A last ditch effort from President Desi Bouterse on Thursday afternoon could not prevent a massive turnout at Friday’s rally. During a radio interview, the president announced that the price increases are being postponed for the time being. During the coming days the government will discuss the matter further with the unions and business sector and also seek advice from the Social and Economic Council, before taking a final decision, Bouterse said.
However, the organizers of the protest refused to call off the rally.
Although the price increase for electricity was the straw that broke the camel’s back, citizens also complain about the fact that life has become more expensive since the government devalued the Surinamese dollar in November last year, and prices for all goods and services have risen correspondingly. Several weeks ago, Bouterse said in parliament that the price hike for electricity won’t affect some 75 percent of all households since the government subsidy for this group will continue.
Protesters urged the government not to implement the austerity measures backed by the IMF, in fear that the economic situation in the country will worsen. As a result of the sharply lower prices for oil and gold on international markets, Suriname’s main export products, and alleged wasteful expenditure policy of the government, there has been a financial and economic crisis in the country for over a year.
In late April, an IMF team reached a staff-level agreement with the Surinamese authorities on the key elements of an economic program that could be supported by a two-year stand-by arrangement (SBA) in the amount of approximately US$478 million, the IMF announced a couple of weeks ago.
Subject to the timely completion of prior actions by the Surinamese government and obtaining necessary financing assurances, the IMF’s executive board could consider the proposed financing arrangement in early May. It was expected that the executive board would take a decision on Friday.
According to the IMF the sustained drop in the prices of gold and oil has caused substantial external and fiscal deficits, and international reserves have declined significantly. These negative external developments, combined with the closure of Suralco’s alumina refinery in late 2015, have pushed the economy into a recession.