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Govt should not direct forex allocation
Mitchell De Silva, new president of the American Chamber of T&T (AmCham), believes that the Government should have as little intervention in the economy as possible especially as it relates to the allocation of foreign exchange.
On Wednesday, during his mid-year review, Finance Minister Colm Imbert said that the Government has requested the Central Bank to give priority to manufacturing and trade whenever it intervenes in the disbursement of foreign exchange to commercial banks.
“Clearly, those are critical areas and it is the minister’s or Central Bank’s right to direct the allocation of currency, but in a free market it is not always best to do those kinds of things when there is interference. It creates distortions in the economy. As a business chamber we are in support of a free system as possible. At the end of the day you have to decide what you want, a market-driven economy or one that is directed by the state,” De Silva said.
De Silva spoke to the media on Thursday evening after the opening ceremony of AmCham T&T’s Annual General Meeting at the Hilton Hotel, St Ann’s. He holds the position of Regional Vice President of Corporate Banking, RBC.
He said Imbert’s announcement is nothing new as the Government’s focus has been to provide foreign exchange to trade, education and healthcare.
He added that some of AmCham T&T’s members have benefited from how the Government has directed the allocation of forex.
Speaking about what his leadership style will be as the president of AmCham, he said it will be “collaborative”.
“I want to get people to talk and to come up with solutions. I am very much against directive-style management. Obviously there has to be direction but people have to understand the direction and why.”
He said under his tenure, one of his main areas of focus will be accountability and discipline.
“Unfortunately, we lack that in T&T. We are part of a joint initiative on the procurement legislation and its operationalisation. That is critical. There is need for consultation and collaboration on that,” he said.
He said there needs to greater discipline in how money is spent in T&T.
“We have TT $37 billion in true revenue this year from taxation but we are going to spend $53 billion. If you think of running your household like that, you will not survive,” he said.
Despite T&T’s deepest recession in decades, De Silva remains optimistic about the economy being turned around.
“We have substantial buffers as a country and we are in a very different place compared to the 1980s in terms of how much saving the country has. There are significant reserves.”