On Monday, Suriname’s President Chan Santokhi unveiled the “Royalties for Everyone” program to distribute profits from the country’s oil and gas reserves. Amid expectations of $10 billion in revenue over the next two decades, each citizen will receive $750 in a savings account. The government’s move towards economic equity comes in light of historical challenges other resource-rich countries have faced due to sudden wealth.
Suriname’s President Chan Santokhi announced a groundbreaking initiative called “Royalties for Everyone” on Monday, aimed at distributing profits from the country’s newly discovered oil and gas reserves among its citizens. This initiative comes as Suriname prepares for significant financial gains from offshore crude deposits, expected to bring in approximately $10 billion over the next two decades. The project exemplifies a commitment to economic equity, as nearly 20 percent of Suriname’s population currently lives in poverty amid a $3.4 billion annual GDP.
The recent unveiling of TotalEnergies’ $10.5 billion oil project, set to commence production in 2028, underscores Suriname’s potential as a key player in the oil industry. Each citizen will receive a one-time payment of $750, allocated into savings accounts with a 7 percent annual interest rate, affirming President Santokhi’s pledge that “no one will be left behind”.
Aware of the challenges posed by the so-called “oil curse” impacting many resource-rich nations, Suriname has established a sovereign wealth fund akin to Norway’s model, which successfully navigated such pitfalls.
Suriname, along with its neighbor Guyana, is experiencing a surge in oil discoveries that could substantially alter its economic landscape. Historically, former colonies of the Dutch, both nations are now poised for a dramatic increase in revenue stemming from their offshore oil reserves. However, with the potential for economic transformation, there is also an acknowledgment of the risks associated with sudden oil wealth, including economic mismanagement and reliance on volatile oil prices, famously referred to as “Dutch disease.”
In conclusion, Suriname’s initiative to distribute oil royalties aims to empower its citizens economically while preemptively addressing the challenges related to newfound resource wealth. The strategic establishment of a sovereign wealth fund and the commitment to equitable profit sharing underlines a determined effort to secure economic stability and shared prosperity for the nation. As the oil industry evolves, effective management of these newfound resources will be critical to Suriname’s success.
Original Source: www.thejakartapost.com
