Getting down to business

Everywhere I look I see people, thousands of them, buying and selling goods and services. It must be easy to do business in Thailand. In fact it is: Doing Business 2009 ranks Thailand 13th out of the 181 economies that the World Bank studied.

Doing Business investigates government regulations that affect the following 10 aspects of business activity: starting a business, dealing with construction permits, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business.

Bhutan, as we know very well, is ranked 124 (read Doing business isn’t easy anywhere). Here’s how we fared in each of the 10 dimensions covered in Doing Business 2009.

First, the good news…In Bhutan, it’s relatively easy to:
Employ workers (13th in the world)
Enforce contracts (37th); and
Register property (38th)

And now the bad news…but, it’s difficult to:
Start a business (63rd)
Pay taxes (82)
Deal with construction permits (116th)
Protect investors (126th)
Trade across borders (151st)
Get credit (172nd); and
Close a business (ranked last at 181st)

So what do these rankings mean? How did we get there? Why? What can be done? I’ll post a few entries on some of these areas to initiate public debate going. Let’s get down to business. Let’s make doing business easier. Let’s strengthen our private sector.

 

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  1. I would like to say you are hitting the iron when it is HOT HOT HOT. Doing business in Bhutan is no doubt a challenge. I ahve been through the process of acquiring a business license many times and I tell you it is really hard work. Actually, it is a simple process but who makes it hard….its none other than our government officers who are delegated this task. Let me see if I can lay out the difficulties of applying for a business license and I am simply talking of a small business.

    First, it is really difficult to even get a for to fill up. They say very harshly it is on the website but why cant they give out the already printed ones lying on their dusty shelves. The regional director is no less than a minister in tehat region and it is super difficult to be able to see him for some advise. He is playing hide and seek most of the time. The most common excuse is that – he has gone to the ministry for a meeting. His lunch breaks are forever. Once he is not there, the other staffs are on holiday too.

    Ok, got a form what next – it is the police clearance which is another feat. You have to know someone there or know a police officer and then you get the clearance quite immediately and if not you wait for weeks. Then comes the time to go to respective Dzongkhags to get their signatures from gups, Dzongdas and worse the committees formd in the Dznogkhags. Most of the time the committee is to meet only once a week and if you miss that you have to wait and even if you made it during that meeting, your papers are kept pending as they ahve to clear backlogs of clear papers that have come through another channel.

    Then comes the requirement to write a project profile. They do give you a guideline for that but it is most of the time rejected even without reading it. However, once everything is done, we have to again polish the staff incharge to put it up to the director for a signature if he is in the office. Now, we have obtained thelicense with a neat photo of yours clipped on it. Looks nice but the challenge is not over. We ahve to go to teh city corporation to get clearance to allow us to set up our offices in a particular location & area.. That is one place where I dread to go for any work. All are corrupt and nobody works there. You will see them (officials) moving from one desk to another trying to do some work or trying to clear some back log but guess whose work…it is all for people that they know and are helping. There is no system of transparent reporting or queue for that matter. Nobody sits on their respective desk…you will be surprised that they are all in the office but just moving around in circles as if with great urgency.

    Actually, I don't have the energy to continue bitching about our system of trying to do business but it surely sucks and BCCI is of no help. What is BCCI doing anyway? There is no system there either….

  2. Anonymous says:

    What has been posted above as some of the difficulties in doing business in Bhutan are absolutely true.

    Obtaining a licence in Bhutan is extremely, extremely difficult. If the LOO and the myriad Parliamentary Committes are so concerned they should study the current procedures and do away with some of them which are intended merely to ‘test’ people and harass them.

    The Regional Director in Thimphu behaves as if he has a ‘license’ to harass people. Creativy and entrepreneurhsip are extremely sesitive issues. People who have ideas should be facilitated to try them. In Bhutan the opposite seems to be happening! Before a person can collect all the papers, a major part of his enthusiam is waned. He even gives up his proposal.

    Sir, we donot need any magical turnarounds to improve things. Just implement His Majesty’s vision of simple and effective services to foster the development of the private sector.

    At present, the services (rather the lack of them!) are provided as if it is a huge huge favour done on the public. Civil servants must change their attitudes. More so, those in service sectors like RBP for NOC, Home Ministry for ID card, and MTI for license. I have seen that Bhutanese people are extremely down-to-earth and friendly. But, what happens to those in these offices? Are they briefed and trained to behave that way before they are assigned in these jobs?

    So sad, yet true!

  3. My Suggestion would be as follows:

    1 : Number one and foremost; It’s about time we introduced some form of STANDARD OPERATING PROCEDURES in our system. Every single detail should be considered, starting from how a form for a business license can be obtained to finally getting down to the actual business. Understanding from the anon comment above, and from my own experience, our system is functioning on a haphazard mannar, pushed forward only by immediate necesasities.
    Having a STANDARD OPERATING PROCEDURE in any system is crucial for increasing efficiency,customer satisfaction,cutting down on waste, and achieving set short term goals which eventually leads to realizing the long term goals.

    2 PROFFESIONAL CUSTOMER CONDUCT.
    If you go to any office in Bhutan, you will find that the desk is either unmanned, or the agent is chewing doma and merrily chatting on the phone. The term “Meet and Greet” has never been taught to any of the agents/officers. They instead expect the customer to greet them with all the traditional flowery words. If by any chance they extended some greeting, it would be “Gachi Mo?” or rather a snarl. Personally,my worst expericence was I got the answer “I DON’T KNOW” without any effort what so ever from the officer. Now, I as a proffesional, do not expect anybody to know all the answers, but I would politely admit that I do not know the answer, and offer to find out from my superiors or, promptly direct the customer accordingly to the next level. At no time or point should any customer go back home without an answer from any office and at the worst, with out a follow up date.

    3.Government Regulations.
    The government should be more flexible with the trade regulations and deal with the problems that you have already detailed. Also, the concerned authorities should proactively look out for such international ratings and statistics and take it seriously. Let’s not forget our population is merely under a million, and our claims of being over burdened can sometimes point towards or lazziness.

  4. Oh, I felt it necessary to mention a point about customer service.
    Most of the Bhutanese are now travelling to Bangkok for vacation or business purposes. Now,the first impression every body (knowingly or unknowingly) brings home is their arrival at the Bangkok International Airport. Let’s look closely at the Customer service. Smiling faces, prompt answers,clear directions,helping hands,detailed and repeated announcements,.. etc.. You feel like a king and at home,.. right?. Are they always that happy? Think again,they are seeing millions and millions of tired, stressed or lost faces on a daily basis.
    Bring it back to our Airport,or a bank, or a government office. Why are our staff so tired, or stressed, or just not happy?
    Self Motivation! They lack it.
    It sure is not rocket science to smile and be helpful. Nor does it take immense funds or the latest technology. It’s something that everyone can cultivate from within and shine naturally.
    Thank you.

  5. Anonymous says:

    I still maintain that business is difficult for ordinary/common/small people only. The procedure and formalities are all in place to deter us small smart people from doing business. Can anyone deny that? Look around. Who owns all the big businesses? Who has taken all the best locations? See the connectedness among the owners of all the big businesses. Look at them in chronological order. I wonder if they even pay taxes.

    And, like one of the anons said, the BCCI is a facade. I happened to visit their grand looking office to enquire about something and I thought I had entered a deserted town.

  6. Anonymous says:

    I agree with Lobxang that ‘customer service’ in govt offices is really pathetic.

    Sometimes it is the Director who has suddenly disappeared. You ask the PA and you’re told “Mashey.” But, most times, you are made to go round a mulberry bush with one officer telling you to go to another and so on. The civil servants are famous for ‘passing the buck’, it seems. Really pathetic ……

    And, they exhibit their worst character when they are requested for information by a consultant or any other business person. They make a whole range of excuses and at some point you get a feeling that they are jealous of your position. They want out but do nto have the courage. And, you can’t even talk to the subordiate staff without the permission of their Chief. Talk of decentralization …Talk of individual empowerment …

  7. Exactly! doing business in Bhutan is soo difficult and it is my personal observation as well. We seriously are going wrong somewhere? isn’t it the role of the govenrment to identify this issue as a priority and tackle asap cos this would be a solution to so many problems we face right now, especially unemployment among our youth. Tackling youth unemployment has just become a mere rhetoric…what are we doing about it??? employment cannot be generated unless we make businesses happen and grow. Civil service has reached a saturation point…it canot grow any furhter than this. I feel we are not coming up with right policies and environment to let businesses start and prosper we are losing out so much on our opportunities to make use of our vibrant youth. if we do not jointly look at the problem and do somthing about it…the youth unemployment problem is going to be a very serious matter as it could rise to social unrest…and i feel that ability to do business in bhutan is strongly related to this issue…

  8. Anonymous says:

    Sometimes,I wonder if the government – both old and new – is even interested in the country’s growth. It appears as though they want farming to be a passed down trade forever and business also a passed down trade among the rich. We’re not living in the old feudalistic age, are we? How can we grow without wider business opportunities? How can we say we’re democratic without equal opportunities for all? I don’t think the role of citizens in a democratic system is only to vote. I think people vote with the hope of their interests being protected. The government is accountable to the people and if people raise their voices, it is the responsibility of the government to respond (not react or retaliate or lash out).

    Even farmers can be progressive with big business ventures. Even traditional handicrafts people can become exporters with the right kind of input and process in place. Why do they have to be dependent on Thimphu business tycoons to sell their products? Who takes the bigger share of the profit from that? Who is exploited? Who is being fooled?

  9. Bhutanese Blogger says:

    http://www.doingbusiness.org/exploreTopics/StartingBusiness/Details.aspx?economyid=24

    This link says that it takes upto 8 months and 8 steps to start a business in Bhutan. 8 months is an incredibly long time by any standards. As expressed through the comments above, I can see how difficult it is.

    To foster entrepreneurship and creativity, and to invigorate the private sector, there is an urgent need to see facilitate individuals wanting to start businesses. It means more employment and contribution to the economy.

    Most of the organisations have access to IT facilities, some of the clearance procedures can be simplified. The MTI and the BCCI should ask if the procedures are absolutely essential? If they are, what can be done to reduce the processing durations?

    I fully endorse the poor customer facing attitudes of our friends in the public sector. Forget assistance in developing business plans from the BCCI and the MTI, you don’t even get a good response when you have queries. BTW I am available to discuss any business plans or ideas that our friends might have (and the help is absolutely free).

    We need a major revamp and I don’t think it will be expensive. But it will be difficult. Much of it depends on how the leaders in the organisation lead their teams and conduct themselves.

  10. My comment is not directly linking to business – but as Karma said – even the famers want progress

    this reminded me of the proposal of making a heritage village in Trong,Zhemgang. To satisfy the someone’s bright idea they have nominated a place where they themselves don’t live. Who is to decide that a whole village must continue to live in the middle ages and suffer from health and other problems due to prohibition to upgrade their homes. The land value will surely decrease and instead the govt suggests these people are being given ‘opportunityi and are ‘ungrateful’!

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  1. […] In “Getting down to business” we looked at the ten dimensions of doing business that were covered in Doing Business report 2009. Six of the ten areas needed drastic improvements if doing business in Bhutan were to be made easier. […]

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