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Suriname Hopes to Close Debt Deal with China by Mid-December

Minister Ramdien Leads Efforts for Suriname’s Financial Recovery, Aims for Sustainable Debt Solutions

Suriname Hopes to Close Debt Deal with China by Mid-December

Suriname is actively working towards a debt restructuring deal with China, aiming to finalize the agreement by mid-December. Minister Albert Ramdien of Foreign Affairs, International Business, and International Cooperation disclosed this information to Reuters recently, marking a crucial step in Suriname’s efforts to reorganize its international debts.

The primary objective is to prevent a significant spike in future interest payments, especially after Suriname, following Zambia, found itself unable to meet its national debt obligations in the aftermath of the 2020 Covid pandemic.

Negotiations between Suriname and China have been underway to extend the existing agreement until the end of the following year. Ramdien, speaking from Beijing, stressed the importance of aligning these terms with agreements made with other creditors. He noted that the Chinese side has reached its technical limit based on the rules and procedures of the EXIM bank, prompting his efforts to persuade them to elevate the discussions to a higher level.

While the specifics of the decision-making process on the Chinese side remain undisclosed, Suriname currently owes Chinese creditors approximately $540 million, with nearly $130 million in arrears. Notably, the loan terms do not allow for concessions, preventing China from seizing Suriname’s assets despite the country’s struggles with repayments.

Two critical issues remain unresolved: the loan tenure, requiring additional time to fit within the International Monetary Fund’s debt sustainability framework, and the pursuit of a reduction in the interest rate. Suriname urgently seeks debt relief from various creditors, including the IMF, the Paris Club, India, and China. The nation’s challenges in repayment stem from declining global commodity prices and depleted reserves, caused by escalating costs of imported goods during the pandemic.

Suriname aims for a deal with China similar to the one negotiated with India earlier this year. In June, Suriname agreed to repay the approximately $39 million owed to India over a period of 15.5 to 20.5 years, depending on the loan type, with a maximum fixed annual interest rate of 1.20%.

A successful agreement with China is crucial for Suriname’s international creditworthiness, enabling the country to attract fresh foreign investments for its oil and gas industries. Ramdien expressed optimism about favorable opportunities for Chinese companies in these sectors once the economy receives support from policymakers.

Ramdien is hopeful that the mutual understanding reached in discussions will translate into acceptance in the coming days, whether through interest rate reductions or revised tenures. He anticipates further discussions with EXIM officials, with a visit to Suriname expected to finalize the deal before the year’s end. Additionally, Suriname recently announced an agreement with private creditors, exchanging $675 million worth of dollar bonds for new bonds, with over 92% of bondholders participating in the exchange.

Source: https://www.starnieuws.com/index.php/welcome/index/nieuwsitem/78372

Date: 9 november 2023

Categories:  Economische Crisis, Economische Nieuws 

Tags:  China, Economic Challenges, India 

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