Inviting issues...

The eighth session of the Parliament will start on 4^th January. Here are the bills the National Assembly will discuss:

• Tobacco Control ( Amendment) Bill 2011
• Druk Gyalpo’s Relief Fund Bill 2011
• Disaster Management Bill of Bhutan 2011
• Education City Bill of Bhutan 2011

And here are the bills that the National Assembly and the National Council will discuss in a joint sitting to resolve differences between the two Houses.

• Child Adoption Bill of Bhutan 2011
• Sales Tax, Customs and Excise (Amendment) Bill of Bhutan 2011
• Public Finance (Amendment) Bill of Bhutan 2011
• Election (Amendment) Bill of Bhutan 2011

The bills can be downloaded from the NC and NA websites. Please give me your feedback.

Also, please give me your suggestions on issues that I should consider raising with the government. I’ll raise them during question hour, or, depending on the nature of the issue, propose them as motions.

Health on drugs...

Causing suffering

The Health Ministry has admitted that they have a problem: they have not been able to maintain an adequate supply of drugs to our hospitals. As a result, patients have had to postpone or even forgo medication. And doctors have been forced to direct their patients to private pharmacies, which, many times, have also been frustratingly out of drugs.

Worse still, the Health Ministry has admitted that they still do not know how to resolve the drug shortage issue, a problem that has reached chronic proportions during the past year. So they’ve announced that, as an interim measure, they will send officials to buy drugs directly from manufacturers in Bangladesh.

I suspect that the officials who’ll be going to Bangladesh will be mainly, if not entirely, ministry personnel, most of them from the Drugs, Vaccines and Equipment Division (DVED). If that is so, that could very well be the problem – a central agency unable to keep up with the growing and changing needs of referral hospitals in general, and the Jigme Dorji Wangchuck National Referral Hospital in particular.

DVED is the Health Ministry’s central procurement agency. They buy, stock and distribute drugs and equipment to hospitals throughout the country. That’s a lot of work, work that just gets more complicated as more people use the health system. Between receiving orders for drugs from individual hospitals to supplying them with the drugs is a logistical nightmare that includes compiling and approving orders from the field; tendering and awarding procurement contracts; receiving, verifying and storing drugs; and finally, distributing them to every hospital and clinic, throughout the country. And all that must be done within the framework of the government’s tight financial rules and regulations.

DVED’s centralized operations have served the nation’s health system faithfully till now. But the health system has changed drastically since the establishment of referral hospitals. And DVED would now find that procuring and delivering drugs to the new and growing referral hospitals is an increasingly difficult and complex matter, especially when their main task is still to service all the other hospitals throughout the country.

So it’s time to decentralize procurement, at least for referral hospitals, and definitely for JDWNR hospital. And why would JDWNR hospital be able to do a better job? Incentives.

When drugs run out, hospital staff take the flak. They are the ones who interact with patients every day, and the ones who, as far as patients are concerned, are at fault if hospital services are not adequate. So it is in the interest of hospital staff – nurses, doctors, technicians and administrators – to ensure that drugs, especially essential ones, are always available. Ministry officials, including DVED staff, cannot, and will not, share the same levels of concern.

So decentralize drug procurement. Allow JDWNR hospital to acquire drugs without having to deal with the bureaucracy of the ministry. Otherwise, be prepared to face more serious drug shortages, more frequently.

In fact, decentralize equipment procurement too. And all personnel matters, including training. And finance. And administration. Make the nation’s biggest and fastest growing hospital fully and truly autonomous. That way, hospital staff would feel a sense of control, a sense of ownership, a sense of purpose. And that would drive them to realize their full potential and to achieve their vision.

But the Health Ministry must regulate them. And make them fully accountable. That way, services would improve, drug shortages would drop, and the health sector’s biggest disease – widespread corruption – would finally be contained for proper treatment.

Photo credit: Kuensel

Our King has spoken...

The People's King

Our elders believe that the words of our kings are droplets of gold. They believe that to carry out a king’s command is to undertake a task that’s heavier than a mountain. They also believe that to ignore a king’s command is to waste an opportunity more precious than gold.

Our kings do not say much. But when they do, what they say is important; what they say has far-reaching implications. And what they say is gratefully received, studied and carried out with a sense of great urgency.

Our King has spoken. In his Royal Address, on 17^th December, our National Day, His Majesty shared his “deepest concerns” with the nation: that we must strengthen the foundations of our democracy; that we must make education more relevant so that it leads to jobs; that we must step up the fight against corruption; and that we must build a self-reliant, sustainable economy.

Our King has spoken. Now will we, like our elders, accept his command as droplets of gold? Will we, like our elders, receive, study and execute his command, even though they weigh heavier than our mighty mountains? Or will we, unlike our elders, ignore and waste that what’s more precious than gold?

High flying...

Yonphula

Domestic air services were formally launched yesterday, coinciding with our 104^th National Day. Druk Air flew their ATR-42 from Paro to Yonphula to Bumthang and back to Paro. And Tashi Air’s Pilatus PC-12 flew from Paro to Bumthang and back. The lucky passengers in the inaugural flight included the Speaker, MOIC minister, Members of Parliament and senior civil servants.

So, after missing several ambitious deadlines, domestic air services have finally begun. Truth be told, I had my doubts. Having spent three years in Kanglung in the 1980s, as a student in Sherubtse College, I was all too familiar with the weather conditions in Yonphula. The Yonphula ridge, where the airstrip is located, seemed to be forever shrouded in mist. And when it wasn’t, strong winds seemed to stage a relentless attack on the ridge. Or it would just rain, continuously, for weeks on end.

But the government has done it. Domestic air services are now a reality. I’m happy. And I’m grateful that the government has succeeded in opening up Yonphula and Bumthang to air traffic. There’s no doubt that the air services to these areas will boost the economies of central and eastern parts of our country through increased tourist arrivals and investments in related areas.

So congratulations are in order, first and foremost to Lyonpo Nandalal Rai, the MOIC minister. Then to the Department of Civil Aviation. And to Druk Air. And Tashi Air. Domestic air travel is possible because of their hard work. Well done. And thank you.

Photo credit: BBS

Nu confidence...

Bhutan airlines?

The government recently approved airfares for our two airlines. This is how the fares were reported in Kuensel:

Druk Air is charging USD 170 (single) and USD 340 (return) for Paro-Bumthang, while Bhutan Air will charge USD 250 (single) and USD 400 (return).

For Paro-Trashigang, Druk Air is charging USD 215 (single) and USD 430 (return). Bhutan Air is charging USD 350 (single) and USD 600 (return).

From Bumthang to Trashigang, Druk Air will cost USD 110 (single) and USD 220 (return), while Bhutan Air costs USD 150 (single) and USD 250 (return).

When I read the fares, two questions immediately came to my mind: why so expensive? And why USD?

The answer to the first is straightforward. The fares are expensive because operating costs are high. And unless domestic air travel becomes unexpectedly popular, both the airlines may incur losses, in spite of the government’s generous subsidies.

The answer to the second question is not so straightforward. Why, indeed, are domestic fares denominated in US dollars?

All goods and services in Bhutan should be priced in ngultrum. Unless, that is, we lack confidence in our own currency. And that shouldn’t be the case. Firstly, the ngultrum is pegged to the Indian rupee. And secondly, if air tickets were priced in ngultrum, foreigners would, anyway, have to pay US dollars to buy the ngultrums to purchase their air tickets.

Hard currency would come into the country in any case. So it may seem that there’s no difference whether foreigners pay for their air tickets in US dollars or ngultrums. Actually, there is a difference. If the tickets were priced in ngultrums, banks – and the Royal Monetary Authority – would automatically be more involved in the US dollar transactions and, as such, would also be better able to regulate the movement of foreign currencies.

But more importantly, we would demonstrate to foreigners, and ourselves, that we have confidence in our own currency. And that confidence is crucial for economic growth.

Photo credit: Kuensel

Thanking our armed forces...

Supreme Commander in Chief

The Royal Bhutan Army, Royal Body Guards, Royal Bhutan Police, and  militia and Desung volunteers celebrated Armed Forces Day yesterday. To commemorate the important day, I’m reproducing a translation of the motion of thanks that I proposed during the opening ceremony of the sixth session of Parliament about a year ago, on 19 November 2010.

Introduction

It has been almost three years since Bhutan became a Democratic Constitutional Monarchy. Throughout this period, His Majesty the King has continuously favoured the first elected Parliament with counsel, guidance and unconditional support. As a result, neither misfortune nor hardship has been able to trouble the two Houses of Parliament or any of its 72 honourable members. And for that reason, we, the members of Parliament, have been able to fulfill our respective responsibilities, and work towards establishing a strong foundation for our democracy.

Earlier this year, during the inauguration of the fifth session of the Parliament, I had the opportunity to report to the Honourable Members that, from the day His Majesty the King ascended the Golden Throne, His Majesty has worked throughout the country, and worked tirelessly, for the benefit of the nation and the people. More specifically, I drew attention to the fact that the selfless service rendered by His Majesty were in accordance with the duties of the Druk Gyalpo as enshrined in the Constitution.

My report, however, was very brief. In fact, since I covered His Majesty’s accomplishments in a range of areas, I could not do justice to any one of them. So today, as I, on behalf of the Opposition Party, respectfully submit this Motion of Thanks, I propose to focus on just one aspect of His Majesty’s work.

To do this, I would like to draw the attention of our Honourable Members to Article 28 Section 1 of the Constitution which states that: “The Druk Gyalpo shall be the Supreme Commander in Chief of the Armed Forces and the Militia”.

Read the rest of this entry »

Druk Wangyel...

Truly amazing!

The heavens descended on Dochula yesterday. Boddhisattvas and gods, enchanting goddesses and spirits, guardian deities and demons, and Milarepa himself, meditating and levitating in the freezing cold, appeared before the thousands of pilgrims who had gathered to witness the inaugural Druk Wangyel Tsechu.

The tsechu was inspired, guided and supported by Her Majesty the Queen Mother Ashi Dorji Wangmo Wangchuck to honour the armed forces for their bravery and selfless services in protecting the peace, security and sovereignty of our nation.

Photo credit: “Dochula Druk Wangyel Festival” by Dasho Karma Ura, the festival director who composed and choreographed the dances.

Observing anticorruption day...

Here’s how I observed International Anticorruption Day yesterday:

One, I went through Transparency International’s Corruption Perception index report for 2011. Bhutan is rated 5.7 (10 means perceived to be very clean; 0 means very corrupt) and is ranked a decent 38 out of the 182 countries and territories that were studied. Bhutan’s rating of 5.7 remains unchanged from the 2010 corruption perception levels. Not bad, but we can, and must, do better.

Two, I tuned in to see BBS’s live debate on the topic “Is Bhutan doing enough in fighting corruption?” The debate, which was organised jointly with IMS, had six panelists, all honourable members of the Parliament. The debate would have been a lot more meaningful if the panelists were chosen to defend two different sides of the motion – one team contending that Bhutan is doing enough to fight corruption; the other arguing that Bhutan is not doing enough.

Three, I closed my poll that asked “Is ACC taking too long to start investigating the Gyelpozhing land case?” The big majority – 300 of the 352 who took the poll – answered “yes” the ACC is taking too long.

Four, I drafted a letter to the ACC encouraging them to investigate and resolve the Gyelpozhing land case as soon as possible. The case is significant as it raises serious questions on the conduct of our senior-most public officials, many of whom hold powerful offices. Did they, for example, violate laws in the way that land was acquired and distributed? And was conflict of interest standards compromised by senior officials who applied for and received land?

Five, I drafted a letter to the Royal Audit Authority requesting them for a copy of their report on the special investigations that they carried out on the lottery operations. I had asked for the report in June this year, but was denied it. I’m hopeful that, for the sake of transparency and accountability, the RAA is now prepared to make the report public.

Important apppointments...

New top

Dasho Tashi Phuntshog, the cabinet secretary, was appointed as the new ambassador to Kuwait yesterday.

The appointment has me confused. I don’t know what to make of it.

The cabinet secretary is our top civil servant. He draws the highest salary in the civil service – several thousands of ngultrums higher than other secretaries – and, as such, is the most senior, important and powerful civil servant.

So when the top civil servant is transferred, even before the completion of his term, as the ambassador of our smallest embassy abroad, we must ask ourselves if the cabinet secretary’s position is really that important.

It is important. Whether the government recognizes it as such is another matter.

Regardless, I congratulate Dasho Tashi Phuntshog on his new appointment. And I wish him success in his new office.

I also congratulate Dasho Penden Wangchuk, the home secretary, who has been appointed as the new cabinet secretary. As our new top civil servant, Dasho Penden Wangchuk must represent, protect and fight for the interests of all our civil servants; he must guide and counsel them; he must be their role model; and, most importantly, he must provide them with much-needed leadership.

I wish him success in this important endeavor.

Finally, I congratulate Dasho Nima Wangdi who has been appointed as the new health secretary. He has his work cut out, having to deal, immediately, with the health procurement scam and chronic drug shortages in our hospitals. His experience in the finance ministry will, no doubt, prove useful in correcting the health ministry’s disorders.

Mistaken government...

The Government has used our foreign currency reserves to address a severe rupee crunch in the kingdom. Last week they sold US$ 200 million from our reserves to pay off the Rs 8 billion outstanding debt on an overdraft account with the State Bank of India.

The Royal Monetary Authority borrows rupees from a special credit line with the Government of India and an overdraft facility maintained with the State Bank of India. The special arrangement with the Government of India permits our government to borrow rupees up to a maximum of Rs 3 billion, and the overdraft facility allows borrowings up to Rs 8 billion.

The RMA had exhausted both lines of credit before it recently cleared the Rs 8 billion loan.

The government has been remarkably quiet on the issue. So here are some questions, questions I will take up officially with them.

What caused the rupee crisis?

We import more goods and services from India than we export. So our trade balance with India is negative. And that causes a rupee deficit. But that has always been so. And that – the trade balance and the resulting rupee deficit – has always been easily resolved by the large amounts of rupees that the Indian government pumps into our economy in the form of generous aid to our government.

So why did we face such a big rupee crisis recently? Why did we have to borrow as much as Rs 11 billion to finance the rupee deficit? Rs 8 billion of that was borrowed in the past year alone, and that, in spite of increased Indian grant aid and huge inflows of rupees for the construction of mega projects.

The government has had to sell US$ 200 million to address the rupee deficit. Otherwise, RMA would not have been able to maintain the ngultrum’s exchange peg with the rupee. And we wouldn’t have been able to continue buying goods and services from India.

In other words, our economy was in serious trouble.

And the government had to bail it out by injecting US$ 200 million into it. US$ 200 million works out to Nu 10.3 billion at the current exchange rate. That works out to 14% of the GDP. And that is a huge bailout by any measure.

So why was our economy in such big trouble? What caused the rupee crisis?

What must be done to prevent another crisis?

Our foreign exchange reserves are not reserves in the strict sense – they are actually savings accrued carefully over several decades. The government has used US$ 200 million of it, in one go, to bail out our economy.

It’s obvious that if we don’t do anything different, if we don’t learn from our mistake, we will face another big rupee deficit by this time next year. Should that happen, the Constitution, which requires that foreign currency reserves must meet at least one year’s essential imports, will prevent the government from selling our foreign reserves for Indian currency. This simply means that the government will not be able to bail out the economy as easily as it has done this time.

So the question is, what must we do to prevent a similar crisis next year? How will the government prevent another rupee deficit from developing? What are the government’s plans?

How will the foreign exchange reserves be rebuilt?

The government has announced that the current reserves, equivalent to US$ 702 million, can finance 13 months of essential import. So even though the government has used up more than 20% of our reserves, what remains is still within the minimum limit set by Constitution according to which, “A minimum foreign currency reserve that is adequate to meet the cost of not less than one year’s essential import must be maintained.”

US$ 702 million at today’s exchange rate of Nu 51.5 for every US$ is about Nu 36.1 billion. And RMA has calculated that this amount – US$ 702 or Nu 36.1 billion – finances 13 months of essential imports. By dividing Nu 36.1 billion by 13 and multiplying it by 12 we now know that Nu 33.4 billion would be required to finance one year’s essential imports. The Constitution requires that the government set aside a minimum of this amount in the foreign exchange reserve.

But by this time next year, if the current trend continues, the volume of essential imports would have increased. That, plus inflation, would mean that the government would need set aside that that much more money in foreign currency to meet the minimum requirements set out in the Constitution.

But since the reserves must be maintained in foreign currency, there’s something else the government must think about: exchange rates.

Today the exchange rate has fallen to an all-time low. What when it strengthens? What if, by this time next year or the following year, the exchange rate rises to 2008 levels of Nu 40.4 per US$? That would mean that US$ 827 million would be required to finance one year’s essential imports at today’s quantity and today’s prices.

That would mean that the government would need to increase the foreign currency reserves by at least US$ 125 million. And that is without even factoring in increased consumption of essential imports and price increases for the essential imports.

The government has spent US$ 200 million. And the government has stated that the US$ 702 million remaining as foreign currency reserves is enough to meet the Constitutional requirements.

What we now need to know is how the government will replenish the foreign currency reserves to ensure that the reserves remain well within the minimum limits set by the Constitution. How will the government rebuild our foreign currency reserves?

Our economy was in serious trouble – that’s why the government used our foreign currency reserves. But that is only a stopgap measure, one that does not address the real issues and one that can be used only this once.

So the government must get serious. The government must identify its mistakes. The government must accept those mistakes. And the government must rectify those mistakes.

Otherwise, our economy, tiny as it is, will collapse.