Speaking with Tobago Today on the issue of economic recovery and diversification on Tuesday, James said the idea of a local development bank is not new, as it is practiced in many countries.
He said Tobago could adopt a system called self-liquidating money.
“It’s just like a development bank that would issue a credit card in a Tobago currency that Tobagonians could use and then periodically liquidate it and then see if you need to do it again, based on the needs of the island.”
He said the crash of oil prices earlier this week would create huge deficits since the Government has been referring to an economy based on a US$40 per barrel oil price and recent estimates put the price of oil at US$10 per barrel.
According to James, no Central Government intervention is needed to establish a Tobago Development Bank, which can be resourced by the Tobago House of Assembly.
“It’s like a bank issuing a credit card and they issue it in the bank’s currency and they charge about two or three per cent in the Tobago self-liquidating currency if you have a Tobago Development Bank.”
He said the concept will allow Tobagonians to readily access funding for developmental projects such as agriculture and manufacturing projects up to a fixed amount.
James suggested that such a bank be liquidated after two years if the island has achieved a number of its developmental goals.
“All of us would own a share of it, all of us would buy into it and run it as a democratic thing,” he said.
The finances made available by the bank’s credit card could also be used for almost anything, he said.
“If you want to hire somebody to come and work on your farm, pay them with the Tobago self-liquidating money which comes from your credit card account rather than the Trinidad and Tobago dollars so you would get more done faster.”
He said the system was used by many countries after the Second World War and has proven to be successful. However, for the idea to work locally it would require a lot of public education because people are always “interpreting their lives in terms of depending on the Government in Trinidad to send up money.”
A Tobago Development Bank could finance a big portion of the recovery as a part of the Caribbean’s effort and it would boost the development of many sectors, including agriculture and infrastructure, without depending on the Government’s allocation to get things done.
According to James, a team should be put in place to determine where Tobago is and where the island wants to go. He suggested that the Tobago House of Assembly allocate one billion dollars to establish the bank, noting it could make the island more self-reliant.