Rupee statement

Some friends have suggested that I should use my YouTube account to incorporate a bit more audio-visual in this blog. I agree.

Here is the statement I recently made on BBS TV urging the government to inform the people about the rupee situation. I’m happy to report that, according to BBS, the acting prime minister and finance minister will appear on TV tomorrow, Tuesday, 3 April.

I’ve posted the English transcript of my statement after the video.

 

Our economy is in a crisis.

Just last year, the government was forced to sell US$ 200 million from the country’s foreign currency reserves to clear a huge rupee deficit. But today, barely five months on, we are faced with another rupee deficit, one that seems to be spiraling out of control.

The Royal Monetary Authority has taken several measures to address the rupee crisis. But their measures are ad-hoc crisis measures, not long-term policies. As such, they have not been able to control the growing deficit. And as such, the general public has become increasingly worried.

The rupee deficit has affected everyone. Businesses, especially small-time traders, are suffering as they do not have timely access to Indian rupees. Similarly, our ordinary citizens are suffering – they no longer have ready access to rupees, and as such, cannot buy basic essentials or travel to India easily for medical treatment, education or pilgrimage.

Our economy is in a crisis. And we, the people, are concerned – we are confused; we are anxious; and we are losing confidence in our own economy. Yet our government has remained completely silent. The prime minister and elected government have still not addressed the people to explain what is happening to our economy.

The government must clear all doubts and reassure the people that they are in control of the situation. Otherwise our people will become even more confused; even more anxious; and may even start to panic.

As the leader of the opposition party, it is my responsibility to demand that the government address the people, and provide us with clear and definite answers.

Therefore, and on behalf of the people:

I call on the government to give a full account on the nature and extent of the rupee crisis.

I call on the government to explain, in clear terms, their plans, strategies and policies to resolve this crisis.

And I call on them to tell us, the people, exactly when we expect our economy to recover from this crisis.

 

 

 

Facebook Comments:

Comments

  1. Dear OL,
    This government may get out with series of short term measures. What will you do as long term measures if you are elected govern Bhutan for five years from 2013?

    As a leader, you too have responsibility to work together in the interests of nation. Rupee crisis is the national interest not party interests.

    It is also time you pitch up your ideas to solve this crises which will be helpful to your party politically.

  2. Thanks OL for uploading video on such pertaining issues.

  3. I think RMA should come out and give their long term solution they are micro managing

  4. Kelpazangla says:

    This is a critical issue and yes, you must pressure govt to convince the people. Good going!

  5. I remember during one of the pNA session opp leader asked the govt about the rupee crisis and hydropower the only earnings might create problem. Govt was always depended on the hydropower. This is exactly what is happening and experiencing.

    As an economist i have analysed the main cause of the rupee crisis due fronting in the border towns of the country. Another is the business tycoon eavding the tax. The third reason is accessibility of credit by the commericals banks with competitve interest on housing loans. In order to increase their lending base the commercial banks go beyong the permissible base rate of interest. The 5th reason is the central bank did not apply the monetary policy like base rate but liberalised the lending rate. With the coming of two private banks the followed cut throat competition where they even go lower down to the deposit rates. The central banks allowed some of the commerical banks like BNB to issue unsecured bonds which inrease their liquidity.

    The 6th reason was on the part of govt’s failure to strictly monitor the fiscal policy.

    The crisis is created by the RMA becuase they borrow rupee at 10% and distributed rupee to the commericals banks. Indirectly thoses banks were benefiting in two forms: benefiting in getting more deposits from the Idian tycoons who have deposited lots of moneyand (6 billion withdrawn) on the other RMA bnorrows from SBI at 10%.Actually they should have been charged by the RMA control the excess liquidity.

    The govt hand RMA should now hand in hand control the policy so that the impact is not felt abruptly.

  6. Thanks Opposition leader for at least addressing mejay Lyonchen chog for our PM.As a bhutanese citizen, we should not look at PDP and DPD as different entity.After all we are one.Yes, definitely, it is OL duty to oppose, but not always.Sometimes you should support too if it benefits the citizen.Your rational thinking and action will be admired by the people but not opposing each and every step.I even heard the rumours that OL refuse to pay respect to PM when all other ministers are in line for reception somewhere in Tsongsa. If that is true,it is really disheartening to hear OLs attitude as a genuine Bhutanese citizen.Politics should not divide instead should bring unity.

  7. I AM SURPRISE TO SEE AND READ THAT THE BHUTANESE LEADER TALKING ABOUT THE PROBLEM OF THE COUNTRY. IT HAS BEEN THE FIRST TIME AT MY KNOWLEDGE.IT IS GOOD TO BE TRANSPARENT TO RESOLVE THE CRISIS OF COUNTRY TOGETHER.

  8. i think ol offered in parliament to assist with the study on the rupee crisis but his offer was ignored by government..in fact when he raised the concern re. rupee, finance minister wangdi norbu shrugged it off as something trivial, reporting to parliament that it was under control..just a few months now, the central bank has been compelled to step in with extreme measures..measures unpopular no doubt but essential for bhutan to avoid even dire consequences..measures this elected government will certainly dodge to avoid unpopular politics..measures guided by self interest as opposed to national & public benefit..measures that this cabinet & government are bereft of..their inaction & silence to clarify the crisis shows just how clueless they are as opposed to big-hearted decisions taken by rma, led by daw tenzin..

  9. guardian says:

    We would like to hear the OLs take on how he would tackle the present rupee crisis. This is his blog so he must put forth his views and if it makes sense, I am sure the RGOB would gladly accept it.

    Right now, I am not sure there is any easy solution to the crisis, short of putting in strict austerity measures.

  10. WE ARE WAITING FOR THE LONG TERM MEASURES THAT THE GOVT HAS PROMISED TO DELIVER WITH IN APRIL

  11. Hear the OL’s take?? What benefit would that have, does he have the power to implement anything? DPT hard core supporters, are again pushing the buck on the OL for this crisis. Be real Guardian!! It is the government’s duty and responsibility to address this crisis adequately and sustainably. But the government’s response, as usual, when confronted with a crisis is SILENCE. Government, please do not mislead the people again by saying this is a trivial problem, please be upfront and tell the people the truth for once, and the measures it is going to take to solve this problem.

  12. guardian says:

    sonamzam,

    He brought out this topic for discussion, so it is only fair that he give his views on how he would tackle the rupee crisis, right now, I don’t think anyone has a remedy to solve this crisis.

    And, please the question is not for you, it is for the OL, we want to hear it from the horses mouth.

  13. So, Guardian – your logic says “since DPT government doesn’t talk or bring the issue about rupee crises out in public, they don’t have the responsibility to clarify and propose a solution? You are a joke.

    Lest look at simple facts – if you want to aks all these unjustifiable questions to any DTP member, how would you do it? Do that have open forum like this? FOr DTP, people like you and my views doesn’t matter. At least OL have given us this forum to ask him anything we want.

  14. Form this weekend onwards it is expected that the vegetables prices are expected to go up… why… because of the rupee rationing by RMA.

    What kind of people are up there in RMA… they should have studied the composition of imports .. i.e. import of vehicles, essential items, construction materials etc… it is clear from the data that only about Nu. 3 billion worth of essential items (like food, vegetables etc) were imported where as about Nu. 10 billion worth of Vehicles + construction materials were imported.

    The RMA should have let the import of essentials as it is and used its monetary policy (SLR and CRR) to control credit in the market which was fueling the construction and vehicle imports. if this is done i think the problem will automatically stabilize…

  15. Sonam Zam…in this issues i have never seen people blaming OL. As a citizen, you and i don’t have solution. Probably, Govt doesn’t have solution which is sad.

    So most of us are wondering if OL has solution that reverse the crisis and that can prevent future crisis.

    It is govt’s responsibility to fix the crisis. The Govt may have no solution. Who is next person to look upto? Opposition Leader whether we like it or not. Since he knew the problems, he must have some solutions. After all, this what leader is for.

    Lets say my solution which may be ridiculous as i have no wisdom of PM nor caliber of OL:

    1. Diversifying the economic growth that can fetch us currencies. Lets say mining Gold in Black Mountain

    2. Emphasizing on Public transport instead of personal cars. Those luxurious vehicles must have higher taxes. Those bought by rich and higher position people must be taxed higher.

    3. Stop importing the junk food which is neither good for health nor for environment.

    4. Make it compulsory for contractors to use local labour except for unavailable expertise.

    5. The so-called software export must be stopped as it is made in India and sold in some less developed country.

    6.The numerous construction of farm roads must be stopped for time-being unless we get full grants.

    7. There should be co-operative farming in a large scale to lessen the food impact. Lets say, somewhere in Gelephug, we have a cooperative thousand acres of paddy field.

    8. Commercial house construction and vehicle loans must be totally stopped.

    9. Department of trade should be more alert to check fronting.

    10. Big businessmen and influential people must be investigated if they have foreign bank accounts to evade the taxes. if found, those accounts should be ceased.

    11. The Government must also stop sending to many people for unproductive trainings abroad and further studies unless there is full scholarships. As a moral responsibility, Ministers and Secretaries should take austerity measures by minimizing foreign Tours.

    12. The privatization in the real sense should be encouraged instead of selective people privatization so that hoarding money in foreign bank doesn’t occur.

    13. Finally, i don’t know what i am saying can really solve the problems….

  16. Thinlay says:

    I agree with most points suggested by Defoz, except gold mining in Black Mountain area. I think we need to carry out feasibility study before embarking on this expensive venture.

    Cheers

  17. Yes as OL said, we need to know exact time frame to out of the crisis. Just adopting to temporary measures is no good.

  18. Few possible ideas to fetch rupees:
    1. TCB to vigorously promote tourism to Indians.
    2. Hike power tariff since cost of production is proportionate to increase in materials cost.
    3. Host many international meetings, training and workshop in Bhutan.
    4. Open direct trade route with China/Tibet for goods and services including land and air transport.
    5. Extraction of natural resources such as gold, silver, etc.
    6. Establish planetary observatory system.
    7. Export drinking water to Arab countries.
    8. Export sand and stone to Sri Lanka
    5.

  19. guardian says:

    paro,

    I am not saying anything, I am just requesting OL for his views.

  20. @guardian, I agree with you.
    One lessone I have learned in life is that it is very easy to make comment on others. However, I always find it difficult to come up with a (perfect) proposal where nobody comment.
    So there is no wonder why we keep on getting comments and no concrete proposal/s.

  21. Does anyone think that OL knows a solution to this problem. I think he knows only to turn problem into a crisis. If he knew solutions, he would have definitely spelled out. Actually, he even does not understand the fully the economic essence. Only the time will tell how he would address the problem if ever he rules the nation. His main problem lies with his personal grudge against the PM and the cabinet. This makes him more unpopular.

  22. Yeh…very true…one of the solution could have been the increase in vehicle tax which he took the govt to the court…what for…to earn a name…fame…to say i fought and defeated the govt…to say it is not as per constitution…
    i am truly saddened by this action

  23. Zamtsho says:

    Nyamchung and Maro,
    How did you know that OL got personal grudge and Cabinet, do not make such baseless comments guys and i dont prefer to talk to DOGS like you. So i am saying nothing to you guys.

    Every one here will have their own suggestions to be made and i accept and appreciate what Defoz wrote. But once exploring the Black mountain for Gold, it should be Govt. owned and not outsourced to some private asses. Which normally happens in Bhutan.

    Bhutan is ruled by a circle of heads if we have to do some findings, and OL is all out for them and we thank you for your timely entry in this politics.

  24. RTC Kinga says:

    This is why the RTI Act is so important and we the people demand for that. The Government need to ensure that they are doing their job and in a right way, so that there is transparency and accountability. Need to really hasten to solve this problem.

  25. Guys, elect me the next PM( just kidding) and I would solve the INR crisis both in short and in long term. Here is my solution to it :-Deforestation and export of timbers on phase wise manner in southern foothills at altitudes where oranges can be grown shall solve the immediate crises of INR. Plantation of oranges in these areas would fulfill the government mandate of 69% forest cover and solve the long term INR crisis.

  26. eforestation= deforestation

  27. @Norbu,, so thoughtful! Perhaps, you should start analyze what the problem really is and stop talking about deforestation!

  28. *start to analyze

  29. OL,
    What do you think about the trade fairs organized by BCCI. I find such fairs draining our bhutanese money at the speed of light. Do you think, in light to the rupee crisis, we need to carry on with such fairs?
    All the things in the fairs are overpriced. 50-100% more than the normal price. That is why huge discount is offered on last day of the fair. It there no price regulation or something. It really needs to be done. Look at the price of the food for example, starts from nu. 100-200 for a piece of chicken in on a plate of rice. Dosa is way cheaper in dantak canteen than in fairs. We can buy two dosa in the dantak canteen for the price we pay for dosa in fairs. People are making huge money and going back.
    lots of luxuary items for sale but we can do away with it. Why bhutanese are visiting such fairs are because they it provides some sort of an entertainment. rather than such fairs, to make people cheat make make piles of money, i think we can organize some sort of entertainment programs.
    Trade fairs are nonsense , specially at this particular period of time .
    already thousands of bhutanese are cheated in jaigoan every day and we bring them inside to cheat us more. BCCI need to regulate the price, it is a free market just now.

    • Dear James,
      If the government has restricted the import of non-essential items, however they may be defined, it goes without saying that trade fairs should be discontinued.
      Tshering

Leave a Reply