Introduction to a Sovereign Wealth Fund for “Countries on the Move” Masterclass

Introduction to a Sovereign Wealth Fund for “countries on the move”

Background

Suriname is a small commodity-based economy that has historically depended heavily on revenues from the extractive sector. Since the offshore oil discoveries announced between 2019 and 2020, expectations have increased regarding future oil revenues and their possible impact on the Surinamese economy. Following the Final Investment Decision (FID) taken by Total Energies and APA Corporation in relation to offshore Block 58, Suriname is expected to commence offshore oil production around 2028.

The prospect of future resource revenues has renewed attention to the question of how these revenues should be managed in a prudent, transparent and sustainable manner, taking into account both macroeconomic stability and the interests of future generations.

A Savings and Stabilization Fund (SSFS) was legally established in Suriname in 2017 and further revised in 2024. The amended legislation seeks to contribute to prudent fiscal management by: supporting fiscal stabilization in periods of volatile resource revenues, promoting long-term savings for future generations; and establishing a framework for the responsible management of extractive industry revenues.

The revised legal framework provides important foundations regarding governance, fiscal rules, reporting obligations and the relationship with the national budget. At the same time, important policy, institutional and operational steps still need to be taken to ensure that the Fund can become operational in a timely and effective manner before the expected start of oil production.

At present, it is not yet publicly clear which concrete implementation steps have already been taken, which additional measures are still required, and how the operational readiness of the Fund will be achieved by 1 January 2028.

International experience demonstrates that countries entering a new resource-revenue phase benefit from establishing strong governance arrangements, institutional coordination, fiscal discipline and stakeholder awareness at an early stage. Conversely, delays in preparation may increase risks related to macroeconomic instability, weak coordination and ineffective use of resource revenues.

Against this background, the Youth Education and Leadership Foundation (YELF) is organizing a small-scale masterclass intended to stimulate informed dialogue and stakeholder awareness regarding the operationalization of Suriname’s Savings and Stabilization Fund.

 

Purpose of the Masterclass

The masterclass is intended as an introductory and policy-oriented exchange on the institutional, governance and implementation challenges associated with operationalizing a Sovereign Wealth Fund in Suriname.

The session aims to:

-          Provide participants with introductory knowledge regarding Sovereign Wealth Funds and international experiences;

-          Explain the legal and institutional framework of Suriname’s Savings and Stabilization Fund;

-          Stimulate dialogue on the steps required to ensure operational readiness before oil revenues begin to flow;

-          Identify possible governance, fiscal and institutional challenges;

-          Encourage stakeholder engagement and broader societal awareness regarding the importance of prudent resource revenue management.

 

The masterclass does not seek to provide exhaustive technical training. Rather, it is intended to serve as a starting point for continued dialogue, awareness-building and policy reflection.

Themes for Discussion

The following themes will serve as the basis for discussion:

-          Introduction to Sovereign Wealth Funds;

-          International experiences and selected country examples;

-          Governance structures and safeguards;

-          Fiscal discipline and integration with the national budget;

-          Transparency, accountability and disclosure;

-          Institutional readiness and implementation challenges;

-          Stakeholder engagement and long-term sustainability.

 

Central Policy Question

The central policy question of the masterclass is:

Which steps are necessary to ensure that Suriname’s Savings and Stabilization Fund can become operational in a prudent, transparent and sustainable manner before the expected start of oil production?

This question includes consideration of governance arrangements, institutional preparedness, fiscal coordination, stakeholder engagement and long-term sustainability.

 

Format

The masterclass is intentionally designed as a small-scale, policy-oriented working session (maximum 15 participants) in order to facilitate meaningful discussion and exchange of perspectives.

Format:

-          Short introductory presentations;

-          Structured moderated discussion;

-          Pre-distributed background note;

-          Active participation by all attendees.

 

The emphasis of the session will be on dialogue, exchange of ideas and identification of possible pathways forward.

 

Speakers and Scope of Presentations

Mr. Karel Eckhorst

Former Advisor to the Executive Director at the International Monetary Fund (IMF)

Mr. Eckhorst will provide:

-          An introductory overview of Sovereign Wealth Funds and their principal characteristics, with reflections on institutional arrangements, governance approaches and procedures relevant for Suriname, including the role of key institutions involved;

-          Selected international experiences and comparative examples, including Norway, Trinidad and Tobago and Guyana;

-          Reflections on the possible macroeconomic significance of Sovereign Wealth Funds for resource-dependent economies.

Intended Contribution

The presentation is intended to provide participants with introductory policy-level insights and comparative perspectives relevant to the Surinamese context.

 

Drs. R. Abrahams RA

Former advisor to the Ministry of Finance and Planning, specialized in Public Financial Management

Mr. Abrahams will provide:

-          An introductory overview of the 2024 Savings and Stabilization Fund legislation;

-          Reflections on the relationship between the SSFS and Suriname’s broader public financial management framework;

-          Observations regarding governance, transparency and internationally recognized principles relevant to Sovereign Wealth Funds, including the Santiago Principles.

Intended Contribution

The presentation is intended to provide participants with a general understanding of the legal and governance framework relevant to the operationalization of the SSFS.

 

Expected Outcomes

By the end of the masterclass, participants are expected to:

-          Have a clearer introductory understanding of the purpose and functioning of Sovereign Wealth Funds;

-          Gain greater awareness of the institutional and governance issues relevant to the operationalization of Suriname’s SSFS;

-          Identify possible implementation challenges and areas requiring further policy attention;

-          Contribute to an informed dialogue on prudent and sustainable management of future resource revenues.