The Bhutanese Leading the way.
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.
The diesel price has gone up which will impact so many others! Still the President of CAB wants to bring P-Day issue here. We thought he was a smart guy, but now he seems stupid. He will talk of 52 Tuesdays in a year. He doesn’t realize that in 52 Tuesdays how many INR saving is generated.
Out of 70,000 vehicles in the country, on Tuesdays 60,000 vehicles remain off road from morning 8.00AM to 6.00 in the evening because of P_Day. If every Tuesday a vehicle saves 2 liters of petrol, 60,000 vehicles will save 60,000*2.00liters=120,000 liters. So convert 120,000 liters of petrol into INR, 120,000liters*INR 66.00 per liter=7,920,000/- INR in one Tuesday. Therefore, in 52 Tuesdays, we will save INR 7,920,000*52 Tuesdays=411,840,000/-. With this savings we can reconstruct our Wangdue Dzong and another small Hydro power Plant. The President of CAB should be change. Just because he can talk, he talks and thats all.
These BCCI,CAB are only meant for elite/big business firms not for majority Micro/small and middle class business units.
As far as we remember, general meeting always dominates the agendas of these big teams.
Therefore, we need to form another association for micro/small and middle class business firms in each Dzongkhags in order to enjoy the rights and privileges and address the grievances in time .
The most of the privileges for training/education/trade fair/festivals and abroad trips goes to the officials and members within the Thimphu,Paro,Haa and Phuentsholing undermining the the members from other far located Dzongkhags.
The prevailing scenerio in BCCI is standstil and it is surrounded by business tycoons who have been grabbing business opportunities meant for all business people of Bhutan. They influence the decision always in their favour and that is why private sector is sinking down the drain.BCCI collects fees from all business people around the country and it has now become hereditary institution.
I agree,we must have business representation in all Dzongkhags so that every one is heard.one thing I fail to understand is the need to take sides.everyone is important.The smaller houses that make up the majority and the bigger houses that take bigger risks.
The rich and poor and the big and small are relative terms where one can not exist without the other. As a human being, sometimes it is imperative to consider yourself from the view point of someone on a par with people around who will have impact on your existence. While one may be rich which is in reality of fleeting circumstances but often meaningless without sharing with other people around. The painful economic scenerio currently undergoing in Bhutan is arisen due to the fact that influential bigger houses have always hijacked the descisions of the smaller houses which make up the majority. We all must be mind ful that we live in a relative world where everything is interdependence.