Banking on our banks...

Our banks continue to make generous profits. Last year, BNB made Nu 310 million, a whopping 124% over the previous year, and BOB made Nu 168 (see Kuensel article). Not bad, considering the size of our economy. And, considering that they’ve been consistently declaring very attractive dividends.

How do banks make money? Primarily by paying depositors a certain interest rate, and charging borrowers a higher interest rate. And obviously, the larger the spread between the two rates, the bigger the profit that banks earn. But what about bad loans, loans that banks cannot recover? That’s the risk that banks take, a risk that’s minimized by lending only to reliable borrowers.

So how do our banks consistently make so much money? By paying depositors low interest rates and charging borrowers interest rates that are much higher. And by requiring that all loans are secured by full collateral.

This is very good for our banks. But not so good for our economy. And definitely not good for people who want to do business.

That’s why doing business is difficult in Bhutan (see “Doing business isn’t easy anywhere”).

And that’s why the Doing Business Report ranks Bhutan a miserable 172 out of 181 countries in terms credit access. (see ranking)

Our banks need to be less conservative and a lot more active. They need to lower interest rates so that businesses have a better chance. Access to capital is limited to a few people who have collateral – and this is what deprives the vast majority of Bhutanese of business opportunities. The financial institutions must be more proactive in making it easier for farmers and small businesses to avail of loans – on the merit of their proposals and not collateral alone. The risk factor can be minimized if loan officers not only study and analyze the proposals, but also offer guidance and other support to the borrowers.

Improving access to credit will be good for businesses. And good for our economy. And that would be good for our banks: they’ll be able to make even more profits.

Mobile banking...

Wouldn’t you be happy if you could get your bank balance on your cell phone instead of having to go all the way to the bank?

Wouldn’t it be good if you could instruct your bank not to honour a cheque that you’d issued mistakenly?

Wouldn’t you like it if your bank informed you every time money was withdrawn from or deposited to your account?

And wouldn’t it be convenient if your bank reminded you when loan repayments were due?

All this, and more, are available with the BNB’s mobile banking service which was launched yesterday. I’m excited about this new service, so I went there yesterday afternoon to congratulate BNB staff and register for their service.

The concept seems to be quite simple: you send instructions by SMS to the bank, and they respond with the required information by return SMS. Regular rates for outgoing SMS’s apply, but incoming SMS’s from the bank are free. Plus the bank sends SMS’s to alert you when money is withdrawn from your account, deposited to your account, or when loan repayments become due.

The beauty of this service is that it is free and easy. BNB has tied up with both Tashi Cell and B-Mobile to provide this convenient service free of cost. And while I will certainly find this service very useful, it could be even more beneficial to our farmers. Almost half our population, and most farmers, now carry cell phones. So mobile banking should now be possible throughout the country. And our farmers should finally find it worthwhile to open bank accounts.

But I’m already excited about the next level of mobile banking: fund transfer. Now wouldn’t you like that? Wouldn’t you be delighted if you could transfer money to your daughter’s account just by sending an SMS? Or if you could shop, buy petrol for instance, simply by using your cell phone?

I congratulate BNB for improving their financial services. And, more importantly, I thank them for making banking that much more possible for our farmers. Go ahead. Make your services even more accessible. And empower us, your customers.

Educating doctors...

On 23rd March, the Ministry of Education announced rules on the recently approved medical scholarship grants (see the rules). The rules clarified how the government will implement the grants. But we should be concerned at least on two counts.

One, on the impact on current private students. According to the rules private students currently studying in universities recognized jointly by RCSC, MOH and MOE in the SAARC region, Thailand and Cuba are eligible to apply for the scholarship. Of them 15 will be awarded the medical grant.

Obviously, every private medical student by now expects the grant. And convincing them that they may not be eligible or that their universities are not recognized will be difficult. We’ve already upset most other private students. Now, it appears, that we may upset many private medical students as well.

And two, on the impact on future students. According to the rules, medical scholarship grants will be awarded to 15 private students each year selected on the “basis of academic merit and competition”. This is good. But there is one catch: to be eligible, a student must have already secured “their own placement/admissions to medical institutions/universities deemed reputable.”

The problem is this: a student having the best possible marks (among those who couldn’t get the full government scholarships) but without the financial backing or the connections to apply for admission privately, will not be eligible for the grant. So the grant is not based solely on academic merit; it favors the rich and the well connected.

And that could also be unconstitutional. Article 9.16 of our Constitution states that “The State shall provide free education to all children of school going age up to tenth standard and ensure that technical and professional education is made generally available and that higher education is equally accessible to all on the basis of merit.”

But it’s not enough to say it’s unconstitutional and do nothing about the shortage of doctors. So what’s the solution? I don’t know about current private medical students – we are already in this mess.

For the future, however, the solution is quite straightforward: Just do away with the grants for future private medical students. And, instead, create additional full scholarships that will be “equally accessible to all on the basis of merit.” It can’t be that difficult to create 15 more full scholarships. The government is obviously willing to make the money available. So all that’s really needed, is to convince other governments or medical universities to reserve a certain amount of admissions for our students each year.

Doing the work...

Regular readers of this blog know that every once in a while I present an issue without making a judgment or giving my views. I just present the facts as I see them.

Why do I do this?

Firstly, to make us think. Merely raising an issue forces me think much more deeply about it. And I am hopeful that it makes you, the reader, also spend some time reflecting on the issue.

Secondly, to solicit your views. Your views are important to me and, I would like to think, to other readers as well. And, by the way, yes, I welcome your comments telling me I’m wrong, especially when they are told convincingly.

And thirdly, to encourage public debate. Constructive discussion will help us determine if an issue is important and, if so, how we, collectively, can address it.

My last entry “Construction waste” was one such issue. The idea was to raise an issue that many of us know about, but don’t necessarily talk about. And the idea is to talk about it publicly so that we, especially those who are responsible for it, are forced to take action.

Construction waste is dumped not only around Memelakha. The forest below the road between Langjophakha and Taba is another favorite spot. And I’ve seen construction waste dumped below the highway opposite the Semtokha Dzong and even on other side of the RBG garage near the Tashichodzong parking lot.

We all know that there’s a lot of construction taking place in Thimphu. And that the waste that’s generated must be discarded. But the question is where? Nobody seems to know. And nobody knows because it looks like we don’t have a landfill for construction debris.

If we had a landfill, most people would gladly take their construction debris there rather than risk being caught illegally dumping it below a road. So our government should identify appropriate landfills. There are many possible sites. The park near Changlimithang, for example, is built mostly on land reclaimed using waste – mud and debris – from construction sites.

Sounds straightforward, doesn’t it? So why don’t we have a proper site to dump construction waste? Probably because no government agency has taken the responsibility. I mean, whose job is it, after all? The City Corporation? The Dzongkhag Administration? Ministry of Works and Human Settlement? Department of Forests? I don’t know. But what seems obvious is that the job, whoever’s it is, is not being done.

So we, you and I, should tell our government that something needs to be done. We can tell our friends in the government. We can express our opinions in the media. We can write to the government agencies. We can write to the member of parliament concerned, South Thimphu, in this case.

We can also bring the issue to the NEC’s notice – this is what I’ll do.

And if nothing gets done, we can get together, as concerned citizens, to clean up the mess ourselves. This has been done in the past. And I’m sure RSPN will be very happy to organize another clean up campaign.

Construction waste...

This afternoon, while travelling to Punakha, I saw garbage dumped below the highway at several places about 10 kilometers from Thimphu. The waste, which was obviously from a construction site, had been transported by truck and dumped in the forest near Memelakha.

The winner takes it all...

I commemorated the first anniversary of our country’s first general elections by pouring over the election results. And, in doing so, I was reminded of the pain and disappointment on that historic day. I was also reminded of the dangers of our electoral system.

Of the 253,012 votes cast, 83,522 were cast in favour of PDP. That works out to a little over 33% of the total votes cast. The rest, that’s about 67%, were cast in favour of DPT.

But PDP won only two of the 47 constituencies. That’s barely 4% of the total number of constituencies. So although PDP won 33% of the total votes cast, it won only 4% of the total number of seats in the National Assembly.

Now what if Dasho Damcho Dorji, contesting Khatoe-Laya, had received 4 less votes? He got 349 votes, so 4 less would mean that he would have got 345. And his opponent, who got 343 votes would have gotten 347. So PDP would have lost Khatoe-Laya.

And what if I, Tshering Tobgay, contesting Sombaykha, had received 190 less votes? I got 1224 votes, so 190 less means 1034 votes. And my counterpart , who got 846 votes, would have gotten 1036 votes. So PDP would have lost Sombaykha too.

4 less votes in Khatoe-Laya and 190 less in Sombaykha would have meant that PDP would have gotten a total of 83328 votes, not 83522. And 83328 out of 253012 works out to 32.93%, that’s almost 33%. So, if that had happened, and theoretically it could have, PDP would have won 33% of the popular vote, but would have had no seats in the National Assembly. And we wouldn’t have had an opposition party.

In fact, in theory, PDP could have won as much as 49% of the total votes cast, and not won a single constituency. That would have happened if PDP had lost every constituency by a very small margin. And DPT? It would have enjoyed an absolute majority in the national assembly although it would have won only 51% of the total votes.

Why am painting such a bleak picture? Because we must accept that our system can produce such an undesirable result. This is one of the disadvantages of a first past the post or winner-takes-all system.

But many countries, including India and the USA, use this system. True. And, theoretically speaking, such outcomes are also possible in those countries. Possible, but very unlikely, because they have a large number of constituencies.

In our country, however, with only 47 constituencies and a small voter population, the likely hood that a party can win 49% of the total vote and yet not win a single constituency, should not be ignored.

I’ve learnt that politics is dangerous. And I’ve also learnt that our electoral system is very dangerous.

A unique example...

Last year, in Sherubste College, a student asked me: “We’ve been told, many times, that democracy in Bhutan is unique – please tell me how it is unique.”

The fact of the matter is that all democracies are based on, more or less, the same principles, and none can claim to be really unique. But, on the other hand, no two democracies are exactly the same, making every democracy, unique in its own way. So to claim that our particular form of democracy is unique, in the way it is structured for example, would not make much sense.

But in one regard we are unique, and in another we must aspire to be so.

We are truly unique in the way democracy was introduced in our country – gifted, so to speak, from the Golden Throne to the people. This, we must never forget. And always celebrate.

And we must aspire to be unique in another way: in the quality of politicians that we elect. In every democracy, politicians are viewed with suspicion. They are considered, and many times proven, to be a greedy, corrupt and power-hungry lot who will go to any length to win, but who, once elected, can’t be trusted to keep their promises.

So this was my reply to the very concerned Sherubtse student: “If you want a unique democracy, insist that our politicians are unique. Insist that they empathize with the common people and that they serve them with humility. Insist that they keep their promises – that they actually walk the talk. Insist that they are the champions of our democracy. And the role models for our youth. Insist that they are unique. Then, and only then, we’ll have a unique democracy.”

Why do I remember Sherubtse? Because today, 24th March, is exactly one year since we elected 47 people to the National Assembly. So it is a fitting time to reflect if we, politicians, are fulfilling His Majesty’s vision for a vibrant and honest democracy. And to see if we, politicians, are living up to the hopes and aspirations of our people. To consider if our politicians are unique.

One politician has already proven that he is unique. Lyonpo Sangay Ngedup may have lost the elections last year, but, by all accounts, he has become even more popular. Yet, in spite of his growing popularity and the strong appeals from all over our country, he resigned as PDP’s president. And he resigned for one reason alone: to take full moral responsibility for his party’s loss in the general elections last year.

Now that, in Bhutan’s context, is unique. And should be emulated by our politicians. Perhaps then, we can claim to have a truly unique democracy.

2nd general convention...

The PDP held its second general convention yesterday.

Despite strong appeals, from every party member, PDP president Lyonpo Sangay Ngedup resigned, taking full “moral responsibility” for the party’s loss in Bhutan’s first general elections.

The general convention confirmed the following nominations:

President: Tshering Tobgay
Vice Presidents: Damcho Dorji, Ritu Raj Chhettri, Yeshey Dorji
Secretary General: Sonam Jatsho
Treasurer: Namgay Dorji
Spokesman: Dr Tandin Dorji

The general convention also approved a new executive board.

PDP general convention...

Tomorrow, 22nd March, PDP will hold its general convention.

We anticipate a large turnout. People from every dzongkhag have telephoned to inform us that they’ll be participating in the meeting.

The convention is open to all party members. To attend, please be at the RAPA hall by 9:30 AM.

Women warriors...

Fourteen villages in my constituency, most of them in Gakiling gewog, do not have electricity. Every night, women in these villages turn their rangthang, a traditional stone mill, grinding buckwheat, maize and millet for several hours in virtual darkness. Working the rangthang is hard work in the best of conditions. But in the dark, by a hearth that offers more smoke than light, grinding food is a lonely and backbreaking exercise. Yet is must be done, for they must feed their families the next day.

So yesterday, when 35 women from similar villages across Bhutan announced that, in three months, they had fitted 504 families in 48 villages from 13 dzongkhags with solar lanterns I was overcome with joy.

These women are not ordinary people. They come from some of the remotest and poorest parts of our country. And almost all of them have never been to school. That’s why they now call themselves “barefoot solar engineers.”

And these women use solar power to fight the darkness that breeds poverty in distant villages. So they are already being called the “solar warriors of Bhutan”.

Yesterday, these women showed off their skills. They showed us how to install, maintain and repair solar lanterns. And they taught us that, with solar lanterns, they won’t have to work in the dark; that their children will be able to study at night; and that they will be better equipped to protect their crops from wild animals. They also taught us that they will no longer have to strain their eyes, or breathe in smoke, or travel long distances to buy kerosene, batteries and candles.

These “warriors” showed off their expertise with obvious pride and joy.

But one warrior, Her Majesty Ashi Dorji Wangmo Wangchuck, easily showed even more pride and even more joy. After all, it was Her Majesty’s Tarayana Foundation that permanently transformed the lives of these women from simple villagers to community leaders. During the last two years, Tarayana, along with Barefoot College, a leading Indian NGO, had carefully selected, supported and trained these women to become confident and competent engineers.

Some of these women will be employed by Tarayana to train even more barefoot solar engineers. Some will soon leave for Ladakh in India to train solar engineers there. But all of them will help illuminate dark villages. And fight poverty.

What I saw yesterday is not just about women empowerment as some observers noted. Or about reducing poverty, as proclaimed by others. It’s much, much more. It’s about putting GNH into action.

And it’s about the distinct possibility that women in my constituency will, in the near future, be able to work their stone mills in the comfort of the light from a solar lantern.