People have been comparing Trinidad’s demonetization of the old cotton $100 bill with the demonetization done in India and Venezuela and I don’t understand why. That makes as much sense as comparing Nailah Blackman today to Nialah Blackman later on today when everyone knows she’s looks like a totally different person everytime you see her. It’s as though they’ve been reading every other word on the Wikipedia page and think they have some deep profound point.
Since apparently some people still using the AOL CD to get dial-up inner-net, I decided to do some quick research to help dispel the pseudo facts people pushing about these two situations. If you still want all the gory details you could go log-on to your neighbor wifi and read it yourself, the password is “stop being a louse”…one word…all lowercase.
Ok, so a while back both India and Venezuela decided to demonetize their largest denominations in circulation in an attempt to fight corruption and the black economy including money laundering and tax evasion.
In the India situation the demonetization was done in a matter of hours with people given until midnight on the day of announcement to spend the money and 50 days to deposit their old notes into banks. One of the main problems India faced was there wasn’t enough new notes printed as the government was also trying to transition the country to a cashless society. So there was a severe currency shortage and chaos which led to weaker economic growth.
Venezuela demonetized its 100 bolivar bill in an attempt to combat the cross-border mafia and to fight corruption and money laundering. Yeah, I know right, Maduro fighting corruption…sounds about right. The government gave the citizens 72 hours to spend the money and 10 days to deposit it into banks. The bright sparks in Venezuela planned to replace the 100 bolivar note with a new 20,000 bolivar note.
Everyone was up in arms especially pensioners whose pensions were already paid in 50 and 20 bolivar denominations. You ever see an angry pensioner in a bank or food establishment? The last thing you want in any country is angry pensioners because they does move like they have nothing to lose and will rumble with anybody. Mass protests followed and Venezuela had to extend the deadline.
So saying what we doing is the same thing as India and Venezuela is like saying Iwer George and Olatunji are the same because they both have two legs and some kinda weird jumbie vibe in them.
What would be interesting to see is the amount of old notes that actually gets exchanged when the CBTT releases its annual report next year. People might think that if close to 100% of the 80 million old bills gets exchanged into new bills this exercise could be considered a success. However, that would mean that all the money in circulation, both clean and dirty, would have ended up right back into the financial system and that would be a failure in my book.
Perhaps not a total failure because at least now we have brand new, PDY, straight from the showroom, plastic money with braille for the visually impaired. Which just means we all have a brand new way to measure our “brokenness”.