Thursday, November 21, 2024

THAT FOREX ISSUE

 The question of access to forex (foreign exchange) is now dominating the local headlines. Whatever the reason, it is clear to all that there is a serious problem that needs to be addressed sooner rather than later.

Perhaps the biggest reason for this shortfall is probably the closure of Petrotrin and the failure of the Government to find a buyer for the plant. (Of course, the related issue of some 10,000 workers as a result of that closure is not a factor in this consideration.) But after this comes a whole host of other issues, e.g., the behaviour of the banks who seem to be making almost obscene profits and favouring their big clients for forex while "starving" the small ones. By the way, speaking of banks, has anybody noticed how difficult it has become to open an account? Or how long? In Canada, for example, it takes about an hour to open an account; here it can take weeks! Why? Whose fault is that?

There are other reasons such as, for example,  the amount of money going out every year for motor vehicles. I read somewhere I think it was in the Guardian) that the amount of foreign exchange for motor vehicles is somewhere in the billions (I can't remember the exact amount)! Now you can argue that the tax on cars is so high that the same car here in T&T costs approximately twice as much as it does in the United States. So, without a proper and reliable public transport system and therefore (the argument goes) the tax is already too high (if not high enough). But if there is a serious shortage of foreign exchange should we still be able to import new vehicles? 

I confess that I don't have all the figures in order to make an informed decision. I have, for example, heard arguments in favour of devaluation on the one hand and 'floating' our dollar on the other. Many of the arguments make sense; but what doesn't make sense is that we seem to be doing nothing about this crisis, choosing instead to ignore it. Is this a good way to handle it?

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