GEISHA KOW­LESSAR-ALON­ZO

Se­nior Re­porter

geisha.kow­lessar@guardian.co.tt

The on­go­ing scarci­ty of for­eign ex­change in T&T has be­come a source of sig­nif­i­cant pub­lic and po­lit­i­cal de­bate, but from a prag­mat­ic busi­ness per­spec­tive, the sit­u­a­tion is a dif­fi­cult and painful re­al­i­ty.

This from Econ­o­mist Dr Mar­i­ano Browne who wad­ed in on com­ments made by Prime Min­is­ter Kam­la Per­sad-Bisses­sar that Gov­ern­ment in­tends to bring leg­is­la­tion that would al­low the Cen­tral Bank of to re­veal all forex al­lo­ca­tions.

Mean­while, for­mer fi­nance min­is­ter Colm Im­bert took to so­cial me­dia yes­ter­day to voice strong op­po­si­tion, em­pha­sis­ing the im­por­tance of pro­tect­ing fi­nan­cial in­for­ma­tion.

“Con­fi­den­tial­i­ty is es­sen­tial in bank­ing to pro­tect sen­si­tive fi­nan­cial da­ta from unau­tho­rised ac­cess or mis­use, to safe­guard clients’ pri­va­cy and safe­ty and pre­vent iden­ti­ty theft, fraud and kid­nap­ping for ran­som. Why is the UNC seek­ing to de­stroy bank­ing con­fi­den­tial­i­ty in TT?” he asked.

In an in­ter­view with Guardian Me­dia yes­ter­day, Browne ac­knowl­edged the sever­i­ty of the forex cri­sis, de­scrib­ing it as “dif­fi­cult” and painful for all stake­hold­ers.

“It’s hard­er and there will be pain and there is pain for every­one. This is not just sim­ply about pref­er­en­tial treat­ment. In the moral of the sto­ry, if there are big com­pa­nies and big de­mands, then there will be big de­mands,” Browne ex­plained.

As the coun­try’s largest con­sumer of for­eign ex­change, the Gov­ern­ment it­self is not im­mune as Browne not­ed stat­ing that its crit­i­cal func­tions range from im­port­ing phar­ma­ceu­ti­cals for the health­care sys­tem to pur­chas­ing fu­el to run the coun­try, which are the sin­gle biggest dri­vers of forex de­mand.

“That’s the re­al­i­ty. If you’re al­ready in po­si­tion and you al­ready have a clien­tele, I mean who’s the biggest pur­chas­er of phar­ma­ceu­ti­cals in the coun­try? The biggest pur­chase of phar­ma­ceu­ti­cals is the Gov­ern­ment and the Cen­tral Bank gov­er­nor al­ready said that they make ac­com­mo­da­tions from time to time de­pend­ing on the re­quest which comes from the health­care sys­tem or oth­er State en­ter­pris­es as re­quired,” Browne said.

High­light­ing fu­el as the coun­try’s largest dri­ver of for­eign ex­change ex­pen­di­ture, Browne ex­plained, “We im­port fu­el. We no longer pro­duce fu­el and it was al­ways the largest im­porter of for­eign ex­change be­cause we al­ways im­port­ed fu­el for pro­cess­ing and then re-ex­port. Now we’re im­port­ing the fin­ished prod­uct for do­mes­tic con­sump­tion. So we are al­so pay­ing for the pro­cess­ing fees that would come with that etc.

“I mean, these are re­quire­ments to run a coun­try. And the re­al­i­ty is that there’s an ad­just­ment process you have to take, what­ev­er de­ci­sion you make, it has costs. What­ev­er one is go­ing to have pain for some­body or for every­one and we can’t avoid that so we have to face it. And try­ing to blame it on some­body as a rea­son why every­body’s not get­ting, just sim­ply miss­es the point. We have to earn more for­eign ex­change.”

The Prime Min­is­ter had al­so de­clared that the Ex­im­Bank (Ex­port-Im­port Bank of Trinidad and To­ba­go) has “failed to func­tion prop­er­ly and fair­ly” and ac­cused com­mer­cial banks of op­er­at­ing as forex car­tels that are stran­gling small lo­cal busi­ness­es.

“There are tens of thou­sands of busi­ness­es in our coun­try, but many are dri­ven in­to fail­ure and bank­rupt­cy by the car­tels at bank­ing in­sti­tu­tions. The sit­u­a­tion at the Ex­im­Bank is bad enough, but what hap­pens in the com­mer­cial banks is even worse,” Per­sad-Bisses­sar added.

When asked about the prime min­is­ter’s com­ments that the Ex­im­Bank has failed, econ­o­mist Dr Ronald Ramkissoon said, “I don’t know what she means hon­est­ly. I have seen what has been in the news­pa­per. I have seen large, medi­um small. I have seen all kinds of busi­ness­es in there that have re­ceived a for­eign ex­change. There was no sur­prise to me that we spend a lot of mon­ey on food im­ports or on phar­ma­ceu­ti­cals. For an econ­o­mist that fol­lows any econ­o­my worth his or her salt that is no news. We know that that is the struc­ture of the econ­o­my.”

He main­tained that re­duc­ing food im­ports re­quires cor­rect­ing the over­val­ued ex­change rate, which would make do­mes­tic food pro­duc­ers more com­pet­i­tive.