Doing business isn’t easy anywhere

But it’s getting even harder in Bhutan!

In “Really hard business” (read blog entry) I had grumbled that doing business in our country was really hard – the World Bank had ranked Bhutan 119th of the 178 countries it had evaluated on ease of doing business in 2008.

Guess what? Doing business in Bhutan has become even harder!

Doing Business 2009 report now ranks Bhutan 124th out of 181 countries that were investigated (see ranking). And in South Asia, Bhutan, ranked 7 of 8, fares better than only one country, war torn Afghanistan (see ranking).

So what, you may say, our economy has grown rapidly. True, we have enjoyed unprecedented growth – the size of our economy has more or less doubled every 5 years since 1980, and per capita GDP, at US$ 1900, is the highest in our region.

That our economy has grown fast is good news indeed. But the far more important question to ask is: how did it grow fast?

Our economic growth has been fueled by loans, foreign aid and hydropower; not by productivity; and not by the private sector. The private sector has not been able to drive economic growth because it is weak. And it is weak because it so hard to do business in Bhutan.

Meanwhile, our vision of strengthening the private sector and making it the “engine” of growth remains just that – a distant vision. And, in spite of the impressive numbers, our economy is actually very weak, which manifests quite clearly in rising inequalities, youth unemployment and widespread poverty.

So what should we do? Make it easier to do business in Bhutan. Make it easier for our people to realize their full entrepreneurial potential. Make it easier for businessmen and women to contribute to the economy. Review rules and regulations. And make them business friendly.

Only then can we expect Doing Business to declare better results for Bhutan.

That said, Doing Business report is, at best, only a test that provides indicators to the state of our domestic business environment. But we should take these indicators seriously. After all, potential investors all over the world take them very seriously.


Facebook Comments:


  1. Let me tell you what you probably know more than me but just doesn’t have the guts to say it loud. Bhutanese private sectors have made lots of money over the years but didn’t help Bhutan’s economy in a tiny bit. Look at private sectors for example Singay; how many Bhutanese do they employ as a percentage to their total workforce? What kind of business are they into? How do they get information before others? There are so many conflicts of interest in Bhutan which people are just scare to mention. Bhutanese business houses are run by people who don’t know the concept of corporate social responsibility. They are successful because our government turns blind eye to them. Let’s look at steel: The only competitive advantage for the Bhutanese steel industries is cheap electricity which I think makes up around 40% of unit cost. Why is our government selling the electricity to the Bhutanese business house when they can get a better price from India? Is it employment? If it is, how many Bhutanese are employed in those Bhutanese steel companies in relation to foreign workers? What I am trying to say is that Bhutanese business houses are incompetent other than Tashi Group. They thrive on cheap electricity and tax difference. They don’t innovate, don’t train employees and cannot be bothered with social responsibility.

  2. because of these personal interest, most people in government department responsible for clearance and paper work don’t want young business hopefuls to do business……..It look like a Bhutanese will do anything to stop other bhutanese becoming more successful (financially)!

  3. It’s really sad that we are a subject of such speculations.
    Our government needs to open their eyes more to international statistics and be flexible to come out of our odd box. It’s basically difficult to do anything in our country.
    You cannot build a house as you please. You cannot dress as you please. You cannot travel 50 miles within the country without being harassed by security officials. You cannot save in dollars although you work overseas. Public information is non existent. Banks are lazy and lack professional conduct with its customers. You cannot question your leaders. Transparency is just a hype.
    There is just so much to the list.

  4. Opinionated Bhutanese says

    Do you know that when you deposit dollars in Bhutanese banks, you have to write the serial no. of the each dollar down and then signed? So imagine Bill Gates depositing in Bhutanese bank. Now compare that to just exchanging your dollar at some shops nearby at higher rate with no hassle. This sort of system encourages and promotes black markets. But no one seems to care about it.

  5. For once, I agree with OL. It would be good if OL could influence his old buddies to share some of the spoils and let others compete and grow in a healthy business environment.

  6. IT is about time that Bhutan join WTO. This will not only open up our economy but will also boost private sector. It is highly unlikely that our local companies could come up to the level of Singye Companies or Tashi and compete with them. Let other companies from outside come in and compete with them. That will generate employment, teach our conglomerates a lesson.

  7. I have no clue why Bhutan government doesn’t allow people to open dollar account and do the transactions in dollar if they earn in dollar outside Bhutan. Because people earning in dollars cannot open dollar account in Bhutan, many Bhutanese have dollar account outside Bhutan. I am not a financial expert but a common sense tells me that it is not benefiting account when bhuatanese people keep their money (hard currency) outside the country.

  8. We have a lot of conglomerates in Bhutan, they have their fingers in every pie. These companies have spent decades enjoying economic protection and favoritism.

    They are protected from internal competition by issuing limited licenses and by preferential treatment.

    I hope in the next election, their will be politcal partys that supports the private sector. Im unsatisfied with the current state of affairs.


  1. […] “Doing business isn’t easy anywhere” we noted that doing business in Bhutan got more difficult during the previous year. The World […]

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