(De Ware Tijd) PARAMARIBO – The government is planning to establish a Sovereign Wealth Fund (SWF). “The bank hails this deliberate step by the government to set up a SWF”. Central Bank of Suriname (CBvS) Governor Gilmore Hoefdraad said this in his Dies address, which he delivered yesterday evening in the Centrum Reformed Church to mark the start of the University’s academic year. A SWF is an investment fund managed by the national government. The funds for the SWF are often from revenues of the mining of minerals (often oil), or tax revenues from the mining sector, or accumulated budget surpluses. These funds are intended to be invested for the long term. Hoefdraad mentioned the example of Trinidad, which started an interim revenue stabilization fund in 2000. The fund was formally established in 2007 and contained US$ 3.83 billion as of June 30. The bank Governor pointed out that Suriname currently has US$763 million in monetary reserves, but he added that “we are not there yet, not by a long shot”. The instability on global financial markets has a big effect on small open economies such as Suriname’s. Hoefdraad also warned that a small mistake could lead from boom to bust. He said that Suriname is profiting from the high prices for raw materials. These additional revenues should be used wisely, however.
