Economy – Page 2 – Tshering Tobgay

Water and food security

March 25, 2012Economy, People13 Comments

Students and teachers of Thimphu’s schools came together in Changangkha to commemorate World Water Day on 22 March. The celebrations included a wide array of well-thought-out presentations and entertaining performances highlighting the importance of water. I was given the opportunity to talk to the students. So I told them a story, one that is relevant to this year’s World Water Day theme: "water and food security". But one that is also relevant to the current rupee crisis. Here’s a quick summary of my story: Nob Gyeltshen is 77 years old. He hails from Dorithasa, a small village in the…

Bhutanese food

March 18, 2012Economy21 Comments

A couple of friends and I went out for lunch the other day. We ate at Cousins, a new restaurant that specializes in authentic Bhutanese food. You'll find the restaurant on the first floor of the new building opposite the BNB. The food at Cousins is good. We had ribs (with dried red chillies and spring onions in a hot garlic sauce),chopped dried beef (in a chilli and cheese sauce), kewa-datsi, dal, rice and, for desert, fresh apples in cream. The food, like I said earlier, was good. And it was mainly traditional Bhutanese fare. But in fact, there…

Crunch time

March 7, 2012Economy63 Comments

A severe rupee shortage threatens to cause an economic crisis. But the government is in denial. As recently as last week, the finance minister blamed the media for blowing up the issue. On the other hand, the RMA governor has declared that, “we have no money.” And he has already stopped issuing rupees to commercial banks. He has also warned that we can no longer sell our foreign reserves to buy rupees. The RMA has had to borrow rupees to allow for the import fuel and other essential items. But traders are already complaining that they cannot do business.…

Radio gaga

February 13, 2012Economy3 Comments

Tourists visit Bhutan for many reasons. Most do so to catch a glimpse of the last Shangri la, that is, to experience our unique culture and enjoy our pristine environment. But many tourists visit our country for specialized purposes, and because those purposes can be fulfilled here more so than in any other country in the world. For instance, tourists visit us to do the arduous Snowman Trek, ride the treacherous Drangmechhu, or complete the grueling Tour of the Dragon. Enthusiasts pay to look for rare butterflies, catch a glimpse of stunning birds, or soak in the beauty of…

Rupee questions

January 16, 2012Economy11 Comments

Last Tuesday, during question hour, I asked the Prime Minister to explain the rupee crisis: what has caused it, what the government is doing about it, and when we can expect it to be over. I directed the question to the PM as I had assumed that our head of government would be the most concerned and, as such, would be happy to reassure the nation that he has contained the crisis, and that the rupee deficit will not spiral out of control. Too bad then, that the PM made the Finance Minister answer on his behalf. Too bad…

Consolidate schools

January 6, 2012Economy5 Comments

In 2007, the year before the elections, when the interim government started work on the 10th Five Year Plan, they decided to “consolidate” the nation’s schools. Their rationale was that children in rural Bhutan were not receiving proper schooling as education resources were being spread too thin across the country. The interim government figured that since the number of children in our villages was falling, it would be better and cheaper to take village children to well-established and well-run schools rather than making them attend ill-equipped and inadequately staffed schools in their villages. But after the elections, the new…

Nu confidence

December 16, 2011Economy9 Comments

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…

Mistaken government

December 7, 2011Economy27 Comments

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…

Conflicting news

December 7, 2011Economy5 Comments

How is it that one week the government calls McKinsey's Accelerating Bhutan's Socioeconomic Development project "A success story", and the next week the government has used our foreign currency reserves to "rescue Bhutan from rupee crisis"? Why would our economy need to be bailed out by using our hard earned foreign exchange reserves if the McKinsey project really was "...an initiative that created 14,000 new jobs in two years, helped tourist arrival cross the magical 50,000 figure, and will save the government Nu 360mn within its tenure, among numerous other benefits" ?

Bhutan builders

June 17, 2011Economy17 Comments

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.

Viva la Shoe Vival!

May 11, 2011Economy4 Comments

I like business startups. These places have an air of excitement about them. They show confidence, enthusiasm and courage. And they give off infectious optimism. But I like new businesses for another reason: they are critical for our economy. They create employment. They help reduce poverty and distribute income. And they contribute to improving and strengthening our economic conditions. That’s why I try not to miss invitations to visit business startups or attend their opening ceremonies. And over the years I’ve had the opportunity to visit a wide range of new businesses ventures from restaurants and bakeries to workshops…

Discriminating industries

January 13, 2011Economy

Today’s steel prices: A ton of 10 mm TMT bar manufactured in Bhutan (by Karma Steel, for example) costs Nu 39,000 in Phuentsholing. A ton of similar grade (Fe415) 10 mm TMT bar manufactured in India (by SRMB, for example) costs Nu 42,900 in Jaigon, outside Phuentsholing. If you were a contractor, which steel would you buy? Bhutanese steel, right? All else being the same, TMT bars manufactured in Bhutan would be cheaper by Nu 3,900 per ton. But Punatsangchu Hydropower Project Authority contractors prefer Indian steel. Why? Because for PHPA, the government refunds the excise duty levied on…

Inflating prices

July 29, 2010Economy

The effects of inflation on the prices of essentials ... Items Rates May June July Stone Free Rice (ST Rice) 980 1050 1100 Nestle Every Day Milk Powder 190 215 245 Red Label Tea Leave (500 gms) 145 145 145 Natural Gold Refined Oil (1Kg) 55 60 65 Maida (1Kg) 20 22 22 Salt (1Kg) 10 10 10 Sugar (1 Kg) 40 40 45 Amul Butter 100 110 120 Amul Cheese 190 205 225

River potential

April 26, 2010Economy

National Geographic has rated rafting on the Drangme Chhu – from the Trashigang Bridge to the Royal Manas Park – as one of the 25 Best New Trips for 2010. But it’s not just the Drangme Chhu. Every one of our major river systems provides some of the world’s best rafting experiences. Dave Allardice of Ultimate Descents says that our rivers are: A gigantic staircase rising from the Indian border to the high Himalayas of Tibet, the soaring peaks of Bhutan are an untapped treasure house of whitewater. The rivers are powerful and challenging. And the National Geographic calls…

Mining our business

March 30, 2010Economy, Government15 Comments

Most of the work at the Punatsangchu hydropower project, estimated to cost more than Nu 36 billion, is being contracted out to large Indian companies. And rightfully so. After all, we still don’t have enough in-house capacity to dig tunnels, erect dams and build powerhouses. But mining? For stone? Now that, I’m sure we can all agree, is something we are good at! Then why is the government allowing Indian companies – L&T, HCC and Gammon – to operate stone quarries for the Punatsangchu hydropower project? And how will L&T, HCC and Gammon operate their mines when the Mines…