Friday, March 1, 2024
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HomeBusinessEconomyFOREX issues could shut down small businesses in Trinidad and Tobago

FOREX issues could shut down small businesses in Trinidad and Tobago

Dear Sir:

The chronic shortage of foreign exchange is affecting Small and Medium-Sized Enterprises (SMEs) disproportionately, and this could harm the already struggling national economy.

The rationing of foreign exchange is compounded by reduced credit card spending limits and the decision of the Customs and Excise Division to subject imports to brokerage services. Further, there is lower consumer demand because of shrinking disposable income, high unemployment and lack of faith in the economy.

The currency black market, to which some SMEs have turned in a desperate move to keep their enterprises afloat is leading to an increased cost of doing business.

The overall scenario requires a judicious and swift intervention from the authorities, and I call for comprehensive policy measures to be outlined by the ministry of finance and the Central Bank.

Failure to do so could cause many SMEs to go out of operations, thus worsening the jobless rate and lessening consumer options. The urgent intervention should include a reduction in corporation taxes that are paid by SMEs.

There should also be specific measures to attract foreign investments and to diversify the economy, in a purposeful effort at earning foreign exchange.

I again call on the government to make strident moves to improve Trinidad and Tobago’s low standing on the Ease of Doing Business metrics.

There are an estimated 20,000 SMEs in the country, comprising 85 percent of all registered businesses, employing a total of about 200,000 workers and contributing 28 percent of the GDP.

The businesses typically employ between six and 25 workers each. SMEs are the backbone of the local economy and are seen in many countries as a prime catalyst for economic growth.The forex crisis could ruin this important sector and create further economic woes for the country. I appeal for a prompt and decisive intervention from the powers-that-be.

Rushton Paray

Member of Parliament, Mayaro

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