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

What we really need

Our country is going through an unprecedented economic crisis. So why is the government establishing a Secretariat for the new economy”for the United Nations? Instead, what we need is an office – a war room – dedicated to planning and directing the recovery of our economy.

And why is the prime minister preparing to “make a statement promoting the vision for a new economic system” for the world? What we really need – desperately – is a head of government who is genuinely and fully committed to understanding, planning and directing the recovery of our economy.

Too good

Yesterday’s economic forum was scripted and implemented to perfection.

  • The forum, which was organised by GNHC and supported by the UNDP, was called “Macroeconomic Challenges, Opportunities and Policy Options for Bhutna” and held at the National Convention Centre.
  • The forum was attended by the prime minister, cabinet ministers, senior civil servants and
  • The forum was NOT attended by the governor of the Royal Monetary Authority and his two deputies. The CEOs of the financial institutions could not attend as they were summoned, by the RMA governor, for a separate meeting.
  • The experts at the forum included Professor Joeseph Stiglitz of Columbia University, and Dr Rob Vos and Dr Hamidur Rashid from UN’s department of economic and social affairs.
  • The experts concluded that our banks had lent too much money too easily, that private consumption was too high, that are foreign currency reserves were very high, that we should use our foreign currency reserves, and that the rupee crunch was caused by our inability to properly manage our foreign currency reserves.
  • Professor Stiglitz, a Nobel laureate and leading economist, certified that the rupee crunch is not a crisis.
  • Lyonpo Yeshey Zimba reiterated the findings of the expert group, and counted the economic successes of the government.
  • And the media – print, TV and radio – informed our people that experts, led by a Professor Stiglitz, had found that our economic situation was not in trouble, and that the rupee crunch could easily be dealt with by proper management of our foreign currency reserves.

If all this sound too good to be true, it probably is.

Consider this: Just 6 months ago, in December last year, the RMA’s rupee borrowings had peaked at Rs 11 billion, and the government had sold US$ 200 million for Rs 10.3 billion to clear Rs 8 billion. So at that time we were left with Rs 3 billion in credit, and Rs 2.3 billion in cash.

Today, the RMA’s rupee borrowings have reportedly already hit Rs 15 billion. And we have already spent the Rs 2.3 billion we had in cash. So that means that in the last six months we have accumulated a rupee deficit of 14.3 billion (Rs 15 billion – Rs 3 billion + Rs 2.3 billion = Rs 14.3 billion).

We owe Rs 15 billion. And we have US$ 720 million in reserves. US$ 720 million equals more than Rs 41 billion at today’s exchange rates. That’s an excess of Rs 26 billion. And that’s why the international experts have us convinced that the rupee crunch is a foreign currency reserve management issue; not an economic crisis.

Now consider this: we accumulated a rupee deficit of 14.3 billion in less than 6 months. If we use our foreign currency reserves to clear this debt, we’ll be left with the equivalent of Rs 26 billion in foreign currency reserves. But at this rate, we will have run up a deficit in excess of Rs 26 billion in less than one year. And we can again use our foreign currency reserves to clear this deficit too.

But then we’ll be left with nothing in our foreign currency reserves. Forget about the Constitutional requirement of maintaining foreign currency reserves not less than one year’s essential imports – our foreign currency reserves will have dropped all the way to zero; it will have been completely depleted. In other words, if, as the experts suggest, we “manage” our foreign currency reserves, we will have spent our entire reserves in less than a year, and we’ll be forced to accept, belatedly, that we are dealing with a major economic crisis.

So don’t blame the mismanagement of our foreign currency reserves for the ongoing rupee crunch. And, please, don’t think of misusing our reserves.

Instead, look at where the real problem lies. Look, for example, at government expenditure. And ask our experts if an increase in government expenditure from 21 billion per year (in 2008-09) to 38 billion per year (budgeted for 2011-12) could have caused the rupee crunch; ask them if excessive and uncontrolled government expenditure is what could have caused the economic crisis.

The plague

Kuensel featured this advertisement yesterday. Read it, and see what’s wrong.

I, like the friend who showed me this notification, found it funny that RITH would invite bids to produce the plague. But we all know that what RITH really wants is a plaque to commemorate the inauguration of the institute. Funny. And no harm done.

But look at the notification again. Look at it closely. To be awarded the work, one must be a registered license holder and pay Nu 200 for a set of bidding documents. The bidding documents will be sold from 17th May to 31st May during office hours.

The bidding documents will, no doubt, spell out many more conditions that bidders must fulfill. A committee will study all the bids. And another committee will award the work to one lucky bidder.

And what is the work? To produce a plaque. The advertisement itself could cost more than the plaque. Add to that the many hours that the many officials and the many businessmen have put into this endeavor, and you end up with a very expensive plaque. Expensive, but not necessarily good.

Our financial system must be tight. But the system should not be counterproductive. For small projects – like this one, to produce a simple plaque – excessive and cumbersome procedures add to the administrative burden and make a mockery of efficiency, transparency and accountability. Now that’s not funny. Because that, like the plague, can cause a lot of harm.

 

But nat!

At school, we, like all children, all over the world, loved playing pranks. Our arsenal boasted an impressive range of innovative pranks. But the simplest and the most popular of them by far was the very versatile but nat! prank.

This is how it was administered: We’d go up to a fellow student and excitedly declare, “I found your wallet!” And then, very slowly, add, “But nat!”

Or we’d tell him, “Our math test is postponed … but nat!” Or, “She says she likes you too … but nat!”

The but nat! was meant to negate whatever news had just been delivered.

For obvious reasons, the prank would work only if the victim had really lost his wallet. Or if he hadn’t prepared for the upcoming math test. Or if he had confided that he was in love with a certain girl. And if, by some chance, the victim had lost a lot money, or really hated math, or was madly in love, the prank would triumph.

The prime minister, who, incidentally, also attended the same school, has pulled off a but nat! on the entire nation.

Last month, he went on live TV and confidently broadcast that the government would ban the import of vegetables from this month onwards. But last week, a month after his announcement, he seems to have changed his mind, and slowly added … but nat!

There’s no doubt that we can grow our own vegetables. In fact, we must grow our own food. But we’ve done precious little to encourage domestic production. So we’ve been relying almost exclusively on imports.

We can, and we must, grow our own food, especially vegetables. But that’s not possible overnight. Our dependency on imported food has come about from years of inefficient farming combined with lazy government policy.

Yes, we can, and we must, work towards substituting imported food with domestic production. But we must work carefully, deliberately and intelligently. An immediate and outright ban on vegetable imports will do more harm than good.

So I wasn’t surprised to hear the government say but nat! and negate the vegetable import ban.

But I am surprised at their decision to allow only one agency, the Food Corporation of Bhutan, to import vegetables. The FCB, as far as I know, does not have any experience in importing vegetables. As such they will find it difficult, if not impossible, to negotiate, buy and transport a wide range of perishable goods every week to Thimphu and other parts of the country. They don’t have the experience to do the job. And they don’t have the incentives to do a good job.

It’s clear that we will be compelled to import vegetables for some time. As such, the government should permit the vegetable vendors to continuing importing vegetables. They, not FCB, are the people who know how to do this business the most efficiently.

But in the meantime, the government must encourage domestic vegetable production. The government must take food self-sufficiency seriously.

Playing but nat! at school, with students, is one thing. Playing around with government policy, without understanding the ground realities, is quite another.

Insurance claims

It’s been seven whole months since the 18th September earthquake. But many of the earthquake victims, including all the victims in my constituency, have still not receive their insurance claims in spite of the Home Minister’s assurances during the eighth session of the Parliament. So I felt compelled to send this letter yesterday.

 

Essential stuff

Article 14 Section 7 of the Constitution requires that, “A minimum foreign currency reserve that is adequate to meet the cost of not less than one year’s essential import must be maintained.”

But what constitutes essential import? Salt, shoes, sicnidizole – surely they are “essential”. But what about construction material, like, say, CGI? And raw material for industries? Are they essential? And how about arms and ammunition? I think they are essential, very essential.

It’s important to have a proper definition of what, in our context, constitutes essential import. It’s important because that definition will determine the “minimum foreign currency reserve” that must be maintained by the government at any time.

We don’t have a clear definition. But last year, when the government sold US$ 200 million from our foreign currency reserves, they told us that we still had US$ 702 million in our reserves, and that that would finance 13 months of essential import.

Divide US$ 702 million by 13 and multiply that by 12 and we quickly get US$ 648 million, the amount that, by the government’s own reckoning, is required to finance one year’s essential import.

That was in December last year. But yesterday, just four months later, the prime minister announced, on BBS TV, that our foreign currency reserves stand at US$ 716 million, and that that can finance 36 months – that’s three years – of essential import. So basically, the prime minister is now telling us that US$ 239 million is enough to finance one year’s worth of essential import.

Between 648 million and 239 million lies huge difference. And that difference points to two conclusions. One, the government is getting ready to sell even more foreign currency from our reserves. And two we need a clear definition of “essential import”.

The prime minister has proven that the government – this government, and others in the future – cannot be trusted to provide an honest and consistent definition of what constitutes “essential import”.  Governments will define, and redefine it, to yield to immediate temptations of selling off our foreign currency reserves.

We need a better way of defining “essential import” and, by extension, of calculating the “minimum foreign currency reserve” that governments must maintain. One way would be to form an independent authority whose duty it would be to decide, without bias and from time to time, what constitutes “essential import”. But for that to work, the authority must have broad-based representation including members from the government, RMA, judiciary, private sector, and His Majesty the King’s secretariat.

Thank you

A couple of late meetings prevented me from watching TV last night. So I watched BBS TV’s rebroadcast this morning. In particular, I watched Lyonpo Yeshey Zimba, the officiating prime minister, and Lyonpo Wangdi Norbu, the finance minister, talk about the current economic situation.

I thank the government for going on national TV to explain the ongoing currency situation to the public at large. The two ministers are our most experienced financial experts. The two of them have served as finance ministers for a combined total of 14 years, and as finance secretaries for more than 10 years. So they are very qualified to speak on the rupee crunch, and to allay the public’s growing fears on the state of our economy.

I also thank the prime minister, who is in New York attending to other pressing matters, for deputing the officiating prime minister and the finance minister to address the nation on his behalf. The fact that the government has eventually addressed the nation at a time when our people’s confidence has been shaken is welcome and appreciated.

So, on behalf of the people, and without getting into the specifics of what was said on TV, I offer a sincere thank you to the government.

GNH and Bhutan

Here’s an insightful cartoon from Bhutan Observer. The message is loud and clear. There’s no need to elaborate.

But one dangerous element is missing in the murky background: the rupee crunch and the growing economic crisis, about which the prime minister has not yet uttered a word.