Suriname is about to establish its own sovereign wealth fund, named the Savings and Stabilization Fund Suriname (SSFS). Suriname is blessed with an abundance of natural resources, but these are finite and nonrenewable. Prices for mining have been unstable in the past, showing large fluctuations. One of the benefits of the SSFS is that the country can be protected from the boom and bust cycles that have plagued us in the past. Establishing the SSFS is necessary because in the past the revenues from mining have fluctuated substantially.

These funds are called sovereign wealth funds, because they are independent, refer to the wealth of a whole nation, and – in fact – belong to the people of the country, living now and in the future. This is precisely the goal of the Savings and Stabilization Fund Suriname: to save for future generations. And we have one more goal: to stabilize the fiscal revenues of the government. In fact, these goals go hand in hand.

The SSFS stabilizes the income from our non-renewable mining resources. It establishes rules for revenues to go to the budget and revenues to go to savings (the SSFS). Thus, the SSFS allows the government to know what revenues go to the budget in the current year and in later years.

By knowing what income is available to the budget, the government can also plan its expenditures. It can do so in a predictable and transparent way. It can plan and discuss with Parliament how to invest in better schools, in better health, in youth development, in female rights, and in science and innovation. The Government can invest into programs for the diversification of the economy.

The SSFS will invest the savings into financial instruments that earn money. This investment income goes back to the SSFS and part of it goes to the budget. As the SSFS grows this will be available for future generations.

Spending from the SSFS will be careful and is conditioned by strict rules. For example, in the event of a national disaster the fund can provide coverage up to half of the costs of alleviation and salvage. If mining revenues to the budget decline when prices drop, less than half of the shortfall can be covered with a transfer from the SSFS. Functioning as a savings and accumulation fund, the SSFS will thus be available to our children and their children, and so on.

If there had been a SSFS in the past, some of the negative effects on the budget might have been avoided. If there had been a SSFS in 2011 and 2012 a total of close to US$ 100 million might have been saved and invested with a profit.

The draft legislation for Suriname’s savings and stabilization fund has incorporated comments from all stakeholders. It has been drafted in line with best international practices and contains wide-ranging transparency requirements. The draft legislation is now being debated in the National Assembly.