Tag: Cold

Although Suriname is one of the smallest countries in the Western Hemisphere, it is gaining importance as it heads in the same direction as neighboring Guyana in becoming one of the world’s newest oil producers. This is a development that both Washington and Beijing are watching closely, especially as they seek to consolidate their positions in the Americas within the context of an intensifying global rivalry that has all the hallmarks of a new Cold War.

China has been carving out a role in Suriname over the past two decades. It is the Caribbean country’s largest sovereign lender and a major trading partner. Its companies are actively engaged in upgrading the country’s infrastructure, and, most recently, the two have focused on the country’s extractive sector: oil and bauxite. China has a Confucius Institute at Suriname’s leading university, the Anton de Kom Universiteit van Suriname, where it conveys the message that engagement with the People’s Republic is a win-win relationship with one of the world’s economically most successful countries. That relationship is constructed on multilateral coordination, solidarity, cooperation, and, of course, a strict adherence to the one-China principle (no recognition of Taiwan as an independent state). Much of this engagement has been under the auspices of China’s Belt and Road Initiative (BRI), which Suriname joined in 2018.  

Head-of-state meetings also play their part. Dési Bouterse, president from 2010 to 2020, visited China in 2019, and his successor, Chan Santokhi, who succeeded him in 2020, paid an official visit in April 2024. Santokhi met President Xi Jinping, and the two discussed the potential for cooperation in infrastructure, agriculture, forestry, and energy. During his visit, Santokhi stated, “China is taking leadership in the world and supporting other countries. One of the examples is the Belt and Road cooperation plan. My country is also benefiting from this development.” He also stressed that the BRI can be implemented through the Community of Latin American and Caribbean States (CELAC) and the Caribbean Community (CARICOM), which can help promote “South-South cooperation” and “can improve the connectivity between Latin American countries and China.”

The extractive industries sector is a major part of Chinese-Surinamese economic relations, which follows a pattern evident in the rest of the Caribbean and Latin America. One of the largest gold mining operations in the country is owned by China’s Zijin, which bought out Canada’s IAMGOLD, and Chinese companies are active in the timber sector. In November 2024, it was announced that the Chinese mining company Chinalco and the government of Suriname had signed a MOU (memorandum of understanding) for the Chinese company to invest $426 million in bauxite mining. The deal will have to be approved by the country’s National Assembly. Bauxite was Suriname’s major industry through much of the twentieth century but came to a halt in the 2010s due to challenging global market conditions and Suriname’s own internal problems. 

In 2024 PetroChina (a subsidiary of China National Petroleum Corporation, or CNPC) signed a deal with Suriname’s Staatsolie for production sharing in blocks fourteen and fifteen, which gives China an important toehold in Suriname similar to the China National Offshore Oil Corporation’s (CNNOC) operations in Guyana. 

Another Chinese company, the China Road and Bridge Corporation, competed in a lengthy process (which began in 2023) for the contract to build the Corentyne River Bridge between Guyana and Suriname. The winning bid was announced in December 2024, with China Road and Bridge Corporation beating out Ballast Nedam Infra Suriname (a local company) and China Railway Caribbean Company Limited. This venture is regarded as critical to furthering the economic integration of the southern Caribbean by improving the ease of travel between Georgetown and Paramaribo.

While the infrastructure and mining part of Chinese economic statecraft seeks to portray a win-win approach, China maintains its more hard-nosed leverage on the country by being Suriname’s largest sovereign debt holder. It was under Bouterse that some $1.5 billion was borrowed, much of it from China, including a credit line from China’s central bank, some of which was used to pay Huawei, the Chinese telecommunications manufacturer, to upgrade the telephone system. 

While Suriname defaulted on its debt in 2020, it was not until November 2024 that the two countries settled the matter. Under the agreement, Suriname agreed to pay off the $476 million (of which $140 million is in arrears) it owes the Chinese state-owned Exim Bank (Export-Import Bank). According to Suriname’s debt management office, payments to China’s Exim will be paid in two tranches. Additional debt owed to the Industrial and Commercial Bank of China of $68 million will be paid in one tranche. Suriname’s total debt as of December 31, 2023, was estimated at $2.7 billion.

Not everyone in Suriname is happy with China’s large role in their country. Indeed, China’s prolonged debt negotiations (four years) raised questions of bullying. As one editorial from de Ware Tijd noted of China’s lengthy bargaining and its objections to an earlier agreement regarding the debt in November 2024:

“After this, Ramdin (the foreign minister) had to eat humble pie and admit that no final deal had been signed, which is why this affair was given the name ‘The Great China Lie’ in the community. And which has been maintained by parties ever since by consistently keeping quiet about it. But with that, the enormous debt burden, with which China can put pressure on the Surinamese government – if not blackmail it – still stands.”

The proposed Chinalco deal has also been criticized. The Association of Economists in Suriname (VES) noted that if approved by the National Assembly, the deal will “be the worst ever in Suriname’s extractive industry.” According to the VES, “The deal means that the government agrees to give away all tax benefits. Chinalco and its companies do not have to pay income tax and Suriname gives away its right to grant concessions in an area of 28,000 hectares.” Additionally, there is an Indigenous community of an estimated 5,000 people who would have to be displaced to make way for the mining operation.

With the advent of the Trump administration, the rivalry between China and the United States is set to heat up. In this, the United States has a stake in Suriname. It is a fellow democracy and is capitalist-oriented. Most of all, its oil and gas sectors are poised to take off in the next few years (pushed along by TotalEnergies and APA’s $10.5 billion investment). Indeed, the opening of the oil and gas sector could provide new opportunities for U.S. companies. The United States is also Suriname’s largest trade partner (according to the International Monetary Fund (IMF) Direction of Trade Statistics).

For the United States, there is a need to upgrade its economic statecraft playbook to compete with China. In December 2024, the Export-Import Bank of the United States confirmed that it had approved a $526 million loan to Guyana in support of the country’s Gas-to-Energy Project. The financing will facilitate the construction of “a natural gas separation plant, a 300 megawatts (MW) combined gas turbine power plant and services linked to the gas supply pipeline.” Significantly, the loan will help Guyana upgrade its aging and polluting (powered by oil) power generation system, replace it with less polluting natural gas, and continue its efforts to develop renewable energy.

The recent loan to Guyana provides the type of support that countries like Suriname need, and which, in the past, China has been willing to supply. If the United States wants to be in the game, it needs to fight fire with fire. Suriname may currently not be all that important to Washington, but its geoeconomic profile is rising, and it faces substantial challenges. The United States can assist the country in reaching its potential or allow China to gain a stronger position.

Dr. Scott B. MacDonald is Chief Economist at Smith’s Research & Gradings. Prior to KWR he was the Head of Research for MC Asset Management LLC, an asset management unit of Mitsubishi Corporation based in Stamford, Connecticut.

Image: Martirosyan Stock/ Shutterstock.com.