The Prime Minister took on the Druk Nyamrup Tshogpa (DNT) head on over DNT’s allegations that Bhutan is becoming the ‘Greece’ of south Asia due to debt being 113 percent of the GDP which is the worst in the SAARC region.
Lyonchhen said, “I am happy that DNT is following the economy and is concerned but I am unhappy at the way it is done. They make it look like Bhutan’s economy is about to collapse. I think they are sensationalizing the issue for political gain.”
He said the real objective is to instill fear in the public to acquire political mileage for the elections next year and that is wrong.
Lyonchhen said that DNT does not have an understanding of the macro economics of Bhutan and also the real debt situation.
The PM said that more than 80 percent of the total debt was hydropower debt for projects like Punatsangchu I & II, Mangdechu and some left over for Tala. He said these debts are considered self liquidating as the tariff of the project would be dependent on the total cost of the project. Lyonchhen a lower project cost would mean a lower tariff.
The PM said Chukha and Kurichhu had already paid of its debt and Tala was also on the verge of doing so.
Lyonchhen said that hydropower debt is a good investment and it is not a foolhardy one.
He said that non hydro debt which should be the real matter of concern is only at Nu 34.511 bn and of this Nu 6 bn is owed by corporations like BPC, BDBL and Bhutan Hydropower Services who can easily pay back the debt.
Pointing to the fact that the IMF had classified Bhutan’s debt as only moderate exposure the PM said that this is because of the unique nature of Bhutan’s debt which is self liquidating.
“I am afraid DNT has exposed a lack of understanding of the fundamentals of the economy,” said the PM.
Lyonchhen pointed out that in 2013 his party had raised the dent issue as the non hydro debt, which included the rupee loans, were much higher and the economy was distressed with the rupee crisis, no loans and stoppage of import of cars, furniture and beer.
The PM said that this government had comparatively brought down the non hydro debt and solved the above economic issues at the same time.