T&T Manufacturers’ Association (TTMA) President Dr Rolph Balgobin says access to adequate foreign exchange to run their businesses is the major issue for importers.
Speaking to the Sunday Guardian on Wednesday, Balgobin said: “The Central Bank tinkered with the method by which foreign currency is allocated and precipitated a serious problem for businessmen.
“They have to find US currency from wherever they can, that's all they can do.
“For manufacturers, falling oil prices and a slowdown in the economy mean that we have to manage our costs, operations and be as fiscally prudent as possible.
"When a storm is approaching you batten down the hatches."
When asked about the criticism that while urging the population to buy local, manufacturers used mostly imported raw materials in their products, he said that was not universally true.
Balgobin said a large proportion of raw materials came from right here in T&T, particularly for the food and beverage industry.
However, he said, even if there was a significant degree of imported raw materials, the country saved a tremendous amount of money and foreign exchange by not importing the finished goods.
When asked whether some local manufacturers would use cheaper, inferior ingredients in their products to save on costs, Balgobin said several local companies' products were superior to some goods entering the country.
He said for example, several local brands of ice cream were much better products than the cheap, inferior foreign imports that had a high percentage of high fructose corn syrup which had raised health concerns in several countries.
When asked what would businessmen wanted to see in the pending budget on October 5, Balgobin said he wanted agencies of the State to run efficiently, a responsible budget, and a reduced deficit.
He said with falling oil prices and a slowing down of the economy the country had to get other sectors in the economy working and earning foreign exchange, as well as employing people.
Balgobin said that the association was very clear that the manufacturing sector knew how to do that and had been doing it for many years.
Fakoory: Special attention to
foreign exchange for SMEs
Dennis Fakoory, chairman of the Fakoory Group of Companies, said foreign exchange was a problem for any businessperson involved in manufacturing and importation.
Speaking at his office in Chanka Trace and El Socorro Extension, San Juan, on Wednesday, he said the advent of online shopping contributed to the problem, while the change in the foreign allocation system that was implemented seven months ago had made a bad situation even worse.
Fakoory said it would be prudent to reverse what was done, because even though the old system was not perfect it worked better.
He said special attention needed to be given to small and medium-sized enterprises in terms of foreign exchange.
Fakoory said banks needed to manage the sale of foreign exchange a lot better and if companies had a lot of foreign exchange in their accounts, they should insist that the companies use some of that currency before selling them more.
He said this would allow the small and medium-sized enterprises that lacked the ability to stockpile US currency to be able to access it when required.
Fakoory said most of them buy US currency on an as needed basis, whereas larger corporations had the ability to stockpile hundreds of thousands of US dollars, sometimes millions, even as they continued to buy foreign exchange during their day-to-day operations.
Fakoory said the issue of skilled and unskilled labour in T&T was a serious one and utilising such people in the private sector would help increase GDP and productivity.
Whether there was the political will to deal with the issue or the understanding by technocrats of what needed to be done remained to be seen, he said.
However, Fakoory said, statements by Prime Minister Dr Keith Rowley and the present Government indicated that they understood what was required to improve productivity in T&T.
He said one got the feeling that Rowley not only understood, but had the desire to make it happen and to create a legacy for himself of being able to move this country forward to being a first world nation.
He said another serious bugbear for businesspeople was public procurement.
Maharaj: Prioritise critical areas for foreign exchange allocation
Balliram Maharaj, the chief executive officer of ADM Import & Export Distributors Ltd, in a letter on Friday about the national budget 2015/2016 to Finance Minister Colm Imbert, said that the foreign exchange situation confronting T&T continued to pose a major challenge for the economy as businesses endured widespread and persistent foreign exchange shortages.
He said some consideration should be given to prioritising foreign exchange allocation to critical areas of the economy such as food, health care and education.
Maharaj said the removal or reduction of taxes and VAT that were working ought not to be a consideration as this could be a prescription for disaster.
He said the removal of VAT on over 7,000 food items had already had a major impact on VAT income, not to mention the loss of property taxes, annual licences and vehicle taxes.
He said any proposal for the national budget which contemplated overly ambitious oil prices, given the deficits that had occurred in the aftermath of the financial crisis, must be carefully evaluated.
Maharaj said alternatively, the pursuit of policies designed to achieve sustainable non-energy based revenue streams should be of utmost priority.
Maharaj said the proceeds from extracting energy resources should be saved and invested, while spending on social image and subsidies needed to be curtailed and rationalised, and the financing of tertiary education re-evaluated.