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Suriname slides into economic abyss, in shadow of Venezuela

Posted 12:01 a.m. Wednesday

— It is a South American nation in crisis: Businesses are closing, food prices are soaring and hospitals are running out of basic supplies such as paper towels and bandages.

No, this isn't Venezuela but rather nearby Suriname, a multi-ethnic former Dutch colony where the economy is in freefall amid collapsing global commodity prices and the local currency's resulting slide against the U.S. dollar.

Life has become exceedingly difficult in this isolated country of about 540,000 people on South America's northeastern coast, which the World Bank says now has the world's third highest rate of inflation, behind Venezuela and South Sudan.

"I am absolutely worried my country is becoming another Venezuela," said Umar Nazier, who closed his Texas-style grill restaurant in June because the cost of ingredients had doubled. "I had no other choice but to adjust the prices on my menu, but these new prices scared the customers away."

The International Monetary Fund, which authorized a $478 million loan to Suriname in May, expects the economy to contract 2 percent this year. Suriname's Bureau of Statistics says inflation is running at an annualized 64 percent, up from an average 4 percent in 2013-2015.

The main reason for the collapse is falling prices for Suriname's main exports, gold and oil, and last year's closure of the Alcoa aluminum refinery, long a pillar of the economy. President Desi Bouterse likely also contributed by spending heavily before the May 2015 election, exhausting currency reserves.

Bouterse has frozen retail fuel prices and backed away from energy price increases, against the IMF's budget-protecting recommendations. He has also vowed to stabilize the exchange rate of the Surinamese dollar, which has fallen by more than half against the U.S. dollar over the past year.

The president said at a news conference Tuesday that the IMF requirements are "very harsh" and that his government may move to withdraw from the loan agreement and seek support from other sources such as the Islamic Development Bank.

"The IMF is cold and only thinks about the numbers and the deadlines we had agreed to," Bouterse said. "If the agreement with the IMF becomes too difficult to follow, if we risk becoming victims of the agreement ourselves, we will have to look for other options."

As in other import-dependent countries, health care has been hit particularly hard. Doctors at the Academic Hospital Paramaribo, the country's largest, recently posted a YouTube video pleading for help from Surinamese living abroad, saying they lacked such things as sterile tubes. "We have reached the point that people will die an avoidable death," one said.

Hospital officials and doctors declined interview requests but accounts of shortages are widespread. Amanda Palis said she visited four pharmacies seeking a medicine to treat nausea and vomiting for her 2-year-old daughter before giving up and trying something else recommended by a pharmacist.

"I eventually gave my daughter medication that was not prescribed for her," she said. "What else could I do?"

Manodj Hindori, chairman of the National Hospital Council, said all of the country's hospitals "are on the verge of bankruptcy" because of higher prices for supplies combined with reduced government subsidies.

Most people live clustered in and around the capital, Paramaribo. More than 90 percent of the country is covered in rainforest, a rugged and beautiful landscape at the headwaters of the Amazon River.

Bouterse, who has expressed admiration for the late Venezuelan President Hugo Chavez, ran Suriname as a military dictatorship in 1980-1987, then returned as president in a 2010 parliamentary election. In 2000, he was convicted of drug trafficking in the Netherlands in absentia. He has been charged in Suriname with orchestrating the killing of 15 political opponents in 1982, but as the economy crumbled this summer, he invoked a clause of the constitution to suspend the trial, citing national security.

Recent polls say Bouterse's popularity rating is now around 17 percent, about that of President Nicolas Maduro, the socialist leader in struggling Venezuela.

But that's where the comparison to Venezuela ends. Anti-government protests have been relatively small, attracting several thousand people at most. The opposition is weak and divided, with some leading figures saying they don't see the point in marching.

Economy Minister Gillmore Hoefdraad says the economic crisis is temporary and will improve when gold and oil prices recover. The government expects its budget will get a boost when U.S.-based Newmont Mining Corp. starts production at a new mine in Suriname later this year.

The Association of Economists of Suriname says the government must better diversify economically and produce more than just oil and gold. Chairman Winston Ramautarsing suggests developing agriculture, tourism and fishing. "Sadly enough, we seem to be better at spending money than at developing strategies to earn money."

The government insists it will pass.

"The current situation, of course, is difficult. We still need to recover from this crisis," Hoefdraad said in a video statement the government released last month. "But the medium-term prospects look much, much better."

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