Visibly, Bhutan’s economy is state-dominated. The private sector is hyped as engine of growth. Reality is, however, different.
That the small retailers, startups and vendors cannot navigate the economic course, we must understand. The economy needs big players, investments, innovations and technologies to coach a tectonic shift. Limiting their potential and foiling their enthusiasm could cost the economy.
The global industrial revolution was fueled by innovation to tap enormous energy and that was followed by technological advancement.
Bhutan’s energy quest began with Chukha and, later, Tala. The first government pursued a programme of accelerated hydropower development with a goal of attaining 10,000MW by 2020. The second government slashed it by half because the economy was deemed incapable of dealing with spillover impact.
Even as the country is known for harnessing clean renewable energy in abundance, four villages in Trongsa are yet to see the light, literally. Industrial estates, wherein power-guzzling industries are supposed to come up a decade ago is now on halt. People in some parts of Dagana, where the prevalence of poverty is high have not witnessed infrastructure developments like roads, bridges and BHUs for three decades. All the while they were promised the benefits of Sunkosh hydropower project as it did to towns of Chukha, Gedu, Wangdue and Trongsa. However, Sunkosh has never happened and the people of Dagana have now had it to the neck.
The state of mining companies has been in limbo for ages with governments waddling with mining policy and proposing amendments to the mines and minerals management Bill, which is yet to be tabled.
Banks are on a lending spree, that too chiefly biased towards inward-looking (consumption-based) policy. Investment in the capital market is skewed, remittances are on the decline, hydropower, according to some experts, are showing symptoms of Dutch disease. The private sector is contingent on government investment, government’s effort to promote Bhutan as investment destination fell short and the small market size makes the matter all the worse.
In short, the country lacks economic direction.
Getting to the basics, the proponents of the licensees for the industrial estates, for instance, pointed out lengthy approval procedures, incompetent project appraisal officials at the banks, delay in issuance of environment clearances and land lease certificate as some of the reasons establishment of industries is delayed. Isn’t it the government’s responsibility to create an enabling environment and private sector’s to explore market, call for investment and innovation.
To drive the engine of growth, our bureaucrats and policymakers must understand that drivers, be it an individual or groups must be compensated for their investment. If wealth accumulation by a few individuals is a concern, the Indian economy wouldnot have reached where it is today. Ambani, Tata and Godrej, to name a few, have had the Indian economy running by creating jobs and horizontal business opportunities.
Nevertheless, Bhutan being a GNH-led economy should be wary about the consequences of crony capitalism. Businesses must thrive on risks and innovations, rather on returns amassed through a nexus between a business class and the political class. This may be food for thought for young and enterprising Bhutanese in the 21st century.