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PM Gonsalves: Forex squeeze impoverishing Vinceys

Monday, June 11, 2018
St Vincent and the Grenadines Prime Minister Dr Ralph Gonsalves

Prime Minister of St Vincent and the Grenadines Dr Ralph Gonsalves has argued that T&T’s foreign currency crunch is “impoverishing” Vincentians.

Dr Gonsalves used the “high-level” session of a consultation of the Caricom Single Market and Economy (CSME) in Guyana as an opportunity to lay into T&T for continued currency difficulties experienced by Vincentian agricultural traders.

Exports to T&T, the prime minister claimed, have declined from EC$20 million annually to EC$10 million. He said, by contrast, his country currently purchases more than EC$150 million in T&T products annually.

Dr Gonsalves argued that despite such a trade deficit, traders were not being paid in foreign currency they could take home, and many have had to open accounts in T&T banks.

Some, he said, have attempted to take T&T goods back to St Vincent in order to benefit from their trade in Eastern Caribbean dollars.

This situation, he said, was “impoverishing” Vincentians, many of whom are from his rural constituency. By contrast, he said, the Barbados government has made arrangements via its Central Bank to have agricultural traders access foreign currency.

A working paper prepared by the Caricom Secretariat for the consultations references difficulties with achieving the free convertibility of currencies—the ability, for example, to use T&T dollars in other Caricom countries.

“In the last few years,” the paper says, “the issue of currency convertibility has re-emerged as difficulties with foreign exchange availability being experienced by one member state have begun to impact trade with other member states.”

Dr Gonsalves also cited continued difficulty with accessing compensation for losses sustained by investors from his country following the collapse of CL Financial. This situation, he said, has led to the creation of a new class of “genteel poor.”

The SVG prime minister also expressed pessimism about the fate of the CSME, important components of which he did not consider to be realistically achievable. He spoke of the problem of the free convertibility of currency and the free movement of Caricom nationals.

There are some components of the single market he said should be “kept as aspirational” but could not realistically be pursued. He said, to cite one example, there were over 200,000 unemployed Jamaicans.

He called on the consultation to consider the possibility of these Jamaicans flooding the job markets of the smaller Caricom island states.

Former Jamaica prime minister, Bruce Golding, who spoke after Dr Gonsalves, said for the CSME “it is a time for reckoning.” Golding recently chaired a national commission in Jamaica examining prospects for the island remaining a part of the CSME.

“The plain truth,” Golding said, “is that the CSME is stuck on a hill”—a situation which required a decision on whether to continue going forward with the project or to make an about turn.

Several proposals for addressing the issue remain pending within the Caricom system. Dr Gonsalves is not optimistic.

“This will not happen in my lifetime,” he said.


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