Crunch time

A severe rupee shortage threatens to cause an economic crisis. But the government is in denial. As recently as last week, the finance minister blamed the media for blowing up the issue.

On the other hand, the RMA governor has declared that, “we have no money.” And he has already stopped issuing rupees to commercial banks. He has also warned that we can no longer sell our foreign reserves to buy rupees.

The RMA has had to borrow rupees to allow for the import fuel and other essential items. But traders are already complaining that they cannot do business. And industrialists worry that they won’t be able to import raw material.

Ordinary people are also being affected by the rupee crunch. Mr Vinod Kumar, for example, sent me this self-explanatory email, which I’m reproducing here with his permission.


I am a teacher working in Rangjung HSS. I am an Indian working in this kingdom for the last 7 years. I am sending this mail to draw your kind attention to a serious issue that we are facing. This month when we (expatriate teachers) went to the BOB Trashigang to send money to India, BOB officials told us that sending money to India is not as easy as before. They told us that the RMA has put some restrictions to send money to India. They told us that we need to register first and after 7 days if it is approved by RMA, then we can send money. We are here leaving our family behind to support this country and make a good future for us. If we are not able to send our hard earned money to our beloved ones, it is a disheartening thing. On them other hand, BNB so far did not get this type of circular from RMA. So please look in to the matter and if sir could make the money transfer of the civil servant as before we will be grateful to you sir.

Thanking you


Facebook Comments:


  1. Kelpazangla says

    While it is a pity on the expatriate teachers who are truely for our nation building, one cause of Rupee crunch is because of the constructions including hydropowers and the sky rocketing allowances paid to the hydropwer expatriate workers. Replace expatriate workers in hydropower porjects with Bhutanese, the Rupee crunch and unemployment will be killed togther with one stone.

    Cross check our hydropower harnessing targets!

  2. the way bhutan’s finance ministry is run even a jackass would do better..but then, it is there for all to see that we have a moron like wangdi norbu holding this portfolio..the man could not comprehend tax legislation & was the reason this government & country saw him & his party lose an historic constitutional case..there’s a crisis with rupees & he has no answers..he’s happy to quietly allow greedy mps a double quota to import cars..
    it’s no wonder ol called for wangdi norbu to resign as finance’s no wonder this idiot is dragging the country’s finances into the gutters..

  3. Dear OL,

    Really touchy subject. We all have memories of our dear Indian teachers and the likes. The issue needs to be resolved at the earliest.

  4. Dear OL,

    Sheer failure of RMA to forecast the future implication and short shortsightedness on the part of DPT Gov. on rupee crunch will have now ripple effect on the developmental activities. Ultimately, common citizens will be affected & economy of the country will dwindle.The relevant organization like RMA&MoF has failed in their responsibility.

    Now,time has come to look for the intelligent solution to the rupee crunch. Restricting issuance of rupee to commercial bank is not an option.
    Therefore, both gov. and opposition must take responsibility to find sustainable solution. Its enough of blame game.

  5. OL's Disliker says

    Frankly, I didn’t vote in 2008. ButI am diehard fan of Prime Minister. I really believe, keeping my life on line, that this government is trying to keep electoral promises. I think OL is a detractor which you are.

    Having said that this development activities have eaten our reserve and we are spending more than we can hardly earn in near future. The starved Nation on its feet will be far better than well-fed nation on others’ back.

    This situation is where OL can face such difficulty in having meaningful debate as there is only two opposition members in the parliament. Best of Luck for your concern.

    I don’t want DPT to lose but if you win next election, such situation has to be resolved without delay. As i said i am DPT fan but I would love opposition to at least have 20 members.

    It is also time opposition wake up and draw alternative policies as you never know the golden opportunity that awaits. In 2008, both parties have same aims to implement 10th five year plan. What PDP lacked was leader that could connect with people. PDP also failed to elaborate the 10th five year as did by DPT. For an instance, DPT says, ‘I will build a road from X to Y’ whereas PDP just says, ‘we will build road as per 10th five year plan’ as if people know about plan.So elaborate and explain your policies to the people.

    Coming back to Indian teacher, i hope you help him by any possible and legal means you can.

    Finally, i hope, our government rethink its development goals. There is no use being leader of beggars. I would rather be a s independent loser than being a leader of beggars. The DPT must not think from point of losing election, it should rethink from the POV of nation.

  6. Every where rupee crisis these days! i know this problem will have many implications in the future too.

    partially rupee crisis was due to some inefficient leaders at the top. they were only thinking of the present and protecting their own heads rather coming together for the solution. They knew it few years ago but they let it like that.

    Now the problem is becoming serious and our country’s economy is already in a thick soup.
    we are afraid becuase central bank (RMA) has said there is no money (Rs).

  7. it is nothing to do with hydro power construction. whatever they are spending is from loan and grant that they get from india in the form of rupee…….

    while, gov and RMA should be blamed for being very shortsighted, we should now look for a solution, and probably, we should share our ideas and views to solve this issue…

  8. My suggestion:

    we should stop or suspend import of Indian made cars and vehicles until such time as rupee reserve reach desirable level.

    we should switch over to wood, mud and stone for house construction instead of steel, irons and cements

    we should suspend pilgrimage to holy sites in India; instead promote local visits to local holy sites

    We should develop habit of eating maize and potato as staple instead of importing Indian rice

    We should increase intake capacity of educational institutions within Bhutan so as to lessen rupee flown out to India for our children education

    We should limit VIPs and Government officials visits to India–unless it is absolutely necessary.

    We should limit import of Junk food from India and promote fruits and vegetables cultivation in Bhutan

    Our youth and unemployed must be made willing (increase daily wage in Nu. and provide them good housing scheme)to work at road, construction and other activities to replace Indian labors

    etc. etc

  9. My suggestions…

    1) Ban all junk foods and stupid sweets

    2) We should not have started all the hydro projects at once….putting all eggs in one basket

    3) Minimize Indian workers ( Increase the daily wage and let Bhutanese work, but also lets make sure they are treated with dignity such as providing liveable living conditions, and other small benefits)

    4) Stopping Rupee Issuance is not the solution at all….it’s going to affect everyone sooner.

    5) Why do people travelling to India be put in Luxury hotels, let them use ordinary standard hotels..expenditure will definitely be less….


  10. Stop hiring consultants like McKinsey & Co.
    Stop vehicle imports for 3 years
    Stop import and sale of junk items like waiwai, chips in tetrapacks.
    Stop urban construction activities for 3 years.
    Do away pool vehicles.
    Cut down chadies for all except for the Royal family.
    Cut down all unnecessary official dinners and lunches except for the head of the govt and the Royalties.
    Foreign travels should be strictly protocol and need based.
    Stop import of dairy products and encourage local production.
    Increase and encourage farming, dairies, fisheries.

  11. Rupee crunch is a wake up call for all sections of Bhutanese society, particularly for people in decision making position. We should not panic. We must approach the problem through serious consultation, keeping our cool and restrain from finger pointing.

    Government should constitute think tank groups in all Ministries, especially in the MoF to advice on macro economic policies. Government must not rush with macro economic development policies such as construction of farm roads, airports, IT park, education cities, dry port, industrial zones without proper research on resources implication, sustainability, economic return, geographical feasibility and effects on environment and culture. It is sad to say that some of these grand infrastructures like airport and farm roads are under utilized that are built with heavy costs. Economic development without economic sustainability and return is waste of resources.

    We must live within our means. Unnecessary borrowings from Banks and financial institutions for house construction, purchase of vehicles and Luxury goods etc. must be kept as minimum as possible until we reach a stage where our income can repay such borrowings. When we have too much money in the market it pushes up inflation and reduce the value of money.

    Government must invest on small scale sustainable less energy intensive economic activities that have comparative advantages in the regional and international markets such as tourism, organic food processing, exotic handicrafts, alternative energy sources like solar, wind, mini hydro-power and bio-gas.

    Public transport must be improved so that people will not invest in individual cars that not only pollutes but consumed fossil fuels, which are imported. Recent news on electric bikes and small cars is a good news and such enterprise must be encouraged.


  12. While I was watching on the show with the Governor of RMA, I instantly recollect OL question on the rupee cruch and bail out by the govt arguing Bhutan has enough to sustain 12 months. DPT always say dont panic and dont worr. When disease outbreak Dortors say dont panic. Isn’t to be worried.

    Govt will worry only when PM starv but when is PM going to starve. After how many centuries.

  13. Typical DPT strategy.

    They are running out of ideas

    Druk Rangdhen Tshogpa Gyalo……let people suffer!




  15. Straight drive says

    Honorable OL,

    Bhutan need to think about using locally available resources for various types of industries if such senario needs to be avoided in future.

    We need to reduce main power supply from India and instead make ways to employ our unemployed population, be it in education sector or construction sector.

    We also need to seriously think about processing our raw materials into finished products, especially in seasonal goods like fruits and vegetables.

  16. Straight drive says

    I think you need to do all that are listed down by Thinlay his/her two posts. These are very pertinent points to be taken note by the ruling DPT as well as all citizens

  17. I will fully support Thinleys comments and suggestions appear very rational.

  18. Tshering says

    I agree with Thinley on the various reasons and probable solutions to the rupee crunch. Selling of hard currencies from the foreign reserve by the Central bank is just a short term solution. How long can a freeze on remittance and other transactions be continued. These are all short term solutions. Government should stimulate the economy of the country by promoting start ups, entrepreneurs, innovative ideas, venture capitals, etc. Honestly, there is no motivation from the government at the moment. It seems that the govt. is too dependent on the central bank but the monetary policy cannot alone solve this long term problem. I find more of a loop hole with the fiscal policy.
    This rupee crunch comes in as a forewarning of a huge trade deficit in future. Let’s learn something from the Greek economy.

  19. lets work hard says

    Dear OL… now is not the time to point fingers and play the blame game. Please lets work together (Government, RMA, opposition, people of Bhutan) in coming up with solution to solve this problem. I am sure you have some good ideas to solve this problem . Please put your effort in working with the government. I am sure they will welcome your ideas.

    I am sure that if we work together, we can surely come out of this crisis. And i hope we all learn out of this experience.

  20. We must stop out sourcing everything to India. Stop sending Govt. Employees on training to enhancing their skills to India. We have capable Pvt. Institute within our Country. Stop collaborating with Indian Education Institute leaving our own pvt Educational Institute bankruptcy. Tell Financial Institute to stop car loan, lots of Bhutanese are getting killed.

  21. I agree. WE need to work hard and we need to work together to come out of this crisis. I think the citizen will need to cooperate with the Government and the Government (our economist) needs to come up with a good solution. There is no such thing as a perfect solution but we need to do something urgently and immediately without any denial or looking for a place to blame since that will not solve the problem. I hope we come out of this crisis strong. There are so much to be done. Lets WORK HARD!

  22. This is what happens when the government doesn’t listen to its people. This is the result of our government’s habit of making excuses, denying reality, and doing nothing serious about it even when the Governor warned them about the emerging dangers of rupee crisis. OL warned the government and wrote about it several times in this blog and also warned the parliament about it. They made a joke of it in the parliament and many MPs openly criticized him.

    Many of you say it’s time work together and come up with ideas and solutions. BUT do you really think people in power will listen to us, the media, and the OL? We’ll have to hire another McKinsey if we want people in power to listen to ideas and suggestions. They’ll never listen to our own people–no matter how sincere and sound the ideas and suggestions may be.

  23. I just can’t help wondering why you opposed the idea of increasing vehicle tax. Had it been implemented the no of vehicles imported would have reduced resulting in so many benefits – increased income, less outflow, good air etc.
    Just because the constitution says so is not a good reason to attack. Constitutionalization is more important than constitution. By which I mean we should debate and interpret so that good decisions prevail.

  24. INVISIBLE says

    Government is “micro-managing macro policies” and that’s where it is going wrong.

    Moreover, it is a MAN-MADE DISASTER (or rather politically created disaster through political capture). Government should be managing Fiscal Policy, not Monetary Policy. When Government manages Monetary Policy through Political Capture (Read: Governor as political appointment rather than appointing an economist), this is what happens – it is called “Killing the goose that lays golden eggs” rather than managing to have golden eggs properly. Or its Bhutanese version would be “Killing the red cow that gives good milk and eat it as meat.”

    One more thing: More people need to give a closer look at our trade statistics (I did) and see which SINGLE billionaire business overtook tourism in terms of export and even almost caught up with hydro-power as one of the biggest exporters to Hong Kong or wherever earning huge dollars (Hint: a software company) – my hypothesis is since this business is a fake business (though legitimate through Government’s political capture again), billions of rupees from our reserve must have gone to India, and no one raised the siren. Is it because we have political appointment in the Central Bank?

    Did someone say Central Bank has to be “independent” of the Government? Yes, you got it right!

    Did someone say Government should manage Fiscal Policy better and not crowd out private investment? Yes, you got it right too!

    Did someone say one SINGLE billionaire superficial business is messing up our macro policies and even screwing up our GDP per capita calculation (rest of us are artificially but legally made richer due to one or two families’ huge income effect)? Yes, it is!

    It’s time our generation wakes up and refuses to be the Silent Generation before we send our preciously inherited nation down the drain. At least, I for one would refuse to do that when this precious nation is crafted by bare hands of our generations of Beloved Kings.

    This issue is above politics. It should concern us all.

    What about you?


  25. Hi Invisible,

    That was an incredible explanation.
    Dose Bhutan have a fake software company?
    How did our country reach that level of sophistication where we have now begun to do business in software? And I am amazed to know that this software business has overtook tourism.
    Coule you shed some more light on this business. Who owns it and who runs it?
    The more I think about it the more I am beginning to doubt that this is the main culprit of the crisis that we are going through right now.

  26. INVISIBLE says

    Dear Bingo and others,

    To validate what I said earlier, even today’s Kuensel (March 12, 2012) editorial even in its MOST RESTRAINT or beating around the bush tone (read: Kuensel is pro-Government in general as Govt has 49% shareholder in it) has the following to say on this FICTITIOUS SOFTWARE COMPANY (owned by our PRIME MINISTER’S EXTENDED FAMILIES):

    “But there are also leakages within the system that is one thing in the books and is another thing in reality. A key point here is business fronting, where the Bhutanese license holder lives off a good commission for basically doing nothing, but the chunk of earnings goes with whoever puts in the money and does all the work. The central bank is probably aware of this, be cause a confidential study done in 2008 had enough evidence to show that two plus two was only adding up to one.

    Today, the software export business continues and, on paper, is bringing in billions, yet everyone knows that it is a mere front, but the government does not want to do anything about it, because taxes are being paid and rules are being followed.”

    I repeat this is above politics when our people at the bottom of economic pyramid are panicking and starving. I work for the INVISIBLE PEOPLE of Bhutan and anything that slowly starves or drags them to death, I will rise up and challenge. We must all rise up and challenge when crisis happens through political corruption, political inaction, political complacence, political eloquence, political “Don’t worry, Don’t be alarm” sweet talks when DATA and HARD STATISTICS show we are screwed up and screwing up more through those sweet talks.

    I put all our public available macro data and trade statistics through RIGOROUS analysis by a group at Harvard, and I must say I was BRUTALLY ashamed to learn from that Bhutan should next move to make SWITCH WATCHES precision parts because Bhutan having software export as the SECOND biggest export after hydropower overtaking all tourism sectors combined is what macro trade data shows….its implications from our GDP per capita calculation, availability of grants and loans from outside…etc etc everything is affected.

    At the more human level, an average middle class family has to go across the border town and buy money by money (buy Rupees 50,000 with Nu. 55,000) to fund for college going child when billions of rupees are leaked through a fake fronting software company. When an average middle class family needs to take a mother for treatment at Bangkok, RMA gives only a few thousand dollars on air tickets when a big business can get millions of dollars for importing cars for sale. Our generation needs to correct all these economic malaise. It is worst when PM only talks about GNH and lets things rot under his own watch, knowingly!

    I mentioned how it affects average middle class families. Let’s not even talk about how poor and invisible families are affected.

    I am not only deeply concerned, I shall challenge.

    I say again. This is above politics.

    For those who are DPT supporters here, I say I have two of my own immediate families as DPT MPs. I will work to vote both of them out in the next election unless they refuse to be “Yes Man” to their PM and give right advice to the PM to correct the PM (to not to harm this precious nation).

    For those who are PDP supporters here, I say my enemy’s enemy is not my friend. Just because I say DPT Government is screwing up the things does not mean I am endorsing PDP as alternative. That said, I must acknowledge OL is asking right questions in the Parliament.

    This is a issue dear to my heart. It concerns the nation. It is above politics. I am concerned. We all must be concerned.


  27. Hi everyone,
    i think its an issue which most affects our country at the moment and as much as i see the reason for this issue to be politicized, i do not think and i do not second it to be right for people to go beyond the subject and discuss the details of each party’s strengths and weaknesses.
    What is importtant is, how are we as citizens affectd? how are we as constructors hold up? and how are we as Indian partners made to feel miserable?
    More importantly, i think it would be wise to send in proper and do-able feedbacks to the so-called stagnant leaders.
    If you may realise, the recent ‘measure’ the governemnt as it has put to this, is not something that will lift today’s issue.
    It’s for future reference.
    And from what i know, i think, we owe it all to the country who has given us free and quality education. Let us be kind with words to prevent this issue turn into a Crisis for the country and the people.

  28. Anonymuse says

    According to RMA’s latest annual report: Hydro-power is 35.5% of exports, Ferro-alloys 19.5%, and Recorded or Unrecorded media 7.3%.

    Like you, I’m interested in hard data and statistics. I’m curious where is this publicly available economic data that points to this software company that has “even almost caught up with hydro-power as one of the biggest exporters”.

  29. INVISIBLE says

    Dear Anonymuse,

    There was a huge (I say HUGE SPIKE) that even Bill Gates won’t be able to comprehend a growth spike on the analysis done on the RAW country data (not secondary data you just reproduced from RMA’s latest annual report). We analyzed using STATA program as well as other programs used for macro-analysis. I was overwhelmed by the SPIKE data of software (in some years it was categorize as media) that knocked off tourism (remember tourism is NOT a small export sector when we have more than 300 tour companies bringing in countless tourists).

    That said, even in your secondary data from the latest RMA (remember in the latest data this business almost stopped or slowed down or halted after a few subtle media reports) – even in your secondary data it shows “Recorded or Unrecorded Media 7.3%” of export. Let me ask one simple question: WHERE IS TOURISM? How can media export knocked out tourism? What is “Recorded or Unrecorded media export” that accounts for whopping 7.3% of nation export even in this SECONDARY RMA report? They are fake CDs/Disc recorded or unrecorded package by 18 or 20 class 12 dropouts in a secluded location in Thimphu (just happened to be near where I stay), exported legally out of paro airport etc. I am not questioning legality of this business. It is out in Kuensel and in other media as legal. My question is why it is legal if it is not political capture/elite capture when it distorts heavily our country macro data. When macro policies are distorted, we go into macro crisis. Rupee crisis is just one such example.

    Hope this helps. I will submit the detailed report at the right place. Meanwhile, I am also hoping the Government I VOTED correct its course without delay.


  30. what will happen owey? lets solve the problem and not balme the govt that we have elected.

  31. Its high time we Bhutanese should learn to “EARN RUPEE”. If we were wise enough, such problems would not have arise.

  32. Anonymuse says

    No it doesn’t help. Like I said before, I’m after hard data and statistics and you have provided none of that.

    In fact, in your previous comment, you assert that “Bhutan having software export as the SECOND biggest export after hydropower overtaking all tourism sectors combined is what macro trade data shows” even when RMA clearly shows that recorded media is a very distant third in terms of export value. You said previously that your statements are backed by “public available macro data and trade statistics” but again you indicate no source even after I asked for it directly.

    Bhutan’s economic problems are a result of deep structural problems, masked for too long by easy money. The rupee crunch is merely a symptom of the economy’s fundamental fragility.

    Simply put, spending more than you earn is unsustainable. Depending solely on the goodwill of your neighbour as your largest creditor, trade partner and donor all rolled into one is unsustainable. Borrowing even more short-term money to tide over this crisis without serious soul-searching, unthinkable.

  33. Dear Invisible,

    I appreciate your concern for our country I too share your sentiments.

    However regarding your claim about the “software company” being a leading cause for our current situation does not make sense.

    Lets be logical,even if the “software company” is a fronted company actually owned by Indians, how exactly is Bhutan losing money???

    The software or hardware? comes to Bhutan from India, so called value might or might not be added to it and reexported to Hongkong probably for a profit.

    The money gained from the transaction would be remitted back to India after paying commission to the Bhutanese partner.

    Overall are we not gaining more dollars compared to rupee lost????

  34. The RMA Governor announced that the public should not panic, things would settle down to normalcy soon.

    Mr. Daw Tenzin articulated himself perfectly well during the people’s voice show last Sunday.

    His defense of the RMA’s recent policy on the Rupee crises made lot of sense.

    While the austerity drive which largely centers into disciplining the Bhutanese people on their happy-go-lucky money usage habits has many takers by way of their expression of the larger interest to the nation, however, there are some genuine practical cases which if not handled tactfully may spark off public hullabaloo and take things into different directions.

    For instance, we are noticing few vested interest groups in cohort with the Jaigoan Business houses are here into mounting pressure on the nation in order to disrupting such long sighted policies.

    Our own banks for example seem playing into these hands of making the things tougher for the public so that it facilitates into lifting such rupee bans by way of public outcry.

    The banks are confusing the public into believing such moves as something of the RMA’s blanket approval of stopping the loan schemes in totality.

    Before people are misled, I think, RMA must issue stern instructions to their banks to be extra careful when dealing with the public in such situations and make sure they do not become party in blowing up the matter.

    One immediate positive aspect of such initiatives mean that our criminal leaning bank’s working habits would now come under the mainstream RMA’s scanner.

  35. Interestingly none seem to ask or loudly question the RMA and the numerous so called “financial analysts” both at the RMA and the DHI! Does anyone has a whiff on what their take home pay is?? You’d be awe-struck!! For these people to have not seen this looming would be the understatement of the century!!

  36. Dear OL,
    your argument on the rupee shortage in Bhutan and fiscal policy being the root cause would have been stronger if you could substantiate it with figures.
    In my opinion the linkages effect due to govt. investment in various sectors have contributed in private sector demand for credit and rupee.For instance,a simple fact is that after the commencement of project in Punatshangchu, the growth in the local economy in terms of pvt. constructions and businesses were triggered due to govt. investment in Hydro project.The govt. should realize that their is an intrinsic connection with the private sector spending and fiscal or budgetary policy.
    Now that RMA has thrown the ball to the Govt. after having exhausted all its ammunition,we are looking forward for concrete measures from the that we do not face such problem in the future.I perceive that the issue is here to stay for long if our Govt. do not set our economic fundamentals correct and we do need to make sacrifices now for better tomorrow.
    Politics should be kept aside and we all should think and work collectively and constructively so that our economic sovereignty is not compromised at the cost of our future generations.Today is the test of time for all of us and a wake up call for the Govt. to react with utmost caution and astute.It is also the time for our ministers and the PM alike to demonstrate their wisdom and competence.Our concerned agencies like GNH commission, MoEA and MOF shouldn’t rely much on the consultants,we do not need outsiders to tell us how to run our house.I observed that some of the people in these agencies have thrived and at times excelled because the consultants have become their google page.I truly wish that we keep our difference aside and work together in solving this problem,I guess we should look up to our forefathers ,who fought with the invaders with unity.

  37. There are two problems with the software company

    1. Non sustainable and un equal business model developed based on loophole in law:

    Bhutan is one of the few countries India has signed free trade agreement. Now how does software company thrive under this FTA? Softwares are imported from India to Bhutan for 0% tax, assembled in Bhutan for the “country of origin” to take effect, and then sold to countries like HK and Singapore. Why don’t the Indians do direct business with HK and Singapore? This is because HK and Singapore has more favourable trade agreement with Bhutan then with India. If they import from India directly, the import duty will be MUCH higher than importing from Bhutan. The reason why Bhutan has a favourable tax agreement with HK and Singapore is because we are a small and economically NON-THREATENING country. What are the problems for Bhutan to have such companies operating in Bhutan? This business model doesn’t employ Bhutanese people, and it make one single person very rich which is very unhealthy in long run. Invisible, you said this family is related to PM. I though it is Ugyen Tshechub who does the software business. How can we rectify this loophole? By directly reporting this to the HK and Singapore authority (this I think is the best and most effective method and I am actually working on it), by informing other major software developers in India who currently doesn’t follow the loophole method. I don’t think Bhutan government will do anything about it as it benefits people who are in power.

    2. How does this software business effects the common Bhutanese people and the rupee crunch?

    This is just my theory, not sure if it is correct. India software companies are probably investing in Bhutan under FDI rule. They invest in Rupees and under FDI rules investors can take their profits out in the money they invest in. Maybe this is why we have rupee crunch? It also should mean that we should have oversupply of dollars since HK and Singapore business people will pay in dollars. Now people in Bhutan who does this fronting business are very cleaver. They will take their profit in dollar and then invest in another fronting that requires dollar investment! I won’t explain in details but I can tell you that around 4 or 5 people/family in Bhutan are very very very rich even in terms of western rich standard. And both DPT and PDP are friends with these people. At the end of the day, all rich and elites in Bhutan are related through marriage – we should all be very careful. I am only going to vote in the future only if the party doesn’t have any relations whatsoever to the elites in Bhutan.

  38. Take the example of our forefathers who bravely stood on their on feet and didn’t even know the presence of currency. So, the question of collective responsibility comes here. We just can not leave the issue to be resolved by some people in governing body.


  39. Thank you Paro and Invisible,

    Your stories and narratives are opening me up. They are very useful information.

    Keep us informad and enlightened.

    Best Regards

  40. As for me a point as simple as i am experiencing now may help retain rupee.

    Whenever i earn, its always spend in Bhutan as i consider myself Bhutanese (Government hasn’t).

    Government has left out the provision to employ people of my category. My job applications are denied citing incomplete necessary documents as a Bhutanese. Well then i did not shy away in order to earn my livelihood and contribute to the nation , if at all i would get a job, from approaching the employers as a non-bhutanese, but fell short of all required papers again, as i had only the educational documents.

    The Government could at least make some arrangements to LET the LOCALLY AVAILABLE WILLING people work, instead of importing.

    We should involve diligently to increase our products / productivity.

  41. I agree with some comments above. RMA needs to be questioned thoroughly. Theya re supposed to be autonomous and they exercise their powers uselessly in the country regulating and making stupid regulations time and again not allowing the economy to grow positively. They sit there and jealously view the financial institutions as threat to themselves when they should be supporting. THE RUPPEE PROBLEM is created by them not being visionary enough. What can we say, after all the heads there are playing games and not serious in their jobs. The governor AND THE DEPUTY GOVERNORS at RMA should think twice and more of what their roles are and what they do instead of cracking un-necassarily on the financial institutions who are doing well on tehir own without regulation. SOLVE THE RUPEE CRISIS NOW…..

  42. Today’s Kuensel carried a story on the “software export business” that Invisible was referring to above….good, but unbelievable the final analysis, “All pigs are equal BUT some are more equal than the others”.

  43. Dear everybody,

    I would suggest if the Government could submit a proposal in the next SAARC Summit for a common SAARC currency like the euro so that we do not face such problems in the future. What do you all say? It will be good for countries like ours. Cheers! Pelden Drukpa Gyalo.

  44. Ahh, so my theory of rupee shortage may be right according to Kuensel’s article today. I don’t trust the government and I belief that “certificate of origin” will be issued easily. I require certificate of origin sometimes for my products exported to EU and guess what – the issuing officer sometimes don’t even look at the products. They just look at the commercial invoice and on that basis hand over the certificate of origin.

    The best is like I said before; inform the Singapore and HK authority. After all, their domestic software companies suffer because of bad practice in Bhutan.

  45. Some suggestions to help solve the Rupee crunch.

    * Cut down on the number of people driving around in huge SUV vehicles when most of the time smaller, more fuel efficient, vehicles would do. This would right away cut down fuel import bill and help Bhutan remain “carbon neutral”

    * Reinstate the Bhutan Lottery under strict supervision. How many rupees are we foregoing because Bhutan Lottery was stopped? It was totally irresponsible to stop this without taking into account the problems the shortfall of that many rupees would cause.

    * Employ Bhutanese on construction projects. To make this attractive we must set a decent minimum wage and good working conditions for skilled Bhutanese carpenters, electricians, plumbers, masons, etc. truly reflecting the skill and dignity of their labour.

    * Promote Bhutan as a tourist destination to Indians. Tour companies seem mostly interested in American and European tourists when there is a huge largely untapped market on our doorstep. Middle class people in Bombay, Bangalore, Hydrabad etc. are not aware of Bhutan as an attractive tourist destination.

    * To aid in this encourage Bollywood and other sections of the Indian film industry to shoot films here. If necessary waive the current fees to do so. New Zealand and other countries have found there is a huge increase in tourism when popular films are shot there.

  46. Rupee scarcity has been pointed out way back by OL in November 2008, and many sensible readers cautioned the government to bring about discipline in Fiscal policy–it seems advice was not heeded. Now, the RMA, rightly, has thrown the ball in Government court to rationalize expenses. Hopefully Government will listen, and come out with comprehensive measures to boost domestic primary sectors and lessen hardship faced by several people especially those who have to depend on Rupee for livelihood.


  47. INVISIBLE says

    Our generation of Kings and our forefathers/foremothers have sacrificed and built this nation with bare hands.

    Our youth generation cannot even get jobs with bare hands that pay decent wage/salary.

    Somewhere in the middle it is heartbreaking to watch and learn that our elite group can do business in Nu./Rupee 4.5 billion a year or Nu./Rupee 2.1 billion a year WITHOUT doing any business. In any respectable business schools around the world, they don’t teach this as business – it is simply money laundering – it is a crime to the nation. Or in development economics, it is simply “elite capture.” If it is legal, it is called “Political capture”/Political Corruption..etc etc….it’s Indonesia’s Suharto style of running the nation’s economy where everything is pegged to Suharto’s health. When Suharto was healthy, stock market goes up and when Suharto gets heart attack, their stock market simply crashed.

    But Suharto analogy will not work in Bhutan. Our K4 and K5 have been absolutely as pure as the North Star. Then, why rest of the people of Bhutan (people like you and me and us) allowing the Government we elected continue to run the country on sweet talks when macro-economy is messing up. I say this because with limited knowledge I have in macro-economics, managing people’s expectation is one component important in macro from inflation targeting to currency risks.

    But I am happy that Kuensel is talking, we are talking, and Government should close their eyes once and for all and save this nation for the future generation, for our children.

    I was pushing the ball to the Government’s court because I don’t at all blame the private sector because private people will always find loopholes and incentives to make profit….that’s how the market works on INCENTIVES. So it is a “Government failure” here that allowed those loopholes.

    That said, we should appeal to all those businesspersons to be considerate to rest of the vast majority of the Bhutanese society.

    When macro dynamics are distorted, there are many implications.

    It’s not just “software export” though that was the biggest that almost even caught up with hydro-power. Even Kuensel clearly mentioned software export was Nu. 4.5 billion and hydro-electricity export was Nu. 4.9 billion. To get the layman feel of the magnitude, tourism export was a peanut (but we have more than 300 tour operators bringing in thousands of tourists and creating one of THE most promising decent jobs for all kinds of people from tour guide to driver to hoteliers to vehicle owners to horsemen to yak herders….the supply chain is very diverse).

    Based on purely data analysis, I must caution that limiting “Certificate of Orgin” to Software is NOT enough. Because it is a fake business, it changes as you would like.

    One year it is called software, another year it is called musical instruments, yet another year it is called spices…..and that’s where our macro data is messed up. One cannot plan the macro-economic projections.

    For instance, how do you plan to give jobs to thousands of unemployed youth? If we have good macro-data, we can at least project some industry trends, growth trends, and hence jobs trends. But when I did macro-analysis with some of my friends (my interest was job creations for our youth – I wasn’t interested in money laundering or fake businesses’ business), I hit the wall because macro-data are all messed up. Time-series data are not reliable. For instance, macro-analysis data for jobs predicts Bhutan should go for SWITCH watch making since data shows we must be having high quality human resources shown by our SPIKE in software export data. That’s what Growth Diagnostics on Bhutan shows.

    So now how RMA is going to make analysis if data are messed up. How are we going to make jobs predictions for our youth. How are we plan for rural-urban migrations. Those are the areas I worry and I worry a lot.

    Another study that I did shows 77% of the total workforce of Bhutan are in the informal sector, an area hardly touched by economy policy (I read Economic Development Policy of Bhutan 2010) and hardly touched by Labor policy (ongoing draft National Employment Policy of Bhutan as well as National Human Resource Development Policy of Bhutan 2010). Basically, we need to align our policies with our realities….let’s give McKinsey Mantra a pause. McKinsey makes me nervous.

    On Shata’s comment on whether South Asia should have a common currency like Euro, it is an interesting thought. But limited understanding is no. Economics does not make sense. Even if it does, political economy in South Asia will not make such happen. That’s only my personal view…I know nothing on this.

    Sorry for my random rant. Nothing personal. I just have seen so much pains of those people at the bottom of economic pyramid – people I call “INVISIBLE” – invisible to those who are privileged and those who walk the corridors of power. It just pains my heart.

    At the individual level, Bhutan is a small society and I find every individual human and good people. But we always run into herd mentality when in group, and that’s where things go wrong.

    We must talk, and we should keep talking without malice. We can “rant” because we are frustrated and I hope those in power will forgive us for ranting.

    We must all work together and get the basics right.

    We must NEVER forget the basics: We have to stay united, work hard, save, and look after each other.


  48. From KOL: March 14, 2012 – Bank’s observing spring festival holiday showcasing their macho money power!

    FI freeze on lending

    Banks, etc., have suspended loans in accordance with the RMA circular

    Financial Institutions: As the government tries to rein in demand for INR (Indian rupee) in the economy, several financial institutions have also decided to stop sanctioning loans that relate to payments in INR for an indefinite period.

    The Bhutan National Bank have stopped all types of loans. T-Bank has suspended housing and vehicle loan and Bhutan Development Bank are providing housing and vehicle loans on a selective basis.

    The central bank’s circular last week said that it would provide INR for payments only for housing constructions approved before or as on March 8. The notification also said INR payments for import of vehicles, excluding public transport buses, will not be permitted.

    The Bank of Bhutan has not suspended any loans, except for what have been directed by the central bank.

    BNB chief executive officer, Kipchu Tshering, said several financial institutions decided to take such a measure, as they soon have to pay dividends to shareholders, which will lead to liquidity in the market and lead to more rupee outflow.

    “This suspension of loans could last from two to six months, depending on how the situation improves,” Kipchu Tshering said. “We haven’t yet increased our interest rates, but it will possibly increase if required.”

    T-Bank CEO Tshering Dorji said they are being very selective in sanctioning loans relating to payment of INR.

    Druk PNB has increased their interest on housing loan interest to 11 percent, an increase by 1 percent.

    Most banks levy a uniform 10 percent interest on housing loans, except for BDBL, which charges 13 percent on rural housing and agriculture loans.

    The financial year 2010-11 recorded an annual growth of 36.5 percent in the total loans of the FIs, from Nu 29.8B in 2010 to Nu 40.7B. “It’s because of the significant increase in lending to the construction and manufacturing sectors,” RMA officials said.

    Of the total lending, 25.3 percent was invested in building and construction, 17.5 percent in manufacturing, 16 percent as personal loans, 14.3 percent in trade and commerce, and the remainder in other sectors.

    By Passang Norbu

  49. Pel Yeshey Gempo says

    Passang Norbu wrote <<<>>>>.

    Amongst all the banks, why have the BNB decided to take such an extreme ruthless action?

    I do not know how my other fellow citizens view such an egotistical statement from a nationally owned public bank, but, to me, this statement in itself sounded more like a direct challenge to the RMA’s circular in particular and an insult to the Bhutanese public in general.

    If I read the RMA’s circular correctly, nowhere has there been a mention to stop all loans.

    Have our today’s public banks under complete intoxicated money power state of mind – grown way too powerful that such nationally important RMA’s circulars mean nothing to them?

    This is a serious matter and such lawlessness behaviors from any quarters be it banks OR anybody is not acceptable to the Bhutanese public.

    Freezing all loans for indefinite time period is synonymous or as good as the BNB remaining closed for that stretch of time.

    In that case, how will BNB justify their staff salaries and other perks if they strike without work?

    The Bhutanese people have now awaken to this reality hit – that of hearing for the first time of existence of bank accounts for such 4000 over non Bhutanese residents having over 2 billion worth of INR saved in our banks.

    Under what compulsion these banking accounts for the non Bhutanese residents were allowed to be opened in the first place? Was some kind of money laundering racket in active action then?

    The matter warrants to be thoroughly investigated by a high level team and the finding should be shared with the public.

    BNB owes an explanation both to the RMA and the Bhutanese public.

  50. with all graduates MP how no one could see this rupee shortage? it is really confusing to stop constructin loans.


  52. Somewhere I read that for every INR (RS) 80, one ends up paying Nu.100 in the market.

    If such statements hold water, then, with this statistics, the so called Jaigoan business houses make an easy plain profit of INR 400 million (40 crores) every 5 years from the 2 billion fixed deposit investments in our banks.

    Besides, every 5 years about 4 billion INR would move out from our banks as maturity payments against the fixed deposits be paid to the Jaigoan business houses by way of a maturity payment.

    Now, the nation painstakingly has so far been buying this hard earned INR from SBI by paying 10% interest on every INR and making them available to the banks by the RMA so that our national developmental activities moves ahead unhindered.

    Furthermore, what guarantee do we have that these so called fixed deposit investments from Jaigoan which our banks open-heartedly accepted in the first place are not black money?

    Just imagine, supposing if we have these over 4 billion INR intact without this Jaigoan’s fixed deposit factor, then, I think, today, we would not be even talking about this Rupee crises because our banks would still remain well stocked with the INR currencies exclusively reserved for our priority national development purposes.

    Obviously, there must be some Bhutanese players in this money laundering business who may be also the beneficiaries in this illegal business – because of whose self-centered actions – Bhutan today as a nation has been thrown into such huge rupee crises at the cost of the national security.

    Therefore, it is of utmost importance that we get to the root account of how this Jaigoan’s fixed deposit investment story first started in the Bhutanese banks?

    Of late, I have also seen some articles in the KUENSEL under the “MY SAY” column by some gentleman in the capacity of the BNB’s advisor.

    The article mainly forced the author’s view on why the Bhutanese people should not panic?

    The irony here is that it was written by someone of a non-Bhutanese initial trying his best into cooling the Bhutanese minds on the subject of the rupee crises.

  53. Invisible? No wonder he chose this name. He is making himself look like Chief Economist, and trying to be expert in Macroeconomic policy. In a way he landed up stating that he has read few government documents, he studying at Harvard University, and sadly claiming to have lots of authority to decide on the elections. You jumbled up everything little you know clearly to not make any sense of the subject under discussion. Don’t embarrass economics subject. If you want to participate in such a forum, make it in a proper sense of subject, not marketing yourself.

  54. Tenzing,

    If you are keen on seeing the responsibility fixed on guilty parties with an iron fist – whether finance minister, rma governor, deputy governor or the bank CEOs, I think, your resignation demand in itself looks well justified given the degree of pain and shame this whole rupee crisis episode brought to the nation.

    We are absolutely pained; we are immeasurably suffering because in a fraction of seconds everything has been brought to a standstill position in the wake of this rupee crises bans which almost shook the nation and striped it bare naked.

    Therefore, the crux of the matter here is to finding out which bank first accepted opening of the Jaigaon business people’s fixed deposit account in the Bhutanese banks.

    Was it done with an approval and if so, who accorded such approval?

    OR, was it unilaterally decided by the bank’s CEOs themselves with endorsement from their board directors?

    How far has this approval seeking business travelled – up to RMA or Finance ministry level?

    A matter of such seriousness definitely qualifies to be termed as indeed a national issue; therefore, we must bring the culprits to task.

    The media must find out more on who first initiated this financial scam and therefore, as part of their sacred duty of informing the nation accordingly must take serious follow up actions until such nation looting gangsters are exposed.

    This is the lesson the Bhutanese people at large must take deep into their hearts.

    Our beloved K4 almost sacrificed his precious life for the national security and here, just for few financial gains, people within some quarters almost sold the nation.

  55. Deeply concerned as many fellow Bhutanese, I also doubt, this Rupee crisis is there to stay, and stay for long. As INVISIBLE and Kuensel have boldly revealed the unethical business of software business, largely responsible for distorting the nation’s economic data and eroding the rupee reserve from the country.
    I strongly feel that Government should thoroughly investigate this unethical business in the name of software export and tax shelter factories of Pasakha. The government should back-track their accounts and see whether the proceeds from the exports have been received in full or not. Government should find out from the companies in Hongkong and Singapore that have imported the software from Bhutan. The big question is DO THEY EXIST? If so what was the incentive for them to buy such expensive software’s from Bhutan. So far I have not seen any discussion revolving around the software customers. I believe that if 50% of the problems are attributable to the upstream of the supply chain, the remaining 50% might be lying downstream with the firms importing the software from Bhutan.
    DPT!! If you are not a part of the solution of the problem, then you are the problem. While we can see that the monetary policy has been exercised by RMA blatantly in an effort to solve the issue in a short run, we doubt these steps would bring more chaos, poverty and economic instability in the country. As it has already outcropped in most part of the country in the form of hike in the price of vegetables, informal exchange of ngultrum with INR at inflated price, shortage of fuels and panic among Bhutanese residing in the border towns etc. The impact of these rupee crunch has already affected all the Bhutanese, I am concerned that, the worst suffers would be the people living below the poverty line in the remote pockets of our country.
    Well I am not an expert on such issues; I do not have a prescribed medicine to completely cure this illness that our nation is undergoing- the power of NGULTRUM is at stake. But I do believe that this issue is of serious nature demanding selfless and dedicated actions from our government.

  56. INVISIBLE says

    Dear Loka,

    I APOLOGIZE if I unintentionally offended you (and others?) by sounding arrogant like a McKinsey consultant arguing on the economic data (simply because I read a few government documents). You are right, that’s why we shouldn’t mortgage our nation’s economy or our future to outside consultants when we have many of our own civil servants and corporate employees who can do better job (having both local and inside knowledge).

    So I am sorry. I apologize from my heart. But I still do worry about our macroeconomic policy. Enlighten me and I can be converted.

    On the name “INVISIBLE”, I am not hiding my face/identity or responsibility. Many readers know me by that name. The reason why I use name “INVISIBLE” is for two reasons.

    Obvious reason is in Bhutan we have limited names/similar names. So I don’t want other persons (similar to my name) get unnecessary blame or confusion for my personal views on our nation’s future. I am SOLEY responsible for my personal views (I will go to jail for my personal views, legally, if it is what it takes to defend our nation’s future from messing up). So that’s one reason I use name “INVISIBLE” and not Nima Tshering.

    But the less obvious reason (and one close to my heart) is I am speaking for the “invisible” people in our society – those who are invisible to those who are privileged and those who walk the corridors of power.

    I started using this nickname “INVISIBLE” since seven years ago in 2005 ever since I was transformed by seeing the plights of invisible people in our country while working as a volunteer at Tarayana Foundation. It’s my hope that by continuously speaking for the “invisible” people, we will be closer to GNH when those who are privileged and those who walk the corridors of power would see those who are “invisible” in our society more clearly. I myself graduated from the invisible group, having born in the jungle while my mother was herding the cattle and having herded cattle myself through my high school. I wouldn’t write online what I wouldn’t say in person face to face. Like I said, I am responsible for all my personal views but my views are not cast in stone. Enlighten me and convert me. I can be changed/converted if anyone can enlighten me what I saw, heard, felt, and understood are wrong.

    Hope this helps. Sometimes our different experiences in life make us look at same things differently. So I don’t expect anyone to agree with what I say. In fact, I put things out there because I want someone to prove me wrong. These are not pleasant or healthy trends for our nation. I would be much happier if people prove me wrong. Just saying “you jumbled up everything” (shut up) does not enlighten or clear my mind. I am looking for light at the end of the tunnel or light at the top of the mountain.

    Until then, I will be an “irritant”. I am nobody. I am just a piece of sand. But I read somewhere that “if you are a piece of sand, would you rather be a piece of sand on the beach or a piece of sand in someone’s eyes?” I chose to be the piece of sand in the government’s eye (a powerless but “irritant”) because I have a respect for this government (I VOTED for this government). I want this government to see more clearly at the plights of the vast majority of the “invisible” people in our society.

    I hope this helps. We may disagree. That’s ok. We can be at different sides but we are still different sides of the same coin – our special nation, Bhutan.


  57. Hi Karmadoj,

    Thank you for your post. i think your post made the most sense and that too is a simple and straightforward manner. I think you have a strong point. Our media should do this study and inform us.

  58. Offshore wrote: “this issue is of serious nature demanding selfless and dedicated actions from our government.”

    I share this view here!

    Yes, the need of the hour here is for the government to look at the things beyond the politically correct prisms.

    This moment should be viewed as the people calling their government.

    Therefore, the government must in their rightful mindset take some real hard actions even if that means sacking their own ministers for the greater common good of the nation.

    Going by what has been reported in the recent newspapers by way of their statements on the rupee crises, I think, our skewed Bhutanese LKW and LWN like leaders are no different people from the Bihar’s Laloo in terms of their political maturity, outlook and foresight.

    But, that doesn’t mean people have lost their trust in this government.

    If anything, it is this JYT’s leadership factor that people wholeheartedly has been banking their trust in the current government with the hope that at least he wouldn’t mind taking politically incorrect decisions.

    For instance, amongst others, the government’s tax decision was one praiseworthy futuristic national growth leaning move, but, sadly, this did not materialize as anticipated – for the reasons that every 10 years old Bhutanese children understands.

    Based on the findings from the investigation report, whosoever were involved in this rupee messing up scam must be immediately sacked or else we as a nation would be headed for a big confusion.

    I think in the recent past, there were some public disapproval reports which featured elsewhere in some other public discussion forums mainly hinting on where things were going wrong then, and needed Bhutanese people’s collective wisdom for rectification.

    However, in our same Bhutanese carefree mentality of see no evil, do no evil kind of state of mind, did not pay any heed into those submissions.

    We, Bhutanese, only act when things hit us so hard in causing huge irreparable damages that we become helpless and fall easy prey to such man made catastrophe.

    But, my hope isn’t lost yet! Let’s wait and see.

    On another planet, there is this so called ‘Invisible’ kind of future political leaders in the making who aspires into becoming our tomorrow’s Bhutanese leaders.

    Going by what has been submitted in that exclusively ‘self gratifying format’ with possibly 2013 in mind, makes the Bhutanese readers here as some kind of guinea pigs having selected to field test their synthetically manufactured poor invisibility community products.

    To such insignificant submissions of merely trying into becoming the ‘irritant sand stone” in the eyes of a hard working government has been received in a very poor taste and rightly remarked by someone called “LOKA” as product marketing kind of affairs.

  59. Reading through the posts from the different users and especially INVISIBLE, I felt moved to write about this scam called software export. Here is a gist of how it operates. I am trying to connect the jigsaw puzzle. I can connect some bit of it and some I need your help. Let me put them in a sequential order:

    1. The so called software is allegedly imported from India, packaged in Bhutan and sold to Hongkong and Singapore.
    2. hard currency in dollars come from Hongkong and Singapore through RMA.
    3. The hard currency is used to import copper and palm oil.
    4. Palm oil and copper comes to Pasakha. They are processed and exported to India.
    5. The proceeds of export (probably) come to Bhutan in terms of INR.
    6. Bhutan pays cost of software to India in terms of INR.

    Now, here is my elaboration on each of the 6 points:

    1. The so called software, exported to Hongkong and Singapore are complete scam. The software CD contains some excel files and sometime they have some sub-standard software, freely downloaded from Internet (and changed cosmetically to display their company names). The companies to which the software is exported DON’T EXIST. I REPEAT, THEY DON’T EXIST! The CDs are discarded on reaching Hongkong and Singapore.

    2. By this time Indian partners of Pasakha Industries would have organized the payment through ‘Hundi’ system from Hongkong and Singapore. For your information, Hundi system is an informal way of transferring money across the Globe, which legally amounts to Money Laundering. Every year Government lose billions of revenue to Hundi system. This is how dollars come to RMA.

    3.This money is then sent to Malaysia for import of Copper. This part is completely legal. Import duty is waived off by the Government because company earns it’s own hard currency.

    4. The copper and palm oil are processed and pushed into market where there they can comfortably compete with Indian Industries because of Tax regime difference between Bhutan and India.

    5. Almost every portion of the proceeds from export (except for a small commission for the Bhutanese counterpart) is kept back in India. This is never brought back to Bhutan. This is revealed and reaffirmed by the recent RMA report and reports in the media that Government has no information about the proceeds from the Pasakha Industries coming into Bhutan. So, these Industries in no way help us in improving our rupee reserves, at least under the present modus operandi.

    6. Instead of bringing rupees in, more rupees are now paid back to India in the name of the cost of Software. Since, we know that software is allegedly said to have originated from India, 100% of it’s proceeds is taken back by the Indian partner. This amount is equivalent to the export data as shown in our macro-economic reports. This means that software export depletes whatever rupees we earn from hydro power exports.

    This is what I have observed, studied and have reached at this stage. I urge media and other individuals who call themselves patriotic to dig, study at depth, unearth and uproot this menace for once and all. Our country is too dear and priceless to us and we should collectively challenge and defeat any entities or individuals that undermine this fact and put a price tag to the very soul of our Nation.

  60. During the Panel Discussion in BBS, RMA governor, Daw Tenzin, repeatedly said that the Rs. crunch was driven by the huge credit that the banks gave out. I was wondering, in that case, RMA should have atleast known that the Rs.crunch was emerging some years back and should have put in place some corrective measures. Did they know that and put in some corrective measures?? Is RMA not the central bank who should be guiding the banks?? If so, Daw Tenzin was blaming RMA itself when in the BBS panel discussion, he repeatedly blamed the banks??

  61. Dear Brokpa,

    What a value-added information you have unearthed! Thank you. I was also trying to dig into and study Hong Kong and Singapore side of the stories through whatever links, networks, and data I could gather.

    In this day and age, it should not be difficult to expose such “Money Laundering.” For instance, millions of chicken export data from Hong Kong to Mainland China go missing in import data of Mainland China. On the other hand, millions of Turkey (that big bird eaten on American Thanksgiving) magically appears in import data of Mainland China from Hong Kong when Hong Kong’s export data never show any turkey export. Putting these two ends of the tunnel together, people could easily analyze where macro-economics goes out of the window and corruption-economics (Money Laundering, Tax evasion in the name of tax sheltered tax differential) comes in.

    Our software export category is something in that route, having read your analysis.

    Just a few years ago, I noticed this weird trade data. I asked “look at that data point, what’s that?” Someone elbowed me jokingly and said “just ignore it, it is an outlier data point.” It took me about 2 years to understand that huge outlier data point. When one data point devours our collective economic pie and leave us with little portion (where citizens have to fight among themselves over that small pie of INR 50,000 for sending children to college in India, INR 20,000 for sending grandparents to Dorji Den Neykor, INR 70,000 for doing business from Kathmandu by our small shopkeepers, we should worry).

    And I feel more sad when it is done by elite group in our society who should be helping OUR TWO BELOVED KINGS more than us, instead of sucking the resources out of the tiny country.

    I say this with so much pain because I have seen (even at the personal level) how much OUR KINGS sacrifice. For instance, all those new flashy cars (BMW, TOYOTA CROWN, etc) that we proudly used during our SAARC SUMMIT are simply PERSONAL gifts to the King by a person in the Middle East (not country to country developmental aid). They are response to a very personalized gift of one wooden Choedrom (Bhutanese table) and HAND WRITTEN friendship note from our King. Our King whole-hearted chose to sacrifice all the flashy cars (not one kept) for the people and government of Bhutan to save other resources. I was deeply moved.

    At another point, His Majesty’s own ONLY one car (also received as gift) ran out of battery outside Dechencholing Palace after granting audience to very important state visit guest. Driver couldn’t start the car and King has to rush to next meeting at Tashichodzong (no car! the Head of the STATE!). HRH Dasho Jigme Dorji had to give his car to the King and he had to hitch huke with someone (I don’t know if he even got proper ride).

    I share this stories with pain in my heart seeing genuine sacrifices of our Kings. Elsewhere the Head of State would have fleet of cars in his/her garage. Our King does not have!

    And here we had to debate stories about how our elite group of our society draining our country’s resources. It makes me very sad. Very very sad.

    I would like to appeal to them, please don’t do this even though you must have done unintentionally or unknowingly. If not you, your children will not like it. Your children are our friends – they are very respectable, innocent, and good future citizens. They have mind of their own. Many of them I know at the very personal level and many of them have no clue. Please don’t corrupt their path to the future.

    With deep respects,

  62. Dear Brokpa,

    Thank you so much for the info – you are way ahead then I am. I have already sent and received few emails from Inland Revenue in HongKong. I am not sure how to proceed now that you said the companies in HK doesn’t exist! It is much bigger than anyone of us can think of.

    Like Invisible said, I wish these people put a cap to their greed. I too know them personally and sometimes I find it so difficult to “hang out” with their children who are on personal level very nice people but who doesn’t seem to care/ignore where his/her father’s money is coming from. I could be seen as a hypocrite.

    I hope someone like Tsnzing Lamzang would cover this story which is a very serious problem created by handful of people. Worst of all, these people call themselves patriotic and royalist. What a shame

  63. Invisible,

    Harvard makes mistakes too, you know. Kissinger taught there…lol

    Jokes aside, I appreciate the stand you have been consistently taking for the underprivileged lot of the country.The pains you have taken in analysing the macro-economic data and relating it to how national economy is driven by few individuals is impressive.

    Keep up the good work, dude.

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