1. Roger Hosein Trade and Economic Development Unit 30th August 2017
Some suggestions to help improve trade outcomes in Suriname with reference to 2 regional clusters
Roger Hosein
Trade and Economic Development Unit
30th August 2017

2. Abraham Lincoln, “You cannot escape the responsibility of tomorrow by evading it today.
Can Suriname sow its extractive industry rents to trigger long term growth?
Can the economic rents generated from gold and oil be used to motivate change in the structure of production in Suriname?

3. Albert Einstein, “The world as we have created it is a process of our thinking. It cannot be changed without changing our thinking.”
Is the CARICOM and Suriname in particular capable of having a different production structure?

4. Table 1: Suriname: Selected Economic Indicators
2013
2014
2015
2016
2017
2018
Proj.
Real GDP Growth
2.9
0.4
-2.7 -9
-0.7
0.9
Consumer Prices (period average)
1.9
3.4
6.9
60.3
38.6
23.3
central govt debt % of GDP
31.6 29
45.7
67.8
Domestic % of GDP
16.7
13.1
24.1
16.5
External % of GDP
14.9 16
21.6
51.2
Terms of Trade (percent change)
-10.1 -4
8.8
2.7
-0.3
Gross International reserves (US$ millions)
779
626
330
447
515
417
In months of Imports
2.8
2.1
2.6
2.3
Current Account Balance
-3.8
-7.9
-16.6
-3.6
2.5
1.1
Real effective exchange rate (percent change. += appreciation)
1.4
-14.4
1.2
8.5

5. Table 2: Natural Resource rents
Total natural resources rents (% of GDP)
Consumer price index (2010 = 100) Suriname
Consumer price index (2010 = 100) US
1990
24.1
0.1
59.9
1995
7.9
7.2
69.9
2000
13.1
29.0
79.0
2001
13.7
40.2
81.2
2002
8.6
46.4
82.5
2003
7.6
57.1
84.4
2004
9.3
62.8
86.6
2005
12.3
69.0
89.6
2006
12.4
76.7
92.4
2007
13.2
81.7
95.1
2008
14.8
93.7
98.7
2009
10.9
93.5
98.4
2010
24.3
100.0
2011
35.6
117.7
103.2
2012
34.4
123.6
105.3
2013
28.1
126.0
106.8
2014
23.6
130.2
108.6
2015
17.7
139.2
108.7
2016 ..
216.5
110.1

6. Table 3: Frequency Distribution of Suriname’s RCA index
RCA Range
Average 97-99
Average 12-14
0 < RCA ≤ 1
210
216
1 < RCA ≤ 2 7 4
2 < RCA ≤ 4 2
4 < RCA 8 3
Total
225
Mean RCA
4.23
0.32
Maximum
503.51
24.43
Standard Deviation
35.88
2.07

7. Table 4: Sectoral Share of RCA > 1 ] for Suriname’s RCA index
Product Group
# of sectors with RCA> 1 (share of total products with RCA>1)
Suriname
97-99
12-14
Agriculture
9 (60.0)
6 (66.7)
Mining
2 (13.3)
0 (0.0)
Energy
1 (11.1)
Resourced-based Manufactures
Semi-Manufactures/Capital Goods
4 (26.7)
2 (22.2)

8. Table 5: Transition Probability matrices for Suriname
(97-99 to 12-14)
Suriname with world To a b c d
0.967
0.019
0.009
0.005
From
0.857
0.000
0.143
0.875
0.125

9. Table 6: Harmonic Mass indices for Suriname 1997-99 to 2012-14
Data points
HMI Index
Critical Values
Conclusion 1% 5%
10%
Suriname
225
0.0894
0.1042
0.1179
No significant change

10. Improving overall business climate
Table 7: Doing Business Index: Starting a Business
Region
Procedures (number)
Time (number of days)
Cost (% of income per capita)
North America 4
3.6
0.8
Europe & Central Asia
4.9
10.2
4.7
European Union
5.3
10.6
3.8
East Asia
7.6
26.8
13.1
Sub-Saharan Africa
7.9
27.4
54.1
South Asia
8.2
15.5
13.4
Middle East & North Africa
8.3
20.6
26.3
Latin America
9.1
37.9
39.4
Caribbean
6.9
21.4 29
Suriname 13 84
100.7
Source: Computed from EODB report (2016)

11. Table 8: World Bank's 2017 Doing Business Report
Indicator
2017 Rank/190
Ease of Doing Business
158
Starting a business
185
Dealing with construction process
112
Getting electricity 84
Registering property
176
Getting credit
175
Protecting Investors
165
Paying Taxes
103
Trading Across Borders 78
Enforcing Contracts
187
Resolving Insolvency
129
Source: World Bank (2017)

12. Table 9: Global Competitiveness Report 2014-2015
Rank/144
Score 1-7 (best)
Global Competitiveness Index
110
3.7
Sub-Index A: Basic Requirements 86
4.4
1st Pillar: Institution
104
3.4
2nd Pillar: Infrastructure
3.6
3rd Pillar: Macroeconomic environment 59
4.8
4th Pillar: Health and Primary Education 73
5.7
Sub-Index B: Efficiency enhancers
121
5th Pillar: Higher Education and training
105
3.5
6th Pillar: Goods market efficiency
129
7th Pillar: Labour Market efficiency
117
8th Pillar: Financial market development
118
9th Pillar: Technological readiness 72
10th Pillar: Market size
137
2.1
Sub-Index C: Innovation and sophistication factors
123 3
11th Pillar: Business Sophistication
122
12th Pillar: Innovation
127
2.6
Source: World Economic Forum 2016

15. Table 9: Depth of Regional Clusters
Cluster Characteristics
Gold jewellery
Guyana
Peppersauce
Trinidad
Age of Cluster
Location specific comparative advantage/s
Georgetown
County wide
Vertical/horizontal integration amongst firms No
Inner Firm level integration
Yes
Concentration of firms in a single geographic location
Lead Firm/s presence in local market
Localized firm rivalry for efficiency and innovation
Weak
Strong
Localized firm collaboration and networking
Very weak
Sophisticated local demand
Very strong
Sophisticated foreign demand
Medium
Local suppliers
Foreign suppliers
Very Strong
Labour market pooling
Financing
Cluster specific Training (local)
Public Institutional support
Cluster specific Government support
Research and Development
Coordinated Cluster Association
Funding of Cluster Association Na
Scope
Country
Regional
Related Clusters existence and linkages
Yes-weak
Yes-strong

16. Absence of trust and visionary leadership in all the clusters
Gold jewellery in Guyana and Pepper sauce in Trinidad and Tobago all exhibit many characteristics of economic clusters.
Understanding of Clusters in the region superficial and in some cases misunderstood
Absence of trust and visionary leadership in all the clusters
Absence of strategic direction and competitiveness strategies for all clusters
Inadequate availability of cluster information, no dedicated data collection agency
Weak private Sector institutions
There are no formal Cluster Initiative in any of the countries.
In general cluster development in the Caribbean is primarily supply rather than demand driven. Absence of market driven analysis decision making .
There are cluster weak segments requiring targeted government support to expand.
Summary of Finding

17. Recommendations Government
Support existing clusters except where a national strategic objectives dictate the seeding of new clusters.
Support should move from the general or firm level to the cluster level for greater efficiency.
Provide funding for early stage Cluster Initiative but ensure counterpart funding is provided in a model that over time reverses the funding formula
Support Cluster Initiatives, as a rule of thumb be private sector lead.
target incentives and support to strengthening weak cluster segments.
Fund training of technocrats and cluster stakeholders in clustering as a tool for industry growth
Private Sector
Develop leadership competencies to build trust towards collaboration
Initiate cluster Initiatives
Invest collectively in cluster development initiatives
Foster linkages with Institutions to encourage them to respond to the needs of the cluster
Educate government on needs of cluster and lobby for appropriate support
Institutions
Applied driven: respond to the needs for the cluster for skills, and productivity and innovation enhancing support

18. Questions and Comments
Thank you.
Questions and Comments