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The State debt consists of a Domestic and an
External debt component. Looking at maturity of the
debt, outstanding debt can be classified in
short-term debt; debt with a maturity of one year or
less, and long-term debt; debt with a maturity of
more than one year.
The Domestic Debt
The Domestic Debt, according to the law
comprises the monetary debt obligations, including
guarantee commitments to residents in Surinamese
currency or other currencies.
The External Debt
According to the law the External State Debt comprises the
monetary debt obligations, including guarantee
commitments to non-residents in Surinamese currency
or other currencies.
The gross State Debt:
the total of outstanding
legally contracted debt obligations at the expense
of the state, including amounts of contracted debt
not yet withdrawn, overdue interest and charges with
respect to the State’s payment obligations and
guarantee commitments.
The net State Debt
The net State Debt, according to the law, is
defined as de gross state
debt minus any
claims for money due to the State in the current
fiscal year including amounts of contracted debt yet
to be drawn, and provided that those claims are not
part of the current revenues of the current account
of the government budget.
International definition of debt
According to the international manual “External Debt Statistics, guide
for compilers and users” the international definition of debt is as follow: “ Debt,
at any given time, is the outstanding amount of those actual current, and not contigent
liabilities that require payments (s) of principal and/or interest by the debtor
at some point(s) in the future” (External Debt Statistics, guide for compilers and
user, IMF and others, 2003, page 7, paragraph 2.3).
The “ Guide” further explains: “ For a liability to be included as (external) debt
it must exist and be outstanding. The decisive consideration is whether a creditor
owns a claim on the debtor” (External Debt Statistics, guide for compilers and user,
IMF and others, 2003, page 7, paragraph 2.4).
According to international standards we talk about debt when there is:
- An outstanding amount of those actual current liabilities
- which require payments (s) of principal and/or interest by the debtor in
the future
- and when there is a (legitimate) claim of a creditor on a debtor.
Acording to this definition all arrear payments of the Government on services and
goods providen by the domestic private sector and by non-residents should be seen
as a legitimate claim on the government and is a debt of the Government.
Contracted debt not yet withdrawn and the non called
guarantees which are components of the Domestic and the External debt according to the National Debt Act are not
current but contigent liabilities and are therefore not
included in the total debt position of a country according to the international defintion of debt .
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Article 3 of the National Debt Act (SB 2002 no.27)
entitled “borrowing ceilings” is to insure adequate
debt management strategies.
These borrowing ceilings are fixed ratios of the
public debt related to the Gross Domestic Product
(GDP) in market prices of the most recent year
calculated by the Central Bureau of Statistics.
The External Debt cannot exceed 45% of GDPmp, while
the Domestic debt has a ceiling of 15%.
This means that the total State debt cannot exceed
the maximum of 60% of GDPmp.
However in article 28, the law provided a temporary provision which stated that de minister of Finance
can, up to 5 years from January 1st 2002, deviate
from the fixed borrowing ceilings.
Also the annulation of every doings exceeding the
ceilings (Article 4 paragraphs 1 of the Act) during
this period is not applicable.
The minister of Finance, according to the law, is
the only one with the authority to sign loan
agreements on behalf of the State.
In the transitional period the Minister of Finance,
according to paragraph 3 of section 28, has the
authority to exceed the norm of the external and
internal debt including guarantees by SRG 250
billion (SRD 250 million).
Paragraph 6 of article 28 also states that during
any of the transition years, the borrowing ceilings
are reached; the ceilings may not be exceeded in the
years after, during this period.
The temporary provision in the law was made because
when the act was taken into force, all the liability
ceilings where already exceeded.
This temporary provision expired on December 31 2006.
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At the end of 2006 the total actual State debt (Central Government) was US$ 623.8
million of which US$ 388.6 million was external debt and US$ 235.2 million was domestic
debt.
According to the definition in the National Debt Act act,
the total State debt by
the end of 2006 was US$ 775.4 million of which US$ 491.4 million was external debt
and US$ 264.0 million was domestic debt.
The height of the borrowing ceilings at the end of 2006 based on the definition
in the National Debt Act was:
* External debt 28.1%
* Domestic debt 15.1%
* Total debt 43.2%
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