Oropouche West MP, Davendranath Tancoo, says Republic Bank’s decision to cut its foreign exchange (forex) allowance to credit-card holders by half, was due to government ineptitude.
During a UNC briefing at the Opposition Leader’s office in Port of Spain on Sunday, Tancoo 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 refinancing 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.
He said the PNM had wrecked the GATE, scholarship and laptop programmes, adding “”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, “Under this Government we have lost $4.2 billion in foreign exchange reserves over the last eight years.”
Tancoo also pointed out that “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 would have paid a lower rate if the bond was for 15-25 years, not ten years, he said.
“This is an expensive refinancing of a loan. Recycled debt at higher cost to taxpayers is nothing to boast about.”
He said this refinancing added nothing to TT’s productive capacity – investment, foreign exchange generation, employment – but just added extra debt.
“I would not be surprised if the Minister’s preference to refinance such a half a billion US dollar debt and at higher rates, was a contributing factor to Republic Bank’s decision to cut access to US via their credit cards.”
He said the refinancing news came just after the Prime Minister’s description of his Dragon gas deal as “a huge diplomatic boulder” being pushed uphill.
He blamed an 18 per cent drop in foreign exchange sold by energy companies onto the local market on TT’s energy sector becoming unattractive for them.
“For the last six years the Prime Minister misled and gave false hope to this country that this Dragon gas deal would provide a supply of gas. They held out Dragon Gas to the population as an absolute solution, the magic pill for this country’s economic collapse.
“They did nothing to grow the economy because they pegged this country’s future on Dragon gas and now even after six years of failure to achieve a single cubic inch of Dragon gas the Prime Minister and his minions are still selling this country dreams that magically next year gas will come. It’s not gas that is coming – it’s gaslighting!”