DAVENDRANATH TANCOO, Oropouche West MP, claimed governmental ineptitude led to Republic Bank to recently halve its foreign exchange (forex) allowance to credit-card holders, speaking at a UNC briefing at the Opposition Leader's office in Port of Spain on Sunday. He called for urgent explanations, while wondering why the Prime Minister had recently said the Government's Spotlight on the Economy public consultation would be held in the future rather than before this year's national budget debate as usually done.
Tancoo said the Government's alleged failures including the stalled Dragon Field gas deal with Venezuela had led to them refinance an old debt by a new US$560 million ($3.9 billion) bond at a worse interest rate, likely leading Republic Bank to tighten its foreign exchange allowance on credit cards.
Saying people feared the upcoming budget, he said the PNM had wrecked the GATE, scholarship and laptop programmes.
"I don’t think there is anything left for the PNM to take away from our children, but if there is anyone who could find something to take away, it is Colm Imbert!"
Regarding Republic Bank's cut from US$10,000 per cycle to US$5,000, he said it blamed past cuts on "the ongoing challenge with foreign exchange availability.”
He said things had worsened in two years. "Under this Government we have lost $4.2 billion in foreign exchange reserves over the last eight years."
Many SMEs had suffered to get actual foreign exchange and so had resorted to using their credit cards although this new limit will now cripple many.
Tancoo recalled existing business woes of accessing VAT refunds, rampant crime, higher transport costs, property tax and impending higher electricity rates.
"Parents with children studying abroad, persons going abroad for medical reasons, distance-learning students who are based in TT and enrolled in programmes from foreign universities are also going to be penalised by this slash in foreign exchange availability."
He said the measure will hit SMEs, jobs and tax revenue; promote a foreign exchange black market; and pass on higher business costs to consumers.
"Republic Bank’s action is a direct result of foreign exchange shortage.
"This Government has failed to attract a sustained inflow of foreign investment to TT."
Tancoo said the Government has borrowed more money than any other TT government, yet done nothing to generate foreign exchange to pay these debts.
"They are borrowing more money to pay back the money they borrowed. And they are boasting about it."
Tancoo rejected Finance Minister Colm Imbert's view of TT's bond over-subscription as "successful" and a sign of confidence in the TT economy.
He said Imbert just borrowed US$560 million at 5.9 per cent to pay an existing bond of US$550 million at 4.37 per cent interest due for repayment next year.
"Investors would gladly take the opportunity for higher returns but these excesses will be paid off the backs of taxpayers.
"Paying more in interest than you need to is nothing to celebrate."
The Government
