Change Carnival Model to Drive Forex Earnings says Economist.

• Trinidad and Tobago need to put proper policies in place to transform the foundations of the Carnival activities, underwriting their evolution into a competitive industry in the global marketplace. This is the advice from economist Dr Vanus James following comments made by Prime Minister Keith Rowley who described the heavy foreign exchange expenditure on Carnival costumes as “absolute foolishness.”
• Rowley who made the statements while speaking at Wednesday’s sod-turning ceremony for Nutrimix’s animal feed and pet food plant on the Point Lisas Industrial Estate, said costumes should be locally sourced.
• Meanwhile, Dr Marlene Attzs, a development economist, also agreed that the Carnival “business model” must also be redesigned so it becomes a net earner of forex rather than a forex drain. Attzs further advised that while the discussion on the use of scarce forex for importing Carnival materials is important, the issue should not be viewed in isolation. Moving forward, she said T&T must rethink its consumption habits, reduce dependence on imports, and acknowledge the reality of dwindling foreign exchange supply. “Without strategic interventions, we risk deepening the crisis and further eroding our economic stability,” she added.
• In its November 2024 Monetary Policy Report, the Central Bank highlighted those purchases of foreign exchange by authorised dealers (supply) from the public amounted to US$3.72Bn from January to October 2024, a 0.7% decrease relative to the same period a year earlier. The marginal decrease in purchases followed a 0.3% rise in conversions by energy companies compared to the same period in 2023. Between January to October 2024, purchases from the energy sector accounted for 72.7% of total foreign currency purchases over US$20,000 in value.
• Sales of foreign exchange by authorised dealers to the public (demand) reached US$4.92 billion over January to October 2024, a 5.7% decrease relative to the same period a year prior.
• Based on reported data for transactions over US$20,000, credit cards (43.7%), energy companies (17.1%), retail and distribution (15.8%), and automobile companies (5.3%) made up the bulk of foreign exchange sales by authorised dealers to the public. The net sales gap reached US$1.20Bn during the period. To support the market, the Central Bank sold US$1,075.0Mn to authorised dealers.

(Source: The Trinidad & Tobago Guardian)