Really hard business

We may have lost the elections. But I still read our manifesto every now and then. It reminds me of our promises. Reminds me to serve with humility. And to walk the talk.

The following article is a “box” from our manifesto. Enjoy.

Doing business isn’t easy anywhere
But, it’s really hard in Bhutan!

The World Bank has been looking into how easy it is to do business in 178 countries, from Afghanistan to Zimbabwe. Laws, regulations and their enforcements are evaluated in each of the following 10 stages of business companies’ life:

1. starting a business
2. dealing with licenses
3. employing workers
4. registering property
5. getting credit
6. protecting investors
7. paying taxes
8. trading across borders
9. enforcing contracts
10. closing a business

Doing Business 2008, the fifth annual report on this investigation, ranks 178 countries on the ease of doing business. Singapore is at the top, followed by New Zealand, USA, and other industrialized countries. No surprise. Democratic Republic of Congo is at the bottom, along with a number of other African countries. No surprise there, either.

Bhutan is ranked the 119th out of 178. You might say “no surprise!” But, we do worse than some African countries (Zambia, Uganda), parts of the world badly affected by war and internal conflicts (Pakistan, West Bank and Gaza, Sri Lanka), and distinctly worse than Bangladesh and Nepal. Surprised? We should be.

It is really hard doing business in our country, especially if you are small or self-employed. No wonder the private sector is not flourishing. No wonder the young people are having a hard time finding jobs.

Bhutan is particularly weak in areas such as trading across borders where we are ranked 149th compared to India (79th) and Bangladesh (112th); and in access to credit where we are 158th compared to India (36th), Bangladesh (48th) and Nepal (97th).

These statistics beg the questions: why is government standing in the way of Bhutanese doing honest business, generating income and creating jobs? And how can we expect the private sector be the “engine of growth” in such a hostile environment?

Doing Business 2008 including its country results is available to anyone at http://www.doingbusiness.org/. Reportedly, it is taken seriously by investors looking for business-friendly countries.

 

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Comments

  1. Our government as such does stress a lot of importance on private sector growth, well at least in the written documents. I think a lot of things have to be in place in order to facilitate private sector growth. Our education system needs to evolve and need to teach students to be more creative and entrepreneurial.
    And also we will soon have the Economic Policy in place, which is suppose to further facilitate private sector growth.

  2. Bhutanese Blogger says:

    There is similar report called the ‘World Trade Indicators – 2008’ published by the World Bank.

    Link is too long to be pasted here. Google it out. It provides a measure of trade liberalisation by different countries.

  3. Dear tchoden, it sounds like you aren’t in business…

    Try it, you’d be shocked. Too many “things” are already in place — in the name of private sector promotion, but doing just the opposite…

    Oh, by the way, various academic research has shown that educational background has little to do with business creativity and entrepreneurship. And, once you get your business going, it’s the network of people-to-people support, not education, that makes a successful business.

  4. Anonymous says:

    I agree partially with Zekom, some of the world’s most successful entrepreneurs had hardly any education at all, John Harvey Jones, Sir Richard Branson..
    Necessity is the mother of invention, and many countries have found that those who are denied access to mainstream jobs (civil service, armed forces) tend to be the most inventive business people.

    However, I’m not sure that I’d want to listen to the WB on face value, considering all the strings they attach to loans for business and economic support – I mean structural readjustment and privatisation are some of the approaches they advocate and they have had devastating effect in many countries. WB and IMF have their own interests at heart and use their power to impose it.It was clear during the initial days of the financial collapse last year – finland and some small eastern european countries consciously opted not to take bail out loan from IMF due to these constraints.

    Yes – the past and present government has not focused on this area of society and there is not a clear enabling enabling environment. Inititaive is looked upon with suspiscion instead of encouraged – ‘ooh – they must be dabbling in corruption if they have found a way to make a profit’

    They (govt) confuse themselves and us and waste peoples time and money in waiting..new media..movie industry..inventive tourism..homestays..

    There is one other flip side though- sure, if the environment was there, maybe some really good ideas might come out – but there is still the issue of our attitude to service. see kuensel forum. Unfortunately the interesting comment got stuck in a thread on something else – but see cure’s contribution, Mon Jan 12 under thread by Raul, ‘story of pathetic nurse’

  5. Anonymous says:

    like everything else, i guess in this area we are slow too…. we also know what foreign investors did to most of these other countries too….. so i guess, there’s a caution needed …..
    i sometimes like to look at the better side too… look at what we have that most others don’t…. afterall its balance we are looking for !!!!!!

  6. Bhutanese Blogger says:

    I disagree with Zekom..

    It takes more than networking to make a successful entrepreneur and business. Risk management, analytical and leadership skills are some which are as important. But my point may not be valid if networking alone works in Bhutan which would be a sad realisation)

    Yes, few entrepreneurs (may be 100 .. there are millions of successful enterprises) have become successful without education but research is inconclusive and scanty to corroborate this. Of course our discussion would depend on what we consider education and business success.

    I agree with what Anonymous 09:30 that we should learn to question the conditions that come attached with assistance from the WB and IMF. He rightly identified the case of Finland. I always think that we know our ground realities better than some world bank official who spend a few weeks in some village in Trongsa and conclude that a road is not beneficial.

  7. Anonymous says:

    Bhutan is a country ruled by few elites. In the west, there is no such thing as licence requirements except in business sectors that are highly sensitive like defence and aviation. The reason I belief Bhutan has licence requirement is to keep profitable business away from common investors. Look at the business house in Bhutan. Who are the big players? People like you and I do not have access to information, but the elite have. For example: all these resort hotel projects were initiated before the FDI policy of 2002 because these people know what is going around. The sad thing is that all these business ventures in Bhutan are undertaken by incompetent people who only know to take commissions and not actually create a company that adds value to the country. The only company that does something for the economic, I believe, is Tashi group. The rest like Bhutan steel and Singay are there only to take advantage of their position!

  8. Anonymous says:

    And remember Bhutanese business house do not know the meaning of corporate Social Responsibilty (CSR). Eg, Bjimina quarry. The NEC is headed by someone who probably doesn’t understand the meaning of sustainable business development for he didn’t bother to check what was happening in bjimina: I understand many residents cannot ven do basic things like drying chillies because of uncontrolled sands blown from the quarry site.

  9. No wonder we are ranked so low in terms of boing business index. Picture this….A business person walks into a government office to process a paper and the first thing he does is look for someone he knows within that organization because sadly going by the normal rightful procedure doesnot get one anywhere. Be it the Directors, bve it the heads of a certain unit, be it some officers – they are all same in the sense that you have to be recommended by someone connected to get that paper signed. COME TOMORROW is indeed the favorite phrase all the government officers use for a business person. Sometimes, one cannot even get a chance to peep in and hear that COME TOMORROW phrase as they are busy entertaining people they know with tea and gossips. By the time you realize, the time is over and he walks out without even acknowledging you at the door.

    I am still hopeful that such scenarios can change if the democratic govt. come down strong on such ill practices. But will it ever happen…. will we ever see any streamlining and change in the mindset of so called government employees….it is yet to be see and of course much desired…

  10. Anonymous says:

    Small people have much less access to big business and other ventures. That is a fact and out in the open. We just turn a blind eye to it and choose to shut up, as in “see no evil” “hear no evil” “speak no evil”. We are Buddhist after all. According to the 2005 Census, 97.3% of us are either happy or very happy. A few are perhaps happy for having accumulated wealth and the rest are probably contented with what they have. Business or no business ……

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  1. […] 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 […]

  2. […] let’s look at what we know. In “Really hard business”, we talked about how difficult it was to do business in our country. The World Bank’s Doing […]

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