One common opinion in the past about the impact of any global financial crisis or economic recession is that it will not impact Bhutan much given the closed nature of our economy, and how we are not a part of the global supply chain.
This view even holds today among policy makers.
However, it is time to revisit this theory, especially as a lot of economic signs from inflation to the behavior of stock markets to lesser spending across the world point to the possibility of a sharp economic dip at the best, and a global recession at the worst in the coming months or by early next year.
What many Bhutanese do not realize is that our 10,000 MW by 2020 dream went up in smoke in part due to the 2008 global financial crisis and its impact on India and the mitigation measures.
In early 2008 the then Indian Prime Minister Manmohan Singh promised 10,000 MW by 2020 and all was well, but within a few months after that the 2008 crisis hit leading to a huge crisis, and the Indian government had to spend billions of dollars to protect its economy.
Suddenly hydro projects in Bhutan was no longer a priority as the then Power Secretary himself complained about the lack of funds.
Today we are even more connected to the world then we would like to admit, and we are finding it the hard way through massive global inflation in fuel prices, food prices, finished goods and other commodities.
A strengthening dollar and falling INR to which the Ngultrum is pegged is also leading to higher import costs for us. Both of these are not at all desirable as an import dependent economy.
We are set to open tourism in September but if a crisis hits before that then it will impact the numbers of visitors to Bhutan.
As a nation we engage in a bit too much navel gazing, but we should be ready for the international financial and economic shocks that will come and impact us directly or indirectly.
People stop buying things, and that is how you turn a slowdown into a recession.