In response to a question at its press conference with the media the Opposition party went into a detailed critique of the government’s performance on the economic front from low growth rates to high liquidity and low FDI. References were also made to the Prime Minister’s investment pitch at the vibrant Gujarat summit.
The Opposition Leader Pema Gyamtsho said that though the lowest GDP rate of 2.05% for 2013 had been blamed on the previous government by the current government, it was actually due to lack of investments, plans and programs in the first year of the 11th plan by the new government.
He said that the previous government had made a lot of investments in rural areas like for farm roads which improved people’s lives, electricity and others all of which reduced poverty from 24 % to 12%.
MP Kinga Tshering said that 2013-2014 Budget report has forecasted a 7.08% growth rate based also on the Nu 5 bn Economic Stimulus Plan which was supposed to increase growth.
“But in reality the actual growth rate of 2.05% and so why did the growth not happen and therefore people should also be held accountable for it,” said Kinga.
Kinga said the excess liquidity of Nu 19.7 bn in the banks was quite surprising as it meant people were not borrowing. He said this was the case as the government was neither able to stimulate the economy nor come up with economic policies to do so.
Kinga said that with one and a half year gone the government should not make excuses and should have economic policies in place so that people can take advantage of them. He said if the government was blaming the former government for low growth rates in 2013-2014, then would the government give credit for the much higher growth rates in 2017-2018 when Punatsangchu I, which was started by the former government, is completed.
MP Dorji Wangdi said that the 2012 International Monetary Fund report had said that Bhutan was the third fastest growing country in the world. He said a report in the Economist in 2011 had said that Bhutan following the same measures would continue to be the fourth fastest growing economy in the world.
He said that such growth had been made possible due to the former government’s investments in various hydro projects and other social sector projects.
Former Finance Minister Wangdi Norbu said that the high liquidity in the banks was due to the banks which had high exposure to sectors like housing clamping down on loans in these areas. He said the banks did not have other major sectors to give the money out to. He, however, said that Nu 19 bn was actually not a very big amount as the start of one or two big activities could soak up this credit. He said the start of BOIC also offering cheaper credit would also have affected the liquidity of banks.
The Opposition Leader said that despite the Prime Minister’s investment offer in Gujarat not much would change in terms of ground realities. He gave the example of the Land Act and the closure of the Education City project and also lack of investment in the tourism sector.
The Opposition party also pointed that the clean, green and sustainable pitch of the PM was actually a part of the manifesto of the DPT and also present in the 2010 FDI policy of the former government.
MP Kinga Tshering said that for global investors they wanted clear economic policies and continuity. He said that the policies have to be clear, decisions have to be made and there must be follow through. He said that he hoped that the PM could get in investment from the Vibrant Gujarat summit where billions of dollars were being committed in India as all he had heard was of around 2,000 cows coming to Bhutan.
Wangdi Norbu alluding to the Education City project said that FDI investors want safety of their money. He said the previous government had made a liberal FDI policy and many investors had come in and the last of which was the Education City where an agreement was made and then it was stopped. He said that what investors think will happen to their money when approved projects are stopped halfway.
Former Economic Affairs minister Khandu Wangchuk said that it was not easy to get FDI as global investors would not be looking at clean and green investments but in fact look at compromises on these fronts.
He said that there were many instances when investors came to Bhutan and got ‘carried away’ promising to come and invest but on going back to their accounts section they would calculate and then decide not to invest.
He pointed out several areas whereby Bhutan was not attractive for FDI. He said that an initiative like BOIC would make people only happy temporarily and others like sending out people for employment was accepting that there is no scope in Bhutan and giving up.
The MP said that people would have to work together and think of other ways to strengthen Bhutan’s economy.