On Ju­ly 25, Au­gust 1, and Au­gust 8, the com­men­taries on this page were head­lined ‘Would float­ing the TT$ solve our fis­cal prob­lem?’ ‘Would flota­tion slow de­ple­tion of re­serves?’ and ‘Does Mr Im­bert have a Plan B for T&T econ­o­my?’ re­spec­tive­ly.

In those three com­men­taries, there were five cur­rent, do­mes­tic eco­nom­ic prob­lems that I be­lieve the flota­tion of the TT dol­lar, at an ap­pro­pri­ate lev­el, would as­sist in re­solv­ing:

• The is­sue of the coun­try’s peren­ni­al fis­cal deficits. As Min­is­ter of Fi­nance, Colm Im­bert, stat­ed in his June 3 af­fi­davit, T&T has on­ly achieved a bud­get sur­plus once in the last 15 years. That was in 2022 when the coun­try ben­e­fit­ted from an in­crease in oil, gas, and petro­chem­i­cal prices as a re­sult of Rus­sia’s war on Ukraine;

• The is­sue of ris­ing TT-dol­lar debt. When coun­tries record fis­cal deficits, the dif­fer­ence be­tween ex­pen­di­ture and rev­enue has been fund­ed, in this coun­try’s re­cent his­to­ry, by rais­ing debt, ac­cess­ing the Her­itage and Sta­bil­i­sa­tion Fund or ac­cess­ing as­sets from the CL Fi­nan­cial em­pire. If flota­tion solves the is­sue of T&T’s deficits, that would re­duce the need to bor­row mon­ey to fund the op­er­a­tion of the coun­try;

• Float­ing the TT dol­lar would pro­mote new for­eign di­rect in­vest­ment in the econ­o­my. There is an ar­gu­ment to be made that cor­rect­ing the over­val­u­a­tion of the TT to US dol­lar ex­change rate would make this coun­try more com­pet­i­tive in at­tract­ing for­eign in­vest­ment, as flota­tion makes ex­ports more com­pet­i­tive;

• The dif­fi­cul­ty of ac­cess­ing for­eign ex­change and the over­val­u­a­tion of the TT dol­lar have con­tributed to cap­i­tal flight. Mak­ing for­eign ex­change avail­able to every­one, at a more ex­pen­sive price, solves the is­sue of ac­cess to for­eign ex­change and may re­duce or even re­verse the cap­i­tal flight T&T has ex­pe­ri­enced for the last 15 years; and

• De­plet­ing for­eign re­serves. If the flota­tion of the TT dol­lar makes all im­ports more ex­pen­sive, eco­nom­ic the­o­ry in­di­cates that the de­mand for for­eign ex­change would be re­duced.

This col­umn re­turns to the is­sue of flota­tion be­cause of the im­age in this space, in which the Op­po­si­tion Unit­ed Na­tion­al Con­gress ap­pears to sug­gest that a UNC ad­min­is­tra­tion would make for­eign ex­change ac­ces­si­ble.

Three ob­vi­ous ques­tions arise:

1) At what ex­change rate does the UNC pro­pose to make for­eign ex­change more eas­i­ly avail­able?

2) Did Op­po­si­tion Leader, Kam­la Per­sad-Bisses­sar sanc­tion the is­suance of this mes­sage?

3) How does the UNC pro­pose to fund bud­get deficits if it plans: to scrap the prop­er­ty tax; low­er tax­es on the pop­u­la­tion; not in­crease wa­ter and elec­tric­i­ty rates; pay pub­lic ser­vants more than the four per cent of­fered by the cur­rent ad­min­is­tra­tion; make qual­i­ty hous­ing more af­ford­able and ac­ces­si­ble to young peo­ple and cre­ate 50,000 new jobs.