He­len Dray­ton

I agree with the sen­ti­ments ex­pressed by Mr Robert Le Hunte in his Guardian ar­ti­cle last week that the pub­li­ca­tion of the Ex­im Bank client’s con­fi­den­tial in­for­ma­tion missed the re­al is­sue: the need for mean­ing­ful poli­cies to gov­ern the al­lo­ca­tion of for­eign dol­lars. What did the mis­chief of pub­li­ca­tion achieve? Where does one draw the line be­tween con­fi­den­tial­i­ty and trans­paren­cy when it comes to client in­for­ma­tion?

Let’s not for­get how this sit­u­a­tion came about. On a po­lit­i­cal band­wag­on, red flags were raised about “a for­eign ex­change car­tel” and the need for an in­ves­ti­ga­tion in­to for­eign ex­change dis­tri­b­u­tion and leak­ages over the last decade. It was promised that a re­port would iden­ti­fy the main users and fa­cil­i­ta­tors and ex­plain how the en­tire “forex dis­tri­b­u­tion car­tel and con­spir­a­cy be­tween cer­tain op­er­a­tives and busi­ness­es were func­tion­ing”.

The pub­li­ca­tion of Ex­im Bank client in­for­ma­tion re­vealed that phar­ma­ceu­ti­cal and food com­pa­nies dom­i­nat­ed al­lo­ca­tions over the past five years. There was no in­for­ma­tion on cri­te­ria for al­lo­ca­tions. The pub­li­ca­tion served to ex­pose the con­fi­den­tial busi­ness of com­pa­nies that pay, through their tax­es, for ed­u­ca­tion, health, trans­porta­tion, and oth­er so­cial ser­vices. All in the guise of trans­paren­cy as a du­ty to the pub­lic.

Ap­par­ent­ly, the pub­li­ca­tion at­tract­ed wide­spread at­ten­tion, and judg­ing from pub­lic com­men­tary and let­ters, it ob­vi­ous­ly cre­at­ed the im­pres­sion that SMEs and oth­er busi­ness­es are not treat­ed eq­ui­tably. It played in­to pop­ulism, fu­elling spec­u­la­tion about a con­cen­tra­tion of al­lo­ca­tions among big busi­ness, the one per cent, while un­der­min­ing con­fi­den­tial­i­ty and the in­tegri­ty of lo­cal banks and fi­nan­cial in­sti­tu­tions.

One pos­i­tive is that the list showed that these com­pa­nies are among the na­tion’s largest non-en­er­gy em­ploy­ers and tax­pay­ers, which sus­tain the liveli­hoods of thou­sands of cit­i­zens.

It would have been far more mean­ing­ful to have asked the fi­nan­cial in­sti­tu­tions and the Cen­tral Bank to pro­vide de­mo­graph­ics by busi­ness sec­tor (im­porters and ex­porters), type of busi­ness, growth, mar­ket di­ver­si­fi­ca­tion, as­set size, em­ploy­ment, and such oth­er in­for­ma­tion to de­ter­mine na­tion­al val­ue and pri­or­i­ties. For that, spe­cif­ic com­pa­ny names are not nec­es­sary, but such in­for­ma­tion would re­veal ir­reg­u­lar­i­ties and pro­vide use­ful in­sights for pol­i­cy for­mu­la­tion de­signed to achieve na­tion­al eco­nom­ic and so­cial ob­jec­tives.

What mat­ters is pro­duc­tiv­i­ty and the ex­tent to which US dol­lar al­lo­ca­tions are syn­the­sised with eco­nom­ic goals such as di­ver­si­fi­ca­tion, sus­tain­able job cre­ation, in­creased for­eign in­vest­ment, and na­tion­al rev­enues. There should be a link to the over­all goal of ex­port gen­er­a­tion if we are to in­crease the forex stock.

What is a car­tel? Nor­mal­ly, it refers to a covert agree­ment among some mar­ket play­ers to con­trol the sup­ply of a com­mod­i­ty, in­clud­ing ma­nip­u­la­tion lead­ing to un­com­pet­i­tive prices and oth­er ac­tiv­i­ties harm­ing com­pet­ing com­pa­nies. In such a sit­u­a­tion, the banks, oth­er fi­nan­cial in­sti­tu­tions and busi­ness­es would have to be in col­lu­sion.

When Mr Lar­ry Howai, Cen­tral Bank Gov­er­nor, said he saw no ev­i­dence of a car­tel, it was high­ly un­like­ly that such col­lu­sion ex­ist­ed in the for­mal econ­o­my among le­git­i­mate bank­ing and fi­nan­cial in­sti­tu­tions and busi­ness­es. One could ex­ist with­in the un­der­ground, black-mar­ket econ­o­my fi­nanced by crim­i­nal ac­tiv­i­ty.

The is­sue of SMEs not get­ting an eq­ui­table share of forex is one that re­quires at­ten­tion. How­ev­er, it is ir­ra­tional to make com­par­isons with al­lo­ca­tions to big busi­ness. If 100 per cent of the US dol­lars re­quired by an SME is sat­is­fied, even 20 per cent of a large man­u­fac­tur­er’s re­quire­ment could be more than twice the sum of that SME’s al­lo­ca­tion.  

Breach­ing con­fi­den­tial­i­ty to sat­is­fy pop­ulism and plat­form promis­es is not trans­paren­cy. A bank’s trade is con­fi­den­tial­i­ty. If it is that Gov­ern­ment can wield a big stick over fi­nan­cial in­sti­tu­tions in which it has a con­trol­ling in­ter­est and “in­de­pen­dent” state in­sti­tu­tions such as the Cen­tral Bank, then it is on a desta­bil­is­ing path to erod­ing de­pos­i­tor and in­vestor con­fi­dence in our fi­nan­cial in­sti­tu­tions, with un­told con­se­quences. How does the pub­li­ca­tion of cit­i­zens’ con­fi­den­tial in­for­ma­tion solve the for­eign ex­change cri­sis?

Trans­paren­cy in gov­er­nance is es­sen­tial. It is not the same as breach­ing clients’ con­fi­den­tial in­for­ma­tion for ques­tion­able rea­sons when there are vi­able al­ter­na­tives to sat­is­fy good pol­i­cy de­ci­sions. Leg­is­lat­ing for the Cen­tral Bank to di­vulge cit­i­zens’ con­fi­den­tial in­for­ma­tion is a road to ru­in. The Fi­nan­cial In­sti­tu­tions Act al­ready makes pro­vi­sions for le­git­i­mate con­di­tions of dis­clo­sure.

Ac­cord­ing to the Guardian on Sep­tem­ber 24, the Prime Min­is­ter called for ur­gent re­forms to strength­en T&T’s democ­ra­cy. Re­port­ed­ly, she said that the “Con­sti­tu­tion has con­cen­trat­ed ex­ces­sive pow­er in the of­fice of the Prime Min­is­ter and weak­ened the so-called in­de­pen­dent in­sti­tu­tions ... The flaws have un­der­mined checks and bal­ances, lim­it­ing fair­ness and ac­count­abil­i­ty in gov­er­nance …”

That is com­mend­able. It is wise to be so guid­ed.