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. -1- Multi-Annual Development Plan 2001-2005 Executive summary by National Planning Office 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 productionfriendly 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 -2- Multi-Annual Development Plan 2001-2005 Executive summary by National Planning Office 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; -3- Multi-Annual Development Plan 2001-2005 Executive summary by National Planning Office 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; -4- Multi-Annual Development Plan 2001-2005 Executive summary by National Planning Office 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. -5- Multi-Annual Development Plan 2001-2005 Executive summary by National Planning Office 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. -6- Multi-Annual Development Plan 2001-2005 Executive summary by National Planning Office 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. -7- Multi-Annual Development Plan 2001-2005 Executive summary by National Planning Office Strengthening law enforcement institutions, such as Police, Public Prosecutors’ Office and the Judiciary in the areas of training, policy, logistics, finances, housing and materials. In this connection, the role of the National Army must be stressed, due to the fact that the Military Police are active in this area with regard to the military and at the border posts and the Navy in the Economic Zone. Combating crime Order, peace and personal security are among the basic elements of a well-functioning constitutional state. The security of the community has a prominent position in this. In the framework of a new strategy, serious crime will be combated and feelings of fear and insecurity will be driven back through cooperation between the actors within the police organization, both mutually and with appropriate partners. Short-term policy priorities have been identified, taking into account the realization of security measures, with financial feasibility and quick, visible results for the police organization and the community as leading premises. The alarming forms crime has assumed therefore necessitate the taking special measures in the short term besides the general policy to combat crime. Given the international character of the illegal drug trade, existing treaties and conventions will be implemented. Conditions will be met such as further adjustment of existing national legislation; empowerment of the most vulnerable groups, namely youths; carrying out intensive police patrols on national roads; establishing a DEA office in the country; implementation of the maritime law enforcement treaty between Suriname and the USA; and signing legal assistance treaties with countries bordering Suriname as also with Venezuela and Colombia. Corruption is growing worldwide, and in the framework of good, transparent and corruptionfree policies, combating this phenomenon is one of the economic cornerstones of good governance. The lack of these elements in the government apparatus will lead to incorrect allocation of scarce resources and an unjust distribution of income, with the worst effects hitting the poorest segments of the population. Tracking down and punishing corruption is high on the list of priorities. The listing of cases that warrant further investigation in this regard will be a continuous activity. -8- Multi-Annual Development Plan 2001-2005 Executive summary by National Planning Office Education reform Reform will focus on the improvement of efficiency, increase of social and geographical accessibility and increase of effectiveness. The Department of Education will dispose of unnecessary tasks and give schools more tasks and responsibilities on the basis of the community-based principle. In the framework of decentralization, schools, beginning with those at Junior and Senior Secondary Level (VOJ and VOS), will be liberalized by extending the authority of school leaders in the areas of maintenance and simple material provisions. Firstly, schools will be merged into larger administrative units, after which these units will be turned into independent legal entities. From the gender perspective, increased investments will be made in the development of the people, with special attention for youths of both sexes in disadvantaged situations, as the best guarantee for sustainable economic development and social justice. In this, efforts of youths will be made visible, while obstacles to their development will be eliminated. Based on the results of a gender analysis of the educational system, measures will be taken to increase participation of both boys and girls. Schooling in the afternoons and evenings will be adjusted and increased in such a way that youths, drop-outs from regular education and adults will have more options to realize their study plans. Measures to increase efficiency In order to let education proceed smoothly and to increase its efficiency, supporting Departments such as Curriculum Development, Inspection, Counseling, Examination Bureau, Research and Planning and the Bureau International Relations will be strengthened. In this framework, steps will also be taken to computerize the Ministry’s entire administration. In this way, the Ministry will be better able to turn the available rough data into information to assist in the assessment of policy and to conduct a rational management of personnel and students. Besides that, it will be possible to conduct good analyses of financial and study results. In order to increase accessibility of higher education, boarding houses will be built in several centers in the interior to accommodate students. In cooperation with the special services and with the Ministries of Regional Development, Social Affairs, Health, Internal Affairs, Justice and Police and Defense, among others, the so-called nucleus system will be introduced. Under this -9- Multi-Annual Development Plan 2001-2005 Executive summary by National Planning Office system, centers will be established in designated geographical areas to provide services to surrounding villages. In order to increase internal effectiveness, which means the flow of pupils, improvement of availability and quality of teachers will be one of the measures that will be implemented. In order to make education more child-friendly and result-oriented; all training of teachers will be restructured. The Institute for Advanced Teacher Training (IOL), which directly and indirectly provides the teachers for elementary and secondary schools, will be strengthened institutionally, in order to eliminate the shortage of qualified teachers at secondary level. The transformation of this college to a university-level institute in the mid-term, will be considered. Full- day schooling is preferred in the training of teachers, while it is the intention to spread evening schooling for teachers over sufficient years. Through refresher courses and other means, teachers will continually be provided with the knowledge, skills and attitudes that are necessary to do a good job. Consequently, a mechanism will be established for permanent training and schooling of teachers. All forms of vocational training and education will be re-evaluated and restructured in order to meet the real need for trained and skilled workers for national production and services. The National Institute for Schooling, Labor and Profession (NISAB) will be re-activated. This institute, in which the government, business, and labor participate, must bring lower and secondary vocational education in line with the qualitative and quantitative needs of the labor market. Lower agricultural education will be re-introduced as one of the subjects at lower vocational schools. The advanced elementary education (MULO) will be evaluated on the viability of its goals and on a possible need for a partial change into vocational education or training. Health care reform Health care reform policy in the 2001-2005 planning period entails the implementation of measures aimed at enhancing equality with regard to access to services, as well as reaching higher levels of efficiency and quality in health care. Reform is also directed at increasing the sector's productivity level through management reform, improved cooperation among public and private health care systems and controlling rising costs, especially those of the intramural sector. - 10 - Multi-Annual Development Plan 2001-2005 Executive summary by National Planning Office Fundamental changes in primary health care will be most noticeable in policy, structure, training and the distribution of means within the sector. The main objectives of measures to be taken are the rehabilitation of primary health care and the control of epidemics in order to realize optimum health care for all. Moreover, given the 'health for all' objective, it is necessary to give priority to those living in urban and rural areas and in the interior, who are currently threatened with loosing access to heath care. Children, women and senior citizens make up the main target group here. Public health care will be strongly boosted so as to curb the spread of threatening diseases such as dengue, malaria, Weill's disease and HIV/AIDS. With regard to the realization of health policy objectives, the following policy instruments will be implemented: In order to enhance the Health Ministry's focal role within the health sector and facilitate health institutions to execute their functions, the central administration will be restructured. Transparent structures for intersectoral consultations will be established, while the delegation of responsibilities will also be properly dealt with. Inspection bodies will be reinforced, and the Health Ministry's Medical Inspection unit will be reactivated; Intersectoral efforts to influence public and individual health, including activities in the fields of nutrition and food processing, potable water, sanitation and environmental protection, primary education, housing and employment; Stressing the integration of preventive components in primary health care, including vaccinations, mother and child care, breast feeding and infant nutrition, and family planning; Highlighting women as a target group and in their role as catalysts for development; The use of local structures through the participation of local workers at all levels, and the support of decentralized management, NGO's and religious organizations, which is to lead to optimum participation by the public and the subsequent identification of its own needs; The implementation of cost recovery as an instrument for curbing costs, while preventing the exclusion of the socially disadvantaged. Effects of the Multi- Annual Development Plan The MDP includes quantified macro-economic and social targets for 2005 in which the effects of the implementation of the policy measures of the MDP haven been estimated. For this purpose basic macro-economic and social indicators have been selected and projections made. - 11 - Multi-Annual Development Plan 2001-2005 Executive summary by National Planning Office Macroeconomic prospects (2001 - 2005) Medium-term projections assume that as a consequence of policy measures, large fiscal adjustment is accomplished and that alumina prices and volumes each increase by an annual 2 percent. The price of crude oil is assumed to stay at current levels, and production to grow by 10 percent a year. The levels of grants and direct foreign investments are also assumed to gradually rise, and external borrowing to be avoided, unless covered by Dutch guarantee funds. As a result, interest rates will decline, and net foreign assets (in months) will increase to 3 months of imports in 2002. The table shows an annual economic growth of 3 percent, declining inflation inf 2002 and increasing local investments during this period. Stabilization of the economy will lead to improved prospects, attracting both domestic and foreign investors. Private investments are projected to increase from 13.8% in 2001 to 15.5% in 2005. On the long run, financial sector reform will increase the efficiency of private investments financed by the banking system. Privatization of the least efficient public enterprises will boost the productivity of their assets. Higher levels of more productive investment and financial stability will increase the rate of growth. GDP growth is expected to increase in the 2001-2005 period . The increase will amount to 4% in 2005. Per capita income is also expected to rise from USD 2248 in 2001 to USD 2465 in 2005. Social effects The social objectives of the government's development policy are reflected by the indicators of table 2. Projections are mainly based on previous trends and the level of feasibility over a fiveyear period. The following indicators were selected: Demographic indicators serving as reference for projected quantified social objectives;( Data used for basic demographic indicators such as number, composition and growth of the population are mainly based on conventional projections for 2005 and the assumption that population policies will not drastically change in the next five years). Indicators internationally used for assessing the Human Development Index (HDI): per capita income, educational participation rate, life expectancy and literacy levels; Indicators that are important as they reflect or influence the effects of a number of social and economic factors (e.g. infant mortality), including HIV/AIDS incidence and poverty rate. - 12 - Multi-Annual Development Plan 2001-2005 Table 1 Executive summary by National Planning Office Macroeconomic indicators: projections for 2001-2006 2001 2002 2003 2004 2005 2006 National and per capita income Population size GDPmp at 1980 prices in mlns of SRG GDPmp at 1980 prices in mlns of USD Per capita GDP in mlns of SRG Per capita GDP in mlns of USD 437906 1771.90 984.39 4.05 2248 441847 1816.20 1009.0 4.11 2284 445824 1870.68 1039.27 4.20 2331 449836 1936.16 1075.64 4.30 2391 453885 2013.6 1118.67 4.44 2465 457970 2114.28 1174.60 4.62 2565 National income and prices (annual percentage change) GDPmp at 1980 prices (Incl. informal sector) Inflation (annual average) 1.9 50.2 2.5 11.4 3.0 7.0 3.5 5.5 4.0 4.9 5.0 4.9 National Accounts (in percent of GDP, not including informal sector) Gross domestic investment Private sector Public sector Gross national saving 17.8 13.8 4.0 -5.0 19.1 14.2 4.9 -2.4 20.5 14.8 5.8 -1.2 23.5 15.1 8.4 1.4 26 15.5 10.5 4.8 27.1 16.0 11.1 7.1 Central government (in percent of GDP including informal sector) Revenue and grants Current revenue Grants Expenditure and net lending Current expenditure Capital expenditure Overall balance Financing Domestic External 31.6 30.6 1.1 34.3 31.4 2.9 -2.7 2.7 -4.2 -10.0 32.7 31.2 1.5 34.5 31.0 3.5 -1.9 1.9 -4.1 -1.7 33.6 31.8 1.8 34.7 30.5 4.1 -1.1 1.1 0.5 0.5 34.1 32.1 2.0 35.6 29.6 6.0 -1.5 1.5 1.0 0.5 34.2 32.2 2.0 36.2 28.6 7.5 -2.0 2.0 1.5 0.5 19.8 31.9 3.0 36.3 28.3 8.0 -1.4 1.4 0.8 0.5 Money and credit (annual percentage change) Money and quasi-money (M2) 40.5 20.7 11.3 10.9 10.7 10.4 -112.7 -102.0 -106.5 -113.4 -114.7 -115.7 -16.4 -15.3 -15.5 -15.8 -15.1 -14.2 73 79.7 81.4 82.2 82.9 83.0 -64.6 -67.8 -69.7 -71 -71.5 -71.6 299.5 -60.3 339 -51 342.6 -4 346.4 -4 350.5 -6 8.9 -8.0 1.9 3.3 3.2 3.1 3.0 3.0 Balance of Payments Current account (in mlns USD) Current account (in percentage of GDP, including informal sector) Merchandise exports, f.o.b. (in percentage of GDP) Merchandise imports, f.o.b. (in percentage of GDP) Foreign debt in mlns USD Change in reserves (in mlns USD) Net international reserves (in months of imports) Sources: IMF, National Planning Office - 13 - Multi-Annual Development Plan 2001-2005 Table 2 Population Population Population growth (%/year) Population structure (%) 0-14 15-60 60 and older Urban population (% of total population) Health indicators Average life expectancy Estimated birth-rate per 1,000 Estimated death-rate per 1,000 Infant mortality (per 1,000 new borns) Maternal mortality (per 1,000 new borns) HIV/AIDS (total number of infected) Educational indicators Literacy (%) Participation ratio GLO (primary) VOJ (lower secondary) VOS (upper secondary) Tertiary Repetition rate (%) Dropout rate (%) Social indicators Unemployment (%) Poverty (%) Criminal offences Teenage motherhood (% births per year) Labor participation rate (%) Executive summary Social indicators of development 1975-1980 1995-1999 2005 (projections) 361637 -1.2 (1980) 41 53 6 65 431272 1.2 (1995) 33 60 7 70 453885 1.2 65 63(m), 67(f) 29.2 7.1 32 71 68(m), 73(f) 22.8 6.6 15 71 -22.8 6.6 13 8 (1980) 0 72 -50% (1999) 1253 -25% (ages 15-30) 93 95(m), 91.6 (f) 95 76(m), 82(f) 85 20 26 (1980) 25 (GLO) 7 (GLO) 17(VOJ) 20 5(GLO) 15(VOJ) 16 (1980) 11 7(m), 17(f) 63 23750 17.2 8 90.8 (1980) 6761 17.2 50 (1978) 16.7% 56 66(m), 37(f) (2000, 4th quarter) 520172 (2000 4th qtr) 12.6% 42.9% 51.8% Average family income (SRG) Income distribution: Poorest 40% earn of total income richest 20% earn of total income by National Planning Office 30 61 9 70 -50% -25% 14 60 650000 20% 40% Sources: National Planning Office, General Bureau of Statistics, Ministry of Education and Community Development, Ministry of Justice and Police. - 14 - Multi-Annual Development Plan 2001-2005 Executive summary - 15 - by National Planning Office