The Bhutanese Leading the way.
In the first meeting between the government, private sector and Financial Institutions chaired by the Prime Minister, the RMA Governor was absent though a team was there. The issues raised were mainly around the monetary measures phase four.
In the second follow up meeting chaired by the Finance Minister the RMA team did not not show up, but instead sent a note shooting down almost all the requests made by the private sector.
Now the Finance Minister has written to the RMA asking it to reconsider what are essentially several proposals put forward by the private sector.
There are various sides to this issue. On one hand is the state of the private sector in what has been a tough two last years, and the need to ensure that they get adequate support measures.
The government due to this meeting has granted fiscal measures, and the letter seems to be pushing the case for additional monetary measures.
The government is very concerned about the state of the economy, and it is accountable to its constituents, a big chunk of which is the private sector.
On the other hand, the RMA Governor or the RMA team not coming for the meeting is not to be rude, but it is an attempt from the side of RMA to preserve its autonomy.
The autonomy of the Central Bank must be preserved as any political tinkering with the banking system can lead to even bigger problems.
There are around 150,000 loan accounts in Bhutan, but there are around 1 million deposit accounts.
The RMA ultimately has to defend the interests of the depositors, and also ensure that the Financial Institutions are stable.
At the same time there is no harm in the Finance Minister making a few evidence based suggestions as long as the RMA is free to make its own decisions in the end.
While respecting the RMA’s autonomy, it needs to improve its communication strategy. It could have sent someone senior to the meetings to listen and make its own case.
Playing hide and seek is not advisable in such matters especially when even a minister feels he has not been heard.
The single biggest problem in communication is the illusion that it has taken place.
George Bernard Shaw