Guyanese invented flying money

Jul 11, 2022 Features / Columnists, Peeping Tom

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Kaieteur News – During the late 1970s and the entirety of the 1980s, when foreign currency was scarce and there were strict restrictions on the foreign exchange transactions, Guyanese overseas developed found simple, ingenious and lawful means to remit monies to their families and to help to finance imports.

Prior to the acute foreign exchange shortage, Guyanese living overseas would send home monies to support their relatives. Often, they would conceal it in the mail or when someone was travelling to Guyana, they would ask that person to bring the money. People assisted willingly because they knew the hardships which Guyanese at home faced.

But the mail was often not reliable or safe. Many families did receive monies through the post but there was always the fear that someone, including the postal authorities, would open the mail and pilfer the cash concealed within

But, as is said: “smarter the government, wiser the population”. One of the techniques used was to send a greeting card with a photograph pasted on one of the faces of the card. Between the photograph and the face of card would be a little space in which the money would be concealed.

But as times got tougher, more money needed to be sent home to support families and relatives. At the same time, many businesses were unable to obtain foreign exchange to procure goods. The two – personal remittances and businesses – came together.

If someone overseas wanted to send some money for their relatives back home, they would contact a local Guyanese businessperson who needed foreign exchange and that businessperson would give the relatives the equivalent amount in Guyana dollars. The overseas Guyanese would then keep the US or Canadian dollars for the businessman to make purchases including of food and clothes. Without such an arrangement, Guyanese would have starved and gone naked. It was Guyanese ingenuity, which provided the means to allow private businesses to source scarce foreign exchange.

After 1991, the foreign exchange system was liberalised. There was no longer that great for businessmen to source their ‘forex’ need from private remittances. But sending money with persons travelling to Guyana, or having some local person give money to relatives in Guyana, continued. It was a convenient arrangement.

A Guyanese in New York, for example, would call up a friend in Guyana and tell that friend to give his relatives in Guyana, some money. A family may need money for a funeral or for hospital expenses or even school fees or for Christmas. Somebody in Guyana would give the money and the recipient’s overseas relatives would find a way to get the foreign exchange to the person who advanced the local dollars. It still works this way. It is a simple, convenient and legal arrangement.  You do not have to go to the bank or money transfer agency. The money gets to you. It has nothing to do with cleaning dirty money.

If the hearsay reports from Vice News are to be believed, it would appear that the Chinese have developed a similar system. China is a closed society and has strict restrictions on the movement of foreign exchange. Usually, monies have to first be converted to Yuan before they can be used to make purchases but some suppliers usually do the conversion at the banks for the buyer.

In such a situation, it is to be expected that ways will be found to remit monies back to China and to transfer monies out of China. It does now appear as if what the Stabroek News calls “flying money” is also used by Chinese in the same way as Guyanese did during the 1970s and 1980s. This does not mean that unclean money is being washed.

Most of the Chinese construction firms in Guyana are Chinese state-owned firms. Not fully private entities. So they would have no need, as the Stabroek News editorial is suggesting, of circumventing border or local regulations. But it is to be expected that rather than exporting monies from China, the local needs of Chinese companies may be funded by dollars generated locally by Chinese businesses.

During the privatisation process in 1990s, a local bank was sold to foreign shareholders. There was a report that alleged that instead of paying for the transaction in US dollars, the new owners used the very deposits in the bank to pay for its purchase.

Stabroek News itself was established with foreign funding from the National Endowment for Democracy (NED) – a notorious organisation used to undermine left-wing governments. Can the Stabroek News state whether the funding by the NED came directly to Guyana or was it used to pay, in part, for the printing of the newspaper in Trinidad?  Was this a case also of “flying money”?

(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.)

 

 

 

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