THERE were different opinions from two former Central Bank governors on the Government’s announcement yesterday to replace the $100 note as part of the fight against the criminal underworld.
Former governor and finance minister Winston Dookeran thought it could be effective in fighting crime.
But another former governor, Jwala Rambarran, believed it will not achieve this and could create another black market in the criminal underworld.
“If the empirical evidence is there it will be valid proposition,” said Dookeran.
He said this move brought back memories of what was done in India for similar purposes.
Dookeran said he was in India at the time when this was being done and recalled there was the view that this was a “pie in the sky” idea.
But it was done in the broader spectrum of a cashless society and to deal with those hoarding money for corrupt purposes.
“By and large, I think it would be a legitimate proposition subject to the fact that there is enough evidence that this is targeting the groups that they claim,” Dookeran said.
But he expressed concern over the “rapidity” in which it is being done and questioned whether people who have legitimate money would stand the risk of losing it given the short time-frame to exchange.
Dookeran said Government will have to ensure this is carefully implemented as “money always finds itself back into the system somehow. So hopefully, steps would be taken to try and prevent that from happening.”
Rambarran said Government Minister Stuart Young should not have made the announcement.
“Why is the Minister of National Security making an announcement on a change with regard to our country’s currency? That announcement must be made by the Governor of the Central Bank. Again it shows how they continue to damage the independence of the institution,” he argued.
He also cited the India example.
“The objective is not going to be met because again it demonstrates flawed thinking. What they trying to do is trying to run a programme of demonetisation that India actually tried to implement a few years aback and it damaged the small business sector in India,” he said.
He said the underworld finds ways to wash dirty money.
“Every time you try to do something like that to the underground economy what you actually do is you force a greater creation of a black market elsewhere,” Rambarran said.