An­drea Perez-Sobers

Se­nior Re­porter

an­drea.perez-sobers@guardian.co.tt

For­mer fi­nance min­is­ter Sel­by Wil­son has cau­tioned that the Gov­ern­ment’s promised leg­is­la­tion to dis­man­tle for­eign ex­change “car­tels” must go be­yond po­lit­i­cal the­atre and de­liv­er re­al struc­tur­al re­form.

Re­spond­ing to Prime Min­is­ter Kam­la Per­sad-Bisses­sar’s an­nounce­ment that leg­is­la­tion will be brought to Par­lia­ment be­fore year-end, Wil­son warned that leg­is­la­tion must ad­dress sys­temic weak­ness­es in the al­lo­ca­tion process rather than sim­ply ex­pos­ing com­pa­nies or in­sti­tu­tions.

“If this leg­is­la­tion is on­ly about nam­ing and sham­ing, then it will not solve the prob­lem. What the coun­try needs is a fair, trans­par­ent, rules-based sys­tem that every­one can trust; Small or Medi­um En­ter­prise (SMEs), ex­porters and even the largest cor­po­ra­tions,” Wil­son told Busi­ness Guardian.

The for­mer min­is­ter, who served in the 1986 to 1991 Na­tion­al Al­liance for Re­con­struc­tion ad­min­is­tra­tion, said forex re­form must cre­ate equal ac­cess across sec­tors, curb an­ti-com­pet­i­tive prac­tices, and en­sure that lim­it­ed US dol­lars are chan­nelled to­ward ac­tiv­i­ties that strength­en the pro­duc­tive base of the econ­o­my.

“Fix the sys­tem, don’t just politi­cise the is­sue,” he stressed.

Per­sad-Bisses­sar con­firmed ear­li­er this week that her Gov­ern­ment is draft­ing leg­is­la­tion aimed square­ly at break­ing what she de­scribed as en­trenched car­tels, mo­nop­o­lis­ing for­eign ex­change ac­cess.

“We can­not al­low a small clique to choke­hold the econ­o­my by hoard­ing forex and leav­ing thou­sands of SMEs and cit­i­zens strug­gling to sur­vive. This bill will shine sun­light in­to a sys­tem that has thrived in dark­ness for too long,” she de­clared.

Though de­tails re­main un­der wraps, sources say the leg­is­la­tion is like­ly to in­clude manda­to­ry re­port­ing of al­lo­ca­tions by sec­tor, in­de­pen­dent au­dits of forex flows, penal­ties for banks or firms en­gaged in an­ti-com­pet­i­tive prac­tices and spe­cial win­dows to guar­an­tee ac­cess for SMEs.

Per­sad-Bisses­sar has framed the move as part of her Gov­ern­ment’s com­mit­ment to restor­ing eq­ui­ty and trust in eco­nom­ic gov­er­nance, ar­gu­ing that fair­ness and prof­itabil­i­ty must co­ex­ist.

Ex­im­Bank leak adds fu­el

A re­cent news­pa­per ad­ver­tise­ment re­vealed Ex­im­Bank da­ta show­ing that from 2020 to mid-2025, US$1.4 bil­lion in for­eign ex­change was dis­trib­uted to 123 com­pa­nies un­der the es­sen­tial goods and man­u­fac­tur­ing win­dows, with phar­ma­ceu­ti­cal and poul­try firms re­ceiv­ing the largest share.

On Sep­tem­ber 4, Cen­tral Bank Gov­er­nor Lar­ry Howai dis­closed that Ex­im­Bank re­ceived US$600 mil­lion, rep­re­sent­ing rough­ly 27 per cent of the Bank’s to­tal US$2.2 bil­lion for­eign ex­change in­ter­ven­tion.

Dur­ing a post-Cab­i­net me­dia brief­ing in May at the Red House, the Prime Min­is­ter promised to take strong ac­tion on for­eign ex­change dis­tri­b­u­tion. She stat­ed that the gov­ern­ment would pre­pare a re­port on forex al­lo­ca­tion and leak­ages over the past 10 years, which would be made pub­lic.

For Wil­son, the pub­li­ca­tion high­lights both the in­equities with­in the sys­tem and the risks as­so­ci­at­ed with poor gov­er­nance.

“Trans­paren­cy is es­sen­tial, but pub­lish­ing com­pa­ny names and their al­lo­ca­tions is reck­less. It cre­ates rep­u­ta­tion­al risks, com­pet­i­tive risks, and most se­ri­ous­ly se­cu­ri­ty risks for busi­ness­es al­ready op­er­at­ing in a high-crime en­vi­ron­ment,” he said.

Wil­son ar­gued that trans­paren­cy can be achieved with­out ex­po­sure. He rec­om­mend­ed pub­lish­ing ag­gre­gat­ed da­ta by sec­tor and in­dus­try to re­veal trends and im­bal­ances, while pro­tect­ing the iden­ti­ties of in­di­vid­ual com­pa­nies.

“Trans­paren­cy does not mean reck­less ex­po­sure,” he said. “If you want ac­count­abil­i­ty, show how much forex went to man­u­fac­tur­ing, agri­cul­ture, or phar­ma­ceu­ti­cals. That way the pub­lic knows where the mon­ey is go­ing with­out putting tar­gets on com­pa­nies’ backs.”

Trust un­der strain

The Ex­im­Bank was de­signed to help man­u­fac­tur­ers and ex­porters by ringfenc­ing forex for crit­i­cal sec­tors. Dur­ing the COVID-19 pan­dem­ic, a for­eign ex­change win­dow was opened for im­porters of es­sen­tial food items and pharmeucit­i­cals.

Wil­son warned that the pub­li­ca­tion erodes trust in the very in­sti­tu­tion meant to sta­bilise the sys­tem.

“Once con­fi­dence in the Ex­im­Bank breaks down, you’ve lost one of the key tools for man­ag­ing forex short­ages. No sys­tem can func­tion with­out trust,” he said.

Busi­ness cham­bers re­main split on the leak, with some say­ing it proves their sus­pi­cions of in­equity, and oth­ers warn­ing it could un­der­mine in­vestor con­fi­dence.

At the heart of the de­bate are the tens of thou­sands of SMEs that con­tin­ue to strug­gle for forex. While large cor­po­ra­tions se­cure mil­lions, small­er firms are of­ten turned away by banks when re­quest­ing as lit­tle as US$5,000.

Wil­son said the suc­cess of Per­sad-Bisses­sar’s Bill will ul­ti­mate­ly be judged on whether SMEs fi­nal­ly get eq­ui­table ac­cess.

“If the re­forms don’t de­liv­er re­al change for SMEs, then all this talk of car­tels and trans­paren­cy will be mean­ing­less,” he said.

The road ahead

The com­bi­na­tion of the Ex­im­Bank pub­li­ca­tion and the Prime Min­is­ter’s pledge of new leg­is­la­tion has el­e­vat­ed the forex is­sue to the top of the na­tion­al agen­da.

Per­sad-Bisses­sar is bet­ting that con­fronting car­tels will res­onate with strug­gling busi­ness­es and the wider pub­lic. Wil­son, how­ev­er, in­sists that the mea­sure of suc­cess will be a rules-based sys­tem that de­liv­ers fair­ness with­out desta­bil­is­ing the mar­ket.

“We’ve been here be­fore with patch­work so­lu­tions. If this Bill is not de­signed prop­er­ly, it will cre­ate more dis­tor­tions in­stead of fix­ing the prob­lem,” he warned.

For now, the de­bate has sharp­ened: trans­paren­cy ver­sus se­cu­ri­ty, ac­count­abil­i­ty ver­sus trust. And with Par­lia­ment ex­pect­ed to de­bate the leg­is­la­tion be­fore the end of the year, the stakes for busi­ness con­fi­dence, in­vestor sen­ti­ment, and SME sur­vival have nev­er been high­er.

Bankers say trust can be erod­ed  

Two for­mer bankers have raised sharp con­cerns about the pro­posed leg­is­la­tion that would com­pel com­mer­cial banks to pub­lish the names of the top for­eign ex­change earn­ers.

One vet­er­an banker ar­gued that such a law would strike at the very foun­da­tion of bank­ing.

“Cus­tomer con­fi­den­tial­i­ty is the cor­ner­stone of bank­ing. It is en­trenched in com­mon law for cen­turies and cod­i­fied in statute for decades. Once you leg­is­late to over­ride con­fi­den­tial­i­ty, you un­der­mine the trust on which the fi­nan­cial sys­tem is built,” the vet­er­an banker said.

He warned that the mea­sure would not be lim­it­ed to large cor­po­ra­tions. “If passed, this leg­is­la­tion would mean that not on­ly busi­ness own­ers but any in­di­vid­ual con­duct­ing a forex trans­ac­tion, no mat­ter how small, could have their in­for­ma­tion dis­closed. Even some­one ap­ply­ing for US$250 to trav­el could find their per­son­al busi­ness in the pub­lic do­main.”

An­oth­er re­tired banker point­ed to the le­gal im­pli­ca­tions, stress­ing that Sec­tion 56 of the Cen­tral Bank Act of Trinidad and To­ba­go is ex­plic­it in pro­tect­ing the du­ty of se­cre­cy.

“Sec­tion 56 makes it clear that con­fi­den­tial in­for­ma­tion can­not be dis­closed ex­cept in very lim­it­ed cir­cum­stances, and there are penal­ties for vi­o­la­tions. If Par­lia­ment forces banks to re­lease cus­tomer da­ta, it rais­es se­ri­ous con­sti­tu­tion­al and le­gal chal­lenges. You would es­sen­tial­ly be rewrit­ing decades of bank­ing law in one stroke,” he ex­plained.

Both for­mer bankers agreed that while trans­paren­cy in forex man­age­ment is im­por­tant, the pro­posed ap­proach risks desta­bil­is­ing con­fi­dence in the bank­ing sec­tor.

“Once cus­tomers fear their pri­vate deal­ings could be ex­posed, the re­la­tion­ship be­tween banks and clients is per­ma­nent­ly dam­aged,” one banker con­clud­ed.

Busi­nes­sown­er’s con­cern

A busi­ness own­er whose com­pa­ny’s name ap­peared on the Ex­im­Bank for­eign ex­change list said it has not on­ly jeop­ar­dised rep­u­ta­tions but al­so risks un­der­min­ing a fa­cil­i­ty that is vi­tal to the sur­vival of lo­cal in­dus­try.

With­out the Ex­im­Bank win­dow, the own­er said most of the com­pa­nies list­ed would not sur­vive.  

“We de­pend on it to pur­chase raw ma­te­ri­als, ma­chin­ery, and es­sen­tial in­puts that keep pro­duc­tion lines run­ning. Those dol­lars don’t sit in our ac­counts; they are trans­ferred di­rect­ly to in­ter­na­tion­al sup­pli­ers. That is how fac­to­ries stay open, how ex­ports grow, and how thou­sands of jobs are pre­served.

“Con­sid­er the progress: in 2018, Ex­im­Bank sup­port­ed on­ly a hand­ful of firms. To­day, over 200 com­pa­nies ben­e­fit from the fa­cil­i­ty, a re­mark­able achieve­ment that has al­lowed man­u­fac­tur­ers like us to ex­pand op­er­a­tions and dou­ble ex­ports. In­stead of be­ing recog­nised for this suc­cess, busi­ness­es are now be­ing un­fair­ly cast as hoard­ers of for­eign ex­change,” the own­er stressed.

The own­er em­pha­sised that the pub­lic dis­clo­sure of fig­ures al­so cre­ates re­al dan­ger, and when head­lines sug­gest that a com­pa­ny ac­cessed mil­lions of US dol­lars, many as­sume that the mon­ey is sit­ting in cash re­serves.  

The own­er high­light­ed that the truth is every cent is spent on equip­ment, or raw ma­te­ri­als over sev­er­al years. Yet such mis­per­cep­tions can dam­age trust with cus­tomers, un­set­tle em­ploy­ee and even put per­son­al se­cu­ri­ty at risk.

“My great­est fear, how­ev­er, is that this po­lit­i­cal storm could lead to the fa­cil­i­ty be­ing weak­ened or scrapped. If that hap­pens, how will man­u­fac­tur­ers source the for­eign ex­change need­ed to keep fac­to­ries open? How will we con­tin­ue to em­ploy peo­ple and pay tax­es in­to the sys­tem? In­stead of erod­ing con­fi­dence, we should be strength­en­ing the very tools that keep our econ­o­my alive,” the busi­ness own­er added.