The government achieved a major feat in introducing the Nu 1,200 SDF for regional tourists and getting it passed in both the National Assembly and the National Council via the Tourism Levy and Exemption Bill 2020.
In the process, the government had stood up to strong pressure from the powerful hotel lobby that employs thousands of potential voters and also engaged in deft diplomacy with the Indian government to get it on board.
However, the government made two major compromises that not only pose a major security and monitoring challenge but also threaten to over turn the much vaunted ‘High Value and Low Volume,’ tourism policy.
The first major issue was with the modified Bill in the NA giving a regional tourism SDF exemption to 11 Dzongkhags of Trashigang, Lhuntse, Trashiyangtze, Mongar, Samdrupjongkhar, Pemagatshel, Zhemgang, Tsirang, Sarpang, Dagana and Trongsa.
It now emerges that it was the government through the TCB who recommended to the Environment and Climate Change Committee of the NA to give exemptions to the 11 Dzongkhags.
This was when the original Bill introduced by the government only talked about levying 25 percent of USD 65 as a SDF on regional tourists.
The National Council on Friday went ahead and added four more dzongkhags of Chukha, Haa, Samtse and Gasa taking the exempted Dzongkhags list to 15 (see story on pg 1).
The second major surprise was when the PM in response to some queries in the NA announced that Gelephu and Samdrupjongkhar will also be open to entry by regional tourists.
The security challenge
In addition to the exemptions now given to the 15 Dzongkhags, the opening of the two entry points of Gelephu and Samdrupjongkhar will pose a security headache. There is already disquiet within senior officials and agencies of the government on how such a major announcement was made without much consultation or reviewing the security implications.
A senior official on the condition of anonymity said, “The opening of Samdrupjongkhar and Gelephu is something that requires very careful consideration and so the fact of the matter is that it was decided unilaterally and so certain agencies were never consulted. The problem here is when you take such decisions and relevant stakeholders are not consulted then it creates a lot of difficulty.”
Another official in the government, also on the condition of anonymity, said, “There is a very good reason why a small country like Bhutan has only a limited number of entry and exit points. It is not good to have too many entry or exit points or after a while we will not be able to secure our borders and track who is entering the country.”
Historically, Bhutan’s southern borders have given it some the biggest national security and even existential nightmares from the time of the Druk Desis, be it the battles with the British and the loss of Bengal and Assam Duars or the huge demographic changes that led to various uprisings and eventually the ‘1990’s problem’ or the ingress of militants from Assam that led to the 2003 Operation All Clear.
The government official said, “Who can certify that we will not have security problems in the future- nobody can. When we are talking about security we are not talking about wars or military conflict but we are talking about our comfort and the moment we are not comfortable then our security is gone.”
He said that a large number of foreigners within the country especially along the southern border will have various repercussions.
“The moment you see so many foreigners inside Bhutan it will be difficult for you to send your daughters to roam in the town. We take that as security,” said the official.
Another official also on the condition of anonymity said, “There is then the issue of the danger from militants and anti-nationals and once there is a lot of movement of people they can come in the guise of tourists and it may be difficult to identify them.”
“We are also talking about inter-marriages with many non-Bhutanese coming in to marry Bhutanese and their children not having census. This will later on will become a law-order problem as people demand citizenship,” second the second official.
There is already long standing pressure on Bhutan from New Delhi and Arunachal Pradesh to give India a route from Samdrupjongkhar to Trashigang to the sensitive site of Tawang in Arunachal Pradesh. India and China have a long standing boundary dispute in that state and it is one of most militarized borders in the region.
There are fears that once tourists start using the opened Samdrupjongkhar to Trashigang route there may be even more pressure to provide a road link to Tawang through Bhutan.
To add to the above problems, there are ever present demographic realities of West Bengal and Assam with their huge and shifting populations and the political problems there which can make it a threat for Bhutan.
Bhutan’s entire border with West Bengal of 183 km is along the Bengal Duars region where there is pitched and long standing battle going on for ‘Gorkhaland.’
Then its 267 km border with Assam is even more turbulent as recent history has shown. Recently, a citizenship verification drive in Assam identified 1.9 mn alleged illegal immigrants in Assam. It is feared that once any action starts against them by security authorities in India then the possibility of some heading into Bhutan through the porous borders to seek refuge cannot be completely ruled out.
One more concern is that with more entry points into Bhutan the entry points in Samdrupjongkhar and Gelephu could also be used by pastors and evangelists from the heavily Christianized states of North-East India to spread conversion and proselytization even stronger and deeper into southern and eastern Bhutan.
The government apart from opening up Samdrupjongkhar is also considering moving the checkpoint from an area 4 km inside Samdrupjongkhar to some 18 km inside to Dewathang.
This presents another problem because currently borders towns like Phuentsholing, Samdrupjongkhar and Gelephu allow in foreigners without any need for permits.
The fear is that opening up Samdrupjongkhar and moving the checkpoint in by 18 km can convert the entire 18 km area of Dewathang into a border town of sorts with no controls on who comes in.
This could result in Bhutanese people constructing houses and buildings and foreigners, whether legal or illegal, living there like in Phuentsholing and who after many years will demand residential rights and cannot be asked to leave.
An added challenge for officials will be the fact that unlike Phuentsholing which is the entry point for regional tourists to popular tourist areas like Punakha, Thimphu and Paro, there are no interior tourism products or sites for tourists coming into Gelephu and Samdrupjongkhar.
The fear is that regional tourists will enter these two towns on large numbers and not go beyond it to avoid paying the SDF but lead to issues like overcrowding of the Gelephu hot springs etc.
There is also an economic threat dimension. Phuentsholing for all its fame as a border town is victim to all the thriving business going to a more vibrant Jaigaon and also fronting where Indian money from across the border is behind a lot of establishments and even industries in Phuentsholing.
The fear is that Gelephu and Samdrupjongkhar could head the same way with Dadgari and Melabazari becoming another Jaigaon to take away the real business and then fronting coming up on the Bhutanese side.
With not adequate capital among the locals in Bhutan, the fear is that fronting could come up in a big way with black money from India coming into Bhutan to open hotels and other economic operations like in the case of Phuentsholing.
On the tourism front, some of the cheapest tour packages into Bhutan including a Nu 999 per day one was being sold by Jaigaon tour operators of which there are around 39 such operators. Similar low budget tour operators could also come up in Dadgari and Melabazari.
Some MPs have argued that local farmers will benefit by selling their produce to the hotels. However, a reality check will show that vegetable and dairy products across the border are much cheaper and already most commercial establishments in the border towns purchase form across the border.
An official pointed out that even if Bhutanese build hotels in the exempted Dzongkhags it will be owned by the already rich in places like Thimphu and the low-paying jobs on offer of security, guards, dishwashers etc. will not be attractive to the local youth and this will put pressure to hire foreign workers.
One idea behind opening up more entry points is to take the load off Phuentsholing but an official pointed out that those coming from Phuentsholing are from Delhi, Siliguri and other big areas.
“So even if we open the two other entry points the same crowds will go to Phuentsholing with the same pressure and the people coming from these two new entry points will be additional entry,” said the official.
Monitoring of 15 Dzongkhags
The exemption now granted to the 15 dzongkhags in effect also means that the Nu 1,200 SDF will not be implementable in a practical way.
A senior official said that the current check posts in place will not be able to check the misuse of the exempted Dzongkhag tags to go to Dzongkhags where SDF has to be paid.
The TCB DG Dorji Dhradhul said, “Right now we don’t have adequate manpower. Recently with the flagship program we got about four additional inspectors and we now have a total of 7 or 8 and they are all based in Thimphu and they have to check hotels. We need more manpower now. However, even the guides are helping us in monitoring through the Guides Association of Bhutan.”
The Department of Immigration has around 300 staff but not all of these are immigration officers and the department currently has a major human resource challenge as this staff is spread across Thimphu, Paro, Phuentsholing, Samtse, Gelephu and Samdrupjongkhar.
The exemption of the 11 Dzongkhags was complicated enough but it was still workable on paper as the thinking in some quarters of the government was that tourists to the exempted Dzongkhags can enter via Gelephu and Samdrupjongkhar and exit from there while the SDF paying regional tourists can enter via Phuentsholing to go to areas like Chukha, Paro, Thimphu, Punakha and others for which SDF has to be paid.
The TCB DG admitted that misuse can still happen here with some tourists and groups not paying SDF and heading to SDF Dzongkhags but he said the system would be streamlined over time.
However, with the NC adding the four Dzongkhags of Chukha, Haa, Samtse and Gasa monitoring will now be near impossible.
For example, it will be impossible to stop or monitor a SDF exempt tour group claiming to be heading for Haa or Chukha actually heading to Paro, Punakha, Thimphu and Wangdue.
This is unless check posts are set up at almost all entry and exit points in the Dzongkhags and almost every vehicle is stopped and checked.
And this now leads to the biggest fear of the Association of Bhutanese Tour Operators (ABTO).
A senior ABTO member said, “I am not worried about misuse but the generalization of regulations and additional bureaucracy that will come after that. That is more dangerous.”
He explained that if even tariff paying tourists have to stop at every check point then it would lead to problems and hamper tourism.
The senior ABTO members said that the exemptions granted to the Dzongkhags will not help boost tourism in those Dzongkhags.
He said similar exemptions were given to the six eastern Dzongkhags for tariff paying tourists but there was not much difference there.
“Where are the tourist standard hotels. For example, Pemagatshel is one of the waived off Dzongkhags but there is no tourist standard hotel there. So how are you supposed to sell Pemagatshel and in reality you will have to turn a blind eye since as per our regulations you are supposed to keep tourists in tourist standard hotels. Most of the exempted Dzongkhags do not have tourist standard hotels and tourists will not go where there is no accommodation,” said the ABTO member.
He said just now there is no issue with Indian tourists wanting to enter from other entry points other than Phuentsholing and nobody has raised this.
“Basically what we wanted was to streamline the ongoing entry and exit of international tourists from Gelephu and Samdrupjongkhar. Nobody has raised an issue on regional tourists’ entry. Just recently a group of Assamese people came via Phuentsholing and the said they have no issues. As it is Bhutan is a small country and coming to Phuentsholing does not take days,” he added.
A senior official said, “When you waive off SDF and open up entry points then it defeats the purpose of containing the numbers and this is taking us back to square one.”
The Chairman of the Environment and Climate Change Committee MP Gyem Dorji explaining the initial exclusion of Samtse said, “There are many entry gates into Samtse, including a gate near Phipsoo which is even more sensitive. We needed to study this and there were some issues on the security front and so even putting them in the exemption list may not get them tourists and and moreover later on they can update.”
He said the committee inserted the 11 Dzongkhags after consultation with the government and stakeholders to balance the regional tourists and divert the regional tourists there.
He said monitoring can be done in terms of the TCB keeping track and producing an annual report as required by the Bill.
The Finance Minister Lyonpo Namgay said, “At the end of the day whatever the committee decides and propose the rationale will be validated and vetted with the government agency. So we are not surprised by the recommendations from the committee but indeed it was more holistic and inclusive.”
Lyonpo said there cannot be two distinctive laws dissecting between regional and international tourists on the issue of exemptions.
On the issue of monitoring Lyonpo said, “The Immigration law is very strong on this, there are immigration checkpoints everywhere and the TCB has drafted a guideline for the management of regional tourists and so everything is coming in one package.”
Lyonpo said that exemptions are not a dilution of ‘High Value and Low Volume’ because the 11 exempted Dzongkhags were never under pressure from heavy influx of regional tourists as hardly any regional tourists visited those Dzongkhags.
“The pressure is more on the five dzongkhags in the west like Paro, Thimphu, Punakha, Wangdue and Haa partially. These Dzongkhags were receiving more tourists and so it is basically to equalize,” said Lyonpo.
Lyonpo agreed that Gelephu and Samdrupjongkhar had remained closed for security reasons but he said that to open them there needs to be a guideline and policy for smooth implementation.
The TCB DG addressing another aspect of the issue said while the SDF regulations will come into effect from 1st July, the implementation will be very gradual.
“We are even thinking that while the guidelines will say the regional tourist will have to do their online booking, get their permit in advance and route through tour operators it will not be right to enforce it so strictly because the information may not have reached everyone. So there will be a transition phase where tourists will be educated and allowed to go up after paying the SDF fee even if they have not done online booking etc.,” said the DG.
He said while there is a risk of misuse of the exempted Dzongkhags the responsibility falls on the Bhutanese stakeholders and there needs to be proper monitoring.
“While we cannot totally rule out saying it will be 100 percent foolproof but efforts will be put in place. I feel it will slowly happen but a few cases cannot be helped. We are not able to monitor fully but we are keeping track of that. We hear that some are taking advantage. Tour operators to get the visa have to have a hotel booking but some operators book in one hotel and give the name of another. We have the data and check occasionally but people do things like this,” said the DG.
The DG said, “Monitoring can be done, as the particular point of having additional Dzongkhags under SDF exemption is our proposal with the objective that we want to take tourism to the other non reached areas. Otherwise, we say we want to take tourists to those Dzongkhags that have not received tourists but without policy intervention it will be difficult. The amendments are not just from the committee but from the government (TCB). The government proposed to exempt 11 Dzongkhags.”
The DG said, “We don’t see any implementation challenges. Of course in the beginning there may be teething problems. To check we will do ad-hoc like going through our list and based on the record we will do a check on the group and as per this record they are supposed to be in this place in this hotel.”