Dec. 13, 2008 -- Suriname will empower local governments to take direct initiative and accountability over basic fiscal functions as well as the delivery of core public services with an Inter-American Development Bank $13.5 million loan.

The country has a geographically dispersed and ethnically diversified population. A law enacted in 1989 defined the responsibilities of the ten districts of Suriname and some preliminary mechanisms for local revenue generation and financial management. Although some progress has been made in a legal framework and the organization of institutions with support from a previous IDB loan, implementation in many districts is still a challenge.

The second phase loan approved on December 10 by the IDB Board of Executive Directors is expected to help all local governments reach the same operating standards and certification.

This program will assist the districts of Paramaribo, Sipaliwini, Saramacca, Coronie and Brokopondo to achieve self-management, including financial and tax systems and management of capital investment. Upon approval of a district tax law, the program will support implementation of a simplified tax administration system in certified districts.

Committees will be created to engage citizens in the decision making process as participation,  still weak due to the low levels of organization, is considered a key factor to achieve greater transparency and accountability in the districts. The program will also help the districts of Wanica, Para, Nickerie, Commewijne and Marowijne in the implementation of community-based basic infrastructure investment projects and services.

The IDB loan is for a 25-year term, with a five-year grace period, at a Libor-based interest rate. The Ministry of Regional Development will carry out the program. The government will provide $1.5 million in counterpart financing.