Govt has no plans to establish more SOEs

In reference to the World Bank’s report on the state’s dominance of the economy, which revealed that it has not only constrained private sector development but also distorted the market, to the Prime Minister said that the government has no plans to establish more State Owned Enterprises (SoEs).

“All the SOEs informed the government that they had scheduled a meeting last month (February) to deliberate on the challenges faced and on ways to increase their profits, but the Ministry of Finance upon my order cancelled the meeting. I did that because there are questions if the private sectors will develop at all the government only gives emphasis to the SOEs,” said the Prime Minister.

He acknowledged that private sector is under developed in the country today. “I held a meeting with the officials from the Druk Holding and Investment  (DHI) today and we came to the consensus that there is a lack of clear policy to guide businesses. So, we are in the process of formulating a policy to promote private sector development.”

The Prime Minister said that in order to develop such policies to ensure private sector development, expertise are required to guide us through the formulation. “As pledged in our manifesto, we have initiated a Private Sector Development Board under the Ministry of Economic Affairs a week ago. The cabinet approved the committee members presented by the economics ministry and I’m sure they are in the process of working to hold a meeting sooner.”

“After consultation with the DHI today, we saw the need to have a spelt out policy on the areas private sector can operate and areas where the government can operate through SOEs with logical reasoning. Firstly, the government must operate in areas where the private sector cannot and on some areas such as mining, we have to think of future generations instead of exploiting it.”

The Prime Minister said that if the intention behind establishment of businesses such as strategic mineral is plainly intended to generate profit, the government could have easily handed over to the private sectors. “There is also need to revise the taxation policies to make it more efficient. If there is an efficient taxation policy in place, we believe that private sector has great potential to generate more profits with the support from the government.”