There is no easy explaining away or hiding from the findings of local economist Marla Dukharan, as to how and why Trinidad and Tobago has become an economy which cannot account for an annual leakage of US$2 billion going back more than ten years.
“It just disappears and nobody has been able to account for it, ever,” said the economist in an interview with the Sunday Guardian Business publication.
The economist says for the past 12 years (2011-2023), US$25 billion has gone missing. Using data produced by the International Monetary Fund, Dukharan shows a net outflow of foreign exchange “that we cannot account for of US$23 billion” with the additional two billion coming from the data of the Central Bank, says Dukharan.
“On a per capita basis,” that means dividing the losses of the hard currency by the size of the population “meaning if we take errors and omissions losses and divide it by the country’s population; we have lost the most globally.” That’s a deduction that T&T should not be proud of.
In the past, the economists, people of the country, the government, the Central Bank, the commercial banks and generally analysts examining the leakage of forex, have concentrated on placing it in the nature of the import-dependent economy.
In this respect, the large food import bill, the high citizen spending through the use of credit cards and other instruments through which the life-blood foreign exchange has been spent, have been identified as avenues by which the hard currency, earned mainly by the energy sector, have been spent. Additionally, it has been acknowledged that holders of hard currency have stashed away US dollars to foreign accounts.
This, said to be unaccounted for disappearance of US$2 billion per year beginning in 2011-2012, allegedly without there being knowledge of how, where and by whom, is startling. This is not an issue of what are referred to as “errors and omissions” in the accounting procedures which may happen occasionally in the budgets sent to the Auditor General and generally of an inconsequential sum. This is an accounting system which cannot account for an annual US$2 billion.
There is another level of the analysis, which if correct, is very troubling. According to Dukharan, the disappearance of the foreign exchange has sent the country headlong into deep borrowing and utilisation of savings and earnings from the Heritage and Stabilisation Fund to service the forex needs. If the Government could not turn to such sources for forex, the economist notes, the country’s foreign reserves at March 2024 would have amounted to no more than US$157 million, rather than the present US$5.98 billion.
Minister of Finance Colm Imbert usually responds very quickly to such statements which relate to his ministry. We are therefore expecting his immediate intervention to clarify and or completely dismiss the analytical claims made by Ms Dukharan, an established economist. Moreover, she has also used data from the International Monetary Fund to conclude on her contentions.
The need for responses which can logically explain or dismiss the findings and analyses of the economist are critical for all kinds of reasons, including political ones.
