Members said the main highlight will be on the credit crisis and pedestrian day
The private sector and Bhutan Chamber of Commerce and Industry will hold a meeting on Monday, September 15 to sort out, discuss and find possible solutions to major issues faced by the members both new and unresolved.
While some issues are pending ones that has been discussed during earlier meetings but a host of issues faced by the private sector has been informally discussed within the public and on social network which remain unresolved.
Prime focus of the Monday meet the businessmen say will be on the pending and unaddressed problems caused by the severe credit crisis in the country.
Secretary General of the Construction Association of Bhutan (CAB), Chheku Dukpa said “we will focus mostly on the credit problem as per the letter from BCCI”.
The first step towards a credit crisis occurred after the Royal Monetary Authority in April 2012 applied new restrictions leading to a virtual credit freeze. This was based mainly on the perception that the excessive credit had fueled the rupee crisis.
Since then construction companies, automobile companies and other industries has been pushed to the brink and some are already on the verge of closing down businesses.
As loans are not available construction companies which need continuous flow of funds to execute a variety of projects on time have been hugely affected. Apart from private home builders, this also includes the government’s huge ongoing developmental construction works like highway networks, bridges, schools, medical units, farm roads, Gewog centers and electricity supply among others.
The second on the agenda is discussions on the inconveniences caused by the pedestrian day and possible alternatives.
Its almost 15 weeks since Prime Minister Jigmi Y. Thinley on June1, 2012 issued an executive order, reiterating the cabinet’s decision to observe all Tuesdays, starting June 5, as Pedestrians’ Day throughout the country. While the government hasn’t shown any signs to let-up on the Pedestrian day, various business houses in the country from small shops to industries are faced with difficulties on different scales and in situation.
Chairman of Singye Group who is also the President of CAB, Ugyen Tshechup Dorji said “BCCI now felt that there is urgency”. He reiterated on his earlier comments in media reports and said that the “number one issue is the credit crisis followed by the pedestrian day”.
Earlier, he argued trucks ferrying industrial products and materials should be allowed on the pedestrian day. “If it can be adjusted for the tourism sector, they should allow for industries and construction too because the loss of 52 days in a year is huge,” he said.
Exporters in the country will highlight issues such as the need of an “export processing zone (EPZ)” and “export packaging credit (EPC)” among others. “We will also want to focus on the credit facility and pedestrian day,” he added.
General Secretary of the Bhutan Exporter’s Association (BEA) Tshering Yeshey said “our proposal for the EPZ is a very important one as we don’t have one in Bhutan as of now”.
He said currently the exporters use temporary sheds to store export items, especially apples and oranges on the land owned 30% by private individuals and 70% by the government at Toorsa in Phuentsholing, Chhukha. “We have difficulty while negotiating,” he said.
He said, the EPZ can be utilized not only for cash crops but for industrial products and other items. Currently each exporter shell more than Nu 0.1mn to construct a temporary shed which is of no use after products are sold out. “So it will be a source of income for the government as well as beneficial to the exporters,” he said.
Another proposal by the BEA is for EPC which the general secretary said can be made available by the financial institutions. EPC refers to any loan or advance granted or any other credit provided by a bank to an exporter for financing the purchase, processing, manufacturing or packing of goods prior to shipment. This in Bhutan’s case is the financial assistance for export items but cash crops in particular to support the farmers.
Hoteliers in the country also have their own issues to put-up during the meeting. President of the Hotels Association of Bhutan (HAB), Tobgye Dorji said the main priority will be to reiterate on the request to the government to waive-off the restriction imposed on requirement of three star hotels standard for tourist accommodation.
Majority of the Hotels in the country falls under the two star category while the government requires three stars standard if the particular hotel wishes to accommodate tourists. However, hoteliers cited lack of capital to make such investments.
An official with the Tourism Council of Bhutan said hotel standard is a prerequisite to make Bhutan a high end tourist destination. “After all we need to provide services worth the money earned from tourists,” he said.
Another issue faced by HAB is the lack of tax incentives or tax holiday. “As an industry that has the highest employment capacity and one of the contributors to national revenue, it is important to allow certain concession,” a hotelier in the capital said.
The tax holiday he said as of now is allowed only on furniture for the restaurant inside a hotel. “The restaurant is not the hotel, it is just a small part,” he said.
The majority of the issues included in the agenda for the meeting will be basically issues that were discussed earlier but still unresolved. Issues that need to be forwarded to the government will be taken up after discussions within the members of the private sector.