Verkavelingsprojecten

With arable land of some 1,5 million hectares, of which only about 52,367 hectares are being utilized, and large fresh water resources, the agricultural sector in Suriname has great potential. With an export value of about USD 20.9 million in 2005 the agriculture sector was the third largest sector in terms of export revenues. Employment in the sectors agriculture, fishery, cattle breeding and forestry accounts for just over 11% of Suriname’s total employment. The contribution to GDP of the agriculture and fishery sector in 2004 was 9.6%. The main agricultural products are rice and bananas. Production and exports of rice and bananas have been closely related to the opportunities created and maintained under unilateral preferential access to the EU market. In table 4.1.1the utilization of the production area is provided.

Table 4.0 Utilization of agricultural land

Crop	2000	2001	2002	2003	2004	2005
Rice	41.995	50.780	40.050	52.425	49.500	45,563
Vegetables	967	1.092	1.034	996	n.a.	947
Oranges	1.650	1.289	1.389	1.245	n.a.	1,355
Bananas*	2.182	2.172	2.178	80	1.449	1,657
Coconuts	1.082	1.078	1.036	962	n.a.	827
Other crops	4.330	2.702	2.162	2.169	n.a.	2,018

Source: Ministry of Agriculture, Fishery and Animal Husbandry

* In 2002 the only banana-company of Suriname, the state-owned Surland NV, closed its doors. The company is now being restructured and has re-started its production at the beginning of 2004.

CROP	2001	2002	2003	2004	2005
ANUAL CROPS
Paddy (14% humidity)	191,370	157,105	193,685	174,490	163,955
Roots	6,147	4,959	4,982	5,552	4,846
Vegetables	17,073	17,138	16,414	18,536	15,123
SEMI-PERENNIAL CROPS
watermelon	3,480	3,480	2,869	3,287	2,785
Bananas	8,071	8,071	1,278	35,298	57,830
Plantains	11,449	11,449	11,843	11,684	8,815
Other Semi perennial crops	765	796	868	676	688
PERENNIAL CROPS
Coconuts	8,056	10,033	10,273	6,137	5,144
Oranges	10,445	1,133	13,037	12,400	13,039
Grapefruit	1,062	1,026	1,052	974	927
Other Citrus Fruits	2,192	2,537	3,014	3,246	2,811
Other Perennial Crops	3,138	3,404	3,481	3,276	3,083

Source: General Bureau of Statistics

Note: 1,000 kg coconuts = 1,000 pcs., 1,000 kg Oranges = 4,000 pcs., 1,000 kg Grapefruit = 2,000 pcs., 1,000 kg. Other Citrus Fruits = 6,350 pcs.

Rice

The rice sector is the most important agriculture sub-sector with a production area of 45,563 hectares and a production of 163,955 tons in 2005, down from 174,490 tons in 2004. The export value was about USD 8.9 million, down from USD 11.9 million in 2004. Suriname enjoys preferential treatment in the EU arising from the Joint Declaration on Rice, which was signed as part of the Cotonou Agreement for ACP rice exporters. Suriname and Guyana, which are the only exporters of rice in the ACP, share an ACP quota of 125,000 tons of husked rice and 20,000 tons of broken rice in the EU market. Suriname may also have access to an additional 35,000 ton quota via the Overseas Countries and Territories (OTC) route. Prior to 1997, Suriname’s access to the EU market via the OTC route was not limited by quota. More recently, decisions taken by the EU under the Mid-Term Review of their Common Agricultural Policy are likely to further erode Suriname’s preferential access. The eroding of the preferential treatment to the EU-market forms a huge challenge for the rice sector. The sector is being restructured with support of the European Union and is seeking new markets in the region, mainly the Caricom and Brazil. The support of the EU consists of a grant of Euro 9,5 million over five years. The grant is being channeled through the rice farmers’ association to support primarily small farmers. The refocus on other markets was successful; in 2005 about 50%of the rice exports of Suriname were to Brazil and Caribbean islands. In 2005 Brazil granted preferential access to rice from Suriname. Up to 10,000 ton of rice from Suriname can be imported duty free to Brazil. The rice industry can also export duty and quota free to the Caribbean market under CSME rules.

Bananas

Suriname is well suited for banana growing: - High sunlight with a nearly constant temperature ensuring a high productivity; - The country has never been subjected to hurricane or floods; - Water is available in quantity and quality, minimizing the irrigation cost; - It has a flat topography, allowing mechanization of harvest (cable way); - The soils have a high cation exchange capacity and high content of organic matter; - The threat of insecticides is low, only yellow sigatoka, much less virulent than the last one and few receptivity of the soil to nematodes allowing low demand in chemical inputs. Since its foundation in 1971, the state-owned company Surland has dominated the banana sector in Suriname. During the 1990s annual banana exports had averaged about 31,000 tons or USD. 24,5 million. As a consequence of a price-reduction and internal financial-, production-, management- and labor problems, the company was forced to close its doors in May 2002. Because of the advantages Suriname has for the growing of bananas the government decided to preservation and long-term development of the banana sector. The purpose was to build a sustainable and competitive banana industry in a liberalized world market. The EU is supporting this effort with Euro 21 million in grants from the Special Framework of Assistance (SFA) Fund, including technical assistance. The Inter-American Development Bank is providing a USD 7.3 million loan to recapitalize the industry, with a view to preparing it for privatization. The farm activities were restructured, the area was cleared and replanting was started in June 2003, using higher-quality varieties. The company activities take place in a new legal entity called ‘Foundation for Preservation of the Banana sector in Suriname’, the SBBS. The restructuring of the banana sector will come about with technical-and financial support of the European Union. The purpose is to re-plant 2,365 ha of area and to realize a production of 41 ton per hectares within 3 years. At the end 2005, the planted area amounted to 1,657 hectares. The first exports took place on March 2nd, 2004. In the period March-December 2004 the export amounted to 20,855 tons. In 2005 the export was 38,384 tons with an export value of USD. 10.5 million. Suriname used to sell its banana production on a FOB basis. As a result Suriname did not get any EU banana import preferences, which went to the importing company. Therefore the SBBS is obliged to buy licenses to be able to export to the EU. In 2004 the SBBS spent Euro 2,4 million to buy licenses and even more in 2005. This inconsistency between the trade and aid policy of the EU is the main difficulty for the banana sector of Suriname. Due to its international competitiveness the banana industry of Suriname will likely be able to profit from the replacement of the EU’s tariff-quota scheme by a tariff-only system in 2006. The restructuring of the banana sector also contains the privatization of the state-owned banana company. Several international fruit companies have expressed their interest in the privatization of SBBS and visited Suriname; the bidding is expected to take place in the second half of 2006.

Vegetables

Vegetable crops are mainly cultivated by some 3,000 – 4,000 full-time and part-time small-scale farmers.
Some characteristics of the vegetable sub-sector are:
- The individual plantings are small
- The production technology is predominantly labor intensive
- A high use of traditional fertilizers and pesticides
- A high risk of harvest failure due to seasonal effects and the lack of appropriate irrigation and drainage facilities in times of drought or heavy rainfall.
(Source: Proplan Consultancy)

In table 4.2 the cultivated area and production and export figures are provided.

Table 4.2 Production and Planted area data for vegetables 1999 – 2005

Year	Planted Area (ha)	Production (mt)	Export (mt)	Export (us $1000)
2001	1.092	17.073	2,725	673,000
2002	1.034	17.138	2,448	737,000
2003	996	16.414	2,676	904,000
2004	1,111	18,536	2,395	900,000
2005	947	15,123	2,475	1,103,000

Source: Ministry of Agriculture, Fishery and Animal Husbandry

The main export market is the Netherlands

Floriculture

Although informal floriculture is widespread, the production for export is limited to about ten farms. The production area is about 50 ha. The export value in 2005 was USD 204,000.-. Due to the EU-ACP agreements, Suriname has preferential access to the European market. The domestic market is estimated at USD 4.6 million and is primarily being supplied by informal producers.

Other Crops

Other important crops are oranges and coconuts. In 2005 the production of oranges was about 13,039 tons and that of coconuts was about 5,144 tons. These crops are produced for domestic use.

Fisheries

Fishery is geographically divided into offshore (industrial), coastal, brackish water and fresh water fisheries. The amounts of fish that can be caught in a sustainable way are estimated to be above 200,000 tons per year. There are several fish-processing factories, most of them certified by the EU and therefore able to export to the EU market.

Fish exports amounted to 11,904 tons in 2005, up from 9,563 tons in 2004. The export value was USD. 9.3 million up from USD 7.6 million in 2004. The main export markets are Europe, the Caribbean islands and the United States of America. In table 3.3 the export quantities and the export values for the period 2001-2005 are provided.

Table 4.3 Fishing figures and export values 2000-2005

Year	Fish catching	Exportvalue (us$-dollars)
2000	7.856	4.768.000
2001	7.719	5.137.000
2002	10.302	8.289.000
2003	9.584	8.367.000
2004	10.333	7.638.618
2005	11.904	9.286.000

Source: Ministry of Agriculture, Fishery and Animal Husbandry

* The amounts of fish that can be caught in a sustainable way are estimated to be above 200,000 tons per year. There are several fish-processing factories, most of them certified by the EU and therefore able to export to the EU market.

Marine Shrimp

The shrimp fishery is mainly being done by foreign shrimp catching companies, while the processing and export is done by two local companies, SAIL and Sujafi. The main species are the pink-spotted, the pink and the brown shrimp. Besides these species local shrimp-catching companies are also catching the sea bob shrimp. The processing and export of the seabob shrimp is also being done by SAIL and Sujafi.. In table 3.4 the export quantities and values are provided. The main export markets are Japan and Europe.

Table 4.4 Export quantities and values 2000-2005

Indicator	2000	2001	2002	2003	2004	2005
exports	5.323	6.498	7.577	7.179	8.703	5.421
Export value (US$ mln)	29,7	34,5	31,6	28,5	28.1	25.1

Source: Ministry of Agriculture, Fishery and Animal Husbandry

Aqua Culture

Suriname is well suited for aquaculture:

- Suriname is near the equator, therefore the country has highly suitable climate conditions;

- The country has never been subjected to any natural disaster, such as hurricanes or floods;

- The cost of land is low;

- The water is of high quality;

- The pollution threat by way of insecticides, herbicides and chemicals is low.

Suriname is also well suited from a marketing point of view; the country is near the large American market and its products have a preferential trading status in the Caribbean and Europe.

The aquaculture sub-sector is relatively new; two companies are in the exploiting phase. The species they carry are penaeus and penaeus vannamei. One company is still in the explora

The cattle breeding sector, which produces mainly for domestic use, comprises the breeding of cows, pigs and poultry. In table 4.5 the number of livestock by type is provided. In table 4.6 the production figures are provided.

 

 

 

 

 

 

 

Table 4.5 Number of livestock (2000 - 2005)

Type	2001	2002	2003	2004	2005
Pigs	23.130	24.825	22.605	20.505	28,640
Poultry	3.947.000	4.072.000	4.045.000	4.420.000	4,645,000
Milch Cows	51.030	n.a.	n.a.	n.a.	12,390
Young Cattle	57.637	n.a.	n.a.	n.a.
Bulls	29.468	n.a.	n.a.	n.a.

Source: Ministry of Agriculture, Fishery and Animal Husbandry

* There are no recent figures available.

Table 4.6 Cattle breeding production (tons) 2000-2002

Type	2000	2001	2002	2003
Cattle* (tons)	1.952	1.890	1.606	1.607
Pigs (tons)	1.165	1.282	1.437	1.392
Poultry (tons)	4.040	4.920	5.538	5.500

Source: Ministry of Agriculture, Fishery and Animal Husbandry

Due to the large amount of available land, its location near the islands of the Caribbean (many tourists) and the fact that Suriname has the most modern abattoir of the Caribbean, the cattle-breeding sector in Suriname has great potential. The export of meat, however, is constrained by the lack of a certification system that meets international requirements. The government is currently developing a certification system.

With over 90 % of its territory covered with forest, Suriname is one of the woodiest countries in the world. Suriname’s tropical rainforest, which is part of the Amazon forest, has an enormous variety of biological species. Despite the potential value of this resource, the forestry sector is relatively small, composing approximately 3.5% of GDP in 2002 and providing employment to some 4,500 people. The export value in 2004 was about USD 2.2 million, down from USD. 2.4 million in 2003. The export value in 2002 was about USD 5.4 million. According to the Multi-annual Development Plan 2001-2005 (MOP 2001-2005), the forestry sector has the potential to become one of the most important sectors for Suriname’s economic development. The objective of the Government’s policy, as stated in the MOP 2001-2005, is to achieve a sustainable rational utilization of Suriname’s forests so as to contribute significantly to the country’s social-economic development, while at the same time preserving the tropical rain forest. In table 4.7 some key indicators are provided.

Table 4.7 key indicators of the forestry sector

INDICATOR
Surface Suriname	16,400,000 ha
Surface Forest	14,800,000 ha
Surface Forest available for wood supply	4,600,000 ha
Volume of Standing Timber	46,000,000 m3
Protected Forest	2,085,000 ha
Grow forest	0.2 m3 per half-year
Degree of deforestary	< 0.1% annually

Source: Ministry of Natural Resources, General Bureau of Statistics, Conservation International

Through the years, the logging has primarily taken place principally in the so-called Forest Belt. The Forest Belt is a 25-75 km broad, loosely defined area that stretches from the southwest to northeast between the border rivers and lies 50-100 km from the coastline. In this area the combination of transport infrastructure and timber resources permitted exploitation. The net area size of the Forest Belt is estimated to be around 1,500,000 ha, equivalent of approximately 10% of the forest of Suriname. Under rational forest management the Forest Belt is able to produce 300,000 m3 /year on a sustainable basis. The Forest Belt can be expanded to the south by upgrading of the infrastructure. It is expected that the Forest sector will benefit from the plans of Suralco Ltd. and Billiton BHP Ltd. to expand mining in the west and east of Suriname. The building of necessary roads will expand the Forest Belt.

Timber Concessions

In accordance with the Constitution of the Republic of Suriname all forests, except for those on privately owned land, belong to the state. Forests on private land do not cover more than a total area of 50,000 ha. The Ministry of Natural Resources is responsible for the allocation of forest concessions. The Minister of Natural Resources has the authority to allocate concessions with a maximum surface of 150,000 hectares. For concessions with a surface larger than 150,000 hectares, approval from Parliament is required. According to the Forest Act 1992, a concession can be granted after an inventory of the timber in the concession area. A management plan according to which the exploitation will be done is also required.

By Instellingenbesluit 1947, the Forest Service (LBB) –since the Forest Management Act of 1992 called Dienst Bosbeheer- was put in charge of the management of all forests in the broadest sense of the word, including nature conservation, with the specific task of: ‘sustainable management of the forest to the benefit of the community’. Due to several causes, among other things the interior war, LBB has gradually lost much authority and capacity in vital areas. With the arrival of Asian timber companies in 1994, the need was felt to strengthen the execution of government tasks again, especially in the field of management and supervision of the logging. For this purpose the Foundation for Forest Management and Control (SBB) was established in 1998. In the current phase SBB is in charge of the management of the production forests, especially with regard to facilitating trade and industry and supervising and controlling the logging. While the responsibilities are formally still with LBB, it is the intention that these are transformed to SBB. The utilization of the managed forest used for timber production is provided in table 3.8. In 2004 concessions were granted for a total area of 50,483 ha.

Table 4.8 Utilization managed forest (2004)

Timber production area	Number	Surface (hectares)
Timber cutting area to tribal communities	110	461.429
Timber concessions	129	1.834.099
Incidental cutting licenses	7	15.170
Other types	12	40.928
TOTAL	258	2.351.626

Source: Institute for Forest Management and Control

Timber production

The wood processing industry with more than 70 sawmills, including smaller mobile and portable units, has an installed capacity of over 600,000 m3/year. This is more than three times the current national production. Most sawmills are obsolete, inefficient and work with limited means. However, with limited updating of equipment several of the companies will be able to produce export quality sawn wood. The registered timber production by assortment is provided in table 4.9. It is estimated that the unregistered log production is about 20-25% of the official production. The timber export in 2004 was USD. 2.3 million. The main export markets were the Netherlands and China. In table 4.10 the timber exports by assortment are provided.

Table 4.9 Timber production in m3 2000-2004

Year	Logs	Sawn wood	Plywood
2000	176.516	54.000	4.000
2001	162.613	56.000	2.600
2002	154.158	47.000	1.760
2003	157.915	56.000	1.500
2004*	155.193	n.a.	n.a.

Source: Institute for Forest Management and Control

Table 4.10 Timber exports by assortment in m3 2000-2004

Year	Logs	Square chopped pillars	Sawn wood	Plywood
2000	9.200	900	7.400	680
2001	5.600	2.400	8.200	290
2002	25.900	n.a.	8.400	132
2003	1.130	2.100	7.700	111
2004*	4.820	1.382	5.054	n.a.

Source: Institute for Forest Management and Control

Table 4.11 Exportvalue of timber 2000-2004

Year	Export Value (USD)
2000	3.237.000
2001	3.439.000
2002	5.326.700
2003	2.418.700
2004	2.214.422

Source: Institute for Forest Management and Control

Non-Timber Forest Products

Non-timber forest products, such as vegetable products, meat products and freshwater fish products are of vital importance to the nutrition and health of communities living in the interior. Some of these products are traded commercially, such as game, fish, live animals, ornamental plants, fruits, herbs and medicinal plants and lianas.

The non-timber forest activities with the highest potential are bio prospecting and eco-tourism; eco-tourism is being developed as alternative commercial utilization of the forest by several companies.

The mining sector accounted for 9.9% of GDP in 2004; in terms of export and fiscal revenues it is the leading sector of Suriname. Traditionally bauxite mining and its processing into alumina and aluminium dominated mining activities. In recent years petroleum and gold mining have expanded rapidly.

The principal laws governing the exploration and exploitation of mineral resources in Suriname are the Mining Decree of 1986, which is general in scope, and laws that apply to particular sectors, notably the Bauxite Ordinance 1919, and the Petroleum Law 1990. The Mining Decree regulates the procedures for granting various types of mining rights, their scope and duration, and the obligations of mineral rights holders. Mining rights are being prepared by the Department of Geological Mining (GMD) and granted by the Minister of Natural Resources.

One of the policy initiatives announced by the Government in the Multi-annual Development Plan 2006-2010 (MOP 2006-2010) is the revision of the Mining Decree 1986. The aim of the revision is, on the one hand, to attract investment to the sector by providing greater legal security to domestic and foreign investors, and offering them a reasonable fiscal climate, and, on the other, to enable the Government to apply more stringent environmental protection requirements.

For many years the mining sector has been primarily focused on the so-called ‘traditional mining’ of bauxite, petroleum and gold. Although these resources will remain important for many years to come, there are also high expectations regarding the potential of kaolin, mineral water and dimension stones.

Bauxite

The mining of bauxite and the processing to alumina is the most important economic activity of Suriname. The bauxite sector generates about 65% of the Surinamese exports. The share of the bauxite industry in total employment is relatively small compared with its contribution to export earnings and GDP. It employs, directly, about 1,410 workers, less than 1.5% of the labor force.

Bauxite production and refinery are under a joint-venture agreement between Alcoa Inc and BHP Billiton Ltd. In augustus 2003, Alcoa and BHP Billiton extended their joint-venture agreement on mining and refining in East Suriname beyond 2006. New mines will be brought into development that will guarantee the supply of bauxite ore for the Paranam refinery until at least 2032. As a result of the new joint-venture agreement the capacity of the Paranam refinery was increased by 250,000 tons to 2.2 million tons. The increase of the capacity of the Paranam was finalized at the beginning of 2005. For the expanding of the production bauxite will be imported from Brazil. Investments of the bauxite companies in 2005 will be approximately USD. 130.- million, mainly for the development of new mines te Kaaimangrassie and Klaverblad in the district of Commewijne.

Bauxite production

With an annual production of about 4,7 million tons, Suriname is - with some 3 % of worldwide production - one of the ten largest bauxite-exploiting countries in the world. In table 3.12 some key figures for the period 2001 – 2005 are provided. In 1999 the production of aluminum was stopped and all bauxite is now being processed to alumina. Due to some difficulties in the refinery the alumina production and therefore the export of alumina declined in 2005. Due to higher alumina prices the exportvalue increased.

Table 4.11 Key figures bauxite sector 2000 - 2005

	2001	2002	2003	2004	2005
Production of bauxite (mt)	4.393.640	4.001.602	4.215.000	4.202.000	4.756.998
Production of alumina (mt)	1.893.255	1.902.706	2.004.538	2.014.500	1.939.615
Export of alumina (mt)	1.909.265	1.886.347	2.041.000	2.025.000	1.946.383
Exportvalue of alumina (mln. US$)	330,4	290	335,8	413.1	449,9
Number of workers	1.501	1.461	1.424	1.410	n.a.

Source: Bauxite Institute Suriname

Bauxite reserves

Surinamese bauxite can be differentiated in coastal area bauxite and bauxite from the interior. The proven bauxite reserves that are in concession of the two bauxite companies are about 161 million tons of which some 76 million tons from the interior. The mines currently in operation are expected to be mined out in 2006. Hereafter new mines in the coastal area will come into production. The largest proven bauxite reserves are in the Bakhuys mountain area in West-Suriname. Preliminary results of geological investigations of 45% of the potential mining area in the Bakhuys mountain showed 170 million tons of bauxite reserves. The results suggest that the total bauxite reserves may be as high as 300 million tons.

The 2002 agreement between Alcoa and BHP Billiton also envisages cooperation on the exploration of mining and refining opportunities in the Bakhuys Mountains. In January 2003, the Government concluded a Memorandum of Understanding jointly with Alcoa and BHP Billiton on the exploration of bauxite mining opportunities in this area. In addition, the Government in January 2003 concluded a MOU separately with Alcoa on the feasibility of building and aluminium smelting plant and a hydroelectric dam in this area. The prospects for the development of an integrated bauxite industry, from mine to metal, in West Suriname are positive. According to the IMF, the potential size of the West-Suriname bauxite project ‘is projected to be in the order of USD 2.5 billion’.

Petroleum

Although oil was found in Suriname in the 1930s, it was not until after the establishment of Staatsolie Maatschappij Suriname N.V. in 1980, that the production of petroleum in Suriname was started. Staatsolie is the only company that produces petroleum in Suriname. Staatsolie is a company with limited liability under Surinamese law. The Republic of Suriname owns all shares. With an annual turnover of USD. 132.9 million in 2004, petroleum is a sizable generator of foreign currency in Suriname.

Exploitation

Staatsolie’s petroleum operations are concentrated in onshore Suriname. The crude production amounted to 4,4 mln. barrels (1 barrel = 159 liters) in 2005 from two fields: The Tambaredjo and the Calcutta field. The proven reserves (P90) as of end 2004 were 85 MMBLS (million barrels), of which 69 MMBLS for the Tambaredjo field and 16 MMBLS for the Calcutta field. In addition, corresponding probable reserves (P50) for both fields are estimated at 28 MMBLS. In table 3.12 the annual crude production for the period 2000-2004 is provided.

Table 4.12 Annual crude production 2001 – 2005

Year	Production
2001	4.700.000
2002	4.500.000
2003	4.300.000
2004	4.100.000
2005	4.380.000

Source: Staatsolie NV

The average daily production for 2005 was 11,987 bbls versus 11,240 bbls in 2004. At the end of 2005 a total of 879 wells were in production of which five in the Calcutta area.

In August 1997, an oil refinery was put into operation. This refinery processed 2.7 MMBLS crude in 2005. Output consisted of Staatsolie Diesel, Asphalt Bitumen and various types of Fuel Oil. The refinery realized a throughput of 7,696 BPSD (barrels per stream day). 63% of the produced petroleum is sold to the local alumina industry, 17% as bunkers, including supplies to fishing vessels, approximately 16% is exported, while about 4% is sold to various local customers.

In December 2003, Staatsolie’s Tout Lui Faut Operations were ISO-certified. This certification comprised the Refinery Operations, Marketing & Sales, Laboratory as well as other parts of the Tout Lui Faut Operations. The certification was conducted in compliance with the new ISO 9001-2000 standard and was performed by Det Norske Veritas (DNV). In 2004 the process of the certification of the main crude production and treatment operations was started.

Exploration

Suriname has three potential oil reservoirs with a total surface of 165,000 km2: a. The onshore reservoir with a surface of 25,000 km2 b. The nearshore (un-deep offshore) reservoir with a surface of 65,000 km2 c. The deep offshore reservoir with a surface of over 75,000 km2

The first version of an exploration atlas has been completed. This first-ever inventory demonstrates that exploration objectives with very large (>> 100 million barrels/lead) volumes can exist. In 2002, a new strategic plan for exploration was adopted. Staatsolie strives to at least replace the annually produced amount of crude with the exploration of new reserves. Foreign oil companies may participate in exploration and production both onshore and offshore. Staatsolie will play an active role in these partnerships, not only by providing data but also by defining prospects.

Three major exploration projects were successfully carried out and completed in 2003: the second phase of the geo-chemical survey in the Nickerie blocks; continuation of the exploration drilling program at Calcutta; and the appraisal drilling program along the western boundary of the Tambaredjo field. In 2005 one of the main objectives of the Company’s exploration policy, to replace the barrels of crude produced by at least the same volume of newly discovered reserves, was achieved. The remaining proven reserves (P90) in the Calcutta field increased from 16 million barrels of oil reserves to 23 million of oil reserves, while the exploration in the Tambaredjo field have resulted in the discovery of 15 MMBLS new reserves.At the end of 2005 total proven reserves (P90) were 107 MMBLS, up from 85 MMBLS at the end of 2004. The probable reserves (P50-90) are estimated at 32 MMBLS.

During the last 20 years, Staatsolie has signed petroleum agreements with several oil companies. These contracts were the result of negotiations initiated by the interested companies. Exploration activities executed by these companies resulted in a sizable database on the petroleum geology of the Suriname-Guyana Basin. This database consists of data from 21 offshore wells and more than 30,000 km of 2D seismic. In 2001, Staatsolie initiated bidding rounds to promote petroleum investment opportunities in Suriname. Through this activity, Suriname has drawn a fair amount of interest from the industry. In April 2004 a Production Sharing Contract (PSC) was signed with the Spanish oil company Repsol YPF for offshore block 30. This block lies approximately 100 kilometers from shore and encompasses an area of approximately 18,900 square kilometers. In May 2004 a Heads of Agreement was signed with the Danish company Maersk Oil for a Production Sharing Agreement (PSA) for offshore block 31. Block 31 covers an area of approximately 13,800 square kilometers, and lies 50 kilometers off the Surinamese coastline in water depths ranging form 35 to 100 meters. A PSC with Maersk Oil was signed in November 2004. In October 2005, a third PSC was signed with Occidental Petroleum Inc.. The contract involves the exploration, development and production of petroleum in block 32 in offshore Suriname. Block 32 is located 250 kilometers from the coastline in water depths of approximately 2,000 meters and encompasses an area of 17,388 square kilometers.

Plans and Objectives of the Petroleum Industry 2005-2010

- Onshore exploitation Continue development of the proven reserves of the Tambaredjo and Calcutta oil fields with a target production of 15,000 barrels per day. - Onshore exploration 1. Establish a minimum of 100 mmbls of proven reserves in 2006; 2. Compensate the annual amount of barrels produced with new reserves; 3. Drill a total of 100 exploration wells onshore. - Offshore exploration 1. Enhancing the understanding of the offshore potential by acquisition of new data and studies of all available data; 2. Promotion of participation of foreign oil companies based on production sharing contracts and joint venture agreements. - Expansion refinery Increase of the processing capacity of the refinery form 7,000 bpsd to 10,000 bpsd. - Power plant Construction of a 15 MW power plant.

The total investments of Staatsolie in the period 2005-2010 are estimated at USD. 360 million.

Gold

Gold reserves in Suriname are concentrated in the Guianas Shield, which stretches from the Amazon River in Brazil to the Orinoco River in Venezuela, as part of a metamorphic rock formation that cuts through the Guianas from east to west. Gold deposits occur in primary form (mostly in and around reefs formed through the filling of cracks in the surface stone) and in secondary form (as gold nuggets or dust formed as a result of erosion on hill slopes or in local rivers and creeks). Gold mining started in 1876; gold production declined when most deposits were exhausted and artisanal mining replaced mechanized commercial operations. In the late 1960’s gold mining was virtually non-existent.

Regulatory Framework

The main legislation governing the exploration and exploitation of gold is the Mining Decree of 1986. The degree regulates the procedures for granting mining rights and their scope and duration. The decree establishes five types of mining titles, of which four are relevant for the goldsector: a. reconnaissance rights for up to 200,000 hectares and three years; b. exploration rights for up to 40,000 hectares and seven years; c. exploitation rights for up to 20,000 hectares and twenty five years, with option to extend the duration in the terms agreed between the parties; d. small mining rights for alluvial or shallow mining for up to 200 hectares for two years, with option to extend by periods of two years;

As of January 2005 the government has granted about half a million hectares in concessions for gold exploration, exploitation and small-scale mining. However, most gold is mined without a legal concession or government control.

Table 4.13 Gold Concessions (as of January 2005)

Type	Number	Surface (Km2)	Surface (ha)
Exploration	20	4.199	419.941
Exploitation	15	1.348	134.824
Small scale-mining	10	20	20000
TOTAL	45	5.567	556.765

Source: Minnistry of Natural Resources, Mining Department

Small-scale mining

In the 1990s informal gold mining increased rapidly and gold mining has become increasingly important in the Surinamese economy. Not only became gold mining an important source of income for the population in the interior, the maroons, but also many Brazilian gold diggers, who had expertise in hydraulic and small-scale mining operations, migrated to Suriname. According to estimates there are about 6,000-8,000 Brazilian garimpeiros in Suriname.

Most gold is produced by small-scale artisanal gold mining operations. According to estimates there are between 10,000 and 20,000 small-scale miners in an area of approximately 20,000 square kilometers in Eastern Suriname. These miners use rudimentary prospecting and extraction techniques and material, including high-pressure hoses, hydraulic pumps along with bulldozers, excavators, and metal detectors. This often entails the use of mercury to bind and purify the gold, which causes substantial health and environmental damage. The government has virtually no control over the informal gold mining activities in the interior. Although these activities are unrecorded, there are indications that the sector’s contribution to the local economy is significant. Government officials estimate that the industry is the second largest employer after the public sector, and that gold production in the informal sector represented about 15% of GDP in 1997-2001.

Gold Purchasing

In the period July 1994- August 2002 the Central Bank bought gold directly from the gold miners. In August 2002 the Central Bank eliminated its program of direct gold purchases by licensing it to the private sector, thereby avoiding the need to maintain facilities and staff to smelt and purify gold. As of end 2004 there are seven licensed brokers that have established facilities to buy gold from the informal sector, process it to separate out impurities and mercury contamination and export gold. The CBvS also instituted pricing and taxation changes that increased the attractiveness of selling gold in Suriname, rather than smuggling it to neighboring countries. Combined with the increase in the international price of gold, this resulted in an increase in gold-purchases from small-scale mining operations from USD. 24 million in 2002, to over USD. 160 million in 2004. In the period January – September 2005 gold purchases were about USD. 109 million.

Large-scale mining

A large gold mine operated by the Rosebel Gold Mines Ltd., a subsidiary of the Canadian company Cambior, opened in February 2004. The mine of the Rosebel Gold Mines NV is at the Gross Rosebel Concession in the north of central Suriname. Rosebel Gold Mines NV has several open-pit gold mines as well as a gold-mill and a gold recovery facility. Capital costs required for developing the mine amounted to a total of approximately USD 95 million.

The Rosebel mine produced about 341,400 ounces of gold in 2005 (2004: 273,700 ounces). The proven and probable ore reserves were 3,212,000 ounces as of end 2005 (2004: 2,459,000 ounces). . Rosebel Gold Mines Ltd. employes about of 800 national and expatriate employees, of which about 20% comes from surrounding communities. Although the economic spin-off from local expenditure is substantial, the revenues for the government are limited due to preferential fiscal facilities. . Besides the preferential fiscal facilities Rosebel Gold Mines Ltd. has also been allocated an availability of 8 MW of electricity from the Afobaka hydro-electric generation station for average consumption and 12 MW for peak consumption at a discount tariff that varies between 3 – 7 USD-cents per kWh, dependent to the gold prices.

Formal large-scale gold mining has growth potential in Suriname. The Suralco has identified various gold deposits at its bauxite mining concessions in the Nassau Hills. On August 9, 2004, Suralco signed a joint venture with Newmont Mining Corporation, world’s largest goldmining company, for further exploration. The Canadian Canarc is also active on its Sarakreek concession near Benzdorp, in South-east Suriname. There are also opportunities for (foreign) investors regarding joint ventures with local concession holders for systematic exploration and exploitation.

The prospects for the goldindustry in Suriname are very good.

Dimension Stone

A significant part of Suriname is covered with stones from the Guyana shield. A large part of these stones is suitable as raw material for nature stones. The economically interesting reserves are in the north of the Guyana shield, near existing infrastructure and at a drill depth of less than 5 meters. In this part of the country there are granite reserves in the colors gray, silver-gray, black, green and rose-gray.

The nature stone sector is still mainly in the exploring phase. In table 4.14 some basic information about nature stones reserves are provided.

Table 4.14 Accessible dimension stone reserves

Location	Stone	Estimated reserve (m3)	Distance to port (km)
Patamacca	Grey granite	500000	35
Pokigronroad	Green granite	400000	135
Railway West	rose-grey granite	100000	45
Railway West	black - red	100000	52
Railway West	black-grey	100000	63

Source: Mr. E. Monsels (geologist)

The reserves at these locations are within a traveling distance of two to five hours from Paramaribo. There are other large reserves of high quality, but to exploit them requires upgrading of the infrastructure.

Kaolin

Suriname has high quality kaolin, suitable for the paper and ceramic industry. For centuries kaolin has been used by the people of the interior for social and cultural activities.

The kaolin reserves lie under the bauxite beds at Moengo and Onverdacht. After being washed the Moengo kaolin is suitable as filler for paper, rubber and plastics and the whiter varieties for paper coating. The reserves are estimated between 14 and 20 million tons. The Onverdacht kaolin is of good to excellent ceramic quality. The reserves are estimated between 40 and 60 million tons.

Because both Moengo and Onverdacht are mining areas, good facilities such as telecommunication, medical care, schools, electricity and water supply, already exist. The harbor of Moengo can accommodate ocean vessels up to 15,000 DWT, while the harbor of Paranam, near Onverdacht, can handle ships up to 23,000 DWT.

Glass Sand

The savanna belt has a surface of more than 10,000 km2, of which about 40% consists of pure white sand. The depth varies between a few to several dozen meters. Glass sand can be used for the construction industry and for the glass industry.

Mineral Water

With renewable freshwater resources of about 199 billion cubic meters per year, Suriname is one of the four countries with the greatest amount of renewable freshwater. Due to a natural filter process of the water by white sand in the savanna belt, the water north of the savanna belt is of excellent quality.

The purity and the large reserves of water form a good base for a drinking water industry, both for domestic use and export. A local entrepreneur estimated the domestic market for mineral water at about 3.4 liter per capita in 2001. The entrepreneur expects the domestic market to grow in 5-10 years to about 11 liter per capita per year, reflecting a market of about 5.5 million liters per year.

The export of water to the Caribbean islands is also very promising. Four of the twentieths countries with the highest water scarcity are Caribbean islands. The potential export value to the region is about USD. 800 million per year.

Suriname offers a rich, distinctive and still untapped tourism product, particularly in the combination of tropical rainforest and the authentic contemporary cultures of the Amerindians and Maroons. Other interesting attributes are its ethnic diversity, a long established system of nature reserves, the historic character of the capital Paramaribo and the fact that Suriname forms part of the Guyana Shield, the world’s largest unspoiled rainforest.

Total foreign exchange receipts from international tourism in Suriname are estimated at USD. 126.7 million in 2004. The direct employment effect is estimated at 5,000 persons and represents about 5.5% of the total workforce.

The Surinamese tourism product consists of: - Climate for tourists’ activities; the sun shines the whole year and the temperatures are between 24 en 32 C. The northeast trade winds make evenings cool and pleasant. - The world famous wooden architecture of the Inner City of Paramaribo that is on the UNESCO World Heritage List. - Unique mixture of cultures and religious groups; trips can be made to the interior with visits to Amerindian and maroon villages by boat or plane. - Unexplored nature with opportunities for Eco-tourism, adventure tourism and wildlife tourism. - As part of the Caribbean, a combination of sea- and adventure tourism is possible. - Much water that makes water sports possible. - Festivals and cultural activities. - A number of nightclubs and casino's provide evening entertainment in Paramaribo.

According to the Surinamese Tourist Foundation (STS) 137,808 tourists entered Suriname through the Johan Adolf Pengel International Airport in 2004. Most of the tourists are Visiting Friends and Relatives (VFR-tourist) accounting for about 50% of total tourists. In table 3.15 a breakdown of tourists by purpose of visit and market area is provided.

Table 3.15 Breakdown of tourists by purpose of visit and market area

Purpose of visit	The Netherlands	Other Europa	Dutch Antiles	Other Caribean	North- America
Pleasure	26%	27%	11%	10%	8%
VFR's	57%	27%	62%	21%	29%
Business	15%	45%	24%	66%	61%
Other purposes	2%	0%	2%	3%	3%

Purpose of visit	South and Central- America	Rest of the World	Total
Pleasure	11%	22%	22,5%
VFR's	14%	28%	50,2%
Business	67%	46%	24,5%
Other purposes	8%	5%	2,8%

Source: Suriname Integrated Tourism Development Programme

Suriname is also a popular destination for tourists from French Guyana. In 2003 about 16,000 French Guyanese visited Suriname. The French Guyanese tourists enter Suriname through the bordertown of Albina.

The overall average length of stay of tourists in Suriname is 18.2 nights. Business and pleasure tourists on average stay for 12.9 and 16.0 nights respectively. Almost half (47%) of all tourist nights are spend in private accommodations. The business tourists are the most frequent users of hotels with 61% of all business nights spent in hotels followed by pleasure tourists with 30%. According to the STS there were 860 beds in the hotel sector, 1,300 beds in guesthouses and 940 beds in bed & breakfast accommodations. In table 3.14 the growth in the number of beds in the tourism sector for the period 2001-2003 is provided.

Table 3.14 Number of beds in the tourism sector 2001-2003

Type of accommodation	2001	2002	2003
Hotels	700	815	860
Guesthouses	940	1199	1300
Bed & Breakfast	600	905	940
Totaal	4.241	4.921	5.103

Source: STS

The growth in the number of beds in the tourism sector is an indication for the growing popularity of Suriname as a tourism destination. The average occupancy rate for the hotels in the last three years is about 70%.

Suriname is a growing destination for nature tourists. The main attractions for these visitors are the pristine rainforest, the national reservoir and the unique Bush-Negro and Amerindian cultures.

Suriname is part of the wider Guayana Shield, a region that is one of the least disturbed tropical wilderness expanses remaining on Earth. In Suriname, nature conservation has a long history, with seven nature reserves already in place in the 1960s (then already 9,000 km², or more than 5.5% of the land). In 1998 the Central Suriname Nature Reserve (CSNR) was established. The Central Suriname Nature Reserve comprises of 1.6 million ha. of primary tropical forest of west-central Suriname. The Reserve protects the upper watershed of the Coppename River and covers a range of topography and ecosystems of notable conservation value due to their pristine state. Its montane and lowland forests contain a high diversity of plant life with almost 6,000 vascular plant species collected to date. There are viable populations of animals typical of the region including jaguar, giant armadillo, giant river otter, tapir, sloths and eight species of primates, as well as 400 bird species. In November 2000 the Central Suriname Nature Reserve was inscribed on the World Heritage List of Natural Sites of the UNESCO.

Some key findings of a Visitor Survey held in 2004 are: 9 out every 10 tourists rated their overall stay in Suriname either excellent or good indicating a very high degree of visitor satisfaction. Nearly 9 out of every 10 tourists stated that the expectations they had prior to visiting Suriname were fulfilled. A little more than 7 out of 10 tourists stated that it is either likely or very likely that they will return to Suriname for a holiday visit within the next five years. A little more than 8 out of 10 tourists would definitely recommend Suriname for a holiday visit to others. These findings indicate a bright future for the tourism industry in Suriname.

The construction sector composes about 3.1% of GDP in 2004. The sector provided employment to 14,031 persons in 2004, about 9.0% of the working population.

Construction

The Construction Act regulates the construction industry in Suriname. This act prescribes that a building permit is obligatory for house construction in the municipal areas. Building permits are given by the Department of Construction and Housing Supervision from the Ministry of Public Works. For houses with a surface exceeding 100m², a building design must be made by an architect. The approval procedure normally takes about two weeks. According to the IDB-financed research “ Housing Supply and Demand (1999)”, the housing stock in Suriname amounts to about 80.000 units. The average surface amounts to 90 m², or about 22m² per inhabitant. About 60% of the houses are inhabited by the owner, about 20% are rented houses, while about 20% of the houses are inhabited in other manners, mainly free lodging. Research shows that about 40% to 50% of the houses are in good repair, while about 15%-20% of the houses are in bad repair.

The housing shortage amounts to approximately 18.000 to 30.000 houses. Due to the young population (more than half of the population is younger than 25 years) the need for houses will remain great in the coming years.

Important bottlenecks in the building process are high interest rates and limited availability of suitable building ground. According to the Decree ‘Elements of Ground Policy’ (1982) every Surinamese citizen is entitled to a piece of ground. Due to an inadequate ground registration, an inefficient area planning and an inefficient land-management system, building grounds are scarcely available. With the help of The Netherlands, the Surinamese government is currently implementing a modern ground registration and land information system (GLIS). Recently, financial facilities with lower rates for the lower and middle-income groups have been created also. This regards the ‘Low Income Shelter Program-which is financed by the IDB and the Surinamese government-and the “Financial Modality House Building for Middle Income Groups”-which was launched by the Central Bank of Suriname in cooperation with local banks.

Based on the number of building permits requests, it is estimated that currently 1875 to 2040 houses are built yearly. Also, about 330 to 360 premises are built for business purposes.

Based on the housing shortage and demographic developments, the multiple year program for the sector ‘Housing in Suriname (2003)’ estimates that the need for home-building in the coming years will be about 3700-4200 houses per year. Also, about 1600 houses need to be renovated per year.

The Investment Law 2001 regulates incentives for investments. Under this law, an institution named ‘Investsur’ is responsible for the administration of requests for investment facilities and the provision of assistance to interested parties in fulfilling the formalities required by the law. A request for an incentive is dealt with within 45 days. If no decision is made within this period, the request has been refused.

The incentives apply to investments in agriculture, aquaculture, the building industry, farming, fishery, forestry, manufacturing, mining, the provision of services, road transport, tourism and trades. The general condition of eligibility for the facilities is a regular bookkeeping with regular annual closings.

The Investment Law 2001 distinguishes between fiscal and non-fiscal incentives.

Fiscal Incentives

Exemption for Import Duty Exemption for import duties is granted if the value of the imported equipment is at least USD. 10,000.-. For goods used in manufacturing business equipment, the exemption is granted if the import value is at least USD. 5,000. -.

Exemption for Value Added Tax (VAT) An exemption for VAT is granted if an exemption for import duties is granted. The exemption for VAT also applies to business equipment manufactured in Suriname if the purchaser’s investment is at least USD. 5,000. -.

Reduction in Wage tax for 5 years A reduction of 10% in wage tax is granted if a company carries out its activities in a designated area.

Joint application of parent companies and subsidiaries Consolidation of profits and losses of the parent company and its subsidiaries may take place if: - The parent company owns 100% of the shares of the subsidiary; - The companies have the same book year; - The subsidiary is a new company making profits; - Both companies apply the same income tax regime; - Both companies are active in designated branches of activities.

Free Depreciation Free depreciation is granted if the investment is at least USD 5,000. -.

Deduction of fictitious interest for 5 years A deduction of fictitious interest is granted if investment in business equipment is financed by own equity. The deduction is 6% of an investment of at least USD 100,000. - and 10% if at least 80% of the goods or services are sold outside Suriname.

Investment deduction An investment deduction in determining a company’s taxable equity or tax base, after compensation of losses. The deduction is 20% of an investment of at least USD 20,000. - in a designated area and 10% of an investment of at least USD. 1,000. - in a designated area to increase environmental protection.

Income tax exemption for 10 years An income tax exemption is granted if: - The company participates in a designated activity; - The company is not entitled to any other facilities under the Investment Law; - The company meets the requirements concerning invested capital and job creation as set out in a state decree.

The exemption does not apply if the profits after compensation of losses amount to twice the invested capital.

Non-Fiscal Incentives

The non-fiscal incentives apply if fiscal incentives are granted. They consist of the granting of: A currency license in respect of: - The repayment of foreign equity obtained to finance investments; - Distributions of profits and/or dividends; - Interest payments on, and the redemption of, foreign loans; - Inter alia, management, technical assistance, know-how and license fees.

A permit in respect of: - The residence and establishment of foreign personnel; - The secondment of foreign personnel; - The establishment of a company; - The import and export of goods and services.

Facilities for Specific Investments

For investments of at least USD. 50 million made in respect of the extraction of bauxite, gold, hydrocarbons, minerals and radioactive ore other incentives may be granted under a separate law.