Economy

The economy of Suriname is dominated by the bauxite industry, which accounts for more than 15% of GDP and 70% of export earnings. Other main export products include rice and bananas. About a quarter of the people work in the agricultural sector. Suriname has recently started exploiting some of its sizeable oil and gold reserves. The Surinamese economy is very dependent on other countries, with its main trade partners being the Netherlands, the United States and countries in the Caribbean.

After assuming power in the fall of 1996, the Wijdenbosch government ended the structural adjustment program of the previous government, claiming it was unfair to the poorer elements of society. Tax revenues fell as old taxes lapsed and the government failed to implement new tax alternatives. By the end of 1997, the allocation of new Dutch development funds was frozen as Surinamese Government relations with the Netherlands deteriorated. Economic growth slowed in 1998, with decline in the mining, construction and utility sectors. Rampant government expenditures, poor tax collection, a bloated civil service and reduced foreign aid in 1999 contributed to the fiscal deficit, estimated at 11% of GDP. The government sought to cover this deficit through monetary expansion, which led to a dramatic increase in inflation and exchange rate depreciation.