Gail Alexan­der

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.”