The Bhutanese Leading the way.
A short review on DPT’s progress against its commitments
It’s agreed, Bhutan became a ‘thought leader’ internationally, and this happened under the Druk Phuensum Tshogpa’s (DPT) tenure.
Nevertheless it also cannot be swept under the rug that the ‘economy’ of the country almost toppled down. This too, can be unquestionably attributed to the DPT rule.
The DPT manifesto which revolves around the development philosophy which is the brainchild of the fourth Druk Gyalpo – Gross National Happiness (GNH) is themed for ‘growth with equity and justice’.
Each ministry in 9 December, 2009 signed the ‘Performance compact’ with Performance Facilitation Unit (PFU) of Gross National Happiness Commission (GNHC). In it the ministry aimed to create employment for 75,000 people.
In the manifesto, the first is strengthening the first pillar of GNH which is equitable and sustainable socio-economic development, mainly ‘Economy’ of the country. Of many, DPT had promised enabling industrial development, rural growth and employment, national wealth, making farm life easier and harmonious and investment and wealth creation.
Now at the end of its term, the progress received ‘mixed responses’. The most critical responses are for ‘the poor state of the economy’ as most businessmen and public complained.
On the other hand, civil servants and many academicians believe that the government has left no stone unturned to become the ‘thought leader’ amongst many nations in the international vista.
The government’s total debt outstanding (internal and external debts) as of 30 June 2011 was Nu 48,619.178mn representing about 64% of GDP. The total principal loan repayment was Nu 2,816.042mn of which Nu 674.677mn was on account of internal borrowing including the redemption of Treasury bills.
In the annual report of the Royal Monetary Authority (RMA), the Governor stated that the total private debt (financial institutions’ cumulative credit outstanding on building and construction; motor vehicles; credit card and personal loans) has grown by 25% per annum on average for the past 5 years.
Further, at the national level, Bhutan’s per capita debt (total external debt) has risen to Nu107,709.4 for the FY 2011/12 up from Nu 84,306 as of the previous year, largely on account of short term Rupee borrowings (overdraft facility).
As of June 2012, Bhutan’s external debt grew to 89.4% of GDP from 80.9% as of FY 2010/11 with this year’s debt service ratio at 131.2%. Mounting debt, both domestic and external pose several policy challenges, given the transmission of Ngultrum debt on the external account via imports and short-term Rupee debt, given the nation’s limited international reserves.
“There is adequate liquidity for the financial institutions to meet current sanctioned loans and commitments; liquidity will however be tight for the medium term when it comes to new loan applications and shall be left to the individual discretion of the financial institutions in line with availability of loan able funds,” stated the governor.
In what seems a solace at the face of economic crises, the governor of RMA had reassured the Bhutanese people the domestic financial system remains safe, sound and resilient.”
Under Foreign Direct Investments (FDI), there are 13 FDIs approved of which these are the ambitious projects ventures.
The Amo Chhu project is worth Nu 4.5bn. The Education City project is a Nu 1bn project. The estimated cost said to be borne by the government sums up to about Nu 500mn. The benefit this project is expected to bring will be in the guise of 4,000 plus foreign students and inflow of foreign currencies.
In addition to these two mega projects, the third focus by the DHI INFRA is on the Special Economic Zones (SEZ). Samdrup Jongkhar, Samtse and Gelephu are some potential areas that are being considered as SEZs.
According to the PFU of GNHC during the last four months the ministries and McKinsey have jointly developed a roadmap for the future. McKinsey developed an analytical fact–base, brought in deeper understanding of global best practices and designed specific programs for each initiative area to help achieve national objectives.
The government has carefully considered and debated all program proposals, and adopted those best suited to Bhutan’s development vision. The government would continue to provide regular updates on the progress of this initiative and seek suggestions from all citizens.
On the foreign relations front besides becoming the ‘thought leader’ through recent international appearances and conventions, Bhutan also vied for a non-permanent seat in the UN Security Council.
The move stirred a lot of controversies and the Opposition leader had asked for ‘accounts to be made public’ on the premise that huge expenditures were made for a mission that was not even necessary.
On the plus however, as the Lyonchhen pointed out, Bhutan established relations with many new countries.
Bhutan so far has bilateral relations with Belgium, Brazil, Afghanistan, Spain, Cuba, Fiji, Morocco, Luxembourg, Czech Republic, Serbia, Indonesia, Mongolia, Vietnam, Myanmar, Argentina, Costa Rica, Andorra, Mauritius, Swaziland, United Arab Emirates (UAE), Slovenia, Slovakia, Armenia, Turkey, Egypt, Kazakhstan, Poland and Colombia.
Puran Gurung / Thimphu
