Well done ECB...

The Election Commission of Bhutan have now completed seven rounds of elections. Of the seven, last Monday’s local government elections was by far the largest and most complex. It was also the most successful.

ECB officials, including those in the dzongkhags, worked round the clock, for months on end, to organize the elections. They were assisted by about 150 senior civil servants who were on deputation since early April this year to work as observers and returning officers.

And more than 5,500 election officials, most of them teachers, were trained and dispatched to man the 1,103 polling stations located throughout our country.

In addition, thousands of workers contributed their services indirectly. They were the ones who kept our roads open, telephones working, banks running and electricity functioning. Plus countless security personal worked to ensure the safety of the elections.

On poll day, despite the rains, a decent 56% of registered voters turned up to cast their ballots. Of the 2,185 candidates who contested the elections, 1,105 won becoming gups, mangmis, tshogpas and thromde thuemis in accordance with the Constitution.

The mammoth exercise cost the State Nu 225 million. But the election is worth the money. And worth the time. And the huge effort.

Why? Because the Constitution requires “… elected Local Governments to facilitate the direct participation of the people in the development and management of their own social, economic and environmental well-being”. And that, in short, is what our democracy is all about.

Incidentally, the first elections that the ECB conducted was the “mock elections” on 21st April 2007 in which “Druk Yellow Party” and “Druk Red Party” emerged as the two leading parties.

On 28th May 2007, ECB conducted another “mock election” in which the “Druk Yellow Party” trounced the “Druk Red Party” winning 46 of the 47 constituencies.

On 31st December 2007, the ECB conducted the National Council elections, which became the first elections to be conducted under the Constitution. On 29th January 2008, National Council elections were held for the 5 dzongkhags that did not have sufficient candidates earlier.

On 24th March 2008, the first general elections to the National Assembly was conducted in which DPT clobbered the PDP winning 45 of the 47 constituencies.

And on 21st January 2011, Thromde elections were conducted in the four so-called “Class A” thromdes.

The banner, featuring voters in Meewang gewog’s Khasatrapchu polling station, celebrates the successes of the Election Commission of Bhutan.

Think about Lhab Tshering...

Lhab Tshering has been in detention since 31st January. On that fateful day, he was caught with 64 packets of chewing tobacco (Baba khaini) at the Chunzom checkpoint. He didn’t have a receipt to prove that he possessed the khaini legally. So he was charged for smuggling tobacco under the Tobacco Control Act.

Yesterday, the Thimphu District Court, found Lhab Tshering guilty of smuggling tobacco, and sentenced him to jail for three years.

Lhab Tshering, a driver, had purchased the khaini on 26th January, while repairing his vehicle, a trailer, in Jaigaon, India. He had paid Nu 200 for the 64 packets of khaini, each of which contains 10 grams of tobacco.

In court, he argued that the tobacco was for personal consumption. And he pleaded that he was not aware of the tobacco ban, which had, in fact, been in effect for barely a month.

The Office of the Attorney General, his prosecutors, maintained that ignorance of the law is not a justifiable defense. They are right. But they went on to elaborate that the Tobacco Control Act was:

… enacted by the Parliament which is represented by the elected members of all the people in Bhutan. This is enough to state that he is part of law making process because he is also a voter who elected the member from his constituency and thus he is also represented in the parliament in the enactment of the Act.

Incredible! The OAG, in its convoluted way, seems to blame Lhab Tshering for passing the law that got him into trouble.

Okay, Lhab Tshering may have voted. (And if he did, he most probably voted for the DPT.) But he can’t be held responsible for the laws that his representatives make. That responsibility – especially for crafting laws that harass people instead of benefiting them – lies solely and squarely with his representatives in the Parliament.

Anyway, Lhab Tshering has been sent to jail. And he doesn’t know what to do. In fact, there’s almost nothing he can do.

But the question is: what can we do about it?

At the very least, we can pause and think about Lhab Tshering.

Think about Lhab Tshering, a fellow citizen. He’s being sent to jail for three whole years for possessing a mere 64 packets of khaini worth all of Nu 200.

Think about Lhab Tshering, the sole bread earner in his family. He earned Nu 7,000 a month as a driver. But since his detention, five months ago, he hasn’t received a salary. And he won’t be able to do so for the next three years.

Think about Lhab Tshering, the young husband and father. His wife is 20 years old. And his son is just two. They’ve had to leave their home in Khuruthang, and are now living with Aum Choden, Lhab Tshering’s distant relative, in Thimphu. Yangchen Lham, Lhab Tshering’s wife, has no money, so she and her son are completely dependent on Aum Choden.

Think about Lhab Tshering, Aum Passam’s only “capable” child. She lives in a bamboo shack in Patale, Tsirang, with two of her children, both teenagers. She does not own any land, and, until recently, was supported by her son, Lhab Tshering.

Think about Lhab Tshering, Tshering Lhamu’s and Phub Dorji’s older brother. Tshering is in Class 3, and Phub is in Class 5. They go to school in Khuruthang and, until recently, they lived with their brother, Phub Tshering. While undergoing trail, Phub Tshering has had to request his Aunty, Wangchuk Dema, a gardener at Ugyen Academy, to take care of Tshering Lhamu and Phub Dorji.

Think about Lhab Tshering, a young man, criminalized by the Tobacco Control Act, and ask yourself if there’s justice in that law.

Think about Lhab Tshering, your fellow citizen, and demand that his representatives in Parliament – and your own representatives – correct this injustice.

Inappropriate...

The Budget Appropriation Bill for 2011-12 proposes how Nu 42,174 million of the government’s Consolidated Fund will be divided during the coming financial year.

Central agencies will keep a good 74% of the funds.

The 20 dzongkhags together will get about 20% of the funds.

And the 205 gewogs combined will get barely 6% of the funds. And that includes money to build farm roads. Take away farm road construction, and the winners of the forthcoming local government elections will have very little money to fulfill their campaign promises.

Budget – taxes...

During his budget report last year, the finance minister informed the National Assembly that the government was implementing a range of measures to rationalize the sales tax and customs duty rates, and to broaden the sales tax base. The measures were expected to bring in additional revenue of Nu 450 million.

The government eventually withheld the implementation of all the increased taxes, except those that were imposed on vehicles. The taxes on vehicles were also lifted after the Supreme Court declared them to be unlawful.

This year, the government has submitted the Tax Revision Bill 2011 to the National Assembly along with their budget proposal. The Bill seeks to increase taxes according to the procedure outlined in the Constitution, the Public Finance Act and the orders of the Supreme Court.

Here are some features of the Tax Revision Bill that may interest you:

Taxes on vehicles. The increase in taxes proposed for vehicles is way below what the government tried to implement last year. Cars that have engine capacities of under 1.5L will be subject to 20% sales tax and 20% customs duty. Cars having engines between 1.5L and 2.5L will be subject to 20% sales tax and 25% customs duty. And cars that carry engines bigger than 2.5L will be subject to 20% sales tax and 30% customs duty.

Vehicles imported from India are exempt from customs duties. And vehicles that were ordered before the Bill was introduced will pay taxes at earlier rates.

Electrical and hybrid vehicles will not be taxed at all. So expect a surge in the number of hybrid vehicles within a few years. Bicycles are also fully tax exempt. That will come as good news to people wishing to bike to work or for pleasure.

Taxes on alcohol. Excise on domestically produced spirits have been increased only slightly, from 20-60% to 30-75%. Higher excise rates will be applied to cheaper alcohol, while the lower rates will be applied to more expensive brands.

The sales tax on imported spirits and wines has doubled to 100%, while customs duty on imported spirits and wines remains the same at 100%.

Beer will now be subject to 100% sales tax (up from 50%). And another 100% in customs duty will be charged on imported beer.

Packaged juices. The sales tax on all fruit juices packaged in containers below 250ml will be doubled to 30%.

Spare parts. The customs duties and sales taxes on a wide range of spare parts have been increased. But for some reason, customs duties on spares for certain boilers, generators, turbines and pumps have been reduced drastically.

Budget – services...

Here are more random thoughts on the budget. Please keep your comments coming.

Education. 17% of the total budget will go towards education. And this does not include money for vocational training, which comes under a separate budget head. Excellent!

Health. 7% of the total budget will go towards providing free healthcare. Excellent! Incidentally, the government earned Nu 130 million as “health contribution”. That works out to 7% of the total outlay for health. Not bad, considering that healthcare is provided “free of cost”. But we can do better: health contribution (which is currently 1% of basic pay) could be restructured to increase our contributions to our healthcare system.

Farm roads. The good news is that last year, an impressive 1350 km of farm roads were constructed. And that this year, 423 farm roads will be constructed. The bad news is that I don’t see how local governments will be able to maintain their roads. The government recognizes that sustainability of the farm roads is an important issue, and will provide each dzongkhag with one pay loader. But for most of the dzongkhags, a single pay loader will not be enough to keep the farm roads open. We need a better strategy.

Irrigation. Nu 50 million has been allocated to build 74 new irrigation channels. That works out to about Nu 6.7 lakhs per irrigation channel. And that’s not too expensive. More, many more, irrigation channels should be built to mitigate rural poverty, and to work towards food sufficiency.

Rural electricity. About 83,569 houses dot our rural landscape. 73% of them have now been connected to grid electricity. This year that figure will rise to 80%. And by the end of the 10th Plan, all houses will have electrical supply. That’s good, even if we’ve had to borrow money to light up our villages.

Housing. Rents continue to spiral without control in Thimphu, Phuentsholing and a few other towns. But the government still does not have a convincing plan to control rents, increase low-income housing and to encourage home ownership. The National Housing Development Corporation will be corporatized soon, but that will not be enough.

Entrepreneurship. Only Nu 10 million has been budgeted to promote youth entrepreneurship schemes. That is not enough. We must invest a lot more money if we want to nurture a culture of entrepreneurship among our youth, and if we want them to create their own jobs through self-employment.

Roads. 11% of the total budget will go to build and improve roads and bridges. Good. Roads, after all, are our country’s economic and social lifelines. Several sections of the East-West highway along our southern border will also be built. Very good.

Domestic airports. Yonphula airport is complete. Badpalathang is nearing completion. And the Gelephu airport will be built this year. Will they be economically viable? I hope so. Will they be safe? They better be!

Public transport. Thimphu’s city bus service is popular, but it is inadequate. The subsidy of Nu 14.5 million will not be enough to make meaningful improvements in the bus service.

Urban development. Nu 886 million will go towards developing outer Thimphu. Chang Bangdu, Luntenphu, Babesa, Semtokha, Langjophakha and Dechhencholing will benefit from this project. But we continue to ignore the rapid and unplanned constructions taking place on the outskirts of Thimphu. Small investments now could save us from big headaches in the future.

Fire fighting. The government will buy 17 new fire engines. Finally. But that won’t be enough. Fire engines carry only so much water, and unless they have access to water hydrants they will be of limited use. So I repeat: in the meantime, get some water tankers.

Relief fund. Nu 20 million has been allocated to His Majesty the King’s Relief Fund. Judging by the frequency and scale of natural disasters in the last few years, this amount will be woefully inadequate.

Public service delivery. Nu 329 has been earmarked to provide more than 110 services online under the G2C project. Good. But sustainability will be an issue as long as the cabinet’s website, and those of most other ministries and government agencies remain idle and, worse still, insecure.

Budget report...

The finance minister presented the government’s budget proposal on Monday. Here are some of my random thoughts on the budget.

Pay increase. Last year’s pay hike for public servants cost the government Nu 380 million.

PIT increase. The government made an extra Nu 247 million in personal income taxes last year, mainly because of the pay hike.

Tax refund. The government collected Nu 28 million by increasing vehicle taxes unlawfully last year. At the Supreme Court’s orders, the government has refunded that money to the taxpayers.

Government expenditure. The government’s expenditure for this financial year is budgeted at Nu 38,020 million. That works out to 45% of the GDP. But the government’s expenditure for the construction of mega-projects (several hydropower projects and one cement plant) is not included in the budget although it is included in the GDP. Similarly, the government’s expenditure on the armed forces is also not included in the budget. Factor them in the budget, and the government’s expenditure could get to above 80% of GDP. That goes to show how very weak our private sector is. That also shows how unproductive our farms are.

Current expenditure. The good news is that current expenditure (Nu 17,185 million) continues to be financed from domestic revenue (Nu 18,606 million)

Grants. 42.6% of the government’s total resources come from grants. 66.5% of the capital expenditure is financed through grants. India is by far the largest donor contributing 74.3% of the total grants.

Debt. The bad news is that the government’s debt will increase to Nu 55,721 million during this financial year. That works out to 66.02% of GDP. 60% of the debt is for hydropower projects. By 2014, total debt is projected to increase to Nu 79,472 or 71.63% of the projected GDP. By then, 68% of the debt will be from hydropower projects.

Hydropower. Revenue from hydropower is expected to fall this year mainly because of the “substantial investments required to address problems in the Tala plant”. The Tala plant was commissioned on March 2007.

Lottery. The government has decided to discontinue lottery operations in India. So it will forgo income estimated at Nu 200 million this year. The government should not completely pull out from the lottery business. Instead, it should clean up the current mess, and then improve the system so that much larger revenues can be earned from the sale of lottery tickets in India.

CDG. Nu 282 million has been allocated for constituency development grants for the past three years. 460 projects costing Nu 172 million have so far been identified. Of that only Nu 106 has been used. I still don’t agree with the CDG. But if it must continue, allow the local governments to use the funds. Another Nu 94 million has been kept aside for CDG this year.

More to come tomorrow. But in the meantime, please give me your views on these thoughts, and any others that you may have on the budget. The National Assembly will debate the budget on Friday.

Bhutan builders...

Jai Prakash and Gammon have been selected to construct the 1000MW Punatsangchhu – II hydropower project.

Gammon, Hindustan Construction, and Larsen and Turbo are building the 1200MW Punatsangchhu – I hydropower project.

Hindustan Construction, Larsen and Turbo, and Jai Prakash built the 1020 MW Tala Hydropower Project.

A select group of contractors, characterized by the complete absence of Bhutanese contractors, public or private, even after decades of experience in hydropower construction in our country.

License to kill...

It’s good that the government will rake in an extra 10 million bucks from the auction of alcohol vendor licenses in Southern Bhutan. The bids were exceptionally high. Many of them sold for twice, thrice and even five-times the earlier amount. And one of them – the license to sell wholesale liqueur in Kuchidaina, Samtse – saw a whopping 2020% jump.

That the government will make that extra money is good news. But we should also be concerned. Our readiness to pay huge license fees means that the alcohol business is thriving. And that just confirms that the government is doing too little to address the abuse of alcohol in this country.

But there’s another reason for concern. The government has auctioned the alcohol vendor licenses just before they submit their annual budget proposal to the National Assembly. The budget report will include proposals to increase taxes. And if taxes on alcohol are raised, the winning vendors could find themselves facing loses that they hadn’t bargained for.

Congratulations!...

25 additional colonels make our armed forces that much more stronger. His Majesty the King, who is the Supreme Commander-in-Chief of the Armed Forces, granted promotions to the accomplished officers this morning.

I thank the officers for their outstanding services to the tsa-wa-sum, and wish them and their families a very hearty Tashi Delek!

Secondary tertiary policy...

About a year ago, on the 26^th of July 2010, the prime minister launched the Tertiary Education Policy. The policy, one of this government’s most significant declarations so far, aims to enrich tertiary education in the country by streamlining how colleges and universities are planned, funded, registered, licensed and accredited.

The education minister described the 112-page policy as, “… a road map for the development and expansion of tertiary education in the country,” and boasted that it would contribute to making our country a “knowledge hub” and our people an “IT enabled knowledge society.”

In his introduction to the Tertiary Education Policy, the education minister boldly, and rightly, declares that:

Henceforth, this Tertiary Education Policy document, approved by the Lhengye Zhungtshog, will be the definitive instrument to guide all stakeholders, public and private, national and international, in developing and implementing programmes of study, material selection and pedagogical practices, assessment and certification, establishment of facilities and the integrity of all elements related to tertiary education in Bhutan.

So far, so good.

Now, the bad news.

It isn’t even a year old and the Tertiary Education Policy is already coming under attack. Actually, the policy is not being challenged. Instead, it’s being sidelined. It’s being ignored. It’s being snubbed. And that’s much worse than coming under any direct attack.

So who is the culprit that is overstepping the government’s inspired policies? Who is the perpetrator that is disregarding the government’s visionary policies? Who is the delinquent that is ignoring the government’s road map?

Believe it or not, that culprit, that perpetrator, that delinquent is the government itself.

The government has drafted a bill – one that the National Assembly is currently discussing – to establish the Bhutan Institute of Medical Sciences. There’s no doubt that the institute is important. It will benefit our country and our tremendously. So it must be established.

But in doing so, the government must follow its own policies. Otherwise why make policies? Why draw road maps?

The Bhutan Institute of Medical Sciences Bill has completely bypassed the processes outlined in Tertiary Education Policy. And it takes absolutely no notice of many of the policy’s important provisions.

So the Tertiary Education Policy’s credibility and authority are at stake. They’re being compromised by the government, no less.

And what are we doing nothing about it? Nothing.