Suriname aims to share oil wealth with all citizens

Suriname, a South American nation, has recently embarked on a significant initiative to ensure equitable distribution of oil wealth among its citizens, following major offshore oil discoveries between 2019 and 2023. Led by President Chan Santokhi, the initiative, dubbed 'Royalties for Everyone,' seeks to manage and distribute an estimated $10 billion in revenues expected over the next 10 to 20 years from new oil and gas projects. This program aims to provide financial support and uplift the standard of living for all Surinamese, who number over 600,000. Despite the country's independence from Dutch colonial rule in 1975, many citizens have not reaped the benefits of resource wealth, prompting the establishment of this wealth-sharing program. The decision to adopt this approach is fueled by the lessons learned from other nations that possess natural resource wealth but have struggled with equitable distribution and economic challenges. Notably, Guyana, Suriname's neighbor, has faced significant poverty rates despite substantial oil reserves. In 2019, Guyana's poverty rate was around 48.4%, down from 60.9% in 2006, indicating some progress but still reflecting dire economic conditions for nearly half the population living on less than $5.50 a day. As both countries have seen their oil and gas industries develop, there are concerns about preparedness for managing newfound wealth, including political stability and equitable revenue distribution. Suriname is not alone in exploring wealth-sharing initiatives; several other countries have implemented systems to benefit their citizens from natural resource revenues. For instance, Mongolia's Human Development Fund distributes mining revenues directly to its citizens, while Alaska established the Permanent Fund Dividend to pay Alaskans from oil revenues generated since 1977. Similarly, Botswana has leveraged diamond exports to evolve from one of the world's poorest countries to an upper-middle-income country through effective revenue management, showcasing the potential benefits of adopting similar practices for oil wealth. With Suriname’s decision to share oil revenues through the 'Royalties for Everyone' initiative, the government hopes to set an example and create a brighter future for its citizens who have long awaited a share of the nation’s natural wealth. As the oil industry continues to grow and the expected influx of cash flows into the country, it will be critical for the Surinamese government to implement a transparent and effective framework for resource management to ensure that its citizens truly benefit from their natural resource endowments.