In much the same manner that the business sector in Guyana, a few decades ago, had been compelled to devise ‘creative’ means through which to acquire foreign currency for imports as the economy continually declined, and the official channels through which to acquire imports and transact other forms of business outside of Guyana dried up, so too is Trinidad and Tobago experiencing a similar challenge which means that according to a report in the Sunday November 17 issue of The Trinidad Guardian the country’s SME’s are facing “devastation.”
One consequence of the foreign exchange shortage, according to The Guardian’s report, is “doom and gloom” this Christmas for micro, small and medium-sized business, and among other things, that the customary seasonal splurge of imports is likely to be substantially reduced this year. The report says that cuts in foreign exchange availability to credit card holders will mean that some business houses will be confronted with the option of limiting the range of items that they will be offering over the Yuletide season or be forced to close up shop.
Talk of foreign exchange scarcity is almost certain to take many Guyanese back to the ‘bad old days’ when a protracted and acute scarcity of foreign currency created gouges in the country’s economic profile that forced a number of businesses into irregular and even unlawful options in order to secure limited amounts of foreign exchange.
One measure of the extent of the foreign exchange crisis confronting Trinidad and Tobago is reflected in the fact that the Canadian Multinational Financial Services Company operating in the twin-island republic has put its customers on notice that it will be furthering tightening pre-existing monthly limits for most of its credit cards to $US2,058 from $US$6,020 effective December 1.
On October 30, Scotiabank in Trinidad and Tobago moved to effect a significant reduction on the foreign exchange allocations on its range of credit cards. Scotiabank said that effective December 1, holders of its prestigious Aero MasterCard Black would be restricted to a spending limit of US$5,000 a month. Other credit cards offered by the majority Canadian-owned bank would have a US$2,000 limit.
While Guyana’s new-found petro resources have placed the country’s foreign exchange challenges to one side, “profligate external spending triggered a June infusion of US$80 million into commercial banks operating locally in order to roll back the threat of shortage linked to the growth of the country’s economy.”
At the time Vice President Bharrat Jagdeo was quoted in the media as saying that it was “natural that once the economy is growing, there will be a greater demand for foreign currency for legitimate transactions, that is, to import more goods, import more machinery and equipment, consumer goods, to make payments for a lot of the intermediate goods, and therefore, that the market may experience from time-to-time, some mismatches. So far, we had seen that overall, the market was clearing itself, although, there was a wait list for a number of people, importers, that the market was clearing itself.”
