Senators question forex inequity

The content originally appeared on: Trinidad and Tobago Newsday

File photo: Jearlean John.

QUESTIONS were raised in the Senate on Tuesday about inequitable distribution of foreign exchange (forex).

The questions were posed by Opposition Senator Jearlean John, independent senators Deoroop Teemal and Hazel Thompson-Ahye and Opposition Senator Anil Roberts during their contributions to debate on a private motion on forex, filed by Independent Senator Amrita Deonarine.

John said, “Nobody is asking for a devaluation (of the TT dollar), but there must be a level of management.”

She asked whether there was equity in the distribution of forex to businesses, claiming many small and medium enterprises (SMEs) were at a severe disadvantage compared to larger companies.

“SMEs play a major role in our economy. They are in places where the larger companies do not site their businesses.”

John said in some countries, SMEs could contribute as much as 40 per cent of revenue. She also claimed some commercial banks are reluctant to provide certain people with forex, but readily do so to “the big players.”

Referring to Public Administration Minister Allyson West’s earlier comment about encouraging certain restaurants to use local food sources to make french fries, John said it was unrealistic to expect local foods to replace all foreign imported foods, given the population’sacquired taste for the latter.

But she acknowledged, “We want choice.”

Teemal asked whether inequity in forex distribution was creating parallel markets for forex and other goods, saying such markets could provide incentives for a host of illegal activities. He was concerned that since 1993, under successive governments, “there has been no significant change to our micro-economic structure.”

Thompson-Ahye admitted to being challenged by the issue of forex distribution. She recalled her earliest financial advice from her father was to divide her salary into three parts – for the household, savings and expenditure. Thompson-Ahye shared John and Teemal’s concerns about inequity in forex distribution.

Independent Senator Hazel Thompson-Ahye. Photo courtesy: Office of the Parliament

She said there should be an effort to boost domestic production of certain items to reduce forex expenditure on similar foreign imports. But she lamented that some of the former are not ready to replace the latter.

Roberts blamed the Government for forex challenges.

“Shame on you, the Government of Trinidad and Tobago.”

He accused Government of blaming everyone else for forex shortages. Roberts also claimed TT was experiencing “double dutch disease” and was producing 60,000 barrels of oil per day.

Dutch disease is defined as a relationship between the increase in the economic development of a specific sector and a decline in other sectors..

Referring to West’s comments about french fries, Roberts asked if food importers received millions of US dollars to import such foods. He claimed if this was the case, it could be described as “a road map to recovery for KFC.”