Essential stuff

Article 14 Section 7 of the Constitution requires that, “A minimum foreign currency reserve that is adequate to meet the cost of not less than one year’s essential import must be maintained.”

But what constitutes essential import? Salt, shoes, sicnidizole – surely they are “essential”. But what about construction material, like, say, CGI? And raw material for industries? Are they essential? And how about arms and ammunition? I think they are essential, very essential.

It’s important to have a proper definition of what, in our context, constitutes essential import. It’s important because that definition will determine the “minimum foreign currency reserve” that must be maintained by the government at any time.

We don’t have a clear definition. But last year, when the government sold US$ 200 million from our foreign currency reserves, they told us that we still had US$ 702 million in our reserves, and that that would finance 13 months of essential import.

Divide US$ 702 million by 13 and multiply that by 12 and we quickly get US$ 648 million, the amount that, by the government’s own reckoning, is required to finance one year’s essential import.

That was in December last year. But yesterday, just four months later, the prime minister announced, on BBS TV, that our foreign currency reserves stand at US$ 716 million, and that that can finance 36 months – that’s three years – of essential import. So basically, the prime minister is now telling us that US$ 239 million is enough to finance one year’s worth of essential import.

Between 648 million and 239 million lies huge difference. And that difference points to two conclusions. One, the government is getting ready to sell even more foreign currency from our reserves. And two we need a clear definition of “essential import”.

The prime minister has proven that the government – this government, and others in the future – cannot be trusted to provide an honest and consistent definition of what constitutes “essential import”.  Governments will define, and redefine it, to yield to immediate temptations of selling off our foreign currency reserves.

We need a better way of defining “essential import” and, by extension, of calculating the “minimum foreign currency reserve” that governments must maintain. One way would be to form an independent authority whose duty it would be to decide, without bias and from time to time, what constitutes “essential import”. But for that to work, the authority must have broad-based representation including members from the government, RMA, judiciary, private sector, and His Majesty the King’s secretariat.

 

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  1. Well, the definition of “essential stuff”will vary from people to people. For a simple minded folks, essential stuff may include enough rice, cooking oil, salt, some vegetables, cloth to cover and sleep, shelter to protect from natural elements, medicine if fallen sick, drinking water; but for materialistic people “essential stuff” may include almost everything under the sun. It will be darn difficult to arrive at acceptable definition of essential stuff when we have people with varying degree of socioeconomic status.

    But in the present context of rupee crunch, i will fully go along with PM’s definition of essential stuff that include food stuffs, medicines, expenses for education and on-going mega hydro projects. I am also very happy that PM will give special emphasis on agriculture because it the sector that will sustain Bhutanese in times of difficulties and will also contribute to socioeconomic development. I think government is making a right noise and taking right action, and we must extend our supporting hand.

    Cheers

  2. the moon man says:

    This just reminded me of the quote I say a few days ago by P.J. O’Rourke. “Giving money and power to government is like giving whiskey and car keys to teenage boys” never ends well. Take care now:)

  3. I definitely expected the OL to come up with another point of criticism to PM’s address and I’m not wrong. If OL was doctor and and a patient comes with complaining for cough and cold, he wwould diagonise as cancer. OL must learn from PM if he is to become a part of ruling government later. Empty vessel makes more sound.

  4. Pro democracy says:

    I agree with the PM’s interpretation of essential stuffs. And i am sure desperate situation demands desperate measures. Going by the current trend of not having enough rupee in our country, it is worth not expecting luxuries in our essential list. But one thing that strikes me is that, what are the essential stuffs during the normal times and during the problematic times like now.
    It would have been clear for us as a citizen to know it. Also with the government spending being reflected as a major cause of rupee problem in the country. I think the government has to let the citizens know all those that affect nation and general public as a whole.
    Its fine if PM says that USD 239million is sufficient to finance one years essential imports. Then the government should also stick to the predictions ($239M). Rather than going for luxuries that would cost more than $1000M.
    Thanks OL for bringing ‘essential’ in your blog. I as a citizen will try to curb spending if i have a clear definition of what is essential.

  5. If I heard it correctly PM mentioned something like 500M USD is sufficient for a year, perhaps another 200M USD is getting sold soon !!!!

  6. I read the newspapers today and I am slightly confused with the statement made by honorable PM. PM has given statistics for import of vegetables, fruits and alcohol. The solution as recommended by him is to check import of vegetables and simultaneously increase production of vegetable by our farmers. How will it be done??? Certainly, increasing production will help, but it is a long process. Same time I was expecting him to announce some immediate measures. What about reducing expenses on increased foreign visits? One more question I want to ask PM is, if the situation was so bad for so many years as he claims, than, how the government was managing so far and more importantly what were the actions, other than selling reserves, the government took to resolve it???

    Just a thought…

  7. These days there is construction boom in few dzongkhags only. In order to get Class A thromde, dzongkhags headquarters to start with, will need to grow. The import will increase. The raw materials for construction, labour (skilled), foodstuff, etc. etc. Therefore, we need to look at the development of the dzongkhags. Power projects will increase, so the imports. Till a saturation on development is reached, there will be increased imports. So we need to be prepared for the unprecedented growth as we scale from a least developed nation to a developing nation. We got to rise and nothing can stop it. So, better we truthfully plan our future as a nation. As a sovereign and independent nation.

  8. bad Abbott says:

    I have a sneaky feeling that the Hon’ble PM put vehs from Japan in the essential list of Imports! the MP and NC are getting their second quota ? that is 72 vehs and foex for that will have to come out of our depleted reserve. So we should eat less, wear less, drnk less so our MP and NC can ride in imported vehs? yes, we will start kitchen garden and give up dependence on Falakata for veggies, actually we should just eat yak and not import any meat? The only solution ! extend the meat ban to 12 years a month !

  9. Rational-Man says:

    OL seems to have listened to the PM’s address to the nation with intentions to reply. As expected he wrote on his blog. For me it seems opposition has no work at all other than to criticize the government only.

    Bad Abbot, you told you that MPs will be provided with second quota of duty free vehicle. That’s not true. You can cross check it MPs you know – even from Dasho Damcho Dorji of opposition party.

  10. Rational-Man says:

    Dear OL,

    You need to be proactive in your actions, at least during the times of national crisis. I know you as an intelligent and capable person. Criticising the government for the sake of being an opposition leader for almost all decisions of the ruling government portrays your intention to woo Bhutanese voters.

    I observe tacitly behaviour, character and personality of our leaders. I am sure if PM is in your shoes as OL, he will definitely make less noise unlike you but call-on you for interactive discussions with his suggestions. On the other hand, I see you avoiding the PM during public function. I noticed one time PM following you to greet you and chat with you.

    I am sorry to write this but it is with my good intention as a loyal citizen. With respect.

  11. Forget everything for a minute. The govt. will do what it must regardless of what people say. The good thing that this crisis has taught us is that there are things we’ve been sweeping them under the carpets. The rot we can’t manage anymore has surfaced now; there are doable things we’ve neglected/overlooked and pretended for too long that things were alright! They were not!
    The only thing left for us to do is grow more food and vegetables, leave the villagers in the villages and provide enabling conditions, provide incentives, quality seeds, cows, layers, bring water for agriculture, create marketing chain to distribute products, improve transport system and 60% of our problems will disappear! Let’s do this for the next 2 years and we’ll be on the highway to real progress from grass root up. Forget everything else including the IT park and Edu City!

  12. Pema Dhendup says:

    It is ridiculous to see the war of criticisms at this hour. Instead, as someone said above, I think it is at crucial times like now that Honble OL should join hands, support and appreciate the good works that the Govt is doing in order to revitalize our economy. No matter what anyone says, we are our own witness. We can see for ourselves that the economy is slowly falling into place. Our internal business is booming, and the business across the border are now drying up. Our identity as an independent and sovereign nation in the world has never been more stronger than now. If HE the PM contests elections for eternity, my votes are for him for eternity. Atleast my loyalty to all the good things that he is doing for the country can never be shaken by any calculated criticisms.

  13. I dont expect anything from OL except critisms to the govt.
    I dont know what kind of a govt will he form if his party ever wins.
    I am sure he won’t be able to handle our closest friend only let alone others. So PDP and also the other parties where we seem to have many egoistic aboard educated ppl who assume they know everything under the sun, pls don’t think that running bhutan is as easy as criticising the govt. It will take ages for you all to gain the calibre of HPM.

  14. If you count only the good things, the bad rot will soon outweigh and will attract further rot. Whatever criticism you read in these pages, try to point out what have been neglected for such a long time given the fact that senior ministers have been ministers long enough to feel the knee deep filth and the dirt and the rot they have been standing in! They should pulled up there socks from day 1 of their having been elected and adorned the new garb! This is their collective failure and it’s their job to get the pieces together.

  15. Dear OL,
    Except to a handful of your followers, majority of the Bhutanese salutes the honourable PM’s great achievements at home and abroad. Bhutan has become a leader to the world in some aspects. As someone mentioned, you not even willing to talk to PM during the public function only reveals your true character and personality. Bhutan never wants leader of such attitude. In other countries like USA, political rivalry does not mix with personal enemity. Once the election is won, the opposition leader accepts defeat majestically and congradulate the winner with full support. Change your attitude at least in public if you aspire to become a leader.

  16. @Karma tenzin i support you!

  17. Pema Yangzom pelga says:

    My contention is PM did say some four months ago that Bhutan had reserves to last for 13 months. Please refer to the media reports at that time. Now he is saying we have enough reserves to last for 36 months for essential imports? have we almost trippled our foreign reserves?

    When they do not meet the targets, change the definition is the mantra of this government as they did in the definition of tourists to bring in 100,000 tourists a year. Ask McKinsey.

  18. OL has nothing but to oppose whatever gov does n says…our opposition is no different from our neighboring countries…opposition should oppose but not on every small issue…should also support in difficult times….unfortunately always on war with gov for every small issue…

  19. Opposition does not mean criticizing almost everything.I think some congruence is also expected of the two parties at times of national crisis like this!

  20. I second Dengpo. The worse thing is OL does not publish some comments which are against him. This blog is therefore not with good intent. Its just to make some political capital.

  21. your honorable excellency,

    I had been following your blog, and i guess i had read all your post. I am really thankful for informative post, and will continue following it. But today after hearing to the speech of our prime minister, i feel that we should support him, and i guess he is referring you in his speech(as someone who is against what govt. is doing). i always find your post reasonable, and correct. i know government had made lot of mistakes, and they made many wrong decisions, and had been irresponsible. But at this time, i will appreciate if u could support government in their decision, and i am sure many will appreciate you too, if you could appreciate and support what government is doing sometime. Many finds you as opposing government on what ever they does. it is good that you inform us on what government is doing, but i am sure many will support you and will be your supportive if you could support what government is trying to do at this critical time.
    You are much more learned, intelligent, far sighted, and capable person. I appreciate you, and i am your fan. will definitely vote you in next election. And i am sure Prime minister can influence many more, but i will be your supporter only.

    its just my views and concern….

  22. dear OL,

    I have been following your blog for quite sometime now. Every time I get signed in to see your blog, I see it is littered with lot of criticism whatsoever the gov. does. Fortunately, Dasho Damcho Dorji is in silent mode. But there are people following you not realizing your antics or may be your core supporter I suppose.

    Definitely RUPEE Crunch is there and it has been there since a decade ago i suppose. But till now, I have never heard anyone of dying of not able to get commodities from India due to rupee shortage. Rather, I myself have learned to respect the sovereignty of my own mother land that it do have significance that it separates from India.
    The world is watching more than it has been and rather I’m amazed by the changes taken place over the few years.
    Moreover, Our business people are enjoying their share of joy and I definitely think this has come at the right time, rather should have come earlier so that we realize the importance of surviving of our own.
    My only request to Gov is please tighten our belts and take necessary action to control the inflation of prices that our businessmen may impose on consumers. Rest is “ALL IS WELL”. I’m living in the border town and not felt any pinch of rupee, rather I’m living with pride..

    Hope OL too realizes it some day…….

  23. Many Bhutanese and I want following changes in you:

    1. Be a professional opposition leader.
    2. Learn to respect the government if you the same treatment later.
    3. Do not try to divide the people by exaggerating the information.
    4. Show positive attitude at least in public.

  24. “Essential” in general is subjective and would differ from individual to individual BUT “essential” in the current scenario would mean the very basic items. And I think your hon’ble OL is clever enough to know the very basic items in this scenario the Govt. is referring to. I see that OL does not leave any opportunity to attack the govt. I am not saying your always targeting them, like I was with you during the OL Vs Govt. case and many others but I do not follow you blindly. The Govt. alone should not and cannot be blamed for this Rupee Crunch. And very soon we will have lost the value of Ngultrum against Rupee and the Citizens of Bhutan as a whole should be blamed for this.

  25. TIME PASS says:

    IS GOING TO OFFICE AND READING ONLINE FORUMS AND OL’S BLOG AND MAKING COMMENTS WITHOUT DOING ANY WORK BUT GETTING PAID “ESSENTAIL”?

  26. Opposition party needs to grow up in terms of professionalism in opposing the government…Today, opposition is opposing for the heck of opposition…Should support where required n oppose when it deem necessary…i was with opposition when opp fought against gov for the constitutional case…But now, looks like opp is on full fledged war against gov for every issue…..that is not professional opposition! ….

  27. I read about Zero Tolerance somewhere but can’t remember where. I don’t think anybody is opposing the govt. for the sake of opposing but merely trying to remind ourselves what have neglected/overlooked or taken for granted. In other words we have been irresponsible for even simple doable things like keeping the towns clean, to keep crime rates down, fire accidents down, traffic accident causing death and damages to property down, controlling the house rents down and coming up with investment plans in rural areas and providing employment to the many educated youth among other things. The govt.’s attention has been devoted to other things no less important but local doables have been put on back burner!

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