COVID-19: Private sector surma hurts

The COVID-19 pandemic has highlighted some important issues for Suriname’s private sector, such as lack of digitization, financial inclusion, and infrastructure. Suriname’s private sector was already challenged by an unfavorable business climate before COVID-19. It was hoped that 2020 would bring some positive changes. Indeed, 2020 brought change, but not the expected change: the COVID-19 pandemic exacerbated what was already an uncertain socio-economic situation.

To curb the spread of COVID-19 infections Suriname closed its borders on March 13, 2020. This had a direct impact on tourism. Strict social isolation measures at the start of the pandemic also restricted non-essential business operations.

The key findings of the Inter-American Development Bank (IDB) survey are:

46.6 per cent of respondents said they had closed their businesses, either because of the authorities’ requirement or the lack of demand.

The IDB’s online survey found that business closures were highest among hotels and restaurants (79 percent), construction (60 percent), and manufacturing sectors (53 percent). Business closures were also slightly higher for low-income households (Figure 1).

Significant income losses were also found for the construction and manufacturing (60 per cent), commerce and ICT sectors (50 per cent), while the tourism sector registered a 95 to 100 per cent loss of income, according to a survey conducted by the Suriname Trade and Industry Association in June 2020.

The survey found that Suriname had the lowest percentage of respondents who reported access to bank accounts and debit cards during the COVID-19 pandemic, among the IDB’s six Caribbean member states (Jamaica, Suriname, Guyana, The Bahamas, Barbados and Trinidad and Tobago). Only 52.2 per cent of respondents indicated they had access to a bank account (compared to an average of 73 per cent of respondents for the region), and an even lower proportion (29 per cent of respondents ) had access to a debit card, compared to an average of 70 percent of respondents for Caribbean countries belonging to the IDB.

Globally, businesses are adapting to the “new normal” of doing business (working remotely whenever possible and ensuring social distance in the workplace), making adequate infrastructure and digital services extremely important for continuity business, durability and success. To facilitate adaptation to the new normal, there are some important areas that Suriname should continue to move forward with:

I. Getting more people online and making progress towards universal internet access can go a long way in helping businesses and individuals in Suriname thrive in a post-pandemic world.

II. Digitizing public services: The pandemic has accelerated many of the digital transformation processes of public services that were anticipated to be more gradual. This trend is likely to bring important benefits in terms of greater savings, greater efficiency and transparency, and a more agile public sector in service delivery.

III. Financial inclusion: The COVID-19 pandemic emphasized the importance of financial inclusion and financial technology services to small businesses and vulnerable sections of society.

IV. Continue to improve access to infrastructure and reduce inequalities in access to basic services. This can help support inclusive socio-economic recovery.

Author: Jeetendra Khadan, Suriname Country Economist, Department of the Caribbean, Inter-American Development Bank.

This article has been edited to address space considerations.