Suriname's Foreign Minister Albert Ramdin speaks during an interview with Reuters, in Beijing, China, on November 8. Photo credit Reuters/Tingshu Wang.
BEIJING, China--Suriname hopes to strike a deal with China by mid-December over rescheduling interest payments on its debt beyond 2024, its foreign minister told Reuters on Wednesday, the final piece in a push to restructure its international debt.
The country wants to ensure interest payments do not balloon going forward after Suriname became the second country to default on its sovereign debt in the aftermath of the COVID pandemic in 2020, after Zambia.
Suriname and China have taken bilateral debt negotiations on rolling over the current agreement beyond the end of next year, as far as they can and are close to a deal, Albert Ramdin said in an interview in Beijing, adding that it was important the terms aligned with what Suriname had agreed to with other creditors.
"At the technical level, [the Chinese side – Ed.] has reached the 'maximum', based on what the rules and procedures of the EXIM bank allow, which is why I am here: to convince them it's time to take this to the next level and see what can be done," Ramdin said.
"I think anything beyond that would require a policy decision at a higher level; somebody needs to take the loss," he added, but did not say whose decision that was on the Chinese side.
Suriname owes Chinese creditors around US $540 million, according to the Suriname Debt Management Office, of which close to $130 million is in arrears. The terms of the loans do not include any concessions, Ramdin said, meaning that China cannot seize any of its assets should the country continue to struggle with repayments.
"There are two remaining issues. One is the maturity rate – the term of the loan – as we need more time, so it fits within the debt sustainability framework of the International Monetary Fund [IMF] ... and the other is to seek a reduction in interest rate."
The former Dutch colony desperately needs debt relief from creditors including the IMF, Paris Club, India and China, whom it is struggling to repay, as its commodities exports have taken a hit with prices plunging globally and its reserves dried up as the cost of imported staples shot up during the pandemic.
"With China, we are aiming for a similar deal as we have received with India, for instance," Ramdin explained.
In June, Suriname agreed to repay the approximately $39 million it owes India within 15.5 or 20.5 years, depending on the type of loan, with a maximum annual fixed-interest rate of 1.20%.
Suriname needs to a secure a deal with China, the largest of its bilateral creditors, to help it improve its international credit rating so that it can attract fresh foreign funds for its oil and gas industries, Ramdin said, adding that he saw "good opportunities" for Chinese firms in these sectors once policymakers have shored up the economy.
"I hope in the coming days, we'll see that understanding translate into an acceptance: whether that will be a haircut on the interest rate or maturity ... and I can go back with a proposal from their side," Ramdin said, adding that he was due to meet with EXIM officials on Thursday.
The bank did not immediately respond to Reuters' request for comment.
Ramdin said he expects EXIM officials to visit Suriname to complete the deal before year-end.
Suriname on Monday said it had reached a deal with its private creditors to exchange $675 million of dollar bonds for new notes, with owners of more than 92% of the bonds by value signing up. ~ Reuters