Growing wage gap

In between the clean wage hike of 2022 and the actual pay hike of 2023 public servants got a hike of 55 to 76 percent.

This hike further widened the already existing pay gaps between the government sector and the private sector.

The private sector was always small and weak in Bhutan but a two-year long pandemic had a devastating impact further shrinking it.

There was no way such a weakened private sector could match up the hike, and in fact retaining staff and paying them what was due was an achievement in itself.

The government’s hand was largely forced by the large numbers of resignations in the civil service as people left for mainly Australia. A combination of the hike and change in migration policies in Australia, Canada and UK brought the numbers of resignation down by a lot.

In fact the government itself did not have money for the hike and it had to use Bitcoins from DHI to pay for Nu 8 bn of the Nu 12 bn that the hike would cost in two years.

The Punatsangchu II project will now take the load of the hike from next year onwards as it comes on line.

Prior to this the last pay hike was given in 2019 when the Mangdechu project was launched.

Hikes were given in 2014 and two more before that going back all the way to 2008.

Even before democracy generous hikes were given when the Tala project and before that Chukha projects were launched.

The trend so far is that whenever large national projects come on the pipeline the cream and the milk are both taken by public servants.

This status quo is likely to continue into the future with the launch of more hydro projects and politicians eager to cater to a big voting block with postal ballots to boot.

In the meantime, a weak and small private sector will not be able to catch up. Ironically, it is only the private sector that can produce jobs in large numbers.

If this situation continues then the next big wave of migration may be from the private sector  looking to make a living abroad. Australia may not be an option but there is the middle east and other countries.

An important duty of this and future governments will be to strengthen the private sector, otherwise there will be a huge income and wealth gap in Bhutanese society, which will not be healthy at all.

We need the private sector to create jobs.-Tim Scott