Suriname’s central bank misused state funds

Bert Wilkinson | 2/13/2020, 1:23 p.m.
President Desi Bouterse has appointed a new acting governor of Suriname’s central bank in the wake of a massive scandal ...
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President Desi Bouterse has appointed a new acting governor of Suriname’s central bank in the wake of a massive scandal involving the unauthorized use of US$100 million in commercial banking deposits by the state to buy regular merchandize like onions and potatoes.

Commercial bank leaders say they suspected something was amiss when the bank ordered them to lodge larger amounts of foreign exchange reserves with the mother bank, noting that few believed the money would have been used by the state for such purposes.

The scandal has already led to the resignation of central bank director Glenn Gersie but the weekend appointment of Sigmund Proeve is already triggering fresh controversy, as the man who had previously served as the central bank head had in fact been previously sentenced to a year in prison for illegally transferring US$100 million to a hotel group linked to casino interests without authorization. Critics say they are astonished that almost the same scenario has played out today as stronger safeguards should have been in place after the first large unauthorized transfer.

Proeve won on appeal but opposition parties are expressing astonishment that Bouterse would now choose such a banker with a stained past to head the institution at this time of increased scrutiny.

The controversy comes just three months before general elections in late May and will likely add to the political and reelection woes of Bouterse, who was in December sentenced to jail for 20 years for the 1982 mass murders of 15 government opponents while he was the military strongman in the Dutch-speaking Caribbean Community country of about 500,000 people. Bouterse, 74, has already appealed his sentence and is not banned from running for a third term.

The scandal also comes in the wake of the resignation of two governors in the past year and as opposition parties and the association of economists in Suriname complain about the politicization of the position of central bank governor.

They are upset that money from private citizens and commercial banks had been secretly used by the state to fund merchandize imports, an unusual development they claim.

“This is unacceptable and against the directives that the bank itself had drafted. The banks are upset that the central bank misled them for months, with incorrect and incomplete information by the then Governor Robert van Trikt,” the association said.

More fuel was poured on the raging issue at the weekend when Vice President Ashwin Adhin admitted that the bank had departed from regular protocols regarding the use of such funds.

“The central bank did not entirely keep their end of the deal. There were agreements on how we would use the money. It was clear that we would use it. The point is that it would be replenished every time we used it.” He also said some cash was pumped into the local money market to stabilize the local dollar and to ensure foreign exchange was available in the country.

Steve Coutinho, manager of De Surinaamsche Bank, is adamant that the sector was misled by central bank and government officials.

“They have played a game with us and stole the people’s money. This is absolute nonsense,” the manager said.

Suriname, which recently found large deposits of offshore oil to go along with a small daily production from onshore wells, has had a perennially foreign exchange availability problem as bauxite exports declined and as prices for rice exports fluctuated so officials have had to tinker with the system to stabilize the dollar and to make money available for daily commerce.