Extraordinary

Something extraordinary took place in the National Assembly last Tuesday.

The government introduced the Land Bill 2012 in the Assembly. But they did not move a motion to deliberate the Bill, as was expected. Nor did they move a motion to withdraw the Bill in accordance with legislative procedure. Instead, the government proposed that the next Parliament deliberate the Bill. And the National Assembly endorsed the government’s proposal.

So what’s out of the ordinary?

One, the government introduced a bill that they never intended to discuss. But why would the government go through the trouble of introducing a bill, if they did not want it to be deliberated? Probably because they felt that the National Council would not agree to the main amendments to the Land Act (that the Land Commission is revamped so its members are largely ministers, and that the cabinet is given powers to grant resettlement land). And probably because they felt that the Bill would not pass the joint sitting of the Parliament that would have to be convened because of differences between the two Houses.

Two, the government decided that the next Parliament should deliberate the Land Bill. The current government enjoys a huge majority. And they, most likely, will form the next government. But to plan lawmaking on that assumption is presumptuous. And it is preposterous. I’m not sure it happens anywhere else in the world.

Three, the National Assembly endorsed the government’s proposal, and resolved that the next Parliament would deliberate the Land Bill 2012. That, in spite of the fact that, according to Section 192 of the National Assembly Act: “All Bills before the Assembly or any committee on the last sitting day of a term of the Assembly or when the Assembly is dissolved shall lapse a the end of that day.”And, in spite of the fact that, according to Section 318 of the National Assembly Act: “If the consideration of a matter has not been concluded by the end of a session, it shall be continued in the following session, unless parliamentary elections have been held in the interim …”

It’s clear that discussions on bills cannot be carried over to the next Parliament. Yet that’s exactly what we resolved to do. Extraordinary.

 

 

The power of the land

For our future

The following is a translation of my statement in the National Assembly yesterday:

Today we are discussing a matter of profound significance – land.

The historic First Parliament of Bhutan has already deliberated many issues of great importance. Today’s topic of discussion, concerning the amendment of the Land Act, is also extremely important. The decisions we take will have a long-term impact, for better or for worse, on our country and our people.

It may appear that our kingdom has been blessed with plenty of land. This is true, but the amount of land actually available for agriculture and human habitation is very limited. This is because our landscape is dominated by high mountains and steep cliffs, and mighty rivers and deep gorges.

In addition, the Constitution requires that a minimum of 60% of the total land is maintained as forest cover for all time. This further constrains the amount of land available for human use.

This is why land is such a precious and scarce resource in Bhutan. This is why each and every one of our kings gave special emphasis to protecting State land and resources, while ensuring that all their people had access to land ownership. And this is why each and every one of our kings has sorted out and solved land related issues, personally, and in a step-by-step manner.

In 1955, for example, the Third Druk Gyalpo, His Majesty the Late King, Jigme Dorji Wangchuck, abolished the practice of serfdom in our country, and initiated major land reforms by which the common people were granted ownership of and complete powers over their lands.

His Majesty the Fourth Druk Gyalpo continued reforming and strengthening land policy for the benefit and welfare of the people. He granted kidu land to the landless, and initiated the land resettlement program. In addition, His Majesty the Fourth Druk Gyalpo issued no less than six Kashos all decreeing that only the Druk Gyalpo, and no other person, has the authority to give away Government land.

Land issues continue to receive special attention under the reign of His Majesty the King. From the very day His Majesty assumed the sacred responsibilities of Druk Gyalpo, He has worked tirelessly to address all land related problems of the people. He has done so personally, and without allowing other persons to interfere.

As such, many people, throughout the country have benefited. People with no land have been granted kidu land; people with excess land, have had their excess land regularized; sa thrams have been provided so that people can enjoy the power and privileges of land ownership; and where the land is unproductive, people have been resettled and rehabilitated properly elsewhere.

We, the people of Bhutan, have enjoyed unparalleled levels of good fortune and prosperity because of the enlightened leadership of our beloved monarchs. As a result, each and every one of us has the opportunity to fulfill our aspirations to own land and a home in our own country, and to ensure that future generations can live where their parents lived.

Yes, there may still be some land-related problems. But they are rare, and they can be easily addressed within the current laws, regulations and system. As such, we should not hold discussions to revise the Land Act 2007. With the permission of the Assembly, I will briefly submit why we should not revise the Land Act.

Firstly, the Bhutanese people expressed deep concern when Their Majesties the Kings introduced parliamentary democracy in our country – our people were afraid that, in a democracy, no one would take care of their individual problems. That is why, when preparations were being made to introduce democracy, the people made sure that the Constitution clearly bestowed all powers of kidu and land to the Druk Gyalpo.

Second, in keeping with this provision of the Constitution, the 87th Session of the previous National Assembly enacted the Land Act 2007. In accordance with the Land Act, the National Land Commission, an independent institution to oversee all land related matters in the country, was established purposely removing administrative powers over land from government ministries. Furthermore, and more importantly, to safeguard against further political interference, the members of the Land Commission were composed mainly of secretaries to the government and the Gyalpoi Zimpon, and deliberately excluded ministers of the elected government.

Third, in accordance with the provisions of the Constitution, His Majesty the King has travelled the length and breadth of the country, to every dzongkhag, in order to personally address the land related problems of each and every citizen. As a result, the people of Bhutan have expressed compete trust and confidence in His Majesty, and have consistently maintained that they are fully satisfied that their land issues have been resolved.

Fourth, His Majesty the King has issued a Kasho to the Prime Minister, the Speaker of the National Assembly, the Chairman of the National Council and the opposition leader. In my personal and humble opinion this extraordinary Kasho reflects the deep concerns of His Majesty that deliberating the Land Bill 2012 could dangerously jeopardize the current system, a system that is working very well for the welfare of the people and the interests of the country.

Fifth, according to many news reports of the media, the people of Bhutan have expressed outrage and concern at the Parliament’s intention to deliberate the Land Bill 2012. The general public has clearly stated that there is no reason to revise the current Land Act.

Sixth, the term of this Parliament will soon be over. We have barely 10 months left. Therefore, we should not deliberate the Land Bill 2012, a matter of great significance, towards the end of our term when the current laws and system are working well.

In view of the points I have briefly mentioned, I would like to recommend the following course of action, and urge the Honourable Members of Parliament to support these recommendations.

  1. That we reject the Government’s Motion that the Land Bill 2012 be introduced in this session of Parliament but be deliberated by the next Parliament.
  2. That instead, the Government should file a Motion to withdraw the Land Bill 2012 in this session.
  3. That a Joint Parliamentary Committee be constituted to study the Royal Kasho, and to seek His Majesty’s guidance, who, by the Constitution, is one of the three integral organs of the Parliament, on how best to proceed keeping in mind the welfare of the people and the national interest.

Thank you.

Taxing issues

The National Assembly passed the Tax Revision Bill last week. The Bill is now with the National Council. The Council will discuss the Bill, but, because it is a “money bill”, the Council can only make suggestions and recommendations that the National Assembly may, or may not, chose to accept.

(Last year, the Assembly did not accept any of the Council’s recommendations on the budget and tax revision bills. In fact, the Assembly just skimmed through the recommendations, barely discussing them.)

The National Assembly has passed the Tax Revision Bill. But, we didn’t discuss it properly. After the Bill was introduced, the members made general comments. But the specifics of the Bill, including the individual taxes were not discussed, and just one item – Green Taxes on vehicles – was put to the vote.

I’m happy that the National Assembly didn’t approve most of the taxation measures. In fact, in my humble opinion, even the reduced green tax should not have been approved, given that the government failed to make a strong enough argument justifying the tax.

Still, we should have discussed the bill properly. The government should have justified each and every tax raise that they had proposed. And the Assembly should have debated the proposals thoroughly before deciding to approve or reject them.

Here are some of the issues I’d hoped to raise:

Justification to raise taxes. The Tax Revision Bill proposed introducing a Green Tax (for vehicles, fuels, lubricants, kerosene, LPG, refrigerators, freezers and air conditioners); raising the Excise Duty (on alcohol, domestic and imported); and raising the Sales Tax (on meat, fish and eggs, silk fabrics, furniture, and power chainsaws).

The government informed the Assembly that the proposed taxes would help address the ongoing rupee shortage. But we didn’t get to discuss how, and by how much, the taxes would reduce imports from India, or enhance overall exports.

I’m all for raising taxes. But only if the government can justify, with numbers, why the taxes need to be raised and how the increased revenue will be spent. The government would also have to prove that the increased taxes would not overburden the people, directly or indirectly, and that they would not make doing business any more difficult.

In this case – if taxes are being raised to address the rupee shortage – I also wanted to know that the government would not spend the extra revenue generated. Spending that money would just add to the rupee problem, not solve it, as almost all of the government’s expenditure ultimately goes to finance imports of goods and services, mostly from India.

Green tax. All taxes must have a legal basis. The Income Tax Act authorizes the imposition of PIT, BIT and CIT. The Sales Tax, Customs and Excise Act authorizes sales tax, customs duty and excise. The Land Act legitimizes land tax. The Local Government Act authorizes the collection of land tax, building, cattle, grazing, entertainment, advertisement and other taxes. And so on…

The so-called “green tax” is a new tax. As such, the Parliament should have first discussed the need for this tax, and then amended the relevant laws to permit the government to impose this new tax. Then, and only then, either as part of an amended law or as part of the Tax Revision Bill, should the government have proposed to levy the tax.

But I had several other questions on the Green Tax. One, why levy a green tax if the real objective is to reduce the rupee deficit? The purpose of a green tax should be to protect the environment, not to reduce the rupee deficit, and the proceeds from tax should go to programs that solve environmental problems.

But, two, do we have major environmental problems, and, more importantly, would the proposed green tax result in positive and meaningful contributions to the environment?

Three, wouldn’t taxing kerosene increase the cost of living for our poor? They are the ones who are the most dependent on kerosene for cooking and lighting. And wouldn’t taxing fuel increase the cost of transport, and therefore, the cost of goods? Would the general population be able to afford the resulting increase in the price of goods and services?

And four, do we really want to tax refrigerators and air conditioners? Would the taxes result in a decrease in the number of refrigerators, and if so, would that make a meaningful contribution to the environment? On the other hand, shouldn’t we be encouraging our people to enjoy the immediate health benefits and the conveniences of refrigerators?

Excise on alcohol. Alcohol is a real and growing menace in Bhutan. We need to act now, before we lose more people, especially our youth, to this scourge. But taxes alone will not prevent our people from drinking excessively. We need a holistic strategy, which includes taxes, but only as a part of bigger, more comprehensive action plan.

If the government must tax alcohol, tax those products that are the most dangerous. Last year’s tax increase avoided them; ditto this year.

Meat, fish and eggs. Taxing these items will, supposedly, lead to lower consumption, which, in turn, will lead to lower imports. Good. But what about domestic production? Wouldn’t the increased taxes also hinder domestic production of meat, fish and eggs?

Furniture. Tax imported furniture. But please, please, don’t make domestic production any more difficult than it already is.

Silk fabric. I have no idea how imposing a 10% sales tax and 50% customs duty on silk fabric will improve the rupee situation. But if it does, I’m for it. Otherwise, we need to rethink our strategy.

Power chainsaw. What’s the big idea of slapping a 20% sales tax and 30% customs on power chainsaws? If it is the environment, strengthen and enforce existing regulations. But, please, let’s not arbitrarily increase the price of labour saving devices.

The rupee crisis. The government must apply fiscal policy to address on-going and growing rupee shortage. One way is to increase taxes. But I’m not convinced that the proposed taxes would have had a meaningful effect, especially if the government were to spend the increased revenue from the increased taxes.

A better and more effective way to control the rupee crisis would be to reign in government expenditure. But that’s not what’s been happening. The government’s current expenditure for 2010-11 was Nu 17, 735 million. It jumped to Nu 17, 185 million in 2011-12. And just last week, the Assembly approved a current budget of Nu 18,262 million for 2012-13.

Just shameful

Games people play

The government was caught off guard when the National Assembly passed the Tax Revision Bill last Wednesday. The Assembly threw out all but one of the proposed taxes. And before the government realized it, their proposals to raise taxes on petrol, diesel, kerosene and LPG; refrigerators, freezers and air conditioners; meat, fish and eggs; silk fabric, furniture and power chainsaws; and alcohol were emphatically rejected by the National Assembly.

The only tax to get through was the “green tax” on new vehicles. But that too suffered a huge setback: the proposed 40% green tax on vehicles (with engines equal to or bigger than 1800 cc) was reduced by half, to 20%; and a 5% green tax, which the government had not proposed, was slapped on small vehicles.

On Thursday, the day after the Bill was passed, the government informed the Assembly that, when they voted on the Bill, they had understood that their proposal to increase taxes on alcohol had been accepted. They were wrong. The only tax that the Assembly approved, it turns out, was the green tax on vehicles.

The government should be ashamed. They should be ashamed for not paying attention in the National Assembly. I had, in fact, tried to notify the Assembly that we had not discussed the Tax Revision Bill properly, in detail, and that, more importantly, we were not clear on what we were voting on. But the government, at that time, chose to remain silent. They chose to take the Assembly for granted. And they should be ashamed.

But the government should be ashamed for a bigger and much more important reason. They should be ashamed that the Assembly rejected almost every proposal in the Tax Revision Bill. Of the government’s many proposals, the Assembly passed just one – to levy a green tax on vehicles – and that too was watered down drastically.

The government has failed to persuade the National Assembly that the proposed taxes are necessary. And the government has failed to convince the Assembly that the proposed taxes are good for our country and good for our people. In other words, the government does not enjoy the confidence of the National Assembly. And that, for a government that commands an overwhelming majority in the National Assembly, is just shameful.

 

Photo credit: Kuensel

Subsidizing profits

In their story about MPs calling for certain state-owned corporations to be privatized, Kuensel quoted me as saying that the government was giving too much subsidies to the corporations. “As if providing land was not enough, the government is even generous enough to provide them subsidy, which meant extra burden to the government”, I supposedly said.

The quote is correct. But the context is wrong. I didn’t complain about subsidies that corporations receive. In fact, I believe that we must do a better job of ensuring that corporations that provide a public service – BBS, for example – have access to more predictable and sustainable subsidies without having to put up with political interference.

What I did complain about, and what I objected to, was the Nu 144 million earmarked as subsidy for the Education City. The subsidy, we were told, covers costs for constructing ancillary infrastructure including road, telecommunications, water supply and bridge.

I objected to the Education City subsidy because the government is already supposedly allocating 1000 acres of prime land for the project. If so, that would be a huge contribution by the government. So the investors – DHI and their FDI partner – should pay for the rest, including the ancillary infrastructure.

Otherwise, the government may end up subsidizing the profits of the Education City investors.

Trowa

Leased land

Trowa Theatre in Changjiji sits on government land. The land, measuring 19,432.56 square feet, was leased to a businessman in 2001 to build an entertainment center.

In 2006, the government approved the transfer of the lease to another businessman. And increased lease rent from Nu 2 per sft per annum to Nu 42 per sft per annum, which was the amount being charged to other lessees occupying similar property in Thimphu.

The businessman taking over the lease did not sign a lease agreement protesting that the new lease rent was too high. He still has not signed a lease agreement with the government. Nor has he paid lease rent since 2006. The total outstanding lease rent as of last month is about Nu 5.24 million.

The Parliament discussed this case in its 5th and 7th sessions, in 2010 and 2011 respectively, and, on both occasions, decided that the government should resolve the issue in accordance with the laws of the land.

Last Thursday, during the Public Accounts Committee’s report to the National Assembly, Lyonpo Yeshey Zimba, the minister for works and human settlement, reported that his ministry was unable to resolve the issue, and that, as such, he had requested the Land Commission to sell the land to the lessee.

The government should answer how a businessman is allowed to run a business on government land, without signing a lease agreement, without paying lease rent, and for so long while violating laws and ignoring regulations. And the government should resolve the issue, even if the case must be forwarded to the court of law, as was recommended by the Public Accounts Committee.

That’s what the government should do. But what the government actually did do, instead, was to send a formal request to the Land Commission to sell the land to the businessman.

What was Lyonpo Yeshey Zimba thinking?

There are many other businesses, in Thimphu and in other parts of our country, which have also leased government land. Wouldn’t selling leased government land to one businessman open the floodgates for other businesses to also buy land that they have leased from the government?

And what about the rule of law? Lyonpo Yeshey Zimba must know that the laws of the land prevent leased government land from being sold. He must know that Section 307 of the Land Act states that:

Under no circumstances shall a land on lease from the Government land or Government Reserved Forests land be converted to ownership right.

Trowa Theatre sits on prime government land. That land belongs to the people of Bhutan. And the people of Bhutan would want to know that their government is protecting their land, not squandering it recklessly.

Real losers

Remove the rot

Does anyone know why the government insists on permitting only FCB to import vegetables? I don’t. The prime minister had explained that only FCB would be provided Indian rupees to import vegetables as FCB would be able to buy in bulk and would not be motivated by profit, which would make prices come down.

But vegetable prices have not come down. Instead, they’ve skyrocketed, because FCB’s prices turned out to be much higher. Plus, a lot of their vegetables had turned bad even before they reached Thimphu. As a result, consumers paid higher prices, but received poorer quality, and vegetable suppliers suffered big losses. In addition, the government now has to bear the cost of 65MT of vegetables that were rejected by the vegetable suppliers.

FCB’s first attempt at importing vegetables has failed terribly. So you’d think that the government w0uld learn from the experience and finally accept that importing vegetables from Falakata is not as easy as it seems. You’d think that they would revert to letting the vegetable suppliers do what they do best, i.e., import vegetables, a specialized trade that they’ve mastered over decades of doing the business.

But what does the government do? They dig in their heels and redouble their efforts to force FCB to import vegetables in spite of the fact that they obviously do not know how. So FCB has reportedly hired an Indian vegetable supplier to “help” them. And the government has forced our vegetable suppliers to pay as much as 70% of their orders upfront, in advance. The idea, it seems, is to coerce vegetable suppliers to buy from FCB, regardless of the quality and the price of the vegetables.

Doing business in Bhutan is difficult as it is. But the government seems hell-bent on making it even more difficult. They should know that businesses, even if they are small time vegetable suppliers, do not stand to lose much; they’ll simply move on. The  real losers, the government should know, are the consumers, the people of Bhutan.

 

 

Ordering people

At the end of the second Pedestrian Day, I reproduce below a comment posted by “Dala”:

Can anyone provide a copy of the executive order circulated by PM.I want to see the content of the order because the Police and the RSTA people are not allowing vehicle movement even in remote places forget about towns and cities. I was on the way to Dagana from Dagapela and they stopped my car and said that I cannot go to Dagana. When I asked why I can’t go, their reply was that there is executive order from PM to restrict all vehicle movement on Tuesday. So, its really confusing for the general public. I thought the executive order applies to Dzongkhag towns and cities only.

The prime minister’s executive order is available on the Cabinet’s website. However, I’m posting it here for your ready reference.

 

 

 

 

The ineligible Bhutanese

What would you do if you found out that there’s this job opening that would pay three times more but would be less demanding than your current job? You’d probably apply for it, right? How could you pass up an opportunity to earn three times your pay for actually doing less work?

What would you expect if you found out that that job was in a government project, financed by government funds? You’d expect to get that job, right? And if you don’t, you’d expect a more qualified and experienced fellow Bhutanese to get it.

That’s exactly what happened. PHPA advertised for doctors. The doctors would be paid by the project. But they would work in the Bajo basic health unit.

Several Bhutanese doctors applied for the lucrative jobs.

But the government intervened. And that’s when things went wrong. The government decided that Bhutanese doctors would not be eligible for the PHPA jobs. They decided that PHPA could, instead, recruit doctors from India.

What is it with us? Our economy is very small. That’s why economic opportunities are few and far between. And yet, we insist on giving the best opportunities to foreigners. We insist on depriving our own people.

Stop playing games

Walking for what?

I like to walk. And I like to bike. So today, on Thimphu’s inaugural Pedestrian Day, I enjoyed the opportunity to bike from my home (in Taba) to my office (in Langjophakha) to the clock tower square to lunch (in Motithang) to the PDP office (Changangkha) to Karma’s Coffee (Hongkong market) to the archery range (near the Indian Embassy) and finally back home.

The government has declared that, henceforth, every Tuesday will be Pedestrian Day, at which time most vehicles will not be permitted to enter the core area of Thimphu. Other cities are reportedly already following suit.

The intentions behind the Pedestrian Day idea may be good. Many of us, for example, already agree that walking is good for our health, and good for our environment. So many of us would not argue against Pedestrian Day.

But some of us may not like to walk, especially if we have several places to go to, in our ghos and kiras, when it is excessively hot or cold, or when it rains. Some of us may find it difficult to walk, like, for example, the old, the weak, and working mothers. And some of us may simply not like walking at all.

So the intention of starting Pedestrian Day – of forcing people to walk once a week – may be good. But the way it has been handled is not good; it is not democratic. The government has, once again, failed to consult the very people they claim to be helping. To walk or not affects the lives of each and every one of us. So we should have been consulted. And the cabinet should not have taken the decision; it should have been left up to the respective local governments. Instead, the prime minister himself has issued an executive order decreeing that, “… all Tuesdays henceforth, will be observed as Pedestrians’ Day throughout the country particularly in major towns”.

As expected, public reaction after the first Pedestrian Day has been varied and mixed. While some residents clearly enjoyed walking to work and back, others have bitterly denounced the government’s decision as arbitrary and draconian.

So the prime minister should call the first Pedestrian Day a “dry run”. And, based on even a few negative reactions, he should revoke his executive order. Then he should start honest consultations with the people. Better still, he should learn to leave these matters to local governments – it is their job to decide how best to organize community life in their respective areas.

The best course of action would be for the prime minister and the government to lead by example. They could call every Tuesday “Pedestrian Day”, encourage people to walk on that day, and make it convenient for them to do so. But people should not be forced to walk. Instead, the government should revitalize the defunct HEHE walk, and lead by example –  they should leave their cars at home and they, themselves, should make it a point to walk every Tuesday. In due course of time, most of us will follow, naturally and happily.

But there’s growing suspicion that the government’s decision to impose Pedestrian Day may not be all that noble. Some have suggested that government’s unilateral decision was motivated by the fact that Rio+ 20, a UN conference on sustainable development, and one that the prime minister is expected attend, will begin in Rio de Janeiro in barely two weeks.

That may indeed be the case. Pedestrian Day may have more to do with pandering to the west than really helping our own people. For instance, if you Google “pedestrian day Bhutan” you’ll find many dozens of news links from all across the world. This shows that the government has obviously targeted the international media; this shows that the government was more concerned about securing international publicity than attending to any domestic inconveniences.

This will not be the first time that the government’s policies would have been determined by our hunger for international adulation. In 2009 the government signed a promise to keep our country carbon neutral for all time to come. That promise, grandiosely called Declaration of the Kingdom of Bhutan – the Land of Gross National Happiness to Save our Planet, was put into effect, also without public consultations or discussions, hardly a week before it was proudly declared at COP15, the UN climate change conference in Copenhagen.

If this is the case, if Pedestrian Day has been timed to simply impress the Rio+20 gathering, the government must stop playing games, they must rescind their decision, and they must apologize to the people of Bhutan.

Photo credit: BBS