Senators question forex inequity

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File photo: Jearlean John.

QUESTIONS were raised in the Senate on Tuesday about the inequitable distribution of currencies (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 the debate on a private forex motion, tabled by Independent Senator Amrita Deonarine.

John said: “No one is asking for a devaluation (of the TT dollar), but there has to be a level of management.”

She asked if there was fairness in the distribution of currency to businesses, saying that many small and medium-sized enterprises (SMEs) were at a serious disadvantage compared to large companies.

“SMEs play a major role in our economy. They are found where large companies do not locate their activities.”

John said that in some countries SMEs could contribute up to 40% of revenue. She also claimed that some commercial banks were hesitant to provide foreign exchange to certain people, but willingly did so to “big players”.

Referring to Public Administration Minister Allyson West’s earlier comment about encouraging some restaurants to use local food sources to make fries, John said it was unrealistic to expect that local food replaces all food imported from abroad, given the acquired taste of the population for the latter.

But she acknowledged: “We want the choice.”

Teemal asked if inequity in the distribution of currency created parallel markets for currency and other goods, saying such markets could provide incentives for a host of illegal activities. He expressed concern that since 1993, under successive governments, “there has been no significant change in our micro-economic structure”.

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

Independent Senator Hazel Thompson-Ahye. Photo credit: Bureau of the Parliament

She said there should be an effort to boost domestic production of certain items to reduce foreign exchange 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 the forex challenges.

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

He accused the government of blaming everyone for the currency shortages. Roberts also claimed that TT suffered from “dual Dutch disease” and produced 60,000 barrels of oil per day.

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

Referring to West’s comments about french fries, Roberts asked if food importers receive millions of US dollars for importing such foods. He claimed that if so, it could be described as “a roadmap to recovery for KFC”.

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