In responding to question on the recent record 8 percent growth the Prime Minister while not spelling it out indicated that the current government’s main platform for 2018 would be the economic recovery and growth from 2013 till date.
The PM during the monthly meet the press on Friday said that that the people to ensure that the economy gets even stronger should vote the right government in 2018 without again spelling out which party to vote for. This assumes significance as one of the biggest stumbling blocks for the former government was the rupee and credit crunch resulting in an economic crisis in 2012-13.
Party leaders have also said that the biggest card that the PDP government has up its sleeve for 2018 is the economic performance especially in comparison to the state of the economy in 2012-13.
With the latest GDP data showing a 7.99 percent growth the Prime Minister Lyonchhen Dasho Tshering Tobgay said this was keeping in mind that his government took over in 2013 when growth had reached a historical low of 2.14 percent.
The PM said that such growth taking place when the global economy is still in a slowdown must be appreciated.
He said that the growth momentum must be kept up and he listed the things that had been done and needs to be continued to done to keep economic growth high.
Lyonchhen said that the government had carried out successful fiscal policies.
The PM said that the government first pumped in Nu 2.1 bn into the banking system so that businesses could borrow once again allowing certain sectors too boom.
Due to liquidity issues and the rupee crisis banks had largely stopped lending by 2012-13.
On the other hand he said that to encourage small and cottage industries the banks were encouraged to lend to them apart from a host of measures to support them like the new Cottage industries department, labour ministry training and also the Nu 1.9 bn BoIC and now REDCL loans given to small entrepreneurs and farmers across the country.
The PM said that such businesses not only diversified Bhutan’s exports but also replaced certain imports.
Lyonchhen said taxes were also streamlined so that there were higher taxes for certain items which were not necessary while taxes were removed in other areas like small shops and businesses outside urban areas. The PIT exemption bracket was also moved to Nu 200,000 from Nu 100,000 and educational exemptions were doubled.
He said that the government worked closely with the RMA to solve the Rupee crisis issue. The PM said that the RMA has managed to keep inflation under control and has also managed the reserves well with a result that the reserves are at record levels. He said REMIT Bhutan was also introduced to help Bhutanese abroad as well as to also improve Bhutan’s foreign currency reserves.
Lyonchhen said that the government also worked closely with the RMA to convince banks to reduce lending rates and as a result loan interest rates came tumbling down which led to more investments that sustained economic growth.
However, the PM said the government is also cautious and it has a macro-economic affairs committee that studies the economy and advises the government well in advance of any issues to ensure that economic growth is sustainable.
Lyonchhen said that bureaucratic red tape is being addressed by streamlining systems and procedures and one of the signs was that Bhutan jumped from 143 in 2013 to 73 in the ease of doing business index in 2016. Lyonchhen said that Bhutan aims to be in the top 50. However, he acknowledged that there was still a long way to go in reducing additional red tape.
He mentioned the creation of a stabilization find so that once the hydro projects start not all money is spent at once but some money is put into the fund for ensuring macro-economic stability.
He said a national debt policy would act as a check on both the current and future governments to borrow responsibly.
Lyonchhen said that the tourism sector is doing well with the focus being on high value while keeping risks at bay.
On the hydropower front the PM said that Bhutan is now moving into other aspect of the hydro business like construction with the CDCL which will be engaged in tunneling also manufacture of equipment and parts by expanding the Jigmeling hydropower centre.
The PM announced that the government along with DHI and DGPC would start a new company that would come up with automated control systems for hydro projects and even other manufacturing companies. The PM said at the same time the government also focused on diversifying the economic basket by not just focusing in hydropower.
Lyonchhen said that agriculture is booming with increased food production.
The PM said that only when it came to mining there are opportunities but they should be careful to tap this sector given its environmental impact and also to ensure that the benefits go to the community and people at large.
He gave credit to not only the government but also others like farmers, tour operators etc for building the economy to this level.
The PM said that these activities need to continue for a stronger economy.