A look at DNT’s Economy pledges

With success of every sector hinging on a sound economy, DNT has pledged to create a vibrant economy and a fairer society with decent livelihood opportunities for everyone irrespective of family backgrounds.

DNT plans to develop a new vision and economic plan for the country, called Bhutan: Vision 2045 in close consultation with all stakeholders, including political parties.

Investing in agriculture, mining, manufacturing and service sectors

DNT has also pledged to diversify the economy instead of relying only on the hydro sector for economic growth by accelerating private sector growth and investing in agriculture, mining, manufacturing and service sectors.

In order to realize their economy pledges, the government elect in its manifesto stated that it will establish business incubation centers in the four regions of east, south, central and west with enough space to enable aspiring entrepreneurs to shape and develop their business ideas.

DNT plans to conduct feasibility studies, identify opportunities and establish Dzongkhag Industrial Estates for manufacturing industries, mining and agriculture in various Dzongkhags, in addition to the existing industrial estates, expand PSL scheme by generating awareness, open information centers at Gewog and Chiwog levels and keep procedures simple and minimal.

The government elect has also pledged to facilitate and attract FDIs in various sectors through creative business promotion strategies, conduct export promotion activities in view of Bhutan’s small domestic market and limited capacity of domestic consumption, expand manufacturing sector to make it an equal contributor, as the hydropower, to the GDP, establish an independent and autonomous Minerals Regulatory Authority to address conflict of interest, and avoid corruption and improve accountability in the mining sector.

Strengthen hydropower

DNT has pledged to reform and strengthen the manpower and institutional capacity in hydropower development to ensure domestic energy security through enhanced generation and robust grid connectivity and the export of surplus hydropower for revenue generation.

DNT hopes to complete the ongoing construction of Punatsangchu I and II, Nikachu and Kholongchu projects of a combined capacity of 2,326MW and engage timely services of GoI agencies for implementation of remedial stabilization measures for Punatsangchu I dam and underground power house complex for Punatsangchu II.

The DNT manifesto says that with the inclusion of Sunkosh and Kuri-Gongri projects, which are already in the pipeline the total generation capacity grows to 5,264MW resulting in more than 100 increase in power exports.

Expand manufacturing

In order to promote manufacturing sector, DNT has pledged to support establishment of import substitution industries such as construction materials, wood-based industries, paper and agro-industries among others. Green procurement policy will be implemented to encourage green technology, according to the manifestos.

The government elect has also pledged to establish joint ventures with private sector to consider investing in manufacturing products for export, by exploring manufacturing health and medicinal products, cosmetics, essential oils, wood-based products and agro-products which will be studied and, at least establish five such manufacturing industries in the country.

Eradicate poverty

To achieve inclusive economic growth that narrows growing income disparity, DNT has pledged to eradicate poverty for the next five years. Currently, the country’s poverty rate stands at the 8.2 percent. To achieve the party’s pledge on poverty, DNT will implement gumba ray lu la-yo ray scheme, which will ensure each poor household receives an employment opportunity, livelihood opportunity, food subsidies and access to credit.

Provide realistic salaries and allowances to civil servants

After realizing that salaries of the civil servants have not kept up with the increasing costs of living, DNT has pledged to increase salaries of civil servants twice during their tenure, institute fortnightly salaries to enable flexible use of it for those that need them, review salaries annually taking into account the state of the economy and inflation in the market, and provide uniform travel allowances (TA) and daily subsistence allowance (DSA) to all civil servants.

Reform the tourism sector to make it more vibrant

DNT has pledged to develop and implement a comprehensive tourism policy in collaboration with key stakeholders and widespread consultation, review tourist tariff system, including waivers to expand the sector and spread its benefits across 20 Dzongkhags, streamline and regulate regional tourism to improve services and reap the benefits from the segment, improve infrastructural facilities for the tourist such as wellness centers, amusement and recreational parks and sports training centers.

DNT will invest 10 percent of all royalty earnings in marketing and promoting Bhutan as a tourist destination in high value markets, for research, analysis and product development, improve access and make it more efficient by expanding connectivity through all modes of travel.

A stronger tax system

DNT has pledged to recover approximately Nu 10 bn by streamlining and strengthening tax collection. Review prevailing taxes and tax bands to ensure the wealthiest Bhutanese do not pay less than hard working middle class to bridge the gap and sustain the economy, exempt low and middle income families from paying Personal Income Tax up to Nu 300,000, and aims to exempt BIT for business establishments and firms that have less than Nu 200,000 annual turnover.

Private sector

The DNT manifesto says that the private sector despite being
the vital machinery for economic growth, has not been receiving adequate support as of now to
harness its full potential to be able
to contribute significantly to the economy and it says that obvious challenges
and issues of the private sector
are, by and large, lack of policy coordination and harmonization, legal constraints (labour laws) and lengthy bureaucratic procedures (for FDI), poor infrastructures and financial constraints with unstable liquidity issues.

It says for the private sector to be vibrant, some of the critical roles are import substitutions through export of
high demand goods and services, achieving self-reliance in agriculture, efficient operation of trade and industry, intelligent entrepreneurship and creative indigenous enterprise development. Towards this DNT says it will partner with BCCI in implementing the suggestions and priorities outlined in the Private Sector Development – e Way Forward, 2016 and in particular, will invest and encourage businesses related to agriculture and food security, manufacturing and services sectors.

DNT says it will create regional balance by stimulating economy in the eastern and central regions through relocation of few institutions to these regions and establishing projects and manufacturing industries. DNT says it will create economies of scale and will decongest Thimphu city.

DNT will review rules and regulations for employing foreign workers in hotels and restaurants and also consider allowing foreign workers in the agriculture sector. It says it will continue to monitor and will institute mechanisms to ensure that foreign workers do no crowd out opportunities for Bhutanese.

DNT will also formalize, legalize and support the informal sector who are 75 percent of the workforce and contribute to the economy through such enterprises as street vendors, temporary workers in the orange export sector, roadside fruits and vegetables vendors, home-based women weavers and home-based bakers to name a few.

Small and cottage industries

DNT’s manifesto says that small and cottage industries are important for the economy as it engages significant number of
people, generates employment and livelihood opportunities for many and contributes towards maintaining Bhutan’s culture and identity. Strengthening and expanding this sector will be key to boosting economic activities in villages and communities and creating wealth and prosperity in rural areas. Towards this DNT says it will promote products of our traditional craftsmen by strengthening APIC, support industries that produce import substitution products and uses green technology and promote Brand Bhutan.

It will increase the Rural Enterprise Development Scheme (REDS) fund ceiling from Nu 200,000 to Nu 500,000 and expand it to reach targeted populations and also ease processes to access priority sector lending (PSL) loans and establish support centers to assist completion and submission of applications.

DNT will support formation of cooperatives and farmers’ groups and enable them to take up collective farm activities.

DNT will collaborate with large industries and business houses to source from rural areas and to establish subsidiary units in the villages.

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