Identifier
Created
Classification
Origin
05PARAMARIBO647
2005-10-05 19:04:00
UNCLASSIFIED
Embassy Paramaribo
Cable title:  

PRESIDENT VENETIAAN'S STATE OF THE REPUBLIC SPEECH

Tags:  PGOV ECON PREL NS 
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This record is a partial extract of the original cable. The full text of the original cable is not available.
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

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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