Prime Minister Ralph Gonsalves has described as wrong the ongoing situation in Trinidad and Tobago where Vincentian traders are unable to buy Eastern Caribbean dollars after conducting business in Port of Spain.
The situation ultimately affects Vincentian farmers who sell produce to these intraregional traders, known in SVG as “traffickers”.
As a result of the ongoing situation, some traders have large stockpiles of Trinidad and Tobago currency in Port of Spain and farmers in St. Vincent and the Grenadines are becoming reluctant to sell to these traders because of the delay in getting paid.
In the most recent attempt to address the situation, the Gonsalves government has set up a facility at the Bank of St. Vincent and the Grenadines (BOSVG) in which it is the major shareholder.
The prime minister, however, told a media conference in Kingstown on Tuesday, Jan. 2, 2018, that he hopes a final resolution can be reached at the CARICOM intercessional meeting in Haiti next month.
He said he has written CARICOM secretary general Irwin La Rocque to have that and other matters placed on the agenda.
Gonsalves further said he has written to his Trinidadian counterpart, Keith Rowley about issues between both capitals, which affect SVG.
“I have been struggling on it [last] year. We have put in a temporary measure which is working,” he said of the TT$2.5 million that his government has set up at BoSVG to allow Vincentian traders to convert their Trinidad and Tobago dollars to Eastern Caribbean dollars.
He said that every week, these itinerant traders bring about TT$200,000 into SVG.
“But if the foreign exchange is available in Trinidad, we would be able to do a bigger trade,” he said.
The Trinidad and Tobago dollars that the traders bring back to SVG is then used to pay government bills in Port of Spain, such as buying oil. Some of the currency was recently sold to Republic Bank, Gonsalves said.
Gonsalves said he has explained the problem to Rowley and to CARICOM.
“It can’t be right and proper [that] anytime you sell your oil to us from Petrotrin or you sell us Busta or any kind of soft drink, you sell us the water from Trinidad or you sell us Bermudez biscuit, whatever you sell us, we pay you in foreign currency. And if you get EC dollars, it’s like US dollars because for every EC dollar we have in circulation we have US dollars backing it,” said Gonsalves, who was Minister of Finance for the 16 years ending last November.
He said that in 2013, SVG imported from Trinidad EC$179.5 million in goods. In 2016, it was EC$146 million, and up to October 2017, the figure was EC$115 million.
Exports to Trinidad in 2013 was EC$25 million, Gonsalves said, noting that there was a balance of trade of almost EC$155 in Trinidad’s favour.
He further said that in 2017, the balance was about EC$104 million in favour of Trinidad.
“So you want to tell me, we buying so much from you, you can’t put aside enough foreign exchange to pay for Vincentian goods? And this is not only to us. This is the same thing going around with the OECS countries. It’s not fair.”
The prime minister said that although his government is helping through the BoSVG, the traders’ problem is that they have a stockpile of TT dollars in Trinidad.
“So we have to, this year, work to help those persons to get that stockpile of TT dollars converted in US or EC dollars. That’s an important part of the mission,” Gonsalves said.
He said while his government has again stepped in to help, the confidence is still not there among some farmers to sell to traders.
They would prefer to take chances in SVG or Grenada or somewhere else, because of the uncertainty over payment, he said.
“You can’t have such a large balance of trade in your favour and not allowing us to get the foreign exchange to pay our farmers. It can’t be right,” the prime minister said.
“Exports to Trinidad in 2013 was EC$25 million, Gonsalves said, noting that there was a balance of trade of almost EC$155 in Trinidads favour.”
Could someone please explain this to me in plain english?
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