Gakiling eggs

Searching for markets

Guess how much an egg costs in Gakiling? Two ngultrums! Yes, farmers there are willing to sell their eggs for a pittance. And still they still don’t get any buyers. That just shows how little access they have to markets.

“Yoed ba chin tsong sa med. May ba chin nyo sa med,” is how Ap Tshering Wangdi had described their predicament a few years ago.

But some farmers have now decided to take matters into their own hands: they’ve decided to, collectively, sell their eggs in Thimphu. And, Rinzin, a young farmer, has volunteered to collect the local eggs and bring them to the capital every week.

So look out for Gakiling eggs – organic eggs laid by free range indigenous chickens.

Visiting tourists

Potential tourists

The bedrock of our successes in the tourism sector has been the “low volume, high value” policy.  This unique policy has served us exceedingly well ever since the first tourists started visiting our Kingdom in early 1970s. And today, Bhutan is both famous and envied the world over for its cautious tourism policies.

This policy has proven itself. We continue to enjoy the rewards of tourism (government revenue, jobs and international attention) without sacrificing our culture, our environment, and our way of life. Equally important, our tourists swear, time and time again, that their experience in Bhutan has been nothing short of pure magic.

All this may change. The Prime Minister’s executive order of 13 November 2009 directs the Tourism Council of Bhutan to constitute:

A cross sector implementation team consisting of the MoEA, MoF, TCB and ABTO to frame and present the blueprint for:

  1. Roll out of the integrated channel, price and supply policy that liberalizes the minimum package price and mandatory package via tour operator requirement; yet ensuring royalty revenue to the government;

The PM’s directives are a mouthful. But, the message is simple: draft a plan to lift the minimum tourist tariff.

If the tourist tariff is liberalized, it would be the government’s biggest policy decision so far: one that would affect our economy and our country significantly. So, we should debate this momentous policy change before it comes into effect – before the “cross sector implementation team” finalises their “blueprint”.

Give me your views, so that I can share them with the relevant authorities. And participate in the poll that asks whether you support removing the minimum tariff for tourists.

Dangerous work

Gammon's bridge

Gammon's bridge

On September 9, 2007 a flyover that was being built in Hyderabad collapsed killing two people. The contractor, Gammon India, was charged with negligence.

On July 12, 2009 a flyover that was being built in South Delhi collapsed killing six people. The contractor, Gammon India, was held responsible for the accident, and was banned from undertaking metro rail construction for two years.

On December 24, 2009 a bridge that was being built in Kota, Rajasthan collapsed killing 28 people. Rescuers continue to search for about 50 workers who are missing since the accident. The contractor? Gammon India, who also happens to be one of the contractors for the Punatsangchhu-I Hydroelectric Project Authority.

Gammon India won the contract to build the Head Race Tunnel for Punatsangchu-I. But, given their recent record, the Government would be well advised to reconsider their contract with them.

Making the right connections

Here’s why many of us suffered slow internet connections yesterday: Vandals had severed Reliance’s fiber optic cables somewhere between Siliguri and Jaigon. The damaged cables are being replaced, and Reliance has assured Bhutan Telecom that their connections will be restored within an hour.

Bhutan Telecom’s total bandwith is currently 110 Mbps. Of this 90 Mpbs is provided by Reliance – 45Mpbs from Reliance London; and, as backup, 45 Mbps from Reliance Hongkong. However, all 90 Mpbs come in through Jaigon along the same route, even if on separate cables. This compromises the Bhutan Telecom’s bandwith backup aspirations.

The remaining 20 Mbps is provided via satellite – 10 Mbps by British Telecom; 10 Mbps by Telesat. That’s what has been keeping us connected – barely connected – to the rest of the world right now!

But there’s good news. Bhutan Telecom is already negotiating with Airtel to provide a 155 Mpbs link to London. This is expected to provide stronger backup connectivity in addition to increased bandwith. And, Bhutan Telecom expects this to happen before the end of the year. The Reliance link to London will then be discontinued, and the Reliance link to Hongkong upgraded to 155 Mpbs.

That would take Bhutan Telecom’s total bandwith to 155 Mbps + 155 Mbps + 20 Mbps. And that is good news.

Standing up for sitting fees

“Guest”, a frequent commentator, left the following note in my last entry:

Please pardon me but I am going to deviate from the topic to register my unhappiness at your support for DHI during the discussions in the Parliament. I cannot believe that a man of your intelligence truly meant what you said.

I do not believe that your blind support for DHI stems from your need to show allegiance to our King. I think it is wrong to do so. In fact, you ought to know, more than anyone else, that it would be a great disservice to the King and his noble intentions that the DHI officers continue to pay themselves such disproportionate sitting fees even while they are drawing huge salaries which the whole country feels is unjustified.

As a responsible citizen and the Leader of the Opposition who has earned substantial goodwill from the people, I am disappointed that you choose to opt for political mileage rather than oppose something that we all know is unfair.

First, let’s set the record straight: I did not make any statement during the recent National Assembly discussions on the DHI. “Guest” may have been led to believe that I did so by Bhutan Observer’s article on the DHI’s sitting fees.

But I did mean what I said to the Bhutan Observer: that as long as the DHI has the legal mandate to establish their own remuneration – as, indeed, they do – I don’t see how we can, or should, interfere. Recall that I made a similar observation six months ago.

Obviously, all of us have opinions on the DHI’s sitting fees. And we should voice them. That is good. But, we should also make sure that no one, particularly politicians and the Government, encroaches on the DHI’s legal authority. This is no small matter, if the rule of law is important. And, it is, especially in an emerging democracy.

So are the sitting fees for DHI Board Members too high? Yes and No. Yes, if we look at their fees in relation to what members of other boards receive. But no, their fees are not high, if we look at them in relation to the scope of their work. The DHI’s net worth stands at about Nu 43 billion. And last year, the Government earned around Nu 4 billion in dividends alone from DHI. But that is not all. We expect them to grow. And to perform even better. This, in fact, is what the Royal Charter states:

The primary purpose of Druk Holding and Investments Limited (DHI) shall be to ensure that its companies are able to meet the challenges and requirements of the corporate sector in a highly competitive global economy, such that DHI creates and maximizes returns to its shareholders, the people of Bhutan.

Let’s face it: we are talking about big money, and even bigger expectations. So we simply must be willing to provide adequate incentives to attract and retain people who will be able to run the company successfully.

But there must be checks and balances. And there are. Three of the DHI’s seven Board Members are senior civil servants who represent the Government. DHI’s performance indicators and dividend targets are established jointly by the Ministry of Finance and DHI each year. Plus the DHI is required, by law, to submit periodic reports on its performance to the Ministry of Finance.

Finally, I don’t know how to respond to the charge that I “…choose to opt for political mileage rather than oppose something that we all know is unfair.” Let’s just say that if I were motivated by “political mileage” I wouldn’t disagree with something that the whole country feels is unjustified”, would I?

The fact is that I’m motivated by what is good for our country and our people. Which, in this case, is about DHI, but, more than that, is about the rule of law.

Investing in Bhutan

During Question Hour today, I asked the Minister for Economic Affairs:

Newspapers recently reported that 100% foreign ownership of hotels is allowed for foreign direct investments above US$ 200,000. Please explain why the minimum is fixed at US$ 200,000.

I was basically concerned that the minimum investment required to qualify for 100% foreign ownership of hotels was too low. I reported that many Bhutanese have already demonstrated that they can build and operate hotels that cost many times more than US$ 200,000. And that, while foreign investors should be encouraged, policies should ensure that opportunities are not taken away from Bhutanese investors.

Lyonpo Khandu Wangchuk’s reply was long. He talked the House through the history of FDI in Bhutan, economic growth, economic policies, employment, tourism, foreign currency, domestic airports, helicopter services, seasonal tourists, conference centers, infrastructure, credit cards, TAB, tourist visas, and hotels. He even mentioned McKinsey and Brazil!

It turns out that I was wrong. The minimum investment proposed for 100% FDI ownership is Nu 20 million, not US$ 200,000.

And it turns out that Lyonpo Khandu may not have known that I was wrong either. He didn’t correct me. Nor did he mention the figure Nu 20 million!

Gifted Sonam

Working gifts

Working gifts

Ever so often, a reader will leave a comment that is much more powerful and important than the original entry. I am delighted every time that happens.

Someone called “Invisible” left such a comment to my last entry, “Farmhouse lunch.” The comment is insightful, thought provoking, and inspiring. So, if you haven’t already read Invisible’s response about SMEs and jobs for the “invisible people”, I encourage you to do so.

“If you ‘genuinely’ believed in Aum Sonam, enjoyed her lunch, and saw a business potential in it…” advised Invisible, “…let it give you inspiration, reason, and energy to drive SMEs in Bhutan.”

I am inspired. And it’s not just because of Aum Sonam’s lunch. It’s also because I believe in the potential of her idea to make homemade soap. Yes, you heard me right, soap.

You see, Aum Sonam and her fellow-farmers produce potato chips that they sell in Mongar and Bumthang. The chips sold well, but she was unhappy that they had to literally throw away the cooking oil after it has been used several times. And, it was not just potato chips: frying banana chips, tsip and khabsay also eventually produced cooking oil that they could not reuse.

So when Aum Sonam learnt that fat was the main ingredient in soap, she quickly decided to recycle the used cooking oils. She now collects all the used oil and produces soap from her farmhouse. Her soap is simple. But it is produces a rich lather that is effective at removing dirt from clothes.

A few months ago, a visitor chanced upon Aum Sonam’s farmhouse. He listened to her. And, he liked her idea, her spirit and her energy. So he purchased her entire stock, and encouraged her to expand her business to include herbal soap and creams that would find a ready market in our own hotels and resorts.

A month later the same visitor returned to her farmhouse. Aum Sonam eagerly told him about the progress that she had made, and about all the new possibilities that she had learnt since they last met. And, she confided that her biggest challenge was to produce soap that had a consistent shape and size. She’d tried everything, from tin cans to sawed-off mineral water bottles, and still she was not happy with the shape of her soap.

So imagine her surprise, when the visitor handed her a gift: a set of wooden soap molds that could produce several sizes of classic bar-shaped soap. She had only seen them – longingly – in pictures, and had wondered if she would ever own one. She was truly overjoyed.

That visitor was His Majesty the King.

Farmhouse lunch

Sonam'sWe had lunch today at Aum Sonam’s house. Aum Sonam, who was a member of the last National Assembly before the introduction of parliamentary democracy, served us a sumptuous meal of kharang, sikam, aima datsi, mushrooms, farm eggs, cottage cheese and papaya.

I enjoyed Aum Sonam’s cooking thoroughly. It was clean, wholesome and traditional. So I asked her if she would be willing to make lunch for other travelers between Bumthang and Mongar or Trashigang. Her answer was “yes!” quickly qualified by “but they should call me first”.

Her farmhouse is located among Thidanbi’s bucolic paddy fields about five kilometres uphill from Lingmithang. It’s a natural lunch stop when traveling from Bumthang to Mongar, or from Trashigang to Bumthang. If you want to try Aum Sonam’s food, telephone her at 1770-1287 or her husband, Thinley Namgay, at 1764-4057.

I’m quite certain that tourists would also enjoy a visit to Aum Sonam’s. Besides cooking lunch and brewing tea, she could be easily be distilling ara, frying zao, or pounding tsip, all traditional activities that more of our tourists would want to see.

I already know where we’ll have lunch on our way back.

Misleading numbers

Spin doctor

Spin doctor

The other day Kuensel reported that: Bhutan’s gross domestic product (GDP) growth slumped to one of its lowest at 5 percent in 2008 despite the Druk Phuensum Tshogpa’s target of achieving a 9 percent growth rate annually.

To this Dr Saamdu Chetri, the head of good governance section in the cabinet secretariat and DPT party member, was quoted as saying: “With inflation going up to 9.2 percent and a global recession, a growth rate of five percent is still an achievement.”

There’s no doubt that the recent global recession would have constrained economic growth. So there could be some truth in Dr Saamdu’s claim that, given the recession, a 5% growth in GDP is an “achievement”.

But claiming that a 5% economic growth is an “achievement” because we experienced inflation of up to 9.2% is misleading. Inflation offsets real growth. So if inflation was 9.2%, then in real terms our economy did not grow by 5%; it would have actually shrunk by 4.2% during 2008.

Consulting tourists

So the government has accepted and decided to implement McKinsey’s recommendations for the tourism sector. And it seems like we are paying a lot of money – almost 10 million dollars – to a consulting firm to tell us what we already know. Attracting high end visitors, promoting ecotourism, making Bhutan a destination for international meetings, easing ticketing, simplifying visa procedures, improving hotels, domestic air services, developing infrastructure, investing in marketing … these are more or less the same recommendations that a series of earlier consultants have made. More importantly, they are the same ones that ABTO and tour operators have repeatedly submitted to the government. Still, I’m hopeful. I’m very hopeful that these common recommendations will finally get some serious attention from the government. After all, they are now McKinsey’s recommendations.

But, the government has, thankfully, already decided to dump McKinsey’s main recommendation: i.e., to increase annual tourist arrivals to 250,000. The government now sees McKinsey’s projection as an “aspiration”, and has decided to stick with the Tenth Plan targets instead. An aspiration? Do we really mean it? Do we really think that 250,000 tourists a year is a goal to aspire for? Or our we being excessively polite? Do we actually mean that our consultants are wrong? That 250,000 tourists a year cannot be good for Bhutan?