What major exporters want for the private sector in the 13th plan

The government is set to simplify and eliminate unnecessary regulations to create a more business-friendly environment. The aim is to reduce bureaucratic hurdles and make it easier for businesses to operate and thrive. To coordinate these economic reforms, address policy conflicts, and monitor the performance of key economic players, an Economic Development Board (EDB) has been established.

The regulatory reforms intend to improve access to finance, nurture entrepreneurship and innovation, investment in infrastructure, encourage public-private partnerships, and enhance market access and trade facilitation for the private sector in the 13th Five Year Plan. 

The former president of Bhutan Chamber of Commerce & Industry (BCCI), Ugen Tsechup Dorji, shared his thoughts on the economic reforms to be implemented, “The government has covered almost all bases in their 13th FYP, but the real challenge lies in making sure these plans translate into action. First up is tackling the high costs of logistics that burden businesses. Then, there’s the pressing need for lower interest rates to fuel growth.”

He also shared that the government’s push for commercial farming is especially vital for young entrepreneurs eyeing agriculture. Simultaneously, smoothing out trade hurdles with the partners abroad is crucial.

“The banks need to become more business friendly with less control by the central bank. Despite government providing liquidity, banks are still playing it safe with strict lending rules. Banks demand high collateral and lack flexibility in offering project-based financing. Moreover, they often treat foreign direct investment (FDI) differently from local businesses, creating disparities in access to funding opportunities,” he further added.

New financial incentives and credit schemes are being designed to improve access to finance for small businesses.  Such an initiative will provide much-needed financial support to build entrepreneurs and small enterprises. Additionally, by providing liquidity into financial institutions, the government plans to enhance credit access for the private sector, easing financial constraints and boosting business activity.

An official from Association of Bhutanese Industries (ABI) shared, “To address these challenges effectively, the government must urgently prioritize the development and implementation of comprehensive Standard Operating Procedures (SOPs). These SOPs should aim to streamline import and export processes across all regions, ensuring uniformity and efficiency. By conducting a thorough GAP analysis and standardizing procedures, led by the Department of Trade and Customs, we can mitigate existing inconsistencies and enhance regulatory transparency.”

While places, like Pasakha, Phuentsholing, serve as vital trade hubs, the absence of standardized guidelines has introduced inconsistencies and complexities in import and export operations for the private sector. Therefore, the lack of harmonization not only complicates business practices but also undermines the confidence of stakeholders in the trading system.

“As for the international trade, we face additional hurdles such as non-tariff barriers (NTBs) and regulatory complexities with neighboring countries like India. These barriers range from certification issues to logistical challenges at border crossings, significantly impeding the flow of goods. Addressing these NTBs through mutual recognition agreements and regular dialogue forums with relevant authorities is essential for promoting seamless trade relations and maximizing export potential,” the official further added.

ABI also shared that the government should advocate for financial incentives that support access to superior raw materials, crucial for enhancing productivity in industries like ferro alloys and steel, and said, “By facilitating customs duty exemptions and enabling the use of convertible currency for procurement, we can boost its manufacturing capabilities and compete more effectively on the global stage.”

The government plans to establish and improve start-up centers to incubate and nurture innovators is a key focus. By allowing businesses to specialize in specific activities and reducing tax burdens, the government aims to encourage greater participation in the industry supply chain.

Bhutan has tremendous potential to grow in international trade, but to unlock this potential, the government needs to work together with the private sector on streamlining regulations, developing infrastructure, and implementing strategic policies.

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