US embassy cable - 05PARAMARIBO766

C O N F I D E N T I A L PARAMARIBO 000766 
 
SIPDIS 
 
 
E.O. 12958: DECL 11/29/2015 
TAGS: EFIN, ECON, ETRD, PREL, NS, Suriname's debt 
SUBJECT: RESOLVING SURINAME'S DEBTS 
 
REFS: A. PARAMARIBO 684 
 
      B. PARAMARIBO 514 
 
CLASSIFIED BY AMBASSADOR MARSHA E. BARNES 1.4 b & d 
 
1. (C) The Governor of the Central bank is embarrassed by the debt 
owed to the USG and would like to find a way to clear the books. 
See action request at para 6.  End Summary. 
 
2. (C) The widely respected Governor of Suriname's Central Bank, 
Andre Telting, sought the Ambassador out at a dinner hosted by 
President Venetiaan on November 24, the eve of Suriname's 
Independence Day. 
 
3. (C) Telting said he was deeply embarrassed by the fact that 
Suriname owed the USG money and that arrears and penalties were 
regularly increasing the size of the debt.  He noted that debt came 
up again in the just completed IMF Article IV consultations. 
Observing that the recent creation of a government debt bureau lodged 
in the Ministry of Finance effectively meant that he didn't call all 
the shots on rescheduling, he expressed desire to resolve issues with 
the USG. (See reftel A for background).  (Note: Telting continues to 
wield tremendous influence and Embassy believes that while he may 
have been expressing personal views, he has the clout to make them 
government views. End note). 
 
4. (C) Telting said Suriname had managed to reach an agreement with 
German Government and was now on track repaying that debt (See reftel 
B).  In a separate conversation, the non-resident German Ambassador 
confirmed this.  He added that the most difficult aspect had been 
gaining Surinamese Government acceptance of debt which was incurred 
when there was a default on a commercial transaction which Euler 
Hermes Kreditversichering (Hermes), German export credit insurance 
company made good on.  The debt is on the order of five million euro 
and is being paid off in ten installments over five years.  Telting 
said that some arrears had been forgiven in this case, but the German 
Ambassador was unable to confirm this. 
 
5. (C) Telting thought the German deal might serve as a model for 
coming to terms with the American debt.  He was focused on GSM 
incurred debt which he placed at approximately 18 million US dollars, 
exclusive of penalties.  (The Embassy's most recent information put 
this at: 
 
PL-480: Balance in arrears totals US$8,750,583. This balance is 
comprised of: US$ 5,593,446 in Principal Outstanding, plus US$ 
2,321,658 in Interest, plus US$ 835,479 in Late Interest. 
 
General Sales Manager (GSM) Export Credit Guarantee: Balance in 
arrears totals US$ 26,698,670. This balance is comprised of: US$ 
13,997,064 in Principal Outstanding, plus US$ 1,032,777 in Interest, 
plus US$ 11,668,829 in Late Interest. 
 
6. (C) Telting said he believes that were the USG to offer to discuss 
the debt, either in Washington, or by sending a team to Suriname, 
such an offer would be well received and there would be a serious 
commitment by Suriname to agree to a payment schedule.  GOS has made 
occasional inquiries about a debt for nature swap program and Embassy 
has forwarded information which indicates that existence of arrears 
and lack of IMF program renders Suriname ineligible.  Telting's 
approach would appear to indicate a more serious interest in trying 
to find a solution.  Suriname has an interest in putting its financial 
house in order.  Debt to US comes up in each Article IV consultation. 
Further this outstanding debt and that to Brazil and Spanish Banks 
will no doubt complicate Suriname's efforts to obtain financing for 
several projects in the early planning stages.  Thus, it appears that 
Suriname has the incentive to put its financial house in order. 
Indeed, this has been one of Telting's primary goals during his 
current tenure at the Bank.  Given Suriname's apparent interest in 
dealing with its US debt, Embassy requests guidance on a response to 
the GOS.  Embassy believes any response should provide detailed 
information on options which might be available to GOS to resolve this 
matter. 
 
7. (C) The Embassy request that it be provided text of an invitation 
inviting GOS officials to Washington to discuss rescheduling of the 
debt, or that Embassy be authorized to offer a visit by Washington 
officials for discussion. 
 
BARNES 
 
 
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