Underlying the distasteful exchange between businessman Inshan Ishmael and Prime Minister Dr Keith Rowley is the very serious issue of the distribution of scarce foreign exchange.
While the public conversation has been distracted by the bacchanal aspects of the crass words flying between both men, the substantial issue of foreign exchange allocations is one of tremendous import to every citizen. This is including those who have no need to purchase foreign currencies.
In the current liberalised market, there is no priority for who gets and who doesn’t. It is left to commercial banks to make their own determinations in this regard. They, too, have their “too big to fail” clients, whose demand for foreign exchange may be prioritised above others. Much lower down the scale is the broad sector of customers coming in to purchase relatively small sums for holiday travel or education abroad. Who gets how much, if any at all, is apparently too often non-negotiable.
The big crunch, however, is among businesses which almost exclusively rely on foreign exchange, such as Mr Ishmael’s roll-on roll-off motor vehicle enterprise.
Indeed, the president of the foreign-used vehicles dealers organisation, the so-named Trinidad and Tobago Automotive Dealers Association, is calling on the Central Bank to conduct an enquiry as to the manner in which the commercial banks are allocating foreign exchange to their clients. He, too, suspects there is some measure of favouritism and of unfair differential treatment in this respect. He appears to have information to the effect that while some clients are afforded a meagre US$5,000, others are favoured with “hundreds of thousands” of the all-important “greenbacks”.
With the country’s foreign exchange position recently buoyed by an infusion of US$644 million in Special Drawing Rights, the Government now has some space for setting an appropriate allocation policy that is aligned to national development priorities.
In this, the manufacturing sector and imported inputs for agriculture would be the obvious priority candidates. The Government has previously supported the needs of the country’s manufacturing sector, through foreign exchange allocations to the EXIM Bank.
It is a clear and present anticipation abroad in the public imagination that pronouncements in this area will form a major highlight of the Finance Minister’s budget presentation on Monday.
We have been down this road more than once before, on which the availability of foreign exchange for those whose business operations depend so heavily on its availability, it’s is a matter of survival, or bust.
What is of significant difference in the current context is the great expansion of business enterprise in the country,…
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