|The Courier N° 151 - May - June 1995 - Dossier : Social Development - Country Report: Suriname (EC Courier, 1995, 88 p.)|
You never cross the same river twice
This expression, borrowed from an Indian philosopher, sums up the attltude of Subhas Mungra who is Suriname's Minister of Foreign Affairs. He quoted it, in a wide ranging interview with The Courier, to underline his message that the world is charging rapidly and tha this country has to change with it. The tides of the global economy, like the waters of any river, are constantly on the move. For Mr Mungra, this should be viewed as a challenge rather than a threat He also has strong views on the importance of new technologies and the free enterprise system. And he sees increasing regional integration as one of the keys to his country's future prosperity. The Minister began by explaining how Suriname's relations with other counties could be used to positive effect to improve the economic situation at home.
- We believe that, in order actively to reinforce our economic recovery programme, the strengthening of our foreign relations, on both a bilateral and multilateral basis, is of great importance. Nowadays, there is no such thing as a domestic economy. There is only one economy, the global one. Given the fact that no country can develop in isolation, there must be a push to strengthen and enhance relations with foreign countries. Normally in economic textbooks you have four factors of production - labour, natural resources, knowledge and capital. In this global village, international economic relations should be seen as a fifth factor. That is our basic philosophy. Anyone who thinks you can still operate within closed economic boundaries is living in different world and one that has already gone.
The globalisation of the economy has, of course, a lot to do with modern communications systems. It took our forefathers, who came from Asia and Africa by sailing ship, three to six months to reach Suriname. Today, I can board an aeroplane in the afternoon and start work next morning at eight o'clock in New Delhi. I can pick up the phone and do business with financial institutions in any country. I can take the fax and communicate with anyone on the globe. Once you are linked to the Internet, you have the world before you at the press of a button. If you buy the proper CD-Rom programmes, you have all information contained in every university at your fingertips. So modem communications systems have changed everything.
The trouble is that most people you talk to are still thinking within the framework of the old world, and this is the major challenge. Our philosophy is that you should not see the changes as a threat but rather as a challenge. We need to reinvent company structures, labour unions and other functional groups within society. Look at what is happening in the USA. There is a corporate revolution going on at the moment; a completely new approach to management. The same goes for governments, of course, especially in developing countries. Governments which design their policies in the framework of a closed economy are living 10 if not 20 years behind the times.
Would that need to reinvent government also include reducing its size?
- Yes, it includes that. We also have to talk about specifics here. What do we mean by re-inventing government? The first thing one must recognise is that, because of modem communications, the political awareness of the population has increased dramatically. So participation at all levels of decision-making must come increasingly into the picture. It is not just a question of the government deciding. You need to get popular consensus and that means restructuring decision-making process. This is especially true for developing countries.
Today, the whole world is talking about adjustment programmes. We have to adjust, not necessarily because we like it, but because it is a necessity. There was a famous Indian philosopher who said 'you never cross the same river twice'. Just as the water in a river is constantly changing, so too is the world we are living in today and our policy must take account of that.
· You have talked about globalisation. Within that, and as we move towards it, there is also regionalisation taking place. Suriname in a sense, straddles two regions - the Caribbean one with which you have strong historical ties and the South American one. Where do you see Suriname being placed in a regional context.
- Given that the whole world is being divided into mega-trade blocs - the KU, the Pacific Rim countries, the seven new tigers of Asia, Nafta, Mercosur and so on, Suriname has no choice other than to join in the process. Regional integration involves a serf" of stepping stones. Obviously, the group closest to us is Caricom. We have applied for full membership of this organisation and hope to be part of it by the middle of this year. This means we become part of a market of five million people with a GDP of $500 million. At the same time, given that governments should be looking, not just at the next election but, also at the next generation, we agreed at the meeting in Colombia last year to sign the Charter of the Association of Caribbean States. This is a grouping of all the nations that border the Caribbean including the three big 'G3' nations; Mexico, Columbia and Venezuela. The market here is much bigger million people with a GDP of $500 billion. Then there was the summit of the Americas in Miami recently, where we agreed to participate in the proposed Free Trade Area of the Americas. This aims to create the biggest market in the world - 800 million people - by the year 2005. So as you can see, we have clear policy of intensifying regional cooperation.
Orienting ourselves more towards our own region means that our previous unilateral dependence on the former colonial power will necessarily be diverted. These steps are important if we are to achieve economies of scale and improve the efficiency of our production. In a bigger market, the most creative entrepreneurs will reap the richest rewards. And the message to the private sector is that you can no longer rely on monopolistic practices, tariff barriers or other kinds of protection from the government. That is no longer possible.
· So the policy of state subsidies is no longer viable?
- No it certainly is not. Of course, what I have just said begs the question as to whether wider economic spaces actually benefit small vulnerable economies like ours. This is a key question to which there is no easy answer. However, realistically, I think there has to be a I transition period in which small vulnerable economies have some special arrangements, although I would hesitate to the use word 'protection' here. If this doesn't happen, whole industries may wither in the face of competition from the multinationals. They are able to afford price differentiation when they are penetrating new markets - temporarily offering prices that are lower than production costs so as to eliminate the opposition. So I think there must be some provision for small vulnerable economies while you are in the process of opening the markets. The important thing is that it should be temporary. President Clinton put the point well at the Miami summit. The only answer, he said, when you think your neighbour is beating you is to do even better yourself.
· You mentioned ending Suriname's dependence on the former colonial power. I have heard comments, both positive and negative, from Surinamese people about your relations with the Netherlands. How would you characterise the situation today? I would also be interested to hear what you think about your relationship with the European Union - which is not the same thing, of course.
- I think one should be very realistic. The reality is that this over orientation to the Netherlands has, one way or the other, to be changed. Once Suriname is forced to play its proper role in Caribbean regional integration, this will automatically divert attention way from the link with the Dutch. At the same time, we have to recognise that we have close family and historical ties and that we speak the same language. These ties will obviously continue.
As for European Union link, that is a different story. Suriname is an ACP member and the EU is one of our major markets. I have talked about exploring and developing a wider economic space in this region, but our entrepreneurs are still oriented towards the European market. And I should say that we have a very good market for our rice and bananas. I think Europe will remain a very important trade partner for us in the coming decades and I see that as a good thing. There is no reason why trade blocs should not cooperate to enhance world trade. The thing that will change is that the blocs, in future, will be dealing with each other on a collective basis, not as individual countries.
So for Suriname, the EU will remain very important. I have focused on trade here, but there is also our dose cooperation in development policy. I believe that the Lome Conventions have helped to accelerate development in a number of sectors. Of course, there is a view that the decision-making process could be speeded up and red tape in Brussels could be reduced. We should look at whether the local delegation of the European Commission should not have more authority to decide on projects at the local level. These are just obsevations which one might make. But the agreement itself, between the EU and the ACP group, is still one which sets an example to the world in modern development cooperation and Suriname is very happy that we are part of it.
· Sticking with the Lome Convention, one of the demands made by the ACP side is that they should have unrestricted access to the EU market for their agricultural products. Would that be helpful for Suriname?
- It would be most helpful to Suriname and many other ACP countries who are primarily involved in agricultural production. Some Caribbean countries, notably the banana producers, are reliant on the European market for 80% of their exports. Fortunately, that is not the case for us, but free access to the EU would still be very welcome and would provide us with significant new opportunities.
· In the same context, new conditionalities are being suggested by your European partners. It looks as if, instead of EDF money all being earmarked to national programmes in one tranche, there will now be two stages, with access to the second being dependent on how well the first has been used. There has also been talk of extra political conditions. What is your view about this?
- Like many ACP countries we are concerned about some aspects of these proposals. As you know, there is a project cycle - the preparatory stage, project analysis, the financing contract, implementation, disbursement and finally, evaluation. The degree to which we effectively use the Lome funds depends, of course, on all these steps in the decision-making process. And as long as we don't know whether the delays have to do with red tape in Brussels, infrastructure problems or poor administration in the developing countries themselves, we should be wary of changes which might simply add to the delays. In particular, if they are due to red tape, you end up punishing the country for slow decision-making over which it has no control. So I don't think this is the way to do it. But I do think we should study new technologies for closer monitoring and better management of the complete project cycle. We need a better understanding of the obstacles for each country or region, and have try to find new measures to enhance the process. I think one possibility would be to have a project pipeline readily available the moment you sign the next Lome Convention. You shouldn't wait to prepare a project and there should be some funding for that. So you have always, so to speak, a selection of projects that are feasible and readily executable.
With regard to political constraints, we don't think there is any objection to the EU emphasising basic human rights, and of course protecting the environment. We all agree on these points. On human rights, I think it is the obligation of humankind, after 5000 years of civilisation, to force governments to tackle problems at the negotiating table and not by violence. Similarly, we should oblige governments to safeguard the environment for future generations.
· There seems to be general agreement that human rights and democracy conditionalities are acceptable - and indeed desirable. But what about a condition, for example, that a country must be committed to a free enterprise economic system Is that an acceptable requirement to impose in a multilateral treaty like the Lome Convention?
- This is a very difficult question to answer because it presupposes we all agree on what is the most appropriate economic system for a country. We do know one thing: centrally-planned economies are out. It is clear that these don't work. No government can plan consumption behaviour, monetary behaviour, savings behaviour and investment behaviour for every person in the world. Even Deng Hsiao Ping admitted that a government that does everything for the people deprives them of their talents. So we mustn't interfere with the creativity of individuals. Let them be free to invest, consume and save whatever they like.
But having said this, we still haven't really identified the optimum economic development model in the world. All economies are mixed economies, but some have more central planning than others. In Sweden and the Netherlands, there is a lot of central planning. In the US, there is less, but even there, it exists. Everybody agrees that we should promote free markets in one form or another because it is better than having monopolies and closed economies, and contributes to general welfare, but the mix of planning and free enterprise differs from country to country. So while we know that the market system should be promoted, I think that to make it a requirement in development cooperation instruments may be going a bit too far. It could lead to unnecessary interference in the sovereignty of a country.
· Is there, perhaps, a contradiction between a free market condition and the requirement that a country be democratic? If the idea that there is only one valid economic model is elevated to a fundamental principle, then surely your democratic choices are reduced to just one possibility?
- Exactly, and that is why we have to be careful about free market requirements. Look at the problems that have arisen between the IMF and a number of countries. The IMF imposes conditionalities to secure monetary and balance of payments targets, but in the process, they restrict the governments' scope for developing their own monetary and fiscal policies. Of course, this is the only way you can do it, but the key point is that it is only temporary. It is designed to bring about stabilisation where things have got out of hand. Imposing the same conditions in the field of regular development cooperation policy is a very different matter.
· One final question. Is the IMF going to get involved in structural adjustment in Suriname?
- Definitely. We recognise that Suriname should have closer cooperation with the Fund. The modalities have yet to be worked out but we are agreed that the IMF should assist Suriname to look into the viability of the programme that is being designed with our European consultant, the Warwick Research Institute. Once the programme is in place, we need the seal of approval and good advice from the IMF. This will help us in attracting the external support that we need and will also help to improve the investment climate.