Another View on Foreign Currency Leakages

Peter Harris Barbados Foreign Currency Leakages

Peter Harris Barbados Foreign Currency Leakages

I have had some positive feedback on my recent blog, in which I suggested a few Solutions to Barbados’ foreign Exchange Problem. Having only recently joined the retail business myself through Honda, I received feedback that the larger buying agencies can leak foreign currency abroad by inflating the cost of imports. Unlike cars that have rigid price controls, other consumables are left to the purchaser’s discretion for the most part to declare prices. If the purchaser is technically purchasing from himself in a foreign country then it is possible to put any price on the invoice.

If prices are artificially inflated then companies have seemingly valid reasons to send more than needed sums of money abroad. This is one area then that needs to be considered urgently if this is indeed being practiced because not only the economy suffers but the consumer as well.

Why should our consumers pay up to 500% or more for an artificially inflated item? Inflated pricing practices not only drains our foreign reserves but further inflates our already high cost of living.

I had the recent experience of looking for a 5-gallon container of a wood sealant. The local Barbados price was $375.00. The US retail price with taxes was BDS$110.00. I am sure cost of shipping, local import taxes and the retailer’s markup cannot add up to almost 300% above the US retail price.

I am not advocating price control of any type. I am merely suggesting that, in the same way that under-invoicing is policed by customs, over invoicing should also be monitored.

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