VZCZCXRO9267
PP RUEHGR
DE RUEHPO #0843/01 3631834
ZNR UUUUU ZZH
P 291834Z DEC 05
FM AMEMBASSY PARAMARIBO
TO RUEHC/SECSTATE WASHDC PRIORITY 7916
INFO RUCNCOM/EC CARICOM COLLECTIVE
RUEHAO/AMCONSUL CURACAO 0926

UNCLAS SECTION 01 OF 02 PARAMARIBO 000843 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR WHA/CAR: LLUFTIG 
 
E.O. 12958: N/A 
TAGS: ELAB PBTS PGOV PREL SCUL SMIG TBIO SENV NS
SUBJECT: SURINAME ILL-PREPARED ON EVE OF CSME 
 
PARAMARIBO 00000843  001.2 OF 002 
 
 
-------- 
Summary 
-------- 
 
¶1.  In a special meeting on Saturday December 17, 
Suriname's Council of Ministers voted to remove all 
remaining legal restrictions to Suriname joining the 
CARICOM Single Market and Economy (CSME).  This came 
exactly two weeks before the December 31 deadline set by 
CARICOM members five years ago to become CSME ready.  While 
the Council's action is an encouraging sign, it has little 
immediate practical meaning given the need to make a 
variety of regulatory and even legislative changes, the 
scope of which are still being investigated, to remove all 
restrictions on the movement of goods, capital and people 
required by the CSME.  Business organizations indicate 
skepticism that Suriname will actually meet the year-end 
deadline, noting not only government, but also businesses 
have work left to do to comply with the CSME. Both 
procedurally and in terms of a competitive business and 
investment mindset, Suriname is not CSME ready.  The 
Council of Minister's grand gesture, unsupported by 
required associated procedures, is not unusual in Suriname, 
and undermines perceptions of regulatory transparency and 
effectiveness. End Summary. 
 
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The Politics 
------------- 
 
¶2.  In a radio interview, Wanya Illes, head of the Caricom 
Bureau at the Ministry of Trade and Industry, told a 
reporter that Suriname has "only" 11 restrictions to 
remove.  These relate to a variety of areas including 
professional licensing, transport and insurance 
regulations, and banking and foreign exchange laws, handled 
by no fewer than five action ministries and other official 
entities.  Illes told the Embassy that not all restrictions 
require legislative action to be removed; some can be 
removed through presidential decrees that amend their 
manner of implementation.  The remainder, though, will have 
to go through a State Council and National Assembly 
approval process, which is problematic for the government, 
not least because the State Council has yet to have all 
members appointed in wake of the inauguration of a new 
government in September.  The National Assembly is already 
on holiday leave until next year and Paul Somohardjo, 
Speaker of the National Assembly, said that the Assembly 
can not be called back at this time for a special session. 
Somohardjo added that he would place the restrictions on 
the agenda early next year. 
 
¶3.  To further complicate the equation, not all of the 
possible conflicts between CSME requirements and Surinamese 
law/regulation have even yet been identified.  The CARICOM 
Bureau is currently going through the laws governing each 
ministry to identify other possible incompatibilities.  An 
early overview of Suriname's Mining Law has already brought 
five potential problem issues to light, and as the process 
continues the Bureau expects to come across more.  When 
asked what the consequences will be for Suriname if it does 
not meet the December deadline, one official stated that 
the only requirement will be that Suriname notifies CARICOM 
it will be late, and will deal with issues related to the 
movement of goods, services, and people "as they arise." 
 
--------------------- 
Business Perspective 
--------------------- 
 
¶4.  Business organizations unanimously agree that Suriname 
is far from ready.  Not only does the government have a lot 
of work to do, but so do Surinamese businesses, in 
particular manufacturers, only a few of whom have adapted 
production to international standards.  Most, however, are 
confident that Surinamese businesses will eventually profit 
from the CSME, since they believe manufacturers here have 
demonstrated their ability to adapt to changing conditions 
over the last 20 to 30 years.  Rahied Doekhi, member of the 
Manufacturers Association, told the media manufacturers are 
currently keeping afloat in a production unfriendly climate 
of uncertainty and excessive regulation, and will continue 
to deal well with the challenges thrown at them by the 
upcoming CSME.  He compares the current situation with the 
situation manufacturers faced when Suriname joined CARICOM. 
The most important restriction his organization seeks is an 
elimination of a series of approval and statistical fees 
levied on all exports.  These fees work against Surinamese 
manufacturers since they make export costs significantly 
higher compared to Trinidad and Guyana. 
 
PARAMARIBO 00000843  002.2 OF 002 
 
 
 
¶5.  Although generally positive on the eventual impact of 
the CSME, Robert Ameerali, chairman of the Chamber of 
Commerce, is more subdued about the impending CSME 
deadline.  Ameerali states that a member nation does not 
prepare for a challenge like the CSME by simply 
synchronizing laws.  According to Ameerali, one of the most 
important issues will be to improve companies' ability to 
compete.  Ameerali reckons that some businesses will be 
unable to survive the increased competition.  Survival will 
not only depend on policy support from the government, but 
on the flexibility of the business community.  Ameerali 
believes it is unclear what will happen after the debut of 
the CSME on January 1, but it is certain that if Suriname 
does not improve its business climate, foreign businesses 
will not come and local businesses will leave. 
 
¶6.  Reshma Radjie, policy coordinator of the Suriname Trade 
and Industry Association (STIA), shares Ameerali's view. 
Radjie states that her organization has called repeatedly 
for the establishment of a Standards Bureau, an improved 
Investment Law, greater flexibility in firing employees, 
and accreditation of Surinamese education.  Only when these 
issues have been dealt with will Suriname be ready for 
CSME.  (Note: The standards law was passed in 2004, but no 
action was taken concerning the establishment of the 
Bureau.  The investment law is currently under review 
before a commission made up of business and public 
officials.  Terms for terminating employees, which are 
quite rigid under Surinamese law, have been raised in 
discussing the Government's minimum wage proposal.  The 
Ministry of Education has been tasked with the 
establishment of an accreditation bureau, but no real 
progress has been made so far.  End note.)  Radjie also 
states that producers have not yet changed their frame of 
mind to produce for the CARICOM region.  In preparation for 
the CSME, the STIA brought its members in contact with 
CARICOM partners.  STIA has also laid the groundwork for 
its members to receive both technological and financial 
assistance from Dutch companies to be better prepared to 
face regional competition.  The sectors eligible to receive 
this support are the manufacturing companies, tourism 
related businesses, and wood and agriculture businesses. 
 
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Comment 
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¶7.  Suriname is not ready for the CSME, notwithstanding the 
Council's December 17 decision.  Based on recent comments 
by CARICOM Secretary General Edwin Carrington, Suriname is 
not alone among CARICOM members in its scrambling to 
reconcile laws.  Suriname shares concern with other CARICOM 
members that the non-discrimination provision in Article 7 
would override restrictions on foreign landholding, which 
is codified in Suriname's Constitution.  Suriname has had 
at least five years to prepare for the CSME and hasn't done 
so, reflecting a distressing tendency to focus on deadlines 
shortly before they occur. 
 
BARNES