Monday, 15 October 2012

Suriname: IMF criticises subsidies to state-owned companies

The International Monetary Fund (IMF) has criticised the way in which Suriname provides subsidies to a few large state-owned companies. In its recently published Country Report the Suriname Energy Company (EBS) is explicitly named and it described as having a "complicated issue of criss-crossing subsidies and mounting unpaid debts?. Meanwhile the EBS owes the government US$47 million for the electricity bill from the Afobaka Hydropower plant. It also does not pay for the diesel it receives from Staatsolie for the Wärtsilää generators at the Paramaribo power plant.
The IMF estimates that a total of US$84 million in subsidies was therefore provided to EBS in 2011. It states, however, that these financial constructions are not harmful to the Surinamese economy but do disguise the level of state subsidies to the public sector.
Analysis : It is obvious that Suriname still has problems operating in a business-like and transparent manner when it comes to the government supporting state companies. Besides the EBS the telecommunication company Telesur and Surinam Airways (SLM) also both receive indirect support from the government.
The lack of transparency gives a biased view of the flow of money and, in addition to that, it disguises information about investment constructions. For example, as noted in previous editions of Suriname Politics & Security, contracts for the power station which is run by Staatsolie were not put out to tender. The generators supplied by the Finnish company Wärtsilää were instead supplied by the businessman Dillip Sardjoe who is a confidant of the president and, at the same time, the Honorary Consul of Finland.
The IMF, does not, however, report on low prices that Suriname ?s population pays for energy. Electricity is fairly cheap which makes it difficult for campaigns on energy savings to be effective. Large-scale government investments in wind and solar energy have failed to get off the ground despite Suriname being in the position of being able to fully provide its own energy needs according to energy experts. If, for example, all of Suriname ?s cars ran on electricity the country would be able to generate energy for its entire fleet and still have sufficient energy to export to its neighbours.
For more news and expert analysis about Suriname, please see Suriname Politics & Security.
© 2012 Menas Associates

No comments:

Post a Comment