Jensen La Vende

Se­nior Re­porter

jensen.lavende@guardian.co.tt

Econ­o­mist Dr Mar­lene Attzs says Prime Min­is­ter Stu­art Young’s de­ci­sion to speak with lead­ers of com­mer­cial banks on the coun­try’s for­eign ex­change is­sues is a good start, but the con­ver­sa­tion needs to go be­yond that.

Attzs said the is­sue is com­plex and the con­ver­sa­tion should in­clude the man­u­fac­tur­ing sec­tor as a forex earn­er.

“Al­so, I think this is a pol­i­cy is­sue that has to be re­vis­it­ed in terms of how we al­lo­cate for­eign ex­change, giv­en the dy­nam­ics that have tak­en place in the en­er­gy sec­tor, that has led us to this sit­u­a­tion where we have a short­age.

“I think this is the start of a con­ver­sa­tion. It’s not some­thing that’s go­ing to be fixed be­tween now and April 28, so it’s not some­thing that’s go­ing to be fixed in a few weeks, or a few months, be­cause I think it re­quires an ar­chi­tec­ture that fo­cus­es on our abil­i­ty to gen­er­ate for­eign ex­change, which is one di­men­sion of it. And then the process of the pol­i­cy that guides the al­lo­ca­tion of the for­eign ex­change.”

Young said ad­dress­ing the for­eign ex­change prob­lem is a pri­or­i­ty for him. He promised to up­date the coun­try fol­low­ing the meet­ing which takes place to­mor­row.

Attzs said the con­ver­sa­tion with the banks should look at a struc­tur­al ap­proach to ad­dress­ing a lack of for­eign ex­change.

“What I meant by the struc­tur­al con­ver­sa­tion is that we have to find ad­di­tion­al ways to earn for­eign ex­change, notwith­stand­ing our con­tin­ued de­pen­dence on the en­er­gy sec­tor, which is the pri­ma­ry source of for­eign ex­change for the coun­try to con­sume.”

An­oth­er econ­o­mist, Dr Vaalmik­ki Ar­joon, said fo­cus should be giv­en to the dis­tri­b­u­tion of for­eign cur­ren­cy.

“What they’re like­ly to be dis­cussing is the fact that it is a dis­tri­b­u­tion prob­lem with re­spect to for­eign ex­change, a dis­tri­b­u­tion is­sue from the com­mer­cial banks with re­spect to the for­eign ex­change. We have a sup­ply prob­lem be­cause of the low­er en­er­gy pro­duc­tion and that has led to a dis­tri­b­u­tion prob­lem or per­ceived in­equity in any dis­tri­b­u­tion of for­eign ex­change.”

Ar­joon sug­gest­ed that banks might be asked to dip in­to their ex­cess forex to sup­ply the lo­cal mar­ket, but this should be done cau­tious­ly so that the banks can meet their for­eign-based debts and re­quests from cus­tomers want­i­ng ac­cess to forex.

Attzs said the meet­ing should al­so fo­cus on gen­er­at­ing for­eign ex­change.

“There will al­so need to be a ques­tion of the man­u­fac­tur­ing sec­tor. I think one of the things that we need to look at is oth­er ways in which we can cap­ture for­eign ex­change and one of the things that I would have spo­ken about is how do we cap­ture, for ex­am­ple, the or­ange econ­o­my,” she said.

“The Car­ni­val sec­tor that we boast about is large, and we have this in­flux of vis­i­tors. If you have an in­flux of vis­i­tors, it al­so means that those vis­i­tors are com­ing with for­eign ex­change. How can we cap­ture some of that as part of the mix in terms of sources of gen­er­at­ing for­eign ex­change?”

Like Attzs, Ar­joon be­lieves the man­u­fac­tur­ing sec­tor can be looked at as a source of forex as earn­ing forex must be pri­ori­tised.

“Who­ev­er forms the next gov­ern­ment, they have to make it a top pri­or­i­ty to earn more for­eign ex­change.

“I mean, out­side of en­er­gy, the man­u­fac­tur­ing sec­tor holds good promise to help buffer to some ex­tent, not ful­ly, but to some ex­tent, short­ages of for­eign ex­change due to the down­turn in en­er­gy pro­duc­tion,” he said.

“We’ve seen since the pan­dem­ic the non-en­er­gy man­u­fac­tur­ing sec­tor grew by over 50 per cent.

Now, while this sec­tor has in­deed been im­prov­ing, their ex­port mar­ket share has been im­prov­ing. So, there­fore, their earn­ings of for­eign ex­change have been im­prov­ing. The prob­lem is that it on­ly ac­counts for sev­en per cent of the over­all econ­o­my.”

Ar­joon said there should al­so be a meet­ing with the pri­vate sec­tor to ad­dress for­eign ex­change dis­tri­b­u­tion.