GEISHA KOW­LESSAR-ALON­ZO

Se­nior Re­porter

geisha.kow­lessar@guardian.co.tt

For­mer fi­nance min­is­ter Lar­ry Howai says this coun­try’s cur­rent forex sit­u­a­tion re­mains fraught with sev­er­al com­plex­i­ties which need to be con­sid­ered.

He made the com­ments while speak­ing dur­ing a vir­tu­al we­bi­nar on na­tion­al con­ver­sa­tions, ti­tled An As­sess­ment of Eco­nom­ic and Fi­nan­cial Sus­tain­abil­i­ty: Forex Flows and Woes”, on Fri­day night. It was host­ed by the Uni­ver­si­ty of the West In­dies, St Au­gus­tine.

In shar­ing some of his thoughts with mem­bers of the busi­ness com­mu­ni­ty, Howai not­ed that one rec­om­men­da­tion was to “float the cur­ren­cy prop­er­ly”.

“For some per­sons, that man­age­ment of the for­eign ex­change is­sue would be straight­for­ward... and they have said to float the cur­ren­cy prop­er­ly and in some in­stances they are cor­rect.

“If you make a com­mod­i­ty more ex­pen­sive, less peo­ple would buy it,” Howai ex­plained.

How­ev­er, he said the is­sue was more com­plex and these fac­tors must be tak­en in­to con­sid­er­a­tion.

“Not the least of which is the im­pact on the so­cial frame­work ... as a small open econ­o­my, every­thing is de­pen­dent on for­eign ex­change and it af­fects every so­cial as­pect of so­ci­ety. The so­lu­tion must, out of ne­ces­si­ty, en­com­pass broad con­sid­er­a­tions,” Howai ad­vised.

He said while there should be con­sid­er­a­tion of a cur­ren­cy ad­just­ment on those less priv­i­leged, at the same time, poor­er coun­tries have al­so lived through a sim­i­lar ex­pe­ri­ence.

Howai al­so shared how the rate could be man­aged, in­clud­ing hav­ing a fixed rate or hav­ing a vari­able rate.

He not­ed that Bar­ba­dos, for in­stance, has opt­ed for a fixed rate which it has held for many years.

“Bar­ba­dos has been able to main­tain that po­si­tion part­ly by virtue of the con­sis­tent sup­port from civ­il so­ci­ety and the way the is­land has co­a­lesced around this mat­ter.

“In the cri­sis that Bar­ba­dos has ex­pe­ri­enced in the late 80s and ear­ly 90s, the trade unions, civ­il so­ci­eties and that gov­ern­ment came to­geth­er and agreed on how they would pro­ceed un­til they were able to fix the for­eign ex­change prob­lem that they had,” Howai added.