VES questions Marine Corps’ $500 million SRD ship

The Ministry of Defense has announced that it will be purchasing a prestigious vessel for the National Army. Minister Krishna Masola justified the purchase by saying that it is to protect the Exclusive Economic Zone (EEZ) and emerging oil and gas activities. She further stated that the ship will cost 80 million dinars. The cost will not be borne by the community but will be covered by funds saved by the Ministry through the dismissal of about 1,000 employees. However, the Surinamese Economist Association said that this positive-sounding news raises some questions Insights It will be released this weekend.

EU may ban Surinamese fish exports

The background is that Guyanese fishermen fish illegally with or without Surinamese licenses. Member of Parliament Ronny Aloema (VHP) reported in June that French Guiana has filed a complaint with the European Union (EU) against Suriname and requested sanctions against Suriname for repeated illegal fishing. He revealed that French Guiana informed Suriname of the matter in January 2023 and again in March 2024.

Despite the presence of the Coast Guard, which has three patrol boats, no action was taken. According to Aloma, this could lead to a ban on Surinamese fish exports. VHP members say that the Surinamese authorities have “seriously failed” in this regard. The excuse given by Minister of Agriculture, Livestock and Fisheries Parmanand Sewdien is “scarcity of resources”. Now he has announced that consultations with France will take place in September (about 20 months later). “Such a lax attitude is characteristic of the quality of our governance. Such a ban would be a fatal blow to this already severely weakened export sector, which brings in about $30 million in foreign exchange each year,” said the VES.

Exclusive Economic Zone Protection

The protection of the exclusive economic zone and emerging oil and gas activities, as pointed out by the defense minister, is important but not within the Navy’s responsibilities. The Coast Guard is specially established and equipped for this purpose. The report said that inquiries to the Coast Guard did not provide much information, only stating that the level of activity was low “due to lack of resources.” Insights.

What are the priorities?

It is normal that priorities need to be set when resources are limited. When the Coast Guard was created for this purpose, the priority was to buy a prestigious ship for the Navy as part of the National Army. In today’s era, how can we justify gig projects costing about SRD 500 million? With healthcare at a standstill, babies dying, garbage disposal bills unpaid, etc., the honest question that policymakers must answer specifically is when and how this amount will be recovered. Even if it is saved by successfully firing about 1,000 redundant employees (who we have never heard of before), the question remains whether this is a worthy priority. In addition, such ships would require millions of dollars in additional maintenance costs and fuel costs every year, VES stressed.

Does the IMF agree with this?

The IMF has apparently approved this new spending project, even though the government appears unable to reduce its primary balance sheet deficit sufficiently according to the IMF’s seventh review. The lease structure is a loophole to circumvent the ban on new loans outside the IMF. The lease is a purchase in instalments, equivalent to annual loan repayments of 80 million riyals. As a result, the primary balance will deteriorate more quickly.

The next government’s hands are tied

Furthermore, the question is whether the government can make such a far-reaching decision at the last minute in the last 8 months. The show will be stolen before the election, probably in early October. It will be seen as an achievement of the current government, while the debt will have to be repaid by the next government. The next government will have to raise an additional 80 million special dollars from the community every year for up to 6 years to pay for this election stunt. How many hospital departments will be closed because of this? Even if it can be defended politically, it is financially irresponsible.

Damen Shipyard was once arrested for bribery

It turned out that this was a 42-meter-long famous ship purchased from Damen Shipyard. Damen Shipyard is a well-known Dutch shipbuilder, a family-owned company with a turnover of 2.5 billion euros in 2022 and 6,000 employees. Damen Shipyard was caught by the World Bank for bribery in Sierra Leone. As a result, Damen was excluded from tenders by the World Bank for 18 months in 2016. In addition, FIOD also investigated Damen for fraud in large contracts awarded in Trinidad and Tobago and the Bahamas. During the World Bank’s debarment, the Dutch government temporarily excluded Damen from using development cooperation financing, and Damen’s access to export credit insurance was also temporarily suspended. At the same time, credit insurance company Atradius Dutch State Business conducted an investigation into Damen’s portfolio. This showed that Damen provided “inadequate or incorrect information about the payment of commissions” in 14 cases. These “commissions” are also known as tyuku in Suriname.

Dutch Newspapers Nuclear Regulatory Commission It wrote: “Between 2010 and 2016, the Dutch government guaranteed 66 Damen transactions through Atradius-DSB, with a total value of €1.76 billion. After studying it, the NRC concluded: “The relationship between Damen and Atradius DSB was so close that the shipbuilder could make mistakes with impunity.” In this case, too, suspicions were raised about the opaque deal. Was there an open tender or a private deal? What were the technical requirements, how many shipyards offered, and Damen was the lowest supplier. Only full transparency could make this clear.

History repeats itself
The Bouterse-Adien government left the Santoki-Brunswijk government with empty coffers and huge debts. The current government seems to plan to do the same with its successor. Hopefully, the Minister of Defense will provide full transparency in the coming days on the need for such a showcase project. VES stresses that the public can make their own judgement on the priority use of scarce public funds.