Really important business

Doing business in Bhutan is already difficult. But it’s getting even more difficult.

Each year, the World Bank publishes a “Doing Business” report in which they rank countries according to the “ease of doing business” in those countries. Here’s how our country has fared in their report over the last few years.

In 2008, Bhutan was ranked 119 out of the 178 countries that the project studied.

In 2009, we fell to 124 out of 181 countries.

In 2010, we were placed at 126 out of 186 countries.

In 2011, we plummeted to 146 out of 183 countries

And in 2012, we improved slightly to 142 out of the 183 countries that were studied.

Our overall ease of doing business ranking fell from 119 to 142 during the period 2008 to 2012. Not good.

But it will get worse. Bhutan’s ranking is probably set to fall again.

Why? Because it’s getting harder to do business in Bhutan.

Why? Because the series of policy measures introduced by the government in light of the rupee crunch all make it much more difficult to do business in Bhutan.

Banks, for instance, cannot lend money. That means that businesses now do not have access to credit.

Informal trade across our borders have come to a standstill. And that has affected hundreds of small time business across the length and breadth of our country.

Import of a range of goods have been suddenly banned. That threatens the investments of a range of businesses.

And most recently, vegetable vendors will no longer be allowed to import vegetables; only FCB will. That means that dozens of vegetable vendors will soon lose their jobs to a government-owned company.

So Bhutan’s ranking in the next Doing Business report will probably take a beating.

Obviously, the ranking, in and by itself, doesn’t matter. What does matter is that it really could be getting really more difficult to do business in Bhutan. And doing business – good business, and lots of it – is what we desperately need to overcome the current rupee crunch.

What also matters is that potential investors refer to the Doing Business reports. And investment – foreign and domestic – is what we desperately need to strengthen our economy, and ensure that we do not face another rupee crunch in the future.

 

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  1. The government is taking away the businesses from private construction companies and vendors and make a mandate for the government-owned companies like Construction Development Corporation Limited and Food Corporation of Bhutan. I was surprised to know that the Business Community has not raise this point when the Prime Minister called them for a briefing recently. Maybe there are not concerned about loosing their business to government-owned corporations.

  2. Honorable OL,
    I think we need to understand the current situation and expressed views. Is it fair to lend rupees at high interest rate and float in the banks to do cross border businesses. To my knowledge the Gov did not ban cross border business but only tightened issue of rupees from the banks. If that has affected the cross border business, it shows that what we considered as cross border business was not indeed the one that we intended. We just seem to be buying and not selling anything worth to earn the amount we spent.

  3. Concerned Citizen says:

    It would be nice to know what opposition party’s thought on combacting the issue. How can we increase our rank of “Ease of doing Bussiness” (Strategies to improve). Kind regards

  4. Langchu says:

    i think the government is trying its level best. we would be glad if OL could also lead a meeting to discuss the issue on rupee crunch

  5. frontier says:

    190 out of 195 in human rights index

  6. Doing business seem to hav become eassier for many who intend to make profit exchanging Nu. with INR at the border. Withdrawing money from indian border ATMs from banks in Bhutan has now become a routine business for many of us. I wonder how many INR debit cards has been issued from bhutan banks before and after the introduction of this new system. The lone study is sufficient enough to prove the black marketting of the INR. Suppliers in border town charge atleast 10% more if paid in Nu. Which ultimately increases the cost of living in our own country. what has remained intact is the aource of income. so the government should rethink about this matter seriously.

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