The Economic Impact of COVID

The Prime Minister recently said that the COVID-19 has not had much of an impact on the everyday economic lives of Bhutanese as they still carry on with their lives.

He said the falling GDP rates are more to do with the big business houses that are in trouble.

This is a troubling view of the situation by the head of the government. It is true that this government as declared by the PM himself is more left in its economics, but such views above are not in keeping with the ground reality.

It is true the pandemic has not had much of an impact on civil servants and government corporate employees or others who draw their pay from the government exchequer, but it has been devastating for the private sector with huge business losses and job losses.

And it is not only the ‘big companies’ who have been impacted, but mainly the small and medium businesses from the tourism sector onwards.

The Royal Kidu has come as a blessing and saved many of them from penury, but the Prime Minister has to recognize that most of them are on much reduced earnings.

It is also important to remember that these same big companies provide thousands of jobs for Bhutanese including many who continue to hold jobs and are thus not a burden on the Royal Kidu or the state.

These same companies give billions in tax revenue to the government. Revenue without which the government may even have difficulty to pay the salary of the civil service.

These companies also hold billions in bank credit. If they go under then the whole Financial Sector will collapse along with the savings of the ‘unaffected people’ in the government. It will also put the economy in a tail spin.

The government and the Central Bank under the leadership and guidance of His Majesty has taken several correct monetary and fiscal measures. This combined with the Royal Kidu has saved Bhutan from economic disaster and ruin.

The Prime Minister must continue to focus on these and not assume that the well being of the people on government pay also applies to a suffering private sector. His words could also send the wrong message down the line.

A strong economy is the source of national strength.
Yoshihide Suga

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