What Is Underpinning The FOREX Crisis In T&T?
Would you pay someone to hurt you? Would you pay someone to make your life worse? Would you pay someone to steal your money, especially your precious foreign exchange? I would hope not, but in essence, this is what we, the taxpayers in T&T have been doing for the last 15 years at least.
The Government collects revenue mostly from the taxes we pay on our income, the taxes we pay on everything we use and consume, and taxes (mostly in USD) on oil and gas (which belongs to the citizens of T&T). So in essence we are paying the whole Government including all policymakers, who we elect to manage our country in a way that makes our lives better. This, in essence, is our social contract. The Government is accountable to us for how it spends our money, and for making our lives better. But do we actively hold them to account? And do they actually make our lives better?
Well, as discussed here, we basically paid the Government to raise poverty levels by 50% about a decade ago. The Government spent 30% more from ~TTD46 billion in 2009 to ~TTD62 billion in 2014, while poverty increased by 50% — the proportion of the population living below the poverty line increased from 16.7% of the population in 2009, to about 24% of the population in 2014. We essentially paid the Government to make us poorer! And T&T, like most Caribbean countries, has failed to measure poverty for over 10 years, so we DO NOT KNOW if we are still paying the Government to make us poorer. But we do know that we are paying the Government and elected policymakers to break our own laws.
THE SOCIAL CONTRACT IN TRINIDAD AND TOBAGO IS BROKEN
Since 2016, as discussed here, the IMF pointed out that our Government is in breach of the international agreements it signed on behalf of the people of T&T regarding FX management. Since 1993, the Government amended the Exchange Control Act to ‘liberalize’ access to and remove controls on FX access. So the FX restrictions we face today, the (de facto) controls that are currently in place, the calls for ‘transparency’ (and controls) on who has access to FX, are all in breach of the prevailing laws and agreements that our Government has signed / enacted on our behalf internationally and domestically. We are paying our Government and elected policymakers to break our laws and agreements, making us all worse off in the process. Surely, this situation could not persist for over a decade unless some powerful person(s) were benefitting. The USD25 billion question is who, and how? And who will solve this problem? My eyes and hopes are on our new Prime Minister, who is saying all the right things this time re transparency and accountability, but who presided over the exacerbation of the FX problem when she was last in this position.
Arguably, if these laws and agreements were not broken, and / or if more appropriate laws were implemented, we would not have these FX problems. This clearly demonstrates that the social contract is broken.
Furthermore, the fact that successive Governments and policymakers are knowingly and willfully breaking our laws and agreements related to FX, begs the questions, how can the Government continue to be in breach of the law without any consequences? Who do we appeal to? What is the point of legislation and the legislative process if the Government can just decide to break the law, and do whatever they want, in plain sight, for over a decade? Can this type of lawlessness on the part of the state, carry over into other areas beyond FX? What is the role of the Board of the Central Bank and the President in all of this? What is the role of the Opposition? What can we, the ordinary citizens of T&T do about this?
On Tuesday 30th September 2025 at 12 noon T&T time, I will be hosting a live webinar and Q&A to discuss the FX situation in our country, and explain how we got here, what the Government is doing wrong, and what can be done now. Register at: marladukharan.com/facts.
The information provided by MD as part of this report and online content derived thereafter is the property of MD, and cannot be copied, reproduced, modified, republished, repackaged, posted, displayed, transmitted, distributed, redistributed or sold in any way, either in whole or in any part without the prior written permission and consent of MD.
