Namrita Khandelwal

Chhophyel, commenting on my previous post: “OL, I am glad that McKinsey’s proposal to liberalize tourist tariff is finally out the window.”

McKinsey and Company is charging the government 9.1 million dollars in consulting fees. Add to that travel, living, per diem and other expenses, and the final tab, by some estimates, could exceed 14 million dollars! That’s a lot of money.

So it’s amazing that we must feel a sense of relief every time their proposals get shot down. Their first proposal to go was about increasing annual tourist arrivals to 250,000. Then it was tourist tariff liberalization. Now their proposal to mandate all hotels catering to tourists to upgrade to at least a 3 Star category is already coming under attack.

True, McKinsey are only consultants. Their job is to recommend. And it’s up to the government whether or not to accept those recommendations.

But who are these consultants? It turns out that McKinsey’s first consultant for tourism was Namrita Khandelwal, who worked with the TCB for six months. I googled “Namrita Khandelwal”, and the only relevant results I got were Ms Khandelwal’s own entries on Facebook and Linkedln.

Namrita Khandelwal, it turns out, is barely 28 years old. She got a bachelors degree in economics in 2001, completed her MBA in 2003, and studied for an MPA from 2006 to 2008.

So Ms Khandelwal graduated in 2008. And by the next year, in 2009, she was in Bhutan, at the TCB, as a McKinsey consultant, recommending policy.

Now I have nothing against Ms Khandelwal. But I’m left wondering why McKinsey would have allowed a recent college graduate to represent them in Bhutan. And, more importantly, left wondering how our government could have accepted Namrita Khandelwal.

 

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  1. mediawatch says:

    Some questions you could possibly answer:
    1. How did the DPT government select Mckinsey and Co?
    2. Shouldn’t there be a global tender for such government undertaking?
    3. Is there a need to hire foreign experts when we have a pool of well educated civil servants? Can’t the government depute a special team to do what Mckinsey is doing for our own people would understand the ground realities better than any outside firm?
    4.I was told the Good Governance Affairs, the erstwhile Improving Public delivery Service (IPDS) unit and Mckinsey had conflicting responsibilities?
    5. IPDS is manned by just four civil servants while the government is investing such a huge amount on Mckinsey. how justifiable is this?
    5. Is there a possibility that the DPT government could have reached an agreement with Mckinsey whereby a certain percentage of the money given to Mckinsey could land up in the DPT coffers, for the sake of party survival?

  2. Dear OL, ..thanks for providing us CV for “Namrita Khandelwal”. She is too young to find out problems faced by Bhutan tourism and our govt. is paying high for consultancy fee. She will need time of 1-2 years to know Bhutan Tourism Industry.You are right OL.. that she will provide us recommendations and final implementation will be given to poor Bhutanese..thats not fair.if this is true then why ACC is keeping quiet…???.I think ACC should know about 9.1 million dollars fee for Mckinsey??.. is global tender or local tender…when it happened?.i should have bid the tender…ha..ha..ha

  3. naw-tsha-wai says:

    To look from different angle and consider the diversity of views let us think this way. It is true that there were some concerns to some of the proposals made but does it mean that the proposals were not good? How do we know without even implementating them? Change and transformation always meet with skepticism and resistance, it is universal law. True that the consultant was young with less experience but does it mean that a person who has worked for 30 years is better than a young person loaded with tons of knowledge? Then we need to select the consultants by age, not by knowledge. Yes, we do have that culture. All old ones back to the seat. What percentage of the management principles are actually applied by the managers in Bhutan today in our organisations? There could be some with “zeroes”. Others with knowledge are quiet for various reasons. Is it justified on our part to blame a consultant, when we hired them? The govt. hired with good intentions to move the country forward but there is fear for change. I am sharing diverse views for fruitful discussion. Some may take my comments with a pinch of salt.

  4. naw-tsha-wai says:

    I meant implementing, not as it….. changes. It is true that we need to be cautious but we also need to move forward. Sometimes courageous decisions are worth risk-taking. Traps are everywhere and we cannot keep running away from them.

  5. change is what people dont like.

  6. A fanciful message for the TCB:

    Dear TCB,
    I’m 32 years old, I have an Hons.BA and an MA in the very specific field of heritage management/cultural tourism. I was trained to consider the local stakeholders first and foremost in all policy decision-making. True, I am a foreigner, but I bring the perspective of the type of tourists you are looking to attract. I’ll work for less than whatever Ms. Khandelwal is costing you, but I will spend time in Bhutan first to get a firm understanding of the situation.
    Call me!
    -Andrea

  7. Chhophyel says:

    OL, kudos to you for sharing the scoop about McKinsey’s consultant, and I couldn’t disagree with you on this. If government should pay $ 9 million, who is going to bear the cost, tax payers or donor countries? Not sure of tax payers or other resources for consultants fee, if it meant through donors maybe they will give a second thought before they reach out to their wallets. Such blinded sided effort from DPT government can cause dire ramifications if and when they reach out for donors for funding for some genuine projects. Maybe adios to finger pointing game, instead either the government or respective body investigate further to find out who to hold accountable, that way something like this will not happen in the future. I completely disagree with naw-tsha-wai because in my opinion OL raised a valued point regarding McKinsey’s consultant. We can of course debate the entire time on experience, knowledge and so on, but the fact remains though that we can not let someone with a year of experience to shoulder responsibility of bringing reforms to our tourism system. I don’t think anyone is challenging her knowledge, and from what I understand I think she is highly qualified, but that doesn’t mean that she understand the nature of the business in Bhutan, let alone know the culture ins & out. I don’t have to say a lot on this because there are so many articles published how even some major companies failed in some countries, and the best advice would be do a little google on such issues. Therefore, when someone like naw-tsha-wai who tries to equate the failed proposal from McKinsey to change par se is a complete misleading and a manipulation. I appreciate the fact that naw-tsha-wai is bringing a different perspective on the table & letting us to look from a different angle, but I don’t think because the majority were not interested in looking forward that there is a strong resistance against the McKinsey proposal. Undeniably everyone wants a better future, and we need lot more but such as what McKinsey proposed are not the change that people are willing to accept at any cost, it has to be a realistic approach and in congruence with our GNH philosophy. We are all proud citizens who love our country, loyalty and dedication towards our kings are unquestionable. So, we know that in the dawn of the modern Bhutan, change is inevitable,however, I believe that we must provide a thorough and careful process followed by an absolute transparency, most importantly not to mislead the citizens. Enough is enough to those who tries to manipulate the word “change.”

  8. I am disappointed that the Hon’ble OL, riding on a wave of popular discontent, has singled out and personally attacked Ms. Namrita Khandelwal for the tourism fiasco.

    This was unwarranted, unnecessary and unintelligent.

    First, how can we point to an individual when s/he represents an organisation?

    Second, checking out facebook and linkedin profiles, and then to share them are steps too puerile and inane for a public figure. This is a possible encroachment on other’s privacy as well.

    If there are issues – I encourage you to take it up with the company itself or rather challenge the decision with the Government who accepted the recommendations in the first place. (of course the Govt also reneged on their earlier stance and has adopted your strategy of giving into popular thought).

    Change can be incredibly difficult when we fail to see the end. I clearly don’t see how McKinsey was at fault. Rather I thought they suggested a good mechanism to revitalise this industry.

  9. BOY – am I glad that Hon PM reversed the decision to Liberalize the tourism tariff or full liberalization. Yesterday and today – I was at the memorial chorten and was so relieved of the PM’s decision. I witnessed 4 big Inidan buses yesterday full of Indian tourists and today another 3 big buses again full of Inidan tourists. There were no guides with them and the moment they got out – the sanctity of the place was ruined by the shrill noise & shouting of these tourists. Had there been a Bhutanese local guide with them- hte outcome would have been different since the guide would have briefed htem to hush up as it is a temple dwelling. The fault does not lie with the tourists but alas – it is the impact & power of mass tourism. We could have constantly faced such a scenario had the liberalization taken place with Inidan agents bringing in even teh foreign tourists in their own indian vehicles and using their own guides and coordinators. Phew… this may not happen now. BUT how do we handle the mass tourism from the neighboring countries. How do we let then come in an organised manner so that the repercussions/impact are minimal. You will want to note that within about 20 minutes the Chorten parking got littered with chocolate wrappers and plastic from potato chips containers.

    THESE ARE ALL GENUINE CONCERNS WE FACE AS CONCERNED CITIZENS OF THIS COUNTRY. WHICH AUTHORITY WILL LOOK INTO THIS AND WHEN WILL IT HAPPEN. IS THIS TCB’S DOMAIN AGAIN.

  10. chhophyel says:

    I goofed up, I meant ‘blind sided’ not blinddddeed

  11. simple clarification…..is government paying NU. 9 million for Ms khandelwal alone or is there other consultants from Mckincy who are working in other sectors?

  12. Frankly speaking what have you achieved by graduating early.
    I think even if you do phd you will do nothing except oppose what ever the government proposes.

  13. Be it in government or corporate or private, we always rely on consultants for every small issue and we have no faith in our own people who could do much better in certain areas. Our top leaders happily listen to consultants even if they make stupid recommendations. On the other hand, when our own people make excellent suggestions, they will turn their ears deaf…Today, we have so many people with qualification and experience who are actually placed to do some clerical jobs and we spend huge amount for consultancies. In most cases, we provide tons of data/information and we land up wasting days and months to explain and at the end they come up with recommendations which are mostly our own suggestions. So, my simple suggestion is, if it is doable by our own people, please don’t hire consultants unnecessarily!…

  14. The article on Bhutan Observer titled “Little hope for dying parties” states that “the OL said ECB must ex­plore ways to clear the past loans, but loans taken after the elections should be settled by the parties themselves”. Did you really say this?

  15. kenchosum says:

    I don’t agree with Bhutanese Blogger saying that the OL has made personal attack on Ms. Namrita. What I can’t understand is “your defensive in protecting Ms. Namrita”. As far as I understand, the OL has just brought out the fact and hasn’t really derated her in anyways. Had the OL not brought it out, I wouldn’t be aware. Thank you OL.

  16. I support “kenchosum”. Looks like this “Bhutanese Blogger” never heard of this Bhutanese saying ‘to remove a whole mountain, we should start at the pebbles’. My 79years old uneducated neighbor who never went to any school, cultivated potatoes and barley all his life, never put on a shoe in his entire life understands why McKinsey is bad for our country. It is pathetic how an educated guy like this Bhutanese Blogger who is perhaps busy all day sitting on a table and actively blogging on the internet does not seem to understand the same. He is definitely not stupid but he is one of our guys who is “trying” not to understand why McKinsey is not good for our country.

  17. And that’s dangerous.

  18. If Namrita Khandelwal happen to be exactly who OL found her to be, then it’s enough a reason in itself to worry about how our future is being shapped. Now I am not surprised about the kind of recommendations we have been getting from USD 9.1m consultant thus far.

    Perhaps, OL should question PM during the Q&A session in the Assemble. About;- how MCK was selected in the first place as consultant? the CV and thus the credibility of the people working for the consultants and finally how the Govt. will account for millions of USD if nothing comes out of it.

    with regards

  19. chhophyel says:

    Unlike others, Bhutanese blogger is not quite rational enough to understand a major decry against McKinsey’s proposal, which was a failure, complete waste of time and money and a distraction. I followed OL’s blog for quite sometime and he raised number of important points, he poked a needle against those who were in favor of McKinsey’s idea, so he deserves an applaud from all of us and we should encourage him to bring such issues to our attention. Bhutanese Bloggers said ‘This is a possible encroachment on other’s privacy as well.’GIVE ME A BREAK!!! I don’t know why that would be invading privacy when an individual have a profile such as facebook, linked online for public view, platform such as OL’s blogs are a fair game and playing field. Anyone can do a google search on McKinsey’s consultant, after all the flow of information never seems to cease. Just give credit to OL for going extra mile to find more facts about the person. Dear Bhutanese blogger, $9 million is a lot of money, we could use the money in many ways or even invest that amount for promoting Bhutan to a larger audience.

  20. She is one of the older ones. Their health consultant Karan is 23.

  21. Let us not forget the issue. Can any of you do some numbers to show why McKinsey was wrong!

  22. Tek Bahadur Thapa says:

    Equity and justice is the motto of DPT government. If our financial regulations require all of us to call tenders, evaluate and place work order for a few thousand Ngultrums, why wouldn’t our Prime Minister be required to call tenders for the award of work to Mckinsey to the tune of USD 9.2 millions? This amount does not include out-of-pocket expenses for stay for these consultants at Tashi Taj, food bills, transport bills and air tickets. There is opportunity of high corruption and our PM and his government should explain this to the people.
    I fully agree with mediawatch that there is ample opporunity for corruption with the involvement of Mckinsey in Bhutan. Huge kickbacks to PM and his government suspected and possible.

  23. dungsamkota says:

    A few of the the twenty years plus from McKensie ran up a bill of Nu. Twenty Lakhs in one month at the Taj Hotel during their first month in Bhutan. The govt awoke to this fact and then moved them out of the Taj. So govt did take action on cutting costs i suppose. This twenty lakhs is in addtion to the 9.1 million dollars.

  24. Huray! We have taken a several steps backward…I thought we might get to the end of tunnel where we saw the light but we even didnt make it there…the tunnel (passage) itself is shut now…this kinda myopic views of ours will only foster monopoly privilege rent-seeking…Our old neighbors and their generations down the line will never go to school, always grow potatoes and barley, they will walk bare footed their entire lives…and I guess in reality that is not what they wish for…

  25. Bhutanese Blogger wrote, “Let us not forget the issue. Can any of you do some numbers to show why McKinsey was wrong!”.
    To Bhutanese Blogger: The world is so much at unrest and disharmony because people always tend to go by the numbers. When I was young, people used to talk about what is good or bad but nowadays people don’t talk about those things anymore. The values have changed. Now they talk about what is fun or boring. They talk about numbers- the number of cars you have, the number of money you can make, the number of acre of land you own, the number of virtual friends you have online, the set index numbers, the numbers of places you have been, the GDP index numbers, and even the numbers of girlfriends and boyfriends you have. They do not care about whether they really know their online friends or not, many of whom they have never met in their real lives at all. They are just happy to make money and won’t bother if the money is clean or dirty. They do not care whether what they are doing is good or bad if that is exciting. They never bothered about how they had been to those places, by hook or by crook if they got to be there. They do not care about love if they can enjoy sex. But that’s not it. We can not do the numbers and show how much we are indebted to our parents. We can not do the numbers and show how much we love our families. It is impossible and it is totally absurd to do so. So you see, my young friend, life is not only about numbers. Life’s got much more than what numbers could possibly express and you should take all this into account. Not just the numbers.
    ============================================

    Gala wrote, “…I thought we might get to the end of tunnel where we saw the light but we even didnt make it there…the tunnel (passage) itself is shut now…”
    To Gala: I think it is better the tunnel is shut down before we ventured into it and fatally hurt ourselves crashing onto an unexpected train at the end of the tunnel! It is better, as a popular Bhutanese saying goes, “thinking beforehand is smart; thinking afterwards is stupid”. It is very essential that we do a very good research about the geological,technological and financial feasibility of building the tunnel first. It is also very critical to make a detailed study about the possible hazards that may result from the tunnel, and how to deal with such hazards. We don’t want you to be inside the tunnel if the tunnel collapses, and if it so happens, we want effective measures to remove you safely out of there immediately. That is the point this commotion about Mckinsey and liberalisation of tourism is all about.
    ============================================

    And finally, McKinsey and Company is charging the government 9.1 million dollars in consulting fees and our Prime Minister can not keep his ass peacefully on his seat. Have you ever wondered why the hectic rush by our Prime Minister to please this Company? As a citizen, I just can’t help but wonder how many million dollars our Prime Minister might have demanded from the McKinsey to fulfil their wishes and realize their dreams with “immediate effect”. Anyone ever wondered like this old man?

  26. Here is another one. The consultant for Ministry of Labour is not older than 25.

  27. Anonymuse says:

    @Bhutanese Blogger
    Let me join you in this lonely corner. I too consider this a cheap shot by the OL.

    The OL mentioned that Ms. Khandelwal was the first consultant, but was she the only consultant?

    Consultants like those from McKinsey do not work typically work alone. It is far more typical that senior partners/consultants are paired with more junior ones to work on projects like these. I would be shocked if the recommendations were drafted solely by an individual consultant like Ms. Khandelwal without additional support.

    Is someone who graduated with her Bachelors in 2001, some 9 years ago, considered a recent graduate? Casting aspersions on an individual’s qualifications based on the limited educational information presented in her Facebook/LinkedIn profiles, is, at best, presumptious.

  28. I think HOn’ OL has created this Blog to debate issues if there are issues to be debated and he has also encouraged participants to speak out their mind. I applaud Bhutsneseblogger and Anonymuse for speaking their minds and this is certainly healthy to probe deeper into issues raised by the OL. There always has to be some amount of opposition in any aspect so that the reasoning becomes sound.

    I AM SURE HON’ LYONPO OL – WILL NOT MIND.

  29. I think people are being narrow minded now. Until now although our beloved kings have singlehandedly developed our country we the civil servants, politicians like OL, and general citizens have not done anything with any serious thinking to the country.

    It is because of this reason that we lag behind in so many areas.

    I do agree that we have highly qualified people both in the civil service and the private sector. But these people lack commitment and at best most of them are egoistic. All of PDP’s candidates have such nature.

    It is high time that we wake ourselves from this deep slumber and do something that will bring about lasting benefits in this country.

    I think Hon’ PM did the right thing by engaging the services of the Mckinsey and company at this critical juncture. (For sure I can say that the service of the company was acquired lawfully through open international tender).

    We are not paying the Mckinsey and company for setting the direction of our country.

    They are here to give us better ideas and implement them in achieving the goals and objectives of the tenth plan.

    They will hopefully instill sense of commitment and dedication to other civil servants who are working with them which all of us lack.

    I would recommend the hon’ PM and the Mckinsey consultants to brush aside such comments and concentrate fully on the targets you all set to deliver.

    If these targets are not delivered then we know where the accountability lies.

  30. (1) Nu 450 million for a study done by a 2008 graduate called Khandewal. I am schoked. She and her group of Mackenzi really Khaod khaod (ate ate).This amount is budget for many of the districts for the 9 five year plan. Haa district 9FYP budget is NU 542 million and Gasa is Nu 244 million. Tsirang get 9fyp budget of Nu 526 million. This is Five year budget. actually given is less. Khandewal and group are bigger than Gasa and Haa for five years. They are bigger and more important for DPT than most of our dzongkhags.

    (2) The deal must be secret. Payment reason must be secret. Not this immature graduate’s report which is worth nothing. Does khandewal bring Indians from Hasiamara and Jaigoan to make up for 100,000 toursits recommened. That will be easy for her. Does she bring 100,000 for top shots’ tourist companys and make money for them. is that the idea? Is it good for everybody. If not why pay our Nu 450 million.

    (3)Who made the decision to bring mackenzi. Who paid Nu 450? Who authorised. PM? GNHC Sec? Cabinet? Finance Minister? We want to know? We want to see the documents. How much tax they paid to RGOB, according to income tax? This amount is very big. In 2006/7 total amount collected for business income tax was Nu 367 million. Total amount received for import duty was Nu 144 million. Total amoutn collected for tax on payrol/PIT in that year was Nu 174 million. All the money collected from business income tax and payrol/PIT was given to Makenzi without any public discussion for unwanted papers and documents. Is there no law nor parliament to control this? Is this democracy? Govt. do not use our money as if it yours private money which you will not give to Khandewal. If you want give your own money to show friendship with Makenzi.

    (4)Lyonpo Opposition. You are not doing enough about this. People, you are not doing enough. TCB DG is also misusing his position. There is no transparency. Why Khandewal is paid for no good report. No quality control

  31. Enlightening!…so much on how should a tunnel be…as long as it gives us a decent passage, all we want is to get to the other side and embrace the brighter light there…lets not expect to take a majestic walk at donkey’s pace…otherwise, we will have missed a lotsa good pairs of shoes and our grand children would still be walking bare-footed….

  32. guest111 says:

    Can anyone (or know anyone who) can take up Namrita Khandelwal’s place.

  33. Replier says:

    (1) The bad quality and poor quantity of work vs the huge amount paid are worthy of suspicion in this case. The process of selecting and payment is suspicious as well. The experience and qualification of Khandewal is too low to be accepted as a consultant. There were other Indians of questionable capability who were trusted for this suspicious and questionable work.

    (2) Which agency and individuals were the decision makers in this case. PM? Cabinet? Finance Minister? GNHC Sec.? This should be known for public knowledge about the kind of competency of officials we have in handling such awards and assessing the validity and standards of reports. It is simply our right to have this information and know how they made collective decision or colluded decision as may be the case. More can go wrong in future if all of us care not to think and respond.

    (3) Nu 450 million for Makenzi is not a small amount. in 2006/7, the total business income tax was Nu 367 million. Total tax on payrol/PIT was NU 174 million in that year. It means that the money paid on business income tax and PIT was given away to Makenzi to be paid to Khandewal and the like.

    (4) 9FYP budget for five years for many districts are less than NU 450 million. Gasa is given Nu 226 million for five years, Haa is given Nu 256 milluion for five years, Tsirang is given Nu 468 million for five years, Yangtsi is given Nu 396 for five years. Pema Gatshel Nu 430 million and Punakha is given Nu 445 million. These are budget. Actually they will get less.

  34. Tashi Tobgay says:

    I hear that Mckinsey was hired to do some work in the Phillipines and since they were creating a mess of things, they were fired before the project was complete and another consultant hired. We should do the same thing with Mckinsey here in Bhutan but DPT may have to refund. How cunning can our leaders get?

  35. @chhophyel – I know that US$9.1m is lot of money but I believe it is for a host of initiatives that are underway at the moment. It is very easy to get emotional here. But I am sure that our Government would have evaluated the opportunity costs of spending this on McKinsey consultancy.

    @Tangba – On your response to my comment on numbers – I will only say that you demonstrate here a logical fallacy called “red herring” – diverting attention from the real issue by cleverly using rhetoric.

    There is also an urgent need for a few of you (including our Hon’ble OL) to understand how McKinsey works and what their credentials are. Anonymuse has noted in his comment that they work in teams. It is good to be critical but we also need to appreciate McKinsey’s record of delivery.

    And can we now stop talking about how young or old the consultants are?

    Anyway – If you all balk from discussing the real issue – let me go ahead. In our Hon’ble OL’s previous post – “PRESS RELEASE”, he mentions that liberalising the tariff will –

    1. Undermine the positive brand image of Bhutan
    2. Result in unsustainably large inflow of budget travellers causing social problems
    3. May not create employment as promised
    4. Could reduce Government’ foreign direct earnings

    I still don’t understand how tariff liberalisation would have negatively impacted our brand image? I have met a lot of tourists who have visited Bhutan and people who haven’t visited Bhutan. I can assure that our brand image is not because of our existing tariff in place (as our Hon’ble OL likes you and I to believe). This is another red-herring here. It is solely because we as a country with our pristine environment, beautiful mountains and valleys, colourful monuments and festivals and our nature as a hospitable and friendly people – offer an exciting and a totally different experience for visitors. This is the exclusivity and not the tariff.

    The proposal required tourists to use a registered tour operator who decides the rate he would charge his customers. If s/he is willing to operate an inefficient, unsustainable and an unprofitable business, he can charge just US$100 (who could qualify as a budget travellers) – but such businesses will not survive for long.

    A minimum of US$150 even for very large groups (questionable for our briefcase tour operators) may not make good business sense. So the tariff would have to be high enough to cover all the costs (accommodation, meals, travel, etc.) including operations and management costs. This would mean a price tag of around $200 anyway. So would this have caused a sudden deluge of budget travellers? If a traveller has around $180 – $200 to pay – he wouldn’t be a budget traveller. And why do we associate social problems with budget travellers? This requires more substantiating. A mere statement is just a statement. But anyway since a tourist would come through a travel agent – it would be the responsibility of the travel agent to ensure that the tourist respects the sentiments of Bhutan and the Bhutanese.

    Rather I thought liberalisation will improve competition within the tour industry requiring tour operators to manage their businesses professionally, provide better services and enhance the overall experience of our visitors. This will also mean up-skilling, investing more in HR, training people, better marketing and attracting more and better people to work in this industry. A good customer experience would also mean that the tour agent can charge a premium and attract more affluent tourists.

    Further, the policy retained the royalty (currently US$65 a day) to the Government which ensured revenues for the Government from the tourists who visit Bhutan. And in concerns about Government’s foreign direct earnings – whatever our tariff policy, these would be only proportional to the number of tourists we get and the rate our tour operators charge (currently US$200)

    Bhutan currently has an external debt of Nu. 35bn, close to 60% of our GDP for which we pay interests close to £1.8bn (external as well as internal debt) each year. We are overly dependent on aids and grants. Our revenue largely comes from hydro-power. We have made incredible progress in the last few decades but look at any of our indicators – even the ones CBS does on GNH- we have opportunities to make further progress.

    Are we always going to live this way?

    Living in Thimphu – it is easy to romanticise and be sentimental about the way of life in our villages. The reality is that our villagers also aspire to a good quality of life and they would like to see their children to be educated and take up a career or a vocation that they like. This would include farming. But we should wish away the days where people have to take up cultivating barley and potatoes and walking barefoot for want of better choices or opportunities.

    Progress can only be made if we build on our strengths (like tourism, our identity as a nation, etc.), think creatively and differently, make the right (sometimes unpopular) choices and get things done. Let us not yield to argumentum-ad-populum (as some of the philosophers would have said).

  36. Chhophyel says:

    @bhutanese blogger-FYI I am not emotional about the amount. You may think that the government evaluated the opportunity cost, we have seen enough of this that the government failed to look at opportunity cost, they were too excited to believe with the McKinsey’s wishful thinking idea. I think you have a fair knowledge about the figures, but you can’t seem to get the facts straight in your head. If you talk about budget travelers, and high end tourisms, those are two opposite sides of the pole. We have many choices either we believe in selling (volume), marketing (target groups) and societal marketing. The later two are an excellent fit for country like ours. So, what the liberalization tourist tariff would have favored mainly is selling. Today, even the auto makers are figuring this out, they are rather investing on creativity and not too much focus on selling concept, because today’s consumers are lot more sophisticated.

    @bhutanese blogger said the following:
    “I still don’t understand how tariff liberalisation would have negatively impacted our brand image? I have met a lot of tourists who have visited Bhutan and people who haven’t visited Bhutan. I can assure that our brand image is not because of our existing tariff in place (as our Hon’ble OL likes you and I to believe). This is another red-herring here. It is solely because we as a country with our pristine environment, beautiful mountains and valleys, colourful monuments and festivals and our nature as a hospitable and friendly people – offer an exciting and a totally different experience for visitors. This is the exclusivity and not the tariff.”

    Let me help you answer few and might provide some new ounces to quench your curiosity. No one and neither does OL denying that we are unique country with so much to offer for avid travelers. The fact that government approach towards the tourism was a smart move to focus on high-value, low-volume. We can achiever higher numbers if we market smartly in the spirit of high-value, low-volume. Otherwise, if we allow people to travel to Bhutan and accept less money, we might get influx of travelers but technically the target groups of ours ie high-end travelers will rather choose other unique destinations. so this will cannibalize the brand image of Bhutan, and how long can we absorb large number of tourists, considering our population is not even 1 million.

    So, you think liberalization will help to create competition within tourism industry, in retrospect, this will only help few big companies at home, and will benefit overseas companies with a deep pocket because they are able and willing to mass-market Bhutan.

  37. Tashi Tenzin says:

    Who is this Bhutanese Blogger? He accuses people of not understanding issues while he is the one who does not understand and a bit thick skinned…

  38. Now that the government has decided to increase the tariff rather than liberalizing the promising vibrant sector, our voices have waned…there are now many instances which makes us infer that the government have been totally indecisive….

  39. Konsultant says:

    We can discuss about the tariff and undercutting and so on…as another topic. Let us not miss the point here. We are talking about “consultants” and let us try and stick to that. Ok! so we got two names so far. How about gathering more names and look into their credentials. A novice consultant just cannot show up in Bhutan and start to advise the government. If at all they need to, first they got to build their CV, practise in other countries and then TRY in Bhutan. Unlike some countries where consultants are required, Bhutan’s model of development is an exemplary one and other countries look upto Bhutan. Bhutan has perhaps the highest number of well educated human resource in a bureaucracy.Consultants should infact pay Bhutan for being able to learn from Bhutan. You should tell them to pack their bags & leave and maybe come back when they are seasoned enough to borrow your watch and tell you the time. Bhutan need experts once in a while to allow you to “think outside the box” and make things happen pushing through the bureaucracy but you need seasoned experts. More names & google them!

  40. Thank you, Tangba, for your enlightening post. It gives a clear perspective of the whole issue.

    When will our government ever wake up and stop wasting our nation’s limited valuable resources? As many people have pointed out, we have our own people who are more capable, experienced, and smarter than McKinsey consultants. The problem is our government and senior officials are too arrogant to listen to our own people. They don’t like the fact that there are people in our own country who are smarter than themselves and have far sighted ideas and intelligence. They would rather spend millions and millions of $s to hire a consultant to gather all the information and ideas from our own people, package them in a standard format, and present to them to the government as the consultant’s ideas. They don’t care about the amount of money charged because it’s not coming out of their own pockets. These kinds of irresponsible behavior by our government will eventually bankrupt our nation.

    If we truly love our country and if we truly want the best for our country, we should put an end to these kinds of wasteful spending including the CDG and MPs’ unlawful pay raise. People like the Bhutanese Blogger and others defending McKinsey should think twice before posting such irresponsible comments. Look at the opportunity cost of how we can make better use of this money. And as Tangba pointed out, it is a lot of money! Can we afford to waste our limited resources in this manner when we have hundreds and thousands of our youth unemployed, and more than 30% of our own people living in poverty with no access to basic necessities that you and I take for granted. What is being discussed here is not rhetoric but facts backed by numbers. How concerned would you be if your own personal money is being wasted by somebody else in this manner? Let’s be more responsible citizens and help, in whatever small ways possible, to make best use of our limited resources.

    The US$9+ million belongs to our nation and to all of us. In the past, we did not have to worry about such issues, because we had complete trust and faith in our Kings. Things have changed now. Our beloved Kings have given back the power of governance to “We the People.” Now, we better take responsibility, individually and collectively, to make sure that the politicians do not take us down the wrong path to fulfill their own short term gains and ambitions. It will be a big mistake to be complacent and have full trust in our politicians. Things have changed completely since March 2008! We better wake up and do our part to hold the politicians and the elected government accountable!!!!

  41. Karma 1 says:

    While I appreciate Tangba for his intelligent post, I also appreciate Replier for putting everything in perspective. What $9+ million (Nu. 450 Million) that our government gave away to McKinsey means in comparison to 5-year budget for various districts, and in comparison to the nation’s annual business income tax and other tax revenues.

    Wow! This whole thing is really disturbing. Our country, at this stage of development, can ill afford such irresponsible experiments with McKinsey’s on-the-job trainee consultants.

  42. @Chhophyel – I tried to define a budget traveller as somebody who would pay US$100 or less. Would you please define a budget traveller? We will not progress beyond this if we don’t agree on this definition.

    The new policy retained the US$65 royalty and the requirement for a tourist to come through a tour operator. So add on accommodation, internal travel, costs of meals and guides, and operational and management costs of the tour company – which will bring the cost to a tourist to around $180-$200 per day. This has to be – otherwise a tour company will not be profitable and sustainable. So we will still be getting high-end tourists that we target. No question of budget travellers or mass tourism or a tour company accepting less money as you mention in paragraph 3.

    On the brand image – I mentioned about what we are because our Hon’ble OL wrote in his post “PRESS RELEASE” in January. I direct all of you to read that post on this blog.

    “Liberalizing the tourist tariff will undermine the positive brand image that our country has carefully cultivated and enjoyed over the last three decades. Most foreigners, including those who have never visited Bhutan, perceive Bhutan as a high end, exclusive destination. They consistently applaud the existing tariff policy as responsible and sustainable measures that are also in line with the principles of Gross National Happiness. Liberalizing the tourist tariff, even if it actually amounts to increased tourist spending, will harm Bhutan’s brand image.”

    Here – the whole premise is that our tariff policy makes Bhutan a high-end exclusive destination while this is not the case. My earlier comment reproduced below refutes this wrong idea that we all have.

    “I can assure that our brand image is not because of our existing tariff in place (as our Hon’ble OL likes you and I to believe). This is another red-herring here. It is solely because we as a country with our pristine environment, beautiful mountains and valleys, colourful monuments and festivals and our nature as a hospitable and friendly people – offer an exciting and a totally different experience for visitors. This is the exclusivity and not the tariff.”

    The new policy would have maintained this. There is no risk of cannibalisation of our brand image. Only that the new policy would have required the tour industry to be more professional, more entrepreneurial, more responsible and more competitive rather than functioning under the protective veil of a structured and assured tariff irrespective of the services rendered to the end customer.

    And I reiterate – if we love our country and want to see progress, we need to think differently and make difficult decisions. This is what I think McKinsey brings in right now. We have talented people in the private and civil service and this will add on to their experiences and skills and not the other way round as I and many of us would like to think so. The reality is quite different from what we want. I agree that the new policy has been a failure not because it was flawed but because of sustained and unsubstantiated opposition.

    As for the other comments – please be assured that I have read them but I struggled to understand what they were getting at. A bit more clarity will help everybody.

    Finally, always up for a good debate but not for some name calling and personal attacks which I do not engage in.

  43. naw-tsha-wai says:

    I appreciate Bhutanese Blogger for the systematic approach adopted in his reasoning. His statements make some sense to me as they are not just plain comments without any supportive points. Some make comments based on wild guesses and emotions. It made me laugh when someone suggested that I search on google to find some supporting research studies, as if there are no other reliable research databases. Healthy discussions are good but I like to believe more when logical points are raised like Bhutanese Blogger.

  44. ” naw-tsha-wai says: March 7, 2010 at 6:38 pm I appreciate Bhutanese Blogger for the systematic approach adopted in his reasoning. His statements make some sense to me as they are not just plain comments without any supportive points.”

    Yeah right! He strikes me as a pseudointellectual trying to impress people with “reasonings” and “numbers”.

  45. Konsultant says:

    Here is a post in Bhutan Observer made by travel industry veteran Mr.Mukesh Gupta on March 5th, 2010-
    “McKinsey or McDonald-ization of Tourism in Bhutan: I am writing about the “prestigious” firm of McKinsey & Company hired by Bhutan to “advise” the country as to its potential growth and / or development. First of all, I am not sure if the hired company’s task is related to “advising” the country in general terms or that it relates specifically to the Tourism aspect of the country only. In any case, knowing and loving Bhutan as I do, I think whatever the reason and purview of the consultancy, I personally think it was not a good choice… Please let me explain this aspect of the question. Being in the travel industry for over 30 years, I feel that I am somewhat credible and do have the necessary experience and expertise to justify my above assertions.

    In this please allow me to give you a short, but relevant, background on myself. Starting in the mid-70s I was very closely associated with a travel and trekking company based in Darjeeling / Sikkim and Nepal. In fact, the company that I was associated with was the FIRST agency to actually send foreign (western) tourists to Bhutan. Later on when I had my own agency in Darjeeling, we were very closely associated with the kingdom and its travel industry. During my several visits into the country I had the opportunity to see the beautiful country and its peoples– specially in its nascent stages of developments. In fact in the early 1980s I even spent a couple of weeks in the country trying to reccy several of its rivers as possible commercial rafting trips in the country. In any case I mention these only to reflect my long time association with the country from its very inception when it first opened up for tourism. In 1984, I moved to the USA and was lucky to involve myself in the travel industry and soon thereafter started my own travel company (www.travelinterlink.com) specializing in travel to exotic destinations of the world. As such I have been very fortunate to research, design and operate very specialized trips for my clients. Special trips such as expeditions to the South Pole….. exploring the dense jungles of Africa looking for the mountain gorilla…… or enjoying the depths of the Great Barrier Reef in Australia. As such I have gained a very good insight into the many (if not all) of these exotic and as I call them– very special places – of the world. However, selling and arranging– for over a quarter of a century– very such special tours and programs to many of these “special places of the world,” I must confess that no destination holds more of a special place in my heart than does Bhutan… and that is why I have taken the task of writing this letter and offer my viewpoint for whatever it is worth. This and a very recent turn of events that has taken place in my life that has tempted me to write this…. That recent event is the taking over of the operations and the management of BHUTAN TRAVEL in New York. For people who do not know, Bhutan Travel was the first and the Official Tourist Office of the Royal Government of Bhutan. It was in fact for many years the Royal Bhutan Tourism Corporation’s office in New York and conducted its affairs sending tourists into the kingdom. Ever since my arrival in the US I was very happy to stay in touch with Bhutan through Bhutan Travel and starting January of this year was very fortunate to take over the company when its founder retired. As such, when I write about my thoughts on the future of tourism in Bhutan, I speak with a deep sense of love, experience and insight. While I agree completely on the Government’s intention of creating more jobs, income and employment for the young and the growing educated… we must always take into account at what costs–all costs. And this is where I think that the choice of a consulting company such as McKinsey is doomed from the start. This is because while McKinsey is undoubtedly at the top of their business, they are, without doubt, at the bottom when it comes to understanding the philosophy of country like Bhutan…. The bottom line for them is the bottom line– dollars. Everything is measured in terms of dollars and cents. While I happen to think that what Bhutan needs is more of a good sense and less of the bad cents.
    A good and careful “expansion” of the existing tourism policy in itself can generate more income and employment. I absolutely do not think that Bhutan should “open” up its tourism to more and mass tourism… if anything, I feel that it should be made much more exclusive either by price or demand (or both) management. Proof of my hypothesis is in the fact why Aman Resorts chose to have not one, not two, BUT FIVE of its super deluxe, super-priced resorts in the country). What attracts destinations such as Bhutan is its exclusivity…I know this is true.. I deal with such customers on a daily basis… We do not need Bhutan competing with Barbados… or with China and with all the other countries near and far, all the way down to Zanzibar…If that happens people just start weighing one against the other in “dollar terms.” .Bhutan does and can have its own exclusive place… and THAT is what does now (and will continue to in the future) attract the high end visitors with minimal environmental impact. After all that is what we all want to happen everywhere… But the point is that it is possible in a place such as Bhutan. And it is possible now. In addition, there are lots of other ways we can increase the high end tourist inflow and thus increase income and employment… How about high end eco and nature lodges in the National Parks…. mountain flight-seeing by helicopters… even landing at some of the high mountains– for a fee……. Allow commercial “expeditions” with good royalties to some of the smaller peaks…..How about “eco-conferences”. i.e. allow only those small and special conferences to take place in the country that will do minimum damage to the environment… I would call them “boutique” Conferences…. Conferences that by the very nature of them holding the conference in Bhutan would mean something and reflect something.. They can be small “peace conferences”… “environmental conferences… “ Conferences dealing with border disputes and such. In other words.. small, low impact, high end, high value conferences– with a message… a good message. In fact the more I think the more convinced I am that this could turn into such an unique product for the country… in fact something very new in the market defined by its nature. It would be very distinct and even revolutionary– in this field….. All one needs to do is to sit back, relax and think… it would, perhaps, could even have saved millions… 10 millions, to be exact.

    I could go on and on listing the philosophy of the esteemed consultants such as McKinsey as to why they are not a good fit in this particular case…..but a good search and research on the internet will take any avid computer user there for an answer.

    I hope, that at the end, the decision will be made based on long term happiness rather than short term economic gains.. after all having McKinsey there we do not want any “McDonald-ization” of tourism in the country,do we ?”

    Thank you….
    Mukesh Gupta

  46. Chhophyel says:

    @bhutanese blogger-I think we all are up for good debate, and like you I despise name calling and personal attacks. I do agree with you on few things though that we need to think differently and make difficult decisions. I like your attitude towards this approach, as long as we are mindful to what avenues we embrace change and make difficult decisions. Absolutely not for the tourist tariff when so much so was on stake. Alright, let me break it down for you with the budget travel, for me, I wouldn’t simply define budget travel as somebody willing to pay $100 or less. It is a commons sense here, budget travelers are someone who loves to travel under budget, for them the determining factor is “price” meaning they will do what ever it takes to scrap her and there to reduce cost. In a old fashion way, right away when you think of budget travel, it associates with backpackers. If we get too excited with the budget travelers here to attract influx of travelers to Bhutan, let me say this we don’t have a UNIQUE SELLING PROPOSITION. I would rather go for high end and invest my dime for higher returns.

    Respectfully saying I think you are confused with the $65, plus $180-$20 and then you conclude that we will still be getting high end travelers. Numbers means a lot in the minds of consumers and selling tactics are the key, so lets not make it too complicated. Let me clarify, say if your selling proposition is based on $100 or what ever the liberalized tariff chooses and say that to travelers, then say BTW adding accommodations, guides, transportation, meals the total comes to $200. You don’t have a target group, you are only expecting anyone who wants to travel under budget will travel to Bhutan. Therefore, never in millions years expect high end travelers will be too excited about this approach. It is like making an ads for hyundai, ford, and lower end auto brands and expect by some virtue that Mercedes, lamborghini, lexus target groups will come to purchase. So, high end travelers are sophisticated, for them price is not really their decision factors opposed to their thrill of anticipation in experience. We are selling experience, these travelers are up for that. We have finally figured out the way to tap into this bracket and that is why most tour operators finds the high value low volume a great selling proposition. It makes it exclusive and a brilliant way to sell. Let me give you one example; when apple or sony comes up with new product, they always say limited numbers. They will buzz around saying that they are going to come up with what ever number maybe 1000 pieces, so customers stay in line and everyone loves to get one. Technically, they will have maybe 10 times more numbers in their warehouse. Did you see ads online? lots of stores will say limited numbers, only 10 piece left but you will get the same ads over and over again. I can certainly give you hundreds of more selling tactics. A long time friend of mine emailed me in the midst of tourist tariff hula hula that he would like to visit Bhutan for the last time because he was so sure that government will approve the tariff liberalization idea, and certainly more budget travelers will be in the country. People like him are genuinely in love with Bhutan, they don’t want to see more tourist heads than locals :)

    I already read your points that you have reiterated, but again the bottom line is CANNIBALIZATION OF BRAND the ultimate result of liberalized tourist tariff. I won’t go into details but there are number of examples. I mean cannibalization of products and brands often happens, that is why we either kill the brand or find ways to save it.

    I know we can’t agree on everything, we shouldn’t otherwise it will be boring. But I hope you will consider few take aways and approach it from a different lens.

    cheers!

  47. To Replier

    By the way what is Mackenzie??

  48. @ugain – I don’t have to impress anybody. I am just expressing my thoughts (obviously backed with numbers and logical reasoning) on the skewed view the post and comments present.

    @Chhophyel – You have me confused.

    If you will clarify the following, you would help me and the readers tremendously –

    1. Could you please define who our target market is? I would like to think it would have been the group of people who could pay at least US$200 per day. It would be ludicrous to think this is not so. It was also our Government’s intention to attract only people who can pay more than US$200 per day popularly bandied as “High value, low volume”. With the new tariff – the target market has just changed to people who can pay at least US$250 per day.

    2. Could you also describe, who or what, in your opinion is a high end-traveller?
    By the way you describe a budget traveller – “as someone who loves to travel under budget” – even the high-end travellers travel within their budget.

    My point about royalty costs, accommodation, meals, travel, guide, operations and management costs was to illustrate that from a cost-based-pricing perspective – irrespective of what our tariff policy is – tour operators will have to charge close to the minimum tariff our Government has established now. So in essence this tariff policy achieves nothing at all.

    Exactly – price is not everything to the sophisticated travellers and value is different for different people. If the perceived value is very high, people are willing to pay over-the-top price. You don’t sell high value by putting a price on it. Now with this policy what we have inadvertently or rather foolishly done (cheered and hurrahed by people who haven’t got a clear grasp of the whole issue) is to put a price on value.

    With the US$250 per day minimum tariff – we will only attract people who will look to pay around US$250 per day irrespective of the value a visit to Bhutan has to them. Pricing could have been better left to the industry dynamics and competition. Having a tariff policy in place doesn’t give Bhutan a unique selling proposition in any way.

    To come to your example – Apple sells not because of its price tag but because of its innovative and creative designs, and the great user experience Apple products provide to the customers. It is solely because of the product quality and its performance rather than the price that Apple or similar brands can command premium prices.

    So our proposition should be based on what value we deliver as a destination rather than on some tariff policy which, in fact, undermines the whole idea of value based tourism.

    I am also yet to reconcile where you stand in your views. You don’t obviously want liberalisation of the tourism sector. You said

    “So, you think liberalization will help to create competition within tourism industry, in retrospect, this will only help few big companies at home, and will benefit overseas companies with a deep pocket because they are able and willing to mass-market Bhutan.”

    But you are clearly for WTO based on your comment on the post Bhutan’s WTO membership. So what are you for? You contradict yourself.

  49. chhophyel says:

    @bhutanese blogger-various obvious reasons we are not going to agree on anything, we are going to talk about apple and orange anyways. Let us not dwell on the past, now government is going to increase the tourist tariff not to reduce it. Period. By now anyone should be able to define target market and at the expense of others time I don’t think we need to get into all the technical terms etc. Reference to apple products, I know what apple product is how innovative they are, by all means apple freaks are going to purchase the product no matter what. however, what I said was that even companies like sony or apple uses selling tactics called ‘Scarcity.’ Next, I am not contradicting my views, I believe joining WTO will help us more than it will hurt us,we will have equal if not stronger bargaining chips should there be any international disputes. I thought we should weed out the options, not simply think about what others are saying or believe in the misconception about WTO. We are all making our opinions based on general assumptions. We don’t know the government plans for next 10 years, what areas are we trying to expand, certainly various factors will cause sidekicks in accession to WTO. Nothing is impossible if we implement policy with care. I am interested to hear PM’s justification to why he is torn between ‘YES’ or ‘NO’ to WTO. I am also very much inclined to know the position of oppostion party about WTO. We need to look at both parties ideas on the table, otherwise, we all are simply barking the wrong tree. Adious fellas!

  50. @chhophyel

    Neither are we talking about apples and oranges nor are we dwelling in the past – the issue is very relevant even if the tariff is raised.

    Never mind – it disappoints me when people make claims but aren’t able to answer straight simple questions and resorts to techniques which obfuscate the whole issue.

    Anyway pleasure reading your ideas.

  51. I don’t think it is right to discriminate someone based on their age. Most brilliant minds start at very young age.
    I think we in Bhutan are so used to 50 year old , class 8 graduates occupying senior positions, we don’t like when someone young and qualified offers new ideas.
    There some people in the world, that becaome billionaire in their twenties. Even Bill Gates, became worlds richest man when he was in his thirties. So never under estimate someone just because they are not your average 50 year old class 8 passed minister from Bhutan.

  52. Tree hugger says:

    Government should immediately replace those “life-threatening” pool vehicles, instead of spending huge sum of money on Mckinsey and Co. Service delivery and smooth functioning of government offices, especially the field offices, are severely hampered and impeded by very old conditions of pool vehicles. Government should recall all old vehicles and provide new ones at the soonest possible to expedite delivery of services to the people.

  53. sithartha says:

    Why did we get in the mess in the first place? Why didn’t the government keep it simple so that any ammendments can be cost efective? Why Mckinsey to teach us how to manage our country? This is contrarary to our GNH philosophy. 9 million dollars down the drain which could be used to educate Bhutanese people or build hospitals. The government forgot such fundamental issues. Keep Bhutan as Bhutan and not bring it down to dumps.

  54. Mckinsey! Who selected them in the first place? I was in a discussion with them one day and what they had to say was uncertain and crap.
    As a Bhutanese, I was ashamed to “agree” to their “crape” coz they are “consultants” to the Royal Government of Bhutan.
    Congradulations Mckinsey, you are never short of convincing words and well cooked crape. Well who decided to select them anyway?

  55. I know this i kind of a really late response. Having read what is available on the ‘Mckinsey’, it seems very similar to the what the people’s project is all about. Maybe I am mistaken on this and if I am, forgive my ignorance.

    having said that, I agree that maybe a team of our well educated Bhutanese persons could have done this.Too late though to pass comments. We reap the fruits of the seeds we sow! Live with it!

  56. This post is another episode that vindicates my claim in one of my posts that we Bhutanese, exemplified by our no less than PM, have the tendency to grossly underestimate the potentials of our fellow country mates. There are lots of qualified people in Tourism and in other agencies (sya Department of Forests) who can do far better than McKenzie’s amateur employees. There are people in DoF who have worked and studied on tourism as much as TCB people have. Note, there are people who have done their PhD on tourism. Why not make use of them. Why not make them show the worth of the expenses incurred on them.

  57. After all, everything boils down to leadership. Everybody likes to talk good and hear good. Very few likes to take risk and challenges for a big change.

  58. Cunsultant says:

    Fuck you guys, McKinsey rocks!

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