Date first published: 30/06/2020
Key sectors: all
Key risks: political stability; policy continuity; sovereign default
President Desire Delano ‘Desi’ Bouterse – also Suriname’s former dictator, convicted killer and drug trafficker – has conceded defeat. On 22 June the ruling National Democratic Party (NDP) congratulated the opposition parties a day after electoral authorities officialised the final results of the 25 May general elections – which had been already confirmed on 16 June. Despite the unprecedented delays, which triggered fears of a potentially protracted electoral crisis like the one still unfolding in neighbouring Guyana, the NPD’s statement and the swearing in of the new National Assembly on 29 June paved the way for a reset of the Surinamese political landscape. The latter will face heightened instability risks amid a deep economic crisis that is expected to lead to a debt restructuring process compounded by the impact of the COVID-19 pandemic. The incoming president, to be elected by 13 August, will also have a crucial role in fostering, or not, the country’s path towards the development of offshore oil production.
The coming days will be crucial to ensure a relatively smooth transition of power. Chandrikapersad ‘Chan’ Santokhi, the leader of the opposition Progressive Reform Party (VHP), appears on track to be elected the country’s next president after having formed a coalition with three other parties, the ABOP, the NPS and the PL. The coalition alone, however, will not be enough. 34 out of the NA’s 51 seats are needed to elect a new president. The coalition is one seat short. Should the two-thirds majority not be achieved, the president would then be elected by the United People’s Assembly (UPA) formed of 934 national and local representatives. The coalition has reportedly asked the NPD to support a swift resolution of the electoral cycle, given that the NPD would also struggle to secure enough support from the UPA.
Bouterse, convicted in absentia on drugs trafficking charges in the Netherlands in 1999 and then on murder charges by a local military court in 2019 over the killing of 15 opposition figures in1982, seems closer than ever to losing his immunity, one that he has so far desisted to hand over. He has appealed the latest sentence, and the hearing has been postponed due to the COVID-19 pandemic. Whether he might try to get a pardon in exchange for support amid tumultuous internal and external conditions remains to be seen, and should be considered a possibility.
The looming risks of political instability associated with the coalition government will be compounded by a longstanding economic and financial crisis that will only be exacerbated by the impact of COVID-19 and plummeting oil prices. On 30 June the government is due to make a US$15.6m amortisation payment and a US$8m interest payment on a December 2023 dollar-denominated bond issued in end-2019. The three main rating agencies have already downgraded the sovereign credit rating to near default levels in 2020: S&P, Fitch and Moody’s currently rate it at CCC+, CCC and B3, respectively, all with negative outlooks. Santokhi has vowed to restructure the country’s debt, and this will likely be the path to be followed.
Bouterse’s departure from the presidency will also potentially reset Suriname’s regional allegiances, which have long been traditionally close to Venezuela and Cuba. A shift will be needed if the country’s potential debt renegotiation process and the development of recently discovered offshore riches are to be successful in the long term.