US embassy cable - 05PARAMARIBO647

UNCLAS  PARAMARIBO 000647 
 
SIPDIS 
 
 
DEPT FOR WHA/CAR 
 
E.O. 12958: N/A 
TAGS: PGOV, ECON, PREL, NS 
SUBJECT: PRESIDENT VENETIAAN'S STATE OF THE REPUBLIC SPEECH 
YIELDS FEW SURPRISES 
 
REF: (A) PARAMARIBO 602 
 
     (B) PARAMARIBO 503 
     (C) 04 PARAMARIBO 776 
 
1. SUMMARY: Surinamese President Ronald Venetiaan marked 
the start of the new parliamentary year with his 
constitutionally required "State of the Republic" speech on 
October 3, which includes a presentation of the country's 
budget for the coming year. Successfully past the election 
period, the new administration offered no particular 
surprises in the speech, and was a good deal less boastful 
of past accomplishments than in his 2004 campaign kickoff 
budget speech (ref c).  In international relations 
Venetiaan stressed the need for Suriname to have a more 
diversified foreign policy and singled out an astonishing 
array of partners, but as in previous years barely 
mentioned ties with the United States.  With the inclusion 
of the Maroon-based A-Combination in the new ruling 
faction, greater attention was paid to addressing the 
concerns of populations within the interior. Finally, with 
regards to the economy, a troubling statistic revealed that 
current debt to GDP ratios violate a Law on Government 
Borrowing (see also septel).  End Summary. 
 
2.  The GOS budget deficit is projected to be 9.3 percent 
of GDP in 2006, which would be more than 2 percent higher 
than in 2005. Operational costs will account for 35 percent 
of total expenditures, with salaries to civil servants 
alone making up 27 percent of the total.  With regard to 
the current state of the economy the only issue featured in 
the President's speech was government debt (septel). 
Venetiaan cited foreign debt figures equating to 33.8 
percent of GDP, and domestic debt at 18.9 percent.  Left 
unspoken was that the latter violates Suriname's Law on 
Government Borrowing of 2002, under which the Minister of 
Finance can be held personally accountable and may face 10 
years in prison and/or a fine of up to 2 million SRD if 
domestic debt exceeds 15 percent of GDP.  Also noticeably 
absent from the President's speech was mention of the 
inflation rate.  Whereas the GOS was quick to boast a 9.6 
percent inflation rate for 2004 in last year's speech, no 
mention was made of it this year; monthly results suggest 
it may be rising. 
 
3.  In the realm of foreign affairs, President Venetiaan 
noted the impact of global changes on small vulnerable 
economies like Suriname. While Venetiaan at various points 
mentioned relations with a wide variety of European, Asian, 
Latin American and other international partners, the words 
"United States" passed his lips only once, before the word 
"dollars." Even Belgium and Greece received specific 
mention of bilateral assistance; we surfaced in the form of 
general reference to the FTAA and Summit of the Americas in 
the context of regional cooperation schemes of interest to 
Suriname. He reiterated Suriname's primary focus would 
remain the country's successful integration into the 
CARICOM Single Market and Economy (CSME) and maintaining 
good relations with Guyana. (Note: Suriname and its Western 
neighbor have a long  standing border dispute. End note). 
 
4. The President specifically mentioned the recently signed 
Petro Caribe Initiative (see Ref A) as well as an upcoming 
fisheries agreement with Venezuela. For all of China's 
activism in Suriname, they received surprisingly short 
mention; once in the general context of Asian cooperation 
and again in a repeat from last year's speech highlighting 
a program of loans and grants intended for social housing. 
 
5. Venetiaan has been criticized in the past for focusing 
on coastal areas to the detriment of the country's 
underdeveloped interior and its peoples (Maroons and 
Amerindian).  After elections in May 2005, the A- 
Combination, consisting of predominantly Maroon parties, 
was added to the Front plus coalition. Venetiaan's speech 
suggested the interior will now receive greater attention. 
He announced ambitious plans with regard to budget 
independence for the interior and stated that his 
Government will start consultations with Maroons and 
indigenous people concerning their rights to land. The 
Government pledged to improve education in those areas, 
establish an effective policy to tackle the contamination 
of water sources due to the use of mercury in gold mines, 
and establish primary health care centers in various 
districts in the interior.  He also referred to improving 
the ease and affordability of transportation to the 
interior. 
 
6. The speech vowed to tighten subsidy policies with the 
objective of making government institutions and parastatals 
 
 
more self-reliant.  The president reiterated previous 
commitments to private non-profitable parastatals, for 
example in banana, rice, and wood industries as well as 
banking, and to enhance revenue collections both by 
revising structures and reevaluating current tariff 
schedules.  A brief line promised to begin charging for 
some public services that had previously been performed for 
free.  These commitments proved somewhat hollow in previous 
administrations, and this speech failed to address 
structural and political obstacles that impeded their 
realization in the past.  The government's monetary policy 
continues to be focused on consolidating the stability of 
monetary ratios and the new currency, areas of reasonable 
success in the last administration, buttressed by a 
disciplined spending policy. 
 
7. Several issues of concern to the U.S. received priority 
attention for continued government commitments.  Notable 
mentions included international cooperation against trans- 
border crime, and a variety of other efforts valuable to 
effective action against trafficking in narcotics and 
persons such as improvements in immigration legislation, 
reassertion of government control in the interior, and 
generally better protection of the country's porous 
borders.  The need for greater professionalism in the 
military and the establishment of strategic military posts 
in the country's interior were heralded.  He promised post- 
elections consultations to improve the efficiency and 
quality of Suriname's election process. 
 
8.  Mild surprises came in the announcement that an 
elaborate plan for public sector reform would reach 
Parliament in 2006 (this is a current IDB project targeting 
the politically sensitive issue of high government 
employment levels;) a proposal to establish a system of 
mininum wages as Suriname integrates into the Caribbean 
labor market; and a contradiction of Natural Resource 
Minister Rusland's recent statements that the contract with 
Rosebel Gold Mines will not be changed.  Venetiaan said the 
deal would be re-evaluated to maximize profit for Suriname. 
The president acknowledged concern on HIV/AIDS, and quoted 
a prevalence rate of 2 percent, below the rate of closer to 
3 percent often quoted by healthcare workers and 
professionals in the sector. 
 
9.  Comment: The criticism voiced in the press and by 
opposition political parties was that the President's 
speech neither contained new ideas nor stated a new vision 
for the country. Some critics panned that he delivered last 
year's speech a second time, and indeed some media pointed 
out specific sections repeated verbatim from 2004.  That 
speech was in fact a good deal bolder in touting government 
achievements, coming as it did as the kick off of the 
elections campaign.  The lack of bold boasts or 
pronouncements in 2005 may reflect economic achievements 
deteriorated by electoral concerns, or the reality of the 
fragility of the coalition's position, in a much narrower 
parliamentary majority than in his previous administration 
(ref B). 
 
LEONARD 
 
 
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