Suriname, a small, isolated nation on the northern edge of South America, has grown into a major narcotics center, serving as a central transshipment point for the growing flow of cocaine to Europe, according to Surinamese and senior U.S. officials and international narcotics experts.

Senior U.S. officials and Surinamese opposition leaders say the country also is becoming an important shipment point for the U.S. drug market and may have become a center for large-scale, permanent cocaine laboratories, as well as a safe haven for traffickers.

These sources as well as a summary of Western intelligence findings on narcotics activities in Suriname say the army commander, Lt. Col. Desi Bouterse, 45, allowed his country to become a major transshipment center in the late 1980s. He is a former sergeant who promoted himself after seizing power in 1980.

According to the opposition leaders and sources in Suriname, the army protects and allows the use of numerous unregistered airstrips to transship cocaine.

The Western intelligence summary listed as "significant violators" of narcotics laws nine Surinamese officials, including Bouterse, two Colombians who allegedly served as contacts with the Medellin cocaine cartel and three companies in Suriname and the Caribbean.

"Suriname's importance as a conduit for cocaine flowing to Europe and the United States is growing," the summary concludes. "The above intelligence strongly suggests (high probability) the involvement of ranking Surinamese military leaders in narcotics trafficking."

The Senate Foreign Relations subcommittee on terrorism, narcotics and international operations, chaired by John Kerry (D-Mass.), is investigating allegations that Bouterse used the Bank of Credit and Commerce International to launder millions of dollars in drug profits.

"We are investigating the involvement of the Suriname Central Bank, Desi Bouterse and other Suriname officials with BCCI to determine whether their relationship with BCCI was similar to that of Panama," said Jonathan Winer, an investigator with the subcommittee. "Specifically, BCCI in Panama appears to have laundered illegal money and shielded funds from seizure. We have growing evidence to suggest the situation with Suriname is very similar."

A senior U.S. official monitoring the region said: "There is no question in the view of the U.S. government that there is significant army, and probably some police, involvement in narcotics trafficking in Suriname."

Bouterse, who formally turned the government over to an elected civilian president in September, could not be reached from outside the country, and two journalists' inquiries about visas met with indications of long delays. However, according to published reports, he denied in August any involvement with drug trafficking following Dutch newspaper reports that he personally presided over a major cocaine operation -- including refineries in the jungle.

Prospects for curtailing the flow of cocaine through Suriname depend in part on who controls the country, Bouterse or the elected government that succeeded him. The new president, Ronald Venetiaan, is described as a respected civilian leader. But U.S. officials and academics said the army, which Bouterse still controls, retains much of the political and economic power, and the constitution, drafted by Bouterse in 1984, gives the military wide latitude to intervene in politics.

In a speech to the United Nations on Sept. 26, Venetiaan said, "Suriname, too, is among the victims of the evil that is illicit trafficking and use of drugs" and that "with the restoration of democracy in Suriname, we have met one of the basic requirements for expanded and intensified international cooperation." The Drug Enforcement Administration recently sent its first team there to evaluate the situation, U.S. officials said.

According to a senior Colombian official, Venetiaan, in a show of goodwill, offered in September to turn over evidence of the Medellin cartel's activities in Suriname, to be used in the trials of jailed cartel leaders Pablo Escobar and the brothers Jorge, Fabio and Juan Ochoa.

Wim A. Udenhout, Suriname's ambassador to the United States, said in an interview that European law enforcement officials now estimate that about 60 percent of the cocaine reaching the Dutch port of Rotterdam, one of the largest European narcotics distribution centers, passes through Suriname.

Udenhout said there "was reason to believe a large-scale investigation is warranted," into allegations of military involvement in narcotics trafficking and that the role of Bouterse "is still under review by the {new} government."

The ambassador said that combating the flow of drugs is "the topmost priority of my government," and he added that Venetiaan, who served in the cabinet of the government that Bouterse ousted, has "credentials enough for the world to believe he will really investigate."

U.S. officials and narcotics experts here said an increasing amount of cocaine is being transshipped from the coast of Suriname in small boats to larger boats on the high seas that carry drugs to the United States.

Colombian narcotics experts said they had detected a greater volume of cocaine moving out through Venezuela and Suriname and that Suriname had also become a major transshipment point for chemicals used in cocaine refinement from the Netherlands and Germany into Colombia.

A senior U.S. narcotics expert said that because most of the cocaine and money from Suriname pass through Europe, "it did not come up on our radar screen until fairly recently, and now we are doing what we can."

Knowledgeable sources who live in Suriname and are familiar with the sparsely populated central and southern regions of the Illinois-sized country said there are at least two restricted military airstrips able to accommodate DC-3s and larger aircraft there, as well as numerous unregistered airstrips for small aircraft in regular use throughout the area, especially close to the Brazilian border.

The sources said the army has grounded private flights around those areas without explanation and that there have been incidents in which small private airplanes, even after filing flight plans, have been shot at. The sources also said there were persistent, credible reports of large-scale cocaine laboratories operating in the area.

"We do not think there are labs there; we know there are," said Carlos Freeman Jr., 69, an American who has worked with the anti-Bouterse forces for six years as a military adviser and a spokesman. "Our people {the resistance} have seen them."

Freeman, who now lives in Miami and is cooperating with Kerry's subcommittee, said he will bring witnesses to testify in hearings scheduled for this month about cocaine operations in Suriname.

Freeman is also collaborating with the office of New York District Attorney Robert Morgenthau, whose investigatation of BCCI has led to several indictments.

Suriname, with about 420,000 inhabitants, is the smallest nation in South America but one of the most ethnically diverse, composed of East Indians, Javanese, blacks of African descent known as Maroons, American Indians and a small European community. Its economy is largely dependent on bauxite, and 85 percent of the population live on the northern coast, mostly in and around the capital, Paramaribo.

In 1980, five years after Suriname gained independence from the Netherlands, Bouterse and 15 other noncommissioned officers overthrew the elected government and declared Suriname a "revolutionary state," strengthening ties to Cuba, Libya and Grenada.

In December 1982, faced with growing unrest, the army rounded up 15 prominent opposition leaders and summarily executed them, many apparently after torture, prompting the Netherlands to suspend its $150 million-a-year aid program and other nations to cut diplomatic ties.

The following year, CIA Director William Casey responded to pleas from Surinamese exiles by ordering a study of the feasibility of ousting Bouterse, according to Bob Woodward's book "Veil: The Secret Wars of the CIA 1981-1987." The idea drew stiff opposition from the congressional intelligence committees, the CIA field team found little prospect of success and the matter was dropped, Woodward reported.

In 1986, with no outside aid, the world price of bauxite plummeting and the economy contracting, Bouterse's ex-bodyguard Ronnie Brunswijk, a Maroon, organized an insurgent force called the Jungle Command. The army responded, according to the human rights group Americas Watch, with "indiscriminate killing of noncombatants," driving thousands of Maroons and members of other ethnic groups from the interior.

"How could such a depressed economy sustain such an army of 2,700 and such a war?" asked Adiante Franszoon of the Maroon Resettlement Fund, in a 1989 article in Hemisphere magazine. "The well-documented answer is that Bouterse has been financing the conflict through drug trafficking."

U.S. officials, intelligence documents and opposition leaders say Bouterse opened up the country as a transshipment point to the Colombian cartels, which flew the cocaine into the interior in small airplanes or used boats to send it down rivers from Brazil.

In November 1986, Capt. Etienne Boerenveen, Bouterse's closest aide and deputy military commander, was sentenced in Miami to 12 years in prison after being found guilty of conspiring to allow drug dealers to use Suriname's airfields as a base for operations into the United States.

The intelligence summary said Bouterse paid $600,000 for Boerenveen's defense and that when Boerenveen was released on parole earlier this year, Bouterse promoted him to "commandant and made {him} commander of the military police and central intelligence services of Suriname's armed forces."

Ambassador Udenhout acknowledged that the Netherlands last May expelled Balthus Theo Berrenstein and Romeo Antonious, two accredited diplomats from Suriname with ties to Bouterse, for narcotics-related activities. According to the intelligence summary, "it is strongly believed by the Dutch that they are in fact members of Suriname's trafficking organization headed by Desi Bouterse."

Last month, another close associate of Bouterse was recaptured after having fled arrest in the Netherlands for narcotics trafficking and is being held in a maximum-security prison, according to published reports.

Senate investigators also have 1986 documents they say show how Bouterse and the central bank used BCCI to launder drug money. BCCI had no offices in Suriname, but according to BCCI documents, the central bank of Suriname had at least four accounts at its Miami branch.

A contract written in Dutch and signed by Henk Goedschalk, governor of Suriname's central bank and, according to printed accounts, a close associate of Bouterse, calls for the Camari Corp., based in the Netherlands Antilles, to lend the government of Suriname $200 million "in cash," to be deposited "in bank account number 01007647 in the Miami branch of BCCI."

Goedschalk denied signing the contract when it was revealed in August. At a press conference last month, however, he acknowledged that he had signed the agreement but said the deal was not carried through.

The BCCI account listed does exist, registered to the "Central Bank of Suriname," according to bank documents, but so far BCCI investigators have not been given access to bank statements for the account.

A Senate investigator said the most suspicious aspect of the agreement was that the loan was to be a lump-sum cash payment and that Camari Corp. had virtually no assets.

According to a U.S. narcotics expert, having money deposited in BCCI in the name of the Central Bank would allow the money to escape some normal reporting requirements.

"I think a lot of what went on in Suriname was tied to the intense difficulties {of the cocaine cartels} in Panama," said a U.S. investigator familiar with BCCI's activities. "The money and things they could do in the past in Panama were becoming very difficult, and they had to look around. A country that would meet all their requirements is not easy to find, and Suriname is way off the beaten path, and there is not much of an American presence there."

The investigator said the Central Bank "was able to do a lot of cash transactions and conceal them behind the official Central Bank to avoid any embarrassment or potentially embarrassing transactions. A central bank is very convenient to have. It opens up a whole range of things you can do."

Even though the insurgency was largely over by 1988, Freeman and the intelligence summary said Bouterse continued to import large amounts of weapons. Brazil, defying international pressure, sold tanks and armored personnel carriers to Suriname, according to U.S. officials, and, according to the intelligence summary, at least one airplane-load of arms from Yugoslavia and two from Poland reached Suriname in 1990 with weapons manufactured in Belgium, Finland and Austria.

By the time of the 1990 shipments, the bush war was over, and investigators suspect some of the arms may have been sold to Colombian drug traffickers. The Medellin cartel was then waging an all-out war against the Colombian government, and it is likely that some of the European weapons were subsequently confiscated by police.

The intelligence summary said Dutch authorities "have developed informant information indicating Pablo Escobar is closely associated with Desi Bouterse." A senior Colombian official monitoring narcotics activities said Colombian intelligence had detected "three or four" trips by Medellin cartel leader Escobar to Suriname from 1987 to 1989.

In November 1987, the Surinamese nmilitary allowed the National Assembly to choose a civilian president, but, according to academic and international observers, Bouterse remained the true power.

Under growing international pressure, especially from the Netherlands and the United States, Bouterse allowed elections to be held in May, while Paramaribo was rife with rumors and government accusations that the United States was planning to assassinate Bouterse or invade.

U.S. officials refused to comment on the reports but said it had been made clear to Bouterse that the United States strongly supports a return to democracy.

"We are putting a lot of hope in Venetiaan," said a senior U.S. official. "The question is whether he and the government can control the military and Bouterse."