Senior Political Reporter
Small and medium enterprises (SMEs) should get together and approach Prime Minister Dr Keith Rowley and Finance Minister Colm Imbert to do something about the worsening foreign exchange crisis, as it will affect these already-ailing businesses and people seeking medical treatment abroad and students, says UNC MP Dave Tancoo.
Tancoo recommended this at yesterday’s Opposition media briefing in Port-of-Spain.
He noted Republic Bank’s move from Thursday to cut its credit card US dollar spending limit by half from $10,000 per cycle to $5,000.
Large and small businesses had expressed concern to Guardian Media about the forex situation last week.
Tancoo said, “Every business house knows there’s a crisis. This isn’t the first time that Republic or any other banks have reduced the US dollar spending allowance. When Republic reduced the maximum limit two years ago, they clearly stated that this was ‘as a result of the ongoing challenge with foreign exchange availability.’
“Obviously, the foreign exchange challenge has gotten worse since then because, according to the Central Bank, today, the level of T&T’s foreign exchange reserves is the worse it’s been for 16 years.”
Tancoo said Republic’s action was a direct result of forex shortage and was caused by Government’s policies and failures.
“When PNM’s administration took office, there was 12 months of import cover with US$10.5 billion in reserves. Under this Government, we’ve lost US$4.2 billion in foreign exchange reserves over the last eight years,” he added.
Tancoo said the latest forex cuts will cripple T&T’s thousands of already severely wounded SMEs.
“Not only is this measure likely to cause the collapse of even more SMEs, job loss and elimination of potential tax revenue to the State, it will continue to encourage the development of the illegal black market for forex,” he said.
“Also, when businesses are forced to pay more for forex to meet their needs, this will be passed to consumers in the form of higher prices. The situation also affects children studying abroad, patients seeking medical treatment abroad and locally-based students enrolled in foreign universities’ distance learning programmes.”
Tancoo added, “We’re in a serious forex crisis, not because it isn’t available but because of who it isn’t available to.”
He challenged Central Bank Governor Alvin Hillaire to find a solution.
“Having admitted that the system of foreign exchange distribution is inequitable, unequal and unfair, tell us what he’s done to correct this problem.
“Also, the Finance Minister admits there’s a forex a shortage but, to date, can point to not a single significant and sustained project that he’s undertaken to bring a substantial inflow of foreign exchange, except borrowing.
“Since this Government entered office, more than US$12 billion has been sold by Central Bank to what it calls “authorised dealers”. So, it’s not that forex isn’t being sold or is unavailable. For 2023 to date, US$837.5 million was sold by Central Bank. The question is to whom?
“The public deserves to know because while big businesses and conglomerates are getting hundreds of millions, average citizens are being driven to the black market and businesses are being suffocated.”
He called also called for a change in the legislation to allow the public access to information on forex activity.
“It’s time to change the law for the population to know who’s benefitting because some of these conglomerates also have interests in the banks and their sister companies can conceivably get forex access via banks.
“Lack of transparency in foreign exchange allocation has been used by this Government to promote specific business interests at the expense of others,” he said, citing small traders and street vendors.
Saying the situation will worsen, and citing Imbert’s silence in “not accounting for the failures or to take action and find new solutions”, Tancoo added, “the only thing SMEs can do is put pressure on Government, hold them to account and find out who’s getting forex. Or T&T will have polarisation of the economy with big businesses getting it and small ones perishing.”