Chamber, TTMA differ on Imbert’s proposed forex arrangements

In stark contrast, the Trinidad and Tobago Chamber of Industry and Commerce (TT Chamber) is warning about the possible negative repercussions of such a move.

Speaking during the post-Cabinet news conference, Diplomatic Centre, St Ann’s on Thursday, Finance Minister Colm Imbert said, “It can’t be that all of the foreign exchange is focused on importation of goods like motorcars and finished goods coming from abroad.” “We have have to focus our foreign exchange on the companies in TT that are employing people and are generating economic activity, exporting Trinidad’s goods, made in Trinidad...I can tell you, it is something that we are looking at very seriously and a statement will be made about that in the near future.”

Responding to this on Friday, the TTMA said it was “extremely pleased...that strong consideration will be given to afford manufacturers a higher priority as it relates to access to foreign exchange. Such news is welcomed as foreign exchange within the manufacturing community is critical to our operations and export growth mandate.”

The TTMA expressed hope that “a major emphasis in Government’s consideration will be to design the mechanism in such a way that all manufacturers have fair and equitable access to foreign exchange, which we consider critical to the overall growth of Small, Medium and Large enterprise development.”

Thanking Imbert for heeding its concerns, the TTMA applauded “the foresight demonstrated here”, adding that it looks forward “to execution of an appropriate plan within the short to medium term.”

The TT Chamber however said while it accepts fully that Imbert “would be constantly searching for solutions to the many problems that confront us – including the issue of foreign exchange”, it was “disappointed” with Government’s announcement that there might be a return to “what would, in effect, be a regime of Exchange Controls.”

“As laudable as (Imbert’s) objective might appear to be, if he fails to change the underlying management of the exchange rate, such a measure, as proposed, would further decrease the amount of foreign exchange available to other key sectors and industries in our country. Government can be assured that numerous other groups which regard their businesses as just as significant as the manufacturing sector, will make equal or superior claims for access of foreign exchange.” The TT Chamber said while it fully agrees that Government policy should seek to encourage the growth of the export business for manufacturers, “it must not be done at the expense of providers of services. Ironically, a more dynamic and proactive management of the exchange rate would have achieved this.”

The TT Chamber argued that “better management of the exchange rate would have permitted the TT dollar to find its right balance. If this flexibility is not permitted and instead exchange controls are implemented, this could be followed by a deep devaluation of the TT dollar.” Imbert was advised to “consider the impact of his statements on the foreign exchange markets.” The TT Chamber said it “therefore urges the minister to engage with all stakeholders before finalising the new arrangements as outlined.”