Gelephu and lifting the twin curses on Bhutan

Before the 2003 ‘Operation All Clear’ His Majesty The Fourth King at times accompanied by the Crown Prince spent time exploring the southern terrain of Bhutan from the west to the east often on foot and through thick forests.

Now 20 years later, His Majesty The King following in his father’s footsteps is conducting a detailed recce of the border Dzongkhag of Sarpang with high Trulkus, potential international investors, senior officials and the stakes are equally high.

The twin curses

This time, however, the enemy is not the ULFA or NDFB but rather the two natural blessings of the past that overtime have now turned into curses for Bhutan restricting economic growth.

Historically, the blessing of a tough mountainous geography helped protect Bhutan’s sovereignty against all manners of foreign invaders, and the second blessing of a small population meant no extreme poverty and better stability.

However, in modern times that same punishing terrain has made Bhutan the most mountainous country in the world restricting economic activities like mass agriculture or good infrastructure, and the small population means a small workforce and a smaller market.

Unable to produce much given its terrain and population size, Bhutan has primarily been a consumption driven economy dependent on grants, government expenditure, seasonal tourism and a few hydro projects.

The economic growth centers of Thimphu, Paro and Phuentsholing have all reached their maximum potential and have nothing more to offer both area wise and economically.

Paro has more space, but it is also the rice-bowl of Bhutan which is important for food security and there is an effort to preserve its unique cultural character instead of turning it into another Thimphu.

The definition of insanity is to do the same thing over and over again and expect a different result. Bhutan has been talking of self-sufficiency since decades but it has been unable to achieve it as we have the same copy-paste five year plans, different only in size but they never dealt with the twin curses on Bhutan.

The youth of Bhutan no longer mollified with outdated election promises and ideas of more farm roads do not see a future here and hence the huge migration in recent years.

The Gelephu Mindfulness City is an attempt by His Majesty The King to lift the twin curses on Bhutan by attempting to develop the biggest and flattest terrain available in Bhutan, add to the special value already there in Bhutan, use sovereign prerogatives and also get in investors and skilled workers from abroad into the city.

It is also an attempt to urbanize Bhutan on our own terms, and benefit from it rather than the haphazard urbanizations until recently.

The size of Gelephu

For those Bhutanese who have not been to Gelephu and Sarpang one has to see it to believe the size of it. All of Bhutan’s thromdes, towns and yenlag thromdes will fit within it and there would be space for much more.

The drive from Gelephu town to the extreme end of the Tareythang Gewog in the east is around 1 hour 30 minutes. This can be shortened to around 30 to 40 minutes once the bridge over Mao Khola is built.

The drive from Gelephu to the start of the Phibsoo Wildlife Sanctuary in the west is around 1 hour.

The land is mainly plane on both sides.

Gelephu in fact feels so big that while flying back Thimphu and Paro feels like isolated settlements which they actually are in the larger international picture.

Bhutan will be getting its first proper international city with Gelephu and the various benefits that come with that.

A challenging past and security

In fact, the Mindfulness City is a coming of age for Gelephu too. In the 1980’s Gelephu was developing and showed great potential but then in the 1990’s the southern problem happened and development came to a standstill.

When it was just recovering from that then the ULFA/Bodo militant camps again hampered development.

In fact, during the resettlements people preferred land in Tsirang and Samtse rather than Gelephu which was not seen as being safe with kidnappings from across the border.

Many people did not even build permanent homes and had homes on stilts or effective Bagos (temporary housing).

Despite its potential Gelephu was mainly forgotten in the dust.

However, after its turbulent past the recent years have seen a good turn for Gelephu and everything from security to connectivity has improved and its once great potential has come to the fore.

Given incidents in the past, good security is also a very import part of the project and here utmost attention is being paid to it. The security observation posts established along the border during the pandemic has not been removed.

A local resident said that before in certain remote areas near the border cattle theft and the occasional kidnapping used to happen from across the border, but the building of security posts has put a stop to that.

The benefits of the city is expected to flow across the border in jobs and trade and that itself will also enhance security.

Burning questions on land and investments

As of now the detailed boundary of the City is yet to be drawn which will be done in the near future. A rough boundary for the project is between the Sunkosh river in the east and Manas Wildlife Sanctuary in the West. If a bigger boundary is drawn towards Sunkosh then parts of some Gewogs of Dagana may also have to be looked at.

A burning question is on what will happen to the private land and here official sources say that a lot of the project will happen on state land, but for the private land that will be acquired it will be done using international best practices.

An existing example is in the expansion of the Gelephu airport where displaced families are being given substitute land nearby. One of the many models being considered is also possible shares in the project but nothing is finalized.

Another burning question for the people is on the potential investors for the City. Here specific information is restricted due to the Non-Disclosure Agreements (NDA) that Bhutan has to sign with foreign companies’ due to which Bhutanese officials cannot share the names and details of the companies who are interested. Bhutan could even be sued for disclosing such information.

However, according to a source there are a lot of companies and people interested and enquiring. These have to do with Lifestyle, Educational Institutions, Data Centers, Infrastructure, Health, Finance, Bio Science, Energy, and others. One area that Bhutan is looking at is also attracting high net worth individuals who may be looking for safe and stable places.

While people are interested to come, Bhutan will not have an open-door or free for all policy as it will be on the basis of invitation and those companies who agree to the local framework and whose values are aligned to the project.

It is a mindfulness project and it will not go for ‘off colour institutions’ like for example those who want to set up polluting industries.

The aim is to get companies to feel proud and take it as a mark of quality that they are in Gelephu.

There is interest in the project from companies in many foreign countries.

Funding Gelephu

The other big question is on how the project would be funded given that Bhutan has limited resources.

Here given that the city has to be sustainable and also meet national goals a simple way here would be giving land deals for long term leases. The pricing would not be on the simple cost of the land but on the special value of it being in Bhutan and its returns which is much higher.

Experts are working on how Bhutan can raise money when it is the owner of the real estate and some international examples are also being looked at.

A source said that investments in Gelephu will not be the traditional model of grants, but it will be very commercial and look at BOOT or Build, Own, Operate and Transfer model especially for certain big-ticket infrastructure items. BOOT is when a foreign company builds a project, owns and operates it for a fixed tenure and then transfers it back to the government.

Vajrayana, location and sandbox

With the City promoting itself not only as an economic hub but also a Vajrayana center, the role of Lams and Trulkus will also become very important. There is interest among them in the City and its potential too.  In fact this would be the first phase of the project.

The other advantage of the Gelephu project is that it is centrally located and stands to benefit all 20 Dzongkhags. It is already connected to several Dzongkhags from the west, east and south.

Gelephu will also serve as a sandbox where if certain approaches, good practices and systems work then it can be replicated in other parts of Bhutan. For example, one such thing is land acquisition and the compensation system.

Secret sauces

While Gelephu has the flatland and location there will be three secret sauces for the success of Gelephu which is sovereign prerogatives, Bhutan’s brand value and skilling Bhutanese. The first is the reason why it is being made into a Special Administrative Region (SAR). Bhutan can offer legal and other incentives to foreign companies that would make Gelephu an attractive destination to make it an economic hub.

The second secret sauce is Bhutan’s already recognized branding of being green, clean, a sustainable country, a Buddhist country and a must visit destination. However, Bhutan could never monetize this brand except for in tourism.  This branding will be applied and implemented in Gelephu and Bhutan will finally be able monetize its positive global reputation and special value.

The third sauce is visible in the largest water project in Bhutan built in Gelephu by Desuups under budget at Nu 375 mn instead of Nu 477 mn and on time. This shows that Bhutanese can do it given the right leadership, motivation and skilling.

Even in conventional terms a local said that hypothetically even if Gelephu just gets the international airport and rail link then the city by that itself can boom.

Gelephu will also be a different project in that sense it will try and give a stake in it to every Bhutanese.

The Gelephu Mindfulness City project in many ways is finally accepting the reality that Bhutan’s economic heartland and true economic potential is not in consumption and import driven Thimphu and Paro up north, but it is in its southern foothills and plains where an export oriented world class economy can be built.

This is the only way for Bhutan to lift its twin curses on it, revitalize its economy and in the process help develop all 20 Dzongkhags.

It will now be up to a brave King heading into battle with his people behind him to lift the two curses keeping Bhutan down.

The outcome will shape Bhutan forever.

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