PE­TER CHRISTO­PHER

Se­nior Mul­ti­me­dia Re­porter

pe­ter.christo­pher@guardian.co.tt

There are mixed views con­cern­ing the gov­ern­ment’s plan to es­tab­lish a for­eign ex­change al­lo­ca­tion com­mit­tee.

Fi­nance Min­is­ter Dave Tan­coo re­vealed the plan dur­ing his pre­sen­ta­tion of the Mid-year Bud­get Re­view in Par­lia­ment on Wednes­day, in­di­cat­ing that the Gov­ern­ment would al­so im­ple­ment a pol­i­cy en­cour­ag­ing re­port­ing oblig­a­tions for high vol­ume im­porters to mon­i­tor for­eign cur­ren­cy in­flows and out­flows bet­ter.

How­ev­er in CNC 3’s Mid-Year Bud­get Re­view show en­ti­tled “State of the Trea­sury,” Am­cham T&T CEO Ni­rad Tewarie said such a lev­el of gov­ern­ment in­volve­ment in the econ­o­my could be prob­lem­at­ic.

Tewarie said, “More gov­ern­ment con­trol and in­volve­ment, di­rect in­volve­ment in the econ­o­my is not good. So I would pre­fer that we fo­cus on the sup­ply side. And as I said, they men­tioned some things around the sup­ply side, but try­ing to over man­age for­eign ex­change could have the im­pact of dent­ing con­fi­dence. So we need to be care­ful how we ap­proach that.”

How­ev­er for­mer Fi­nance Min­is­ter Karen Nunez-Tesheira felt the com­mit­tee was nec­es­sary giv­en the wide­spread chal­lenges faced in ac­cess­ing for­eign ex­change in the coun­try at the mo­ment. She how­ev­er was not sure who would form the com­mit­tee or how the al­lo­ca­tions would be as­sessed.

“The is­sue, for me is they need to de­ter­mine what are the the con­di­tions or the fac­tors you’re tak­ing in­to ac­count in the al­lo­ca­tion of for­eign ex­change. And I think a ma­jor one is to what ex­tent the busi­ness, in which you are en­gaged, is adding to the pro­duc­tive ca­pac­i­ty and earn­ing for­eign ex­change,” she said.

For­mer In­de­pen­dent Sen­a­tor, econ­o­mist Am­ri­ta De­onar­ine how­ev­er felt the com­mit­tee would be short term fix to a wider prob­lem.

“It is a short-term mea­sure. It is not some­thing that can be sus­tained for a very long pe­ri­od of time. So I tend to agree a lit­tle bit here with Mr Tewarie, be­cause it is not some­thing that is usu­al­ly rec­om­mend­ed from an eco­nom­ic per­spec­tive. It is not sus­tain­able and I think it is just a stop gap mea­sure to reach to a point where we could say that we have fig­ured out what our growth strat­e­gy is,” she said.

“How we are go­ing to treat with the dif­fer­ent poli­cies to gen­er­ate rev­enue and to gen­er­ate for­eign ex­change, so that we can im­prove the amount of for­eign ex­change that we are earn­ing?”

This point was sup­port­ed by Trinidad and To­ba­go Cham­ber of In­dus­try and Com­merce Pres­i­dent Son­ji Pierre-Chase and ex­pand­ed up­on by econ­o­mist Dr Justin Ram, who felt the wider is­sue resided with­in the cur­rent con­sump­tion of for­eign prod­ucts by the lo­cal mar­ket.

Pierre-Chase said, “The is­sue is not on­ly on is­sue of al­lo­ca­tion, but an is­sue of sup­ply. So yes, the Cham­ber has been call­ing for more trans­paren­cy as it re­lates to al­lo­ca­tion, and I think that is where the com­mit­tee’s role will be very crit­i­cal.”

Ram said that in­stead of a forex dis­tri­b­u­tion com­mit­tee, what T&T re­al­ly needs is an eco­nom­ic ad­vi­so­ry board, which will seek to re­duce the over­all use of for­eign ex­change for con­sump­tion and seek to pro­duce more of what we con­sume at home.

“Maybe push­ing that from 70 per cent of con­sum­ing im­ports to per­haps con­sum­ing lo­cal­ly pro­duced goods, or some val­ue-added goods at 70 per cent and then hav­ing ex­cess pro­duc­tion ready for the ex­port mar­kets. So I see the for­eign ex­change dis­cus­sion re­al­ly, as a symp­tom of a much, much wider prob­lem of the econ­o­my, and I think the Gov­ern­ment re­al­ly needs to fo­cus on the fun­da­men­tal struc­tur­al prob­lems of the econ­o­my,”