PE­TER CHRISTO­PHER

Se­nior Mul­ti­me­dia Re­porter

pe­ter.christo­pher@guardian.co.tt

A sur­vey of 111 busi­ness­es shows that the for­eign ex­change short­age has caused sig­nif­i­cant op­er­a­tional im­pacts.

The Trinidad and To­ba­go Cham­ber of In­dus­try and Com­merce’s lat­est pub­li­ca­tion, ti­tled Chal­lenges in Ac­cess­ing For­eign Ex­change: Busi­ness In­sights, shows that 62.2 per cent of busi­ness­es face de­lays in pay­ing sup­pli­ers, while 59.5 per cent re­port de­clin­ing prof­itabil­i­ty due to forex short­ages.

In the sur­vey, which was con­duct­ed from No­vem­ber 12 to De­cem­ber 13, more than half of the 111 re­spon­dents (58.6 per cent) re­port­ed that on­ly 0-25 per cent of their forex needs are be­ing met by com­mer­cial banks, while 15.3 per cent said 25-50 per cent of their month­ly forex de­mands are sat­is­fied, while on­ly 8.1 per cent can se­cure 50-75 per cent and on­ly 10.8 per cent of busi­ness­es man­age to re­ceive 90-100 per cent of their forex re­quire­ments.

The cham­ber said: “Busi­ness­es, es­pe­cial­ly small and medi­um-sized en­ter­pris­es (SMEs), strug­gle to ac­cess the nec­es­sary for­eign cur­ren­cy for im­ports and in­ter­na­tion­al trans­ac­tions, lead­ing to op­er­a­tional chal­lenges and in­creased costs. In­di­vid­u­als face dif­fi­cul­ties in ob­tain­ing forex for trav­el, on­line pur­chas­es, and oth­er per­son­al needs.

“This short­age has led to the emer­gence of un­reg­u­lat­ed mar­kets where forex is trad­ed at high­er rates, fur­ther com­pli­cat­ing the eco­nom­ic land­scape.”

Close to 60 per cent of the busi­ness­es said the chal­lenges lead to a re­duc­tion in their range of prod­ucts or ser­vices, which af­fects prof­its and ul­ti­mate­ly cus­tomer sat­is­fac­tion and prof­its.

UNC shad­ow fi­nance min­is­ter Dave Tan­coo said the sur­vey re­in­forced a con­cern he had raised with the Gov­ern­ment some time ago.

“I have cau­tioned the Gov­ern­ment on mul­ti­ple oc­ca­sions about the for­eign ex­change car­tel that dom­i­nates the ac­cess to for­eign ex­change in Trinidad and To­ba­go. What we have to­day is the small and medi­um-sized busi­ness com­mu­ni­ty be­ing sac­ri­ficed at the al­tar of po­lit­i­cal and eco­nom­ic ex­ploita­tion by this PNM Gov­ern­ment.

“This has led to the de­struc­tion of the mid­dle class and has con­tributed to dis­in­cen­tive for cit­i­zens who are small and medi­um-sized in­vestors,” he said.

“This rav­aging be­hav­iour is not con­ducive to at­tract­ing in­vest­ment and in fact, as the sur­vey shows has dam­aged the ease of do­ing busi­ness in Trinidad and To­ba­go. When this is added to the con­stant hi­jack­ing of busi­ness VAT re­funds by the state, run away crime, con­tin­u­ous de­lays at the port, a cleared pic­ture emerges of the eco­nom­ic cri­sis that this coun­try is in.”

The sur­vey stat­ed that many busi­ness­es be­lieved the rea­son for the short­age was favouritism in forex dis­tri­b­u­tion, with 80 per cent of re­spon­dents of the view that pri­or­i­ty is giv­en to large busi­ness­es. More than two-thirds of re­spon­dents said the short­age was due to un­changed con­sump­tion pat­terns de­spite the on­go­ing chal­lenges.

“This sug­gests that busi­ness­es or con­sumers may still be op­er­at­ing un­der the as­sump­tion that for­eign ex­change is read­i­ly ac­ces­si­ble, lead­ing to in­creased com­pe­ti­tion for a lim­it­ed sup­ply. The is­sue points to the need for ad­just­ments in be­hav­iour and po­ten­tial­ly tar­get­ed poli­cies to bet­ter man­age forex re­sources,” the re­port stat­ed.

There was less agree­ment on what could be done to ad­dress the sit­u­a­tion as 40.5 per cent of re­spon­dents sup­port­ed float­ing the TT dol­lar, be­liev­ing that might im­prove avail­abil­i­ty. How­ev­er, 32.4 per cent of re­spon­dents op­posed the idea, cit­ing con­cerns about po­ten­tial in­fla­tion and the un­pre­dictabil­i­ty of costs.

The busi­ness­es agreed that change is need­ed, with 83.8 per cent of re­spon­dents strong­ly sup­port­ing changes aimed at en­sur­ing that banks have a suf­fi­cient sup­ply of forex for eq­ui­table dis­tri­b­u­tion.

It was sug­gest­ed that dis­tri­b­u­tion be done on a pri­or­i­ty sys­tem with sup­pli­ers of crit­i­cal items such as phar­ma­ceu­ti­cals and ba­sic foods giv­en top pri­or­i­ty, fol­lowed by pro­duc­ers of goods re­duc­ing im­ports.

Busi­ness­es felt lux­u­ry items such as cars and fire­crack­ers should be giv­en the low­est pri­or­i­ty, along with cit­i­zens seek­ing for­eign ex­change to shop abroad or on­line.

Cham­ber pres­i­dent Ki­ran Ma­haraj said these chal­lenges need­ed to be ad­dressed.

“The cham­ber held dis­cus­sions with Gov­ern­ment of­fi­cials and pol­i­cy­mak­ers, and we ex­press our grat­i­tude to the Min­is­ter of Fi­nance, Colm Im­bert, and the Gov­er­nor of the Cen­tral Bank for their re­cent en­gage­ments, which pro­vid­ed an op­por­tu­ni­ty to share in­sights and ex­plore po­ten­tial so­lu­tions.”

T&T Cham­ber CEO Vashti Guyadeen said it would do more re­ports in a bid to pro­vide da­ta-dri­ven so­lu­tions.

“By do­ing so, we aim to pro­vide deep­er in­sights in­to the forex chal­lenges and sup­port busi­ness­es in nav­i­gat­ing these is­sues. Ad­di­tion­al­ly, we re­main com­mit­ted to help­ing our mem­bers ex­plore op­por­tu­ni­ties in emerg­ing sec­tors such as agri­cul­ture, agro-pro­cess­ing, re­new­able en­er­gy, cre­ative in­dus­tries, ICT, knowl­edge-based ser­vices, and man­u­fac­tur­ing, which hold po­ten­tial for forex gen­er­a­tion and eco­nom­ic di­ver­si­fi­ca­tion,” she said.