EDITORIAL
The people of once oil-rich Trinidad and Tobago are currently facing a foreign exchange crunch unlike anything seen in years. Individuals and companies are now under heavy manners with reported restrictions of a daily limit of US$100 for those seeking to purchase cash, bank drafts or wire transfers. Some Trinidadian companies have even had to go to the lengths of asking affiliated companies within the same group but in other countries to settle bills with overseas suppliers on their behalf as they cannot get the necessary quantities of foreign exchange from within the Trinidadian financial system. Some may say that ‘there but for the grace of God we go’ as, in Barbados, merchants have cried out this holiday season that sales are significantly down, reportedly as a result of the higher costs wrought by the increased National Social Responsibility Levy plus the tax on international purchases meant to stem the outflow of our foreign reserves.
In both countries, citizens who have spent decades acquiring a taste for imported goods and regular overseas holidays have become very vocal in blaming their governments for the situations in which they now find themselves. The ability to live a lifestyle parallel to what they have been fed by North American or European media is taken by the man on the street as an unwritten human right and we have now become victims of our own success. It is recognised that the single largest foreign exchange earner for Barbados is its tourism sector. However, on the flip side, millions of dollars are pumped back out of the economy on overseas marketing to attract visitors. Even before these visitors reach our shores, international tour operators, online booking companies, and international hotel brands take the bulk of the money paid for accommodation and attractions. Some gourmet restaurants on island, pool resources to fly in fresh ingredients to compete with the fare offered in the metropolitan centres from which many visitors are drawn.
In life it is easier to learn from others’ hard lessons than to be forced to learn from your own. Barbados therefore is at this critical point that it must take heed of the hard lessons that Trinidad and some of its other neighbours have learnt from in past years. For other countries such as Trinidad, Jamaica and Guyana with far more natural resources than Barbados and far more Human Resources, have experienced this difficult and long arduous task of trying to pull themselves out of the abyss created by poor spending habits and the dependence on one natural resource at their peril. The lesson therefore to be learnt is that Barbados must take immediate steps to diversify its economy in the face of declining revenues from the tourist sector and the fact that much of the foreign exchange earned from this sector goes right back into maintaining this sector and not into our reserves.
Let us be smart and avoid having to experience first hand what some of our Caribbean brothers and sisters have endured. Let us take heed and take action and save ourselves from a foreign exchange crunch that in this trajectory we are on would be inevitable.