Private sector nervous with no response from government

Having waited enough for solutions from the government, businessmen expressed urgency for solutions to improve the situation

Business community across the country are impatient and gripped by serious worries as more than three months has passed since the private sector submitted various issues to the government during a meeting with the government in May this year.

The six main issues forwarded to the government then were with regard to commercialization of farming, improvement of the tourism industry, hoteliers’ access to finance and professionals, external commercial borrowings (ECB), lifting of ban on certain import items and concerns of labor shortage among others.

However, the government till date has responded to only one out of the six vital issues proposed for solutions.

The government, which was represented by the Prime Minister Lyonchhen Jigmi Y Thinley, four cabinet ministers and senior government officials, said during the meeting in May that, while import of vehicles, furniture and alcohol would continue to be restricted, the import of juice, energy drinks, chips, wafers, waffles, snacks and cakes from third countries would be allowed.

High-end hotels were also allowed to import international brands of beverages, which they use as a raw material.

While some business houses are on the verge of collapse due to the Indian Rupee (INR) shortfall and credit crisis which surfaced earlier this year, very little has been done by the government to address the issues, businessmen said.

The automobile industry suffers a huge setback without a single import since March this year and it still sustains on the spare parts and repair services.

In the meantime overhead costs of majority of the business houses are not in line with the business proceeds. “We are currently running at loss but we still need to make payments to our staffs and other current expenses,” a businessman in the capital said.

The business community during a recent meeting with financial institutions earlier this week raised concerns about the solutions to their problems. However, Bhutan Chamber of Commerce and Industry (BCCI) president Tobgyal Dorji said the proposal will be submitted only by mid-October given the variety and volume of issues to be compiled.

This, a businessman in the capital said will be too late for many traders as they have already waited long enough.

“In the last seven months, there has been zero growth so if the private sector and banks are on the same page, there is a need to come together and tell the government,” Chairman of Singye Group and also the President of CAB Ugen Tsechup Dorji said Monday during a private sector meeting.

During the same meeting, bankers and CEOs of different corporations said it was important that the current economic situation will worsen if not addressed soon by the government.

Druk Holding and Investments (DHI) chief executive officer Karma Yonten said the meeting was called at the right time and if the appropriate measures are not taken then situation may get worse. It is also very important that both Financial Institution and private sector should work closely so that they can float together otherwise will sink together.

He informed that it is difficult to quantify the credit requirement in the economy. Therefore, he suggested that if each sector association could determine the amount required to be injected to the private sector and accordingly, this amount should be arranged by the Royal Government from other external sources. Lastly, he stated that systematic approach is required to solve this liquidity issue.

The BCCI president during the same meeting said “we have called for a meeting with the prime minister three and half months ago when we discussed six major points. There is only one issue which is cleared.”

“There are so many unresolved issues which have been reiterated in today’s discussion and the government must give us a feedback,” he added.

“If the government doesn’t react, we as citizens of the country must act accordingly to sustain our economy,” the president assured the business community.

BCCI secretary general Phub Tshering said the chamber hopes to have all the issues resolved with the government through the leadership of its president.

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15 comments

  1. wakey wakey hon’ble ministers from your slumber. Time is drawing nigh and the goose remains uncooked. show us that you can make a difference.

  2. The DPT government never knew what they were doing and still do not. They embarked on a great economic jump program, too much in a rush to develop Bhutan in a short time. The Speaker even claimed that they will do more for Bhutan in 5 years than the country has achieved in the last 50 years.

    In reality, they have simply exploded Bhutan’s expenses in the government sector and left nothing for the private sector. As a result, the growth of about 7-9% per year has now become almost negative. 

    The government has simply proven itself to be foolish and ego-driven, much to our cost. They must go in 2013.

    All who agree say AYE!

    • I say NAY to you. The private sector is responsible for their own woes, brought about by their irresponsible spending, the RGOB has been spoon feeding them too much for the last so many years. If you don’t agree with me, just take a look around, all the people that are complaining now are the ones that have their children studying abroad, drive Land cruisers/Prados worth a few millions, own a building or two, in many cases they own several buildings, live in fancy houses with air conditioning/central heating, depending on where they live etc, travel abroad on month long vacations with their whole family during the school holidays, if you feel sorry for them, than you are a fool.

  3. DPT….

    “You are what you do and NOT what you say,,”

  4. The two fastest growing economies of the past decade, that of China and India are also suffering because of the meltdown in the Eurozone etc, as a country which depends so heavily on India, it is only natural that we to will feel the cascading effects of this global meltdown.

    The problem with our people is that we have always spent much more than we earned, this is exactly why the banks are suffering, as they approved too many loans and now they find themselves with no more money to lend.

    Injecting money into the economy will at best only have a good short term effect, the example of USA can be cited, as despite the Obama administration pumping in so much money, the US economy has remained static. It is just that the global financial situation is such that whatever the RGOB does, it will not be enough.

  5. Good, you  are such a d…. Head. How is our rupee crisis connected to Global economic crisis. You talk like we are big and powerful economy like USA and China. We continue to receive the committed amount of aid and donation from donor countries. The only affect we might feel  is from inflow of western tourists which I don’t think has gone down if you go by erecent  news. India is pouring rupee into Bhutan as committed . It is us who have failed to manage our economy. Balancing inflow and outflow of rupee should have been the most important task of RMA and the Economic Affairs Ministry. 

    • Dema T, please tell me how you will balance the inflow and outflow of rupees when we import everything from India and export absolutely nothing to India. I don’t know who the real d…..Head is here. OK suppose you are the head of RMA, tell me what you would do to solve the rupee crisis, it is easy to pin the blame on the RMA for not having proper fiscal policies in place, but in reality it would have been impossible for them to do anything about it. And I suspect you too have no solution to this crisis, if you do have one, we are willing to listen.

    • As to why China and India were mentioned, it was just to inform the readers that the global financial crisis is having a negative impact on everyone, including China and India, both countries that saw huge growth to their economies in the past decade or so and that Bhutan with hardly an economy to even speak of was not immune to the global meltdown too.

      • How about the huge grants we receive from Government of India plus the export of power to India, isn’t that inflow of rupees ???? 

        • But the amount we get from the above two is a miniscule when compared with the amount we import from India, that’s why we have such a large trade deficit with India.

        • Please read the Kuensel edition of 28 Sep 2012, under the heading “An import driven economy”, you will understand why our situation is so precarious vis-a-vis the rupee situation.

  6. good is having a very skewed oblique view of the whole issue,,, his perspective itself is wrong ,,, so why argue with a person who is fixated with a view that is wrong,, this whole financial problem is a man made disaster created by the finance ministry and the monetary authority over period of one decade or so,,,
    this scenario is not something like natural disaster happening out of the blue,,, 

    • So wise guy, why don’t you provide a solution, I am sure you have none.

      • haha,,, so the solution is whats happening with us nowadays,,the reality is the country is having a dearth of INR,,, therefore, austerity measures are enforced upon the public by strict rationing of foreign currency, pedestrian day which saves few million INR every tuesday,, loan embargo coz loan is a INR drainer,,, and many more,,,,,
        Wud mr. good have a solution when people like mr. goof  sorry mr. good have been self immolating oneself for the 90% of the time haha,,,the self damage done is quite profound,,,thank you  no offence and bye la

  7. thegooseisovercooked

    It seems that the current government is very short sighted , inexperienced and naive to such an extent, that they would justify their decisions no matter how deep they pull the country down into the shithole. 
    Bhutan lacks a substantial amount of INR which was earlier fulfilled by the private community ( read indian business men) by way of money deposited in Bhutanese banks. during this period, there was no problem with Bhutanese Currency as everyone in Jaigoan right upto Oadlabari accepted BC at par with INR. This was only because the indian business community fulfilled part of the INR deficit with their private wealth. The moment Bhutan asked the Indian account holders to close their accounts and withdraw their money, the BC lost all credibility. This would have been avoided still, had the Bhtanese government / banks bought back all their currency (BC) with INR borrowed from India. They however decided to ignore this. Now if “YOU” disrespect your own currency, then how will someone else respect it more than you? 
    now the reality is that although the BC is valued at par with the INR officially, unofficially the BC is valued at 10-20% less than the INR. This unofficial devaluation could as well be official as “one” cannot exchange the BC to INR “freely” at any Bhutanese Bank . So now Bhutan economics has become a playground , to experiment on. 
    Rumor has it that there is still approx 400 Cropres worth of Fixed Deposit’s belongining  to the Indian Business Community waiting to mature and go back to India. The Bhutanese banks have been using this wealth to circulate currency  within Bhutan post the IC BC problem . Once this FD”s mature and go back to India, Bhutan economics goes further down the shithole, right into the shit! 

    The solution if you ask me is this:

    1. open up small business for partnerships between Bhutanese nationals and Indian Nationals. Somehting like 51%-49% in favor of Bhutanses people. Most small foreign countries are open to this. This would result in a huge inflow if INR cash. Make it legal for a Indian to own a business in partnership with a Bhutanses national in Bhutan.

    2. Open up the labor crisis by issuing work permits for Indians in many areas where Indians are more efficient than Bhutanses people. This will result in better business, better sales and better income. 

     Bhutanese people need not worry about working for a salary when they could become bosses. The above mentioned two ideas would partly solve the cash flow problems as well as employment problems in Bhutan. 

    There are other solutions as well to the woes of Bhutan , but this is solely  subject to ones ideology. 

    one last word. Would Mr Goof….ooopppssss….sorry…ahem….. Mr Good please not reply to my thoughts as i feel Mr Good is a pro DPT government fellow or better yet, is someone from the DPT government  itself.  

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