The Tech Park issue

For a country already reeling from the ongoing Rupee and Credit crisis, the announcement that APG the 70 percent owner of the Tech Park is withdrawing, brings to light several issues.

The first is the fact that among other reasons, one of APG’s main reasons to withdraw is the inability of the Tech Park to attract tenants.

This runs contrary to repeated claims in the past – both by the Tech Park and the Ministry of Information and Communications- that all was well with the project.

Fantastic claims were made of employment that would be generated which is currently way below the target.

The Tech Park, in short, has de-generated to several paces from its original goal of being the venue of world-class tech companies to a call center to now a White Elephant.

This, White Elephant, in which the government and investors pumped in a total of Nu 500 mn, 18 acres of land and a lot of time, at the moment, should serve as a cautionary tale on future mega projects.

There are several lessons to be learned which can serve us well in the future.

One important lesson is that Bhutan cannot build or invest its way to prosperity without working out the basics.

There is a need for skilled and trained manpower. Our school and tertiary institutes, and in fact, our entire education system should undergo a dramatic overhaul to suit the new economic reality. Our schools end up producing obedient and quiet civil servants or the jobless and skill-less youth.

Another basic issue that has to be looked at is our infrastructure. Several of our ambitious projects – be it roads or internet lines, though constructed – are not up to mark. An example would be the ‘3-G’ internet packages which are as slow and inefficient as 2-G with the only difference being that it is more expensive.

Another lesson to be learned is that good ministers or consultants don’t necessarily make for good business decision makers. The Tech Park is an example of what can go wrong when the government gets too involved in activities that should ordinarily be left to the private sector. It is revealing to note that Bhutan’s domestic IT industry were not consulted while the IT Park was being created with the result that the park after being rejected by foreign investors is not even suited to domestic needs.

The fact that the promotion of the Park was left to an inexperienced government department also explains volumes on why the venture failed to take off. While ministers and senior civil servants may benefit through such regular trips abroad, in terms of better income from generous DSA, they should see if their trips were of any real value to the venture.

The failure of the Park is also indicative of the fact that an adequate and realistic study was not done.

After McKinsey left many wondering what was really achieved, the Tech Park currently serves as a giant ‘what not to do’ sign, in terms of investing in mega projects.

There is currently a lot of handwringing going on about the cancellation of the Education City project. However, a lot of the things said to promote the Education City have also been said about the Tech Park where government agencies and private developers promised the sun and moon.

The Tech Park, ultimately brings into sharp focus some key issues behind our economic woes -starting from the sheer incompetence and inertia of our system to address and improve the economy and the also the lack of many basic economic capabilities.

 

The government solution to a problem is usually as bad as the problem.
Milton Friedman

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