Multi-Annual Development Plan 2001-2005 Executive summary by National Planning Office
R E P U B L I C OF S U R I N A M E
Multi-Annual Development Plan 2001- 2005
Executive summary by the National Planning Office
In Suriname elections are held every five years and the development-planning period more or less coincides with each government's term in office. The planning process takes place at the beginning of each new five-year administration period. The output of such planning is a draft Multi-Annual Development Plan (MDP or MOP by its Dutch acronym) for five years, which includes budgetary considerations. The MDP must be submitted to Parliament for approval according to the Constitution.
Status of the MDP 2001-2005 per September 4, 2001
The MDP has already been approved by the Council of Ministers. The State Council debates on the MDP are currently underway. The State Council is a high level advisory body headed by the President of Suriname, in which representatives of political parties, labor unions and the private sector participate. Its tasks also include checks of draft legislation on compatibility with the Constitution. Once the MDP has passed the State Council, it goes to the National Assembly for debate and approval.
Following the inclusion of all approved comments and changes, the MDP becomes a law that is to be observed during the entire five-year administrative period. The National Assembly is formally entrusted with monitoring implementation of the MDP. The government submits its annual budget, based on the MDP, which includes an annual public sector investment program (Jaarplan) which must be consistent with the MDP, for approval to the National Assembly.
Challenges
Challenges in the development planning process include the institutional capacity available for planning and implementation, its timeliness and multi-stakeholder participation. Also impeding proper planning is the national problem of poor performance in data collection.
Implementation of plans and policy measures suffer from inadequate institutional capacity, mostly in the public sector, and insufficient and often untimely funding.
National development strategy for sustainable production
The draft Multi-annual Development Plan 2001 -2005 includes a national development strategy for sustainable production and a strategy for poverty reduction. Within the strategy for sustainable development, the availability of natural resources as well as well-developed human resources and trade, are important conditions for development. The MDP states that it is equally important that basic conditions of good governance are expressed: open and honest governance with respect for law and order and human rights and the establishment of a corruption-free society.'
Principles of sustainable development according to the MDP include:
· All citizens must be allowed an equal share in development opportunities;
· Man is the main production factor, which implies increased investments in education and specialized training;
· Local and foreign entrepreneurs and investors should be encouraged by a production-friendly climate;
· Human capital must be rewarded to prevent brain drain;
· Gradual withdrawal by the government from non-strategic production, thus making way for private initiatives;
· Public/private partnerships will be the basis in political governance, financial, economic and social development;
· The Government will guarantee the development of a favorable, modern financial market open to the private sector, especially for beginning entrepreneurs;
· Industrial development utilizing natural resources will be strongly developed;
· Natural resources will be used in a strategic way. Regenerative sectors will be exploited in such a way that they maintain their economic potential, while exploitation of extractive sectors is to render sustainable profits for the whole population;
· Semi-governmental companies will be rationalized;
· Access for women and youth to credit, training and production means will be improved;
· Women should participate in the mainstream of development.
The MDP mentions the establishment of an economic order that has the state withdrawing from non-strategic production and will include sufficient guarantees for the availability of goods and services through the strengthening of public-private partnership. Structures will be created to properly guide the government's structural withdrawal from non-basic tasks as well as the repositioning of the private sector, with special emphasis on the role of education as a way to bring about cultural changes throughout the entire society. Efforts will be focused on changing the ways in which people think and act towards an attitude of cooperation, production, development and progress.
Government support for the private sector will be realized through:
· The creation of structures that facilitate frequent consultations between the public and private sectors on production policies to be implemented;
· The identification of potential export markets, with a special role played by the Ministry of Foreign Affairs;
· The establishment of strategic alliances both in Suriname and abroad, with the aim of strengthening the export sector and its competitiveness;
· The improvement of legislation and facilities concerning export;
· The establishment of solid relationships between education and the labor market, thus facilitating sound interactions between export market and export production;
· The rehabilitation of air and water ways and ports;
· The development of export production funds;
· The implementation of the Law on Investments through fiscal and non-fiscal facilities and incentives, which might also encourage the repatriation of foreign currency;
· The adjustment of physical and institutional infrastructures according to demands put by an ever changing international environment;
· The drafting of destination plans, especially the identification and organization of industrial areas, as a way to promote optimum spatial management.
The MDP, in determining the selection of sectors for long term strategic production, takes into consideration the optimal utilization of the potential of several production factors that is only partially exploited such as:
1. Natural resources, especially in the rain forest, marine fishery and unused agricultural land as well as marginally exploited ores;
2. Human resources, due to hidden unemployment in the public sector and the informal sector, as well as national entrepreneurs and other Surinamese currently living abroad;
3. Existing infrastructure facilities that could be used more efficiently;
4. Production capacity currently present in especially state-owned enterprises;
5. National savings leaking out of the country and possibilities for multilateral external financing and technical assistance.
Foreign investments
Through the years private investors have shown an increased interest in Suriname. The number of foreign investors increased between 1990 and 2000 as compared to 1975-1989 and the period before 1975. Most foreign investors in 1990-2000 were from the USA (18%), followed by Trinidad & Tobago (14%), Canada (14%), China (14%) and the Netherlands (8%).
Judging from the number of enterprises in 1990-2000, investors mainly focused on crude oil and mining (32%), forestry (17%) and financial services (15%).
Strategy for poverty reduction and improvement of living standards
One of the objectives of the government's policy is the creation of a more socially just society. Efforts will be aimed at creating development prospects for all, providing for opportunities that will enable all persons, including the underprivileged and vulnerable groups, to fully participate in the labor process. Social policies will not only be focused on the elimination of social backwardness, but also on the improvement of living conditions.
Focal points of the strategy to improve living standards are:
· The creation of opportunities: the implementation of measures aimed at quick, sustainable growth in correlation with efforts towards strengthening the human and physical potential of the underprivileged;
· Encouraging participation: to create opportunities for the poor that enable them to influence those conditions that determine their living standards through their increased participation in the political process and level of decision-making;
· Improved social care: the implementation of strategies specifically aimed at increasing standards of living so as to reduce the vulnerability of the poor.
Specific target groups that due to their special characteristics, deserve special attention under the MDP are:
· youth, especially the unemployed and those trying to get out of their poverty status by starting their own business (including the agrarian sector);
· underprivileged women, especially pregnant and nursing women;
· women trying to establish their own private business;
· persons who are unable to independently earn sufficient income to provide for themselves, especially senior citizens and persons with a disability;
· workers with incomes below the official poverty level. Following a thorough study, a minimum salary level will be introduced in order to guarantee workers and their families fair living standards;
· Inhabitants of and migrants from the interior and other underdeveloped areas.
Public sector reform
Management of the state budget
A number of budgetary, revenue generating and organizational measures will be implemented as part of fiscal policies as a way to support the government's managerial tasks, an extension of capacities to fine-tune (macroeconomic) aggregates and the steering of developments within those aggregates.
Budgetary measures entail budgetary process reform, the introduction of a new budgetary system apart from the current system, semi-annual budget evaluations, an adequate management system, procedures for strengthening the expenditure monitoring and the timely presentation of a planning and budget cycle.
Revenue generating measures are aimed at increasing public revenues through an improvement of tax registration, a broadening of the tax-levy base, a further structuring of efficient registration of non-tax incomes, a shifting of emphasis from direct to indirect taxes, improved tax structures, adjustment of non tax incomes according to market situations and the introduction of a new type of non tax incomes.
Organizational measures are aimed at improving the state apparatus through the strengthening of those sections of Ministries that are entrusted with carrying out the government’s budgetary activities. Fiscal measures are aimed at reforming fiscal legislation, stimulating the community's opportunities to generate income and to save, detecting new taxpayers, and providing for a transparent fiscal judicial process.
Civil service reform, which the government has set as one of its main measures for improving efficiency, will be carried out with utter care and with negative effects for other sectors kept minimal.
The leading principle for the government in implementing its relevant policies is that public servants are not to become unemployed. This implies that certain requirements are to be met, including:
· Public servants involved must receive half-pay in accordance with the Law on State Personnel (Personeelswet), while there is also the possibility of providing additional assistance;
· Alternative employment at a comparable level should be available to public servants selected for lay-off;
· In case of a lack of alternative employment, public servants are to be enabled to independently generate their own incomes.
Rationalization of public enterprises
Most public enterprises and institutions are facing problems. Inefficient production is causing these enterprises to compensate rising production costs through increasing consumer prices, while Suriname is also being confronted with increased pressure on export markets for agricultural products, where some of these enterprises operate.
The reform program for public enterprises will include a cohesive set of measures, including:
· A review of the performance of all public enterprises;
· A central state service entrusted with monitoring commercially-oriented public enterprises on their financial performance and the extent to which they create and implement operational programs and budgets;
· A center for the privatization of public enterprises that is to manage an integral implementation of the reorganization process. As such, the center will focus on reforming and restoring the cost-effectiveness of these enterprises as well as on terminating state subsidies. The center could also play a key role in promoting and executing new investments in cooperation with local and foreign partners.
The process is to aid public enterprises in reforming their management style in order to establish a commercial approach. Based on the nature of Suriname's public enterprise sector and data currently available regarding the financial position of some of these enterprises, it is recommended that a center for privatization of public enterprises adopt an integral approach.
A privatization program will be prepared and implemented for both financial and non-financial public enterprises. The first step towards privatization is to determine which services are of strategic importance to the State. Such services are to operate under the immediate influence of the State. Other focal points include issues concerning industrial relations, the potentially unbalanced formation of economic power as well as the need for a clear structuring of the privatization process.
Also important is the presence of broad based support for the process both at the highest level and throughout all segments of the community, and data on the public enterprises involved.
Factors relevant to the method selected for implementation include the government's objectives and the strategic importance of the public enterprises involved. The vast amount of potentially influential factors requires the establishment of a privatization body, rather than the employment of a comprehensive method of privatization. With the possibility of external technical assistance, such a privatization body will be entrusted with setting up a strategic privatization plan
Rule of Law and Democracy
After taking office, the government immediately started with carrying out measures intended to restore the troubled relations within the Judiciary and to confirm its independence. Guaranteeing and strengthening the rule of law and democracy will therefore be encouraged emphatically and visibly. In order to restore the community’s confidence in the Judiciary, this institution will undergo a restructuring besides an expansion of the number of members and substitute members. This will be focused on:
· Guaranteeing and optimizing the rule of law, with the necessary attention for the creation of opportunities, particularly for the disadvantaged segments of the community.
· Settling the legal position of the members of the Judiciary by law, as well as building guarantees for the independence of this institution.
· Strengthening the infrastructure provisions for the Judiciary, as well as establishing an institute for the training of members of the Judiciary, with the purpose of improving the quality and quantity of the Judiciary.
· A Constitutional Court will be established to improve legal security within our system;
· In order to guarantee legal assistance for everybody in the community, the Legal Aid Bureau will be reorganized and the remuneration of the lawyers provided will be evaluated. Experts will be hired in order to support policy in this through legislation.