Suriname’s President Chan Santokhi announced the “Royalties for Everyone” initiative aimed at distributing oil revenues among citizens as the country prepares for significant income from newly discovered offshore oil and gas reserves. Each citizen is set to receive an initial $750 with a 7% interest rate. The initiative seeks to alleviate poverty amid expectations of generating approximately $10 billion over the next 10 to 20 years from its oil resources, while also establishing a sovereign wealth fund to mitigate risks associated with resource wealth.
On Monday, Suriname’s President Chan Santokhi unveiled a comprehensive initiative dubbed “Royalties for Everyone” during his Independence Day address, aiming to ensure that every citizen benefits from the nation’s burgeoning oil and gas reserves. This initiative comes in response to potentially lucrative offshore crude deposits, in which Suriname and neighboring Guyana are expected to garner significant financial returns in the years ahead. The government estimates that Suriname could make roughly $10 billion within the next two decades from these resources.
The nation of approximately 600,000 people faces considerable economic challenges, with nearly 20 percent of its population living in poverty, as reported by World Bank figures. Currently, Suriname’s annual GDP stands at approximately $3.4 billion. Recently, French company TotalEnergies announced a substantial investment of $10.5 billion for the development of an oil field off the coast, anticipated to yield a production capacity of 220,000 barrels per day by its projected start date in 2028.
As part of the new policy, Surinamese citizens will receive an initial payment of $750 deposited in individual savings accounts, which will accrue an annual interest rate of seven percent. Santokhi expressed a commitment to inclusivity, stating that “everyone shall benefit from this opportunity and no one will be left behind,” while emphasizing citizens’ co-ownership of the oil revenue. Recognizing the potential risks associated with resource wealth, often referred to as the “oil curse,” Santokhi noted the importance of learning from the experiences of other nations, such as Venezuela and Norway, which successfully established sovereign wealth funds to manage their oil revenues responsibly. Suriname has taken analogous steps by creating a dedicated fund to prepare for the expected influx of oil wealth.
The announcement of the “Royalties for Everyone” initiative comes at a critical juncture for Suriname, a country rich in natural resources but burdened by socioeconomic challenges. Suriname and Guyana, both former Dutch colonies, are on the cusp of a substantial oil boom thanks to offshore discoveries. This wealth has the potential to transform Suriname’s economy; however, the government is acutely aware of the pitfalls that have befallen other nations rich in resources. Historical cautionary tales such as the “Dutch disease” illustrate the need for prudent economic management and investment in long-term stability, making Suriname’s proactive measures noteworthy.
In conclusion, President Chan Santokhi’s “Royalties for Everyone” initiative represents a significant step toward ensuring that all Surinamese citizens share in the benefits of the nation’s discovered oil wealth. While the potential revenue from offshore deposits could amount to billions, it is critical for the government to navigate the economic challenges carefully to avoid the pitfalls associated with resource management. By establishing a sovereign wealth fund and offering direct benefits to citizens, Suriname aims to create a model for equitable wealth distribution and sustainable economic growth.
Original Source: www.thejakartapost.com
