Rapheal John-Lall

Busi­ness own­ers say they are brac­ing for a wors­en­ing of for­eign cur­ren­cy short­ages in 2017. In re­cent weeks, lo­cal man­u­fac­tur­ers and im­porters have com­plained about dif­fi­cul­ties with for­eign ex­change, with se­vere short­ages of US dol­lars, Eu­ros, yen and oth­er hard cur­ren­cies.

Abrahim Ali, pub­lic re­la­tions of­fi­cer of the San Juan Busi­ness As­so­ci­a­tion, said he does not ex­pect the sit­u­a­tion to im­prove any time soon.

"This prob­lem did not start yes­ter­day and has been go­ing on for years. It has got from bad to worse. Lo­cal im­porters will have prob­lems to pay their sup­pli­ers in the new year. The sit­u­a­tion for busi­ness peo­ple to get for­eign cur­ren­cy will get even worse," he said.

Ali added: "We al­so have prob­lems to get the yen. Lo­cal busi­ness­es do a lot of busi­ness with Japan and Chi­na and those Asian coun­tries. The prob­lem is we can not even get those cur­ren­cies ei­ther."

He said the main cause of the prob­lem is that T&T is an en­er­gy de­pen­dent econ­o­my: "OPEC signed an agree­ment and there will be pro­duc­tion cuts in 2017. This will lift prices a bit and we will see some in­crease in the sup­ply of US dol­lars. How­ev­er, T&T's prob­lems will con­tin­ue if Gov­ern­ment does not di­ver­si­fy quick­ly so that the coun­try can earn from oth­er sources."

The ex­tent of the prob­lem was con­firmed by Gabriel Faria, CEO of the T&T Cham­ber of In­dus­try and Com­merce, who told the T&T Guardian in a mes­sage that mem­bers of the coun­try's largest busi­ness group have been af­fect­ed.

The wors­en­ing forex sit­u­a­tion comes on the heels of a re­port by the Eco­nom­ic Com­mis­sion for Latin Amer­i­ca and the Caribbean (Eclac), which is pro­ject­ing a 4.5 per cent de­cline in the T&T econ­o­my for 2016.

In an in­ter­view on CNC3's Busi­ness Watch, Nigel Bap­tiste, man­ag­ing di­rec­tor of Re­pub­lic Bank, said the pur­chase of US dol­lars is linked to oth­er cur­ren­cies be­cause US dol­lars are need­ed to pur­chase oth­er cur­ren­cies.

Li­quat Ali, pres­i­dent of the Cou­va/Point Lisas Cham­ber, said lo­cal im­porters had been ask­ing their sup­pli­ers to ac­cept pay­ments us­ing British pounds, Eu­ros and oth­er cur­ren­cies.

"Some of the for­eign sup­pli­ers start­ed to ac­cept oth­er cur­ren­cies when lo­cal im­porters did not have the US. The prob­lem is that the pres­sure has moved from peo­ple want­i­ng scarce US dol­lars to the oth­er cur­ren­cies," he said.

Ali, too, said he does not ex­pect the sit­u­a­tion to im­prove much in 2017.

"The OPEC agree­ment will cause oil prices to rise. We are al­ready see­ing prices over US$50 and it should get bet­ter. How­ev­er, if we get past this we must di­ver­si­fy the econ­o­my to an ex­tent where this will nev­er hap­pen again."

Daphne Bartlett, pres­i­dent of the San Fer­nan­do Busi­ness As­so­ci­a­tion, said for­eign ex­change dis­tri­b­u­tion sys­tem is not eq­ui­table and she fore­casts clo­sures of many small and medi­um busi­ness­es in 2017 as a di­rect re­sult of the cur­ren­cy short­ages.

"It seems that on­ly a few big­ger busi­ness­es are get­ting most of the for­eign ex­change and not the SME's. This will have a rip­ple ef­fect and will cause un­em­ploy­ment and oth­er neg­a­tive ef­fects," she said.