Stop digging!

Listen...don't dig

Denis Healey, a British politician, once famously said: “When you’re in a hole, stop digging.”

Digging. That’s what the government is doing by issuing guidelines to relax the implementation of the controversial Tobacco Control Act. According to the guidelines:

Any Bhutanese bringing in tobacco products, more than the permissible quantity for personal consumption through designated port of entry, will not be directly charged for smuggling, but would be levied a 200 percent tax.

The excess quantity would be seized, the citizenship identity card number noted, so that the offender would be charged on the second attempt to bring in more than the prescribed limit.

Why do the guidelines amount to “digging”? There are several important reasons:

First, the government does not have the authority to grant exceptions to the Tobacco Control Act. According to the Act, any person found selling or buying tobacco products “… shall be punishable with misdemeanor if the source of supply is revealed. If the accused fails to disclose the source of supply, he or she shall be liable for the offence of smuggling in addition to the offence of misdemeanor.”

The law is straightforward. And the government must not undermine it. Doing so, like granting exceptions to first time offenders – letting them off with a small fine – could amount to interfering in the judicial process.

Second, why did the police draft these guidelines? That’s not their job. It’s the Bhutan Narcotics Control Agency’s job to make rules for the implementation for the effective implementation of the Tobacco Control Act. And why did the cabinet approve the guidelines? That’s not their job either. Their job is to ensure that the rules made by the BNCA are in line with the provisions of the Tobacco Control Act.

And third, what happens to the 27-odd people already under detention. Some of them are being tried. And some, as we know, have already been incarcerated.

Through the guidelines, the government has now admitted that possessing illegal tobacco for personal consumption is a trivial offense, one that should carry a fine of only 200% of the cost of the tobacco. If so, amend the Tobacco Control Act.

The 7th Session of the Parliament has just begun. So if the government proposes an “urgent bill” to amend the Act, there’s enough time to discuss and amend the Act in this session itself. Otherwise, at least begin the process in this session. In the meantime, get BNCA to take another look at their rules. And stop digging.

Financial services … for who?

A joint sitting of the Parliament passed the Financial Services Bill. 66 members voted for the Bill. Only one member voted against it. That solitary member was me.

I voted against the Bill because it is discriminatory – it favors foreign investors over our own people.

Section 50 of the Bill specifies that a Bhutanese individual cannot own more than 20% of a financial institution’s shares; and that a Bhutanese company cannot own more than 30% of a financial institution’s shares.

But the Bill does not specify the amount of shares a foreign company can own in a financial institution. That has been left up to the Foreign Direct Investment policy. And the present FDI policy allows foreign companies to own as much as 51% of a financial institution.

So basically, the maximum amount of shares Bhutanese individuals and companies can own in a financial institution are clearly defined by law. But the amount of shares that foreign companies can own is not defined by law – instead, it’s left up to a government policy. Today’s policy allows foreign companies to own a lot more shares in a financial institution than what our own companies can own. And tomorrow’s policy could allow foreign companies to own even more shares.

It’s important to specify – clearly specify – the maximum amount of shares that a Bhutanese individual or a company can own in a financial institution. And it’s even more important to clearly specify the maximum amount of shares that a foreign company can own.

Our laws should favour Bhutanese companies over foreign ones. But if, for whatever reason, that’s not possible, both of them – Bhutanese and foreign companies – should be treated equally. Foreign companies should never receive preferential treatment over our own companies.

But that’s exactly what the Financial Services Bill allows.

Foreign investors already have more money, have more expertise, and have more experience. Now with more ownership of our banks, they will, in time, dominate and control our financial sector. That cannot bode well for the security of our economy.

Here’s Section 50 of the Financial Services Bill:

No person shall hold more than the following percentage of interest in shares of a financial institution:

(a)     in case of a Bhutanese individual, 20 percent,

(b)     in case of a Bhutanese company not being a financial institution, 30 percent.

(c)     in case of a Bhutanese company being a financial institution, as per the limit provided under section 53 below, and

(d)     in case of a foreign financial institution, as per the RMA regulations in line with the Foreign Direct Investment Policy.

Going out of control

The Tobacco Control Act is going out of control.

The Thimphu district court sentenced Gelong Sonam Tshering, a monk, to 3 years in prison for possessing a mere 48 packets of chewing tobacco. He appealed to the High Court. But the High Court has upheld the 3-years prison sentence.

Countless others – I’ve lost count … really – are in detention or undergoing trail in various parts of the country. We’re told that there are a couple of tobacco smugglers among them. But all the others were caught with small amounts of tobacco, obviously meant for their personal consumption.

And today, the Paro district court sentenced three men to jail for three years each. Their crime: they were caught smuggling ten packets of cigarettes.

Ten packets of cigarettes, just ten packets – that’s how much most smokers consume in ten days – and three people are going to jail for a total of nine years!

I called the Tobacco Control Act draconian. It’s much worse. It’s utter madness.

Amend the Tobacco Control Act.  And stop this madness before our people go out of control.

Asking questions

About a month ago, I posted the question on Facebook that asked: “What should the National Assembly discuss during the coming session?”

A whopping 1366 of my “friends” voted on the 73 answers they generated themselves. This morning the situation looked like this:

The top five answers, as you can see, are the Tobacco Act, corruption, disaster management, jobs and sports.

But there are many other suggestions. They include citizenship, social security national security, agriculture, irrigation; health, music, alcohol, FDI, BCSR, PCS and DSA.

One enlightened friend suggested that we discuss “How to liberate people from suffering”. And another suggested that the National Assembly “Discuss on raising their pay again”!

Thank you for your suggestions. We – Dasho Damcho and I – will see how we can incorporate them in our discussions in the Parliament and the National Assembly. We’ll do our best.

But I’d like to invite some more suggestions, this time for the National Assembly’s “question hour”. If you have questions that you’d like us to ask the government, please post them here.

Obviously, I can’t guarantee that we’ll be able to attend to all your questions. But I will guarantee that we’ll do our best.

Thanks in advance.

Saving McKinsey

Where's the savings?

McKinsey is costing the government US$ 9.1 million. That works out to about Nu 432 million. That’s a lot of money. The government knows it. And that’s probably why the government makes it a point to tell us that the McKinsey project will bring about “savings” in excess of the US$ 9.1 million being charged by them.

About two years ago, when McKinsey’s “accelerating Bhutan’s socio-economic development” project was first announced, we were told that, “The savings the government makes through this project will more than make up for the consultancy cost.”

A year later, amid increasing public concern about the usefulness of McKinsey’s recommendations in the tourism and construction sectors, we were told that the project had identified, “A preliminary saving potential of Nu 500M over the 10th Plan period for government has been identified.”

A few months after that, when the PM was asked why McKinsey were hired when our own civil servants could have done whatever the consultants were doing, we were told that, “through the project, a saving potential of Nu 500M in the health and constructions sectors has been identified, while additional savings are also being identified in the ICT and agriculture sectors.”

But can McKinsey really bring about savings to offset their huge fees? And, more importantly, will the savings bought about by McKinsey be real?

McKinsey have almost completed their project. So it’s time to evaluate their work. And it’s time to count our “savings”.

Fist, McKinsey says that we can save Nu 13 million by “having a long-term contract with one supplier, and bringing in supplies directly from the wholesaler” when buying medical supplies.

Okay … but is this really something that we didn’t already know? And aren’t there reasons – to prevent corruption, for example – why our financial rules purposely discourage long-term contracts with any one particular supplier or buy directly from wholesalers?

If purchasing medical supplies directly from the source is a good idea, why stop there? Why not purchase paper directly? And vehicles? And fuel?

Second, McKinsey says that using higher-grade steel – Fe500 instead of Fe415 – in government constructions would bring about savings. Higher-grade steel means higher costs, but “theoretically, upgrading to better quality of steel would mean the quantity required will be reduced.”

That’s probably correct – Fe500, a relatively new product in India, is being marketed aggressively and is already becoming popular. So McKinsey or not, wouldn’t construction in Bhutan – yes, including government construction – have naturally migrated to Fe500?

Third, McKinsey says that importing bitumen packed in polybags instead of barrels will result in savings. But it appears that polybag bitumen is not yet available in India. And anyway even if it was available in India, and even it was cheaper, wouldn’t we have the common sense to buy bitumen packaged in polybags over the more expensive barrels?

Fourth, McKinsey says that the government should buy cement directly from the cement factories, and claim for a rebate on the cement it purchases. That rebate, it turns out, is actually the commission cement manufacturers give their agents. So yes, the government will save money by going directly to the source. But in doing so, they’ll be functioning as cement agents. And they’ll drive all the current cement agents out of business.

It’s good that McKinsey is identifying savings for the government. But the savings must be real. The ones they’ve identified so far won’t do.

3-on-3

Good shot!

Ghandians, Dudly Bros, Usuals, Jachung, Jaguars, Local Z, Pvt Schools and Blue Formers – these are jazzy names of the 3-on-3 basketball teams that will play their quarterfinal matches today.

The matches, which will begin at 5:00 PM, will be played on the rather attractive make-shift half-court that has been constructed bang in the middle of the clock tower square. The semifinals will be held tomorrow. And the finals on Wednesday.

The Bhutan Basketball Federation, which organized the tournament, is keeping a close eye on all the games – they’ll be recruiting a national team from the participants.

Two related notes:

One: have you noticed that the clock tower square is being put to very good use? On most weekends there’s something taking place there. And sometimes – like the basketball tournament that’s going on now, and the recent Tarayana Fair – the square is occupied throughout the week. Very good.

Two: have you noticed that there’s been a sudden and significant improvement in sports after HRH Prince Jigyel took over the Bhutan Olympic Committee? Very, very good!

3-on-3

Good shot!

Ghandians, Dudly Bros, Usuals, Jachung, Jaguars, Local Z, Pvt Schools and Blue Formers – these are jazzy names of the 3-on-3 basketball teams that will play their quarterfinal matches today.

The matches, which will begin at 5:00 PM, will be played on the rather attractive make-shift half-court that has been constructed bang in the middle of the clock tower square. The semifinals will be held tomorrow. And the finals on Wednesday.

The Bhutan Basketball Federation, which organized the tournament, is keeping a close eye on all the games – they’ll be recruiting a national team from the participants.

Two related notes:

One: have you noticed that the clock tower square is being put to very good use? On most weekends there’s something taking place there. And sometimes – like the basketball tournament that’s going on now, and the recent Tarayana Fair – the square is occupied throughout the week. Very good.

Two: have you noticed that there’s been a sudden and significant improvement in sports after HRH Prince Jigyel took over the Bhutan Olympic Committee? Very, very good!

Family ties

People's gift

“Throughout my reign I will never rule you as a King. I will protect you as a parent, care for you as a brother and serve you as a son …” so pledged His Majesty the King during the coronation two and a half years ago.

His Majesty the King has kept his promise.

His Majesty has traveled the length and breadth of our country and personally granted land kidu to tens of thousands of farmers. He has walked – sometimes for days on end, in the sun, rain and in the snow – to meet our remotest villagers, and has cooked for them, slept in their houses, and granted kidu to the destitute, the needy and the infirm.

He has visited almost every school, from community schools to colleges, to talk with, to play – at times even barefoot – and to guide our students.

And when disaster has struck – earthquakes in our East, floods throughout the country, fire in many places – His Majesty the King has rushed to be with His people; to console them and to support them; and to help them rebuild their homes and their lives.

His Majesty has kept his promise – He has protected us as only a parent can; cared for us as a true brother; and served us as a devoted son. He is the People’s King.

The People’s King has already touched the lives of thousands upon tens of thousands of ordinary Bhutanese. And yesterday, when he announced that, “it is now time for me to marry” His Majesty touched the hearts of an entire nation.

The joyous announcement did not come as a Royal Command. Instead, His Majesty informed the nation personally, without formality and without any attempt to hide his complete sincerity, much like a son informing his parents and his siblings.

Our future queen is Ashi Jetsun Pema. And the royal wedding will take place this October.

The entire nation, like one big family, is already celebrating.

Where’s equity?

Bright stuff?

First, the good news: the government has granted autonomy to the Royal University of Bhutan. This means that the university can now concentrate on improving standards without the usual encumbrances of the bureaucracy.

4icu.org, a tertiary education search engine, places our university at a lowly 7,418 of the 10,000 universities they rank. Hopefully, their ranking is not accurate. Hopefully, the RUB will correct it to more accurately reflect their real ranking. And hopefully, RUB will improve on their real ranking.

Naturally, a lot more is now possible – and expected – from our university.  There’s a lot of work to do. But I’m optimistic.

Now the bad news: the first thing that an autonomous RUB has done is to start charging fees.

Actually, charging fees is not bad. Tertiary education is expensive. And, in order to improve standards and to ensure sustainability, we must start paying for college.

But the way the university is going about charging fees is questionable. 90% of their students don’t pay any money, while 10% of them are charged hefty fees. Those 10% of the students have to shell out a colossal Nu 69,000 to 83,000 depending on their course. And on top of that, they, unlike the other students, are required to pay boarding fees.

Our last poll asked if RUB should charge fees. 46% answered “Yes”. And 54% said “No”. Perhaps they too would have supported fees if those fees had been applied more sensibly.

So how should RUB charge fees? With equity!

A minority of the students – say 10% of them – should be given full scholarships for, for example, excelling in academics, sports and culture, and to promote diversity and gender balance. The rest should have to pay fees.

So, instead of 10% of the students paying Nu 70,000 per year, there would be 90% of the students paying a much more manageable Nu 7,777 per year.

And in three years, instead of 30% of the students paying Nu 70,000 per year, as envisaged by the university, there would be 90% of the students paying Nu 30,000 per year.

The RUB should charge fees if they must, especially if college standards are set to improve. But they should do so sensibly. And with equity.

Photo credit: Royal University of Bhutan

Social media and politics

Welcome

Mountain Echoes, a literary festival, starts this Friday. The festival, which has already become Thimphu’s biggest annual literary event, will take place at the Tarayana Centre.

Please take part in the festival if you are interested in art, literature and culture. It runs through 24th of May and is open to the public.

On Monday, 23rd of May, I join Gopilal Acharya, David Davidar and John Elliot to discuss social media in Bhutan. Please join us if you are interested.

I’ll be talking about “social media and politics in Bhutan”. So I’m interested in listening to your views: has social media had an effect on politics in Bhutan?