Oil and gas revenues offer opportunities for poverty reduction
One of the expectations regarding oil and gas developments is that poverty in Suriname can be reduced. The activities will, among other things, lead to an increase in employment and higher government revenues. As a result, more resources may become available for social programs and the strengthening of the social safety net. Rosita Sobhie, a researcher at the Interfaculty of Graduate Studies and Research and chair of the multidisciplinary working group on the Determination of the Poverty Line, views the developments positively. According to her, oil and gas reserves could make Suriname one of the three fastest-growing economies in the region over the next two to three decades.
“Poverty can certainly be reduced more easily because the country will have more revenue. Additionally, more opportunities will arise to invest in education, employment, healthcare, and improved infrastructure. However, experience shows that rapid economic growth does not always work to the advantage of poor population groups.”
According to Sobhie, it is therefore important that clear agreements are already made regarding the allocation of future revenues. For instance, a fixed percentage of oil and gas revenues could be allocated to a fund for poverty reduction, education, healthcare, and community development.
“I see it as a concern that the interior could become neglected, because these areas do not make a direct contribution to oil and gas production. This applies especially to indigenous communities. Maroon communities are still actively involved in the gold sector. Therefore, development plans must be drawn up at various levels, such as in neighborhoods, villages, and districts. In this way, communities can chart their own future for the next ten to fifteen years.”
In addition, Sobhie expects that the increasing demand for labor will lead to higher wages. Due to the scarcity in the labor market, employees will gain a stronger bargaining position. “Suriname has traditionally had a culture of relatively low wages, especially in professions requiring little specialized knowledge. Due to economic developments, a shift in this is likely to occur. Employers will have to work harder to attract and retain staff. Additionally, a sudden increase in income typically has a positive effect on the economy, as investments, consumption, and business activity increase.”
However, Sobhie emphasizes that economic growth in itself offers no guarantee of a better standard of living for everyone. “The success of the oil and gas industry must ultimately be measured by the extent to which prosperity reaches the entire society. Only then can these developments contribute to a sustainable reduction of poverty in Suriname.”