The Risks of Privatizing State-Owned Enterprises: Lessons Suriname Could Learn from Global Cases
November 10, 2024
I recently received a digital column from my colleague in Suri-name, Delano Gefferie, written by Khan, which deeply resonated with me and prompted me to share my thoughts on a critical issue facing Suriname today. The government’s push to privatize state-owned enterprises (SOEs) based on a flimsy document raises significant concerns about the future of that nation’s economic landscape.
Suriname’s proposed privatization of state-owned enterprises risks creating an oligarchic structure like those seen globally, where rapid privatizations have allowed government affiliates to acquire key national assets. Without a strategic and transparent approach, Suri-name could witness its public resources transition into the hands of an elite few, leading to increased economic inequality and weakened public services. This scenario is not merely theoretical; history has shown us that rushed privatizations often sell public assets at under-valued prices to well-connected individuals, transforming these resources into private fortunes while the broader economy becomes increasingly controlled by a small, powerful elite.
For instance, in the 1990s, several Eastern European countries experienced similar privatization waves post-communism. In many cases, state assets were quickly sold to insiders and their associates, leading to the rise of oligarchs who amassed significant wealth and influence. This concentration of economic power undermined democratic institutions and led to widespread corruption, ultimately stifling national growth and reducing public and private accountability.
The potential consequences for Suriname are equally alarming. Concentrated wealth can hinder national growth, weaken public services, and reduce accountability. Suriname risks repeating these detrimental patterns without a clear and comprehensive vision, undermining its future. The government's reliance on a simplistic approach, devoid of detailed analysis or transparent procedures, exacerbates these concerns. To prevent this pathway to more inequality, Suriname must adopt a more strategic and thoughtful policy framework that considers the country’s unique needs and economic context.
A more robust alternative would involve studying models of sustainable public-private partnerships, retaining strategic assets, and prioritizing national interests over short-term financial gains. For example, countries like the United Arab Emirates have successfully maintained ownership of critical industries, such as Emirates Airlines and Dubai Airports, using them as catalysts for broader economic development without relinquishing control to private elites. These enterprises support national development goals and ensure that profits remain within the country, fostering inclusive growth and stability.
Moreover, Suriname must prioritize the development of a long-term economic vision that clearly outlines which enterprises should remain under public ownership and which could be privatized under stringent regulatory frameworks. This approach would help safeguard national interests, promote equitable economic growth, and prevent the emergence of oligarchies that could undermine democratic governance and social equity. While privatizing state-owned enterprises might appear as a viable solution to fiscal challenges, it is fraught with risks that Suriname cannot afford to overlook. A meticulous, transparent, and strategic approach is essential to ensure that privatization efforts contribute to the nation’s sustainable development rather than facilitating the concentration of wealth and power in the hands of a few.
Miguel Goede
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