About measures and incentives

Last week, the government announced that they “…will be introducing measures to expand the revenue base.” And, that they are “…also considering fiscal incentives to stimulate the private sector growth…” These announcements were made, quietly, in the government’s National Budget for 2009-10. But, the budget report offered no details.

These are significant financial policies. So, our government should elaborate what “measures” and “incentives” our people can expect during the coming year.

Poor villages

No Shangrila

No Shangrila

Our government estimates that 23.3% of our population live in poverty. And that the incidence of poverty in our villages is significantly higher than in our towns. In fact, the poverty rate in rural Bhutan is 30.9%. That is, almost one in every three of our villagers lives below the poverty line. Compare this to the urban poverty rate of just 1.7%, and it becomes clear that our villages need serious and immediate attention.

But, the amount of money allocated to local governments, and hence to rural Bhutan, for this financial year, again, is negligible. Only 22.8% of the national budget has been earmarked for the dzongkhags. And, a paltry 3.5% has been kept aside for the 205 gewogs. The rest is in the hands of the centre.

The government reasons that much of the money budgeted for the ministries is actually for the villages. They say that roads, schools, hospitals and RNR centres will be built for the villages. I say, let local governments do their own work. And, give them the means – money and people – to do so. After all, they know, better than anyone in Thimphu, what they need. Plus, they, unlike most of us in Thimphu, have a stake in their own progress.

So, if a programme, say school education, benefits only one gewog, let that gewog handle it. If it benefits more than one gewog, let that dzongkhag handle it. The centre, as far as I’m concerned, should be involved only for national-level programmes.

But, look at how this year’s education budget has been allocated. A very generous 17.5% of the entire budget has been earmarked for education. That’s very good. However, none of it – not a single chetrum – will be in the hands of our local government. All Nu 5,309 million will be handled by the centre. That’s not good at all.

This is no way to wage war against poverty. And, at this rate, the scourge will prevail.

The photograph is of Thangdokha, a village in my constituency.

Farmers’ produce

Not much

Not much

Our economy grew by 8.1% last year. That’s not the 9% growth per year promised by DPT. But, given all that happened in those 12 months, from a host of national celebrations to the global financial crisis, 8.1 is really not too bad.

The share of the primary, secondary and tertiary sectors to our GDP are 16%, 45% and 36% respectively. And, during the past year, the primary, or agriculture, sector grew by 1.7%; the secondary, or industry, sector grew by 7.5%; and the tertiary, or service, sector grew by 12.1%.

These figures were given to the National Assembly by the Finance Minister. Let’s see what they could mean for the majority of the people – our farmers. According to the Ministry of Agriculture, 79% of our population depends on agriculture. Yet, they contributed only 16% of our GDP. This means that our farmers are a lot poorer, economically speaking, than the other Bhutanese. But, we all know this, don’t we?

Now the agriculture sector grew by only 1.7% last year. And that’s much lower than last year’s inflation, which averaged about 7%. So, in real terms, our farmers produced less last year than the year before. That is, they became poorer. This, we didn’t know.

The news for the next financial year is not good either. Our government forecasts that the share of the agriculture sector to the GDP will fall even further, from 16% to 14%. Obviously, we need to focus a lot more on the agricultural sector. After all, most of Bhutan depends on it.

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Total eclipse of the sun

Totally awesome

Totally awesome

I watched the solar eclipse, with my family and about a hundred other viewers, from Kuenselphodrang. By the time we got there, a little after 6 AM, it was already bright. But, the skies were overcast. And, as much as we hoped that the clouds would disappear over the eastern skies, they stood their ground, stubbornly.

I secretly accepted that we wouldn’t be able to see the eclipse; that we’d miss the moment the moon overpowers the sun; and that we wouldn’t be able to put to use the eclipse glasses that we got, miraculously, only the night before. Galek, my daughter, had learnt so much about the eclipse, and was so excited about the experience, that I couldn’t tell her that we would have to settle for just witnessing a bright early morning suddenly turn to night.

But then, nature’s magic took over, and in the heavens, right before our eyes, the sun emerged and literally smiled at us. The upward crescent cast long shadows. And, with its rays struggling to reach us, the lively morning quickly turned to an errie twilight.

As the magic continued, the moon covered the sun completely. Dogs howled in the sudden cool night and, in the distance, lights were switched on from houses and passing vehicles. Directly above us, a lone star presented itself.

And, there was more magic. As the sun and the moon combined to form a celestial diamond ring, Galek, aged 10, whispered: “I’m so happy that I’m old enough to remember this moment throughout my life.”

This week’s banner celebrates that breathtaking experience. The world will have to wait for more than 100 years to see a similar eclipse. And Bhutan? We’ll most probably have to wait a lot, lot longer. If you would–and this is especially for Zhidag and Romeo–like to see a few more photos of the eclipse, please visit the gallery.

Our debt

Yesterday, the Finance Minister reported that Bhutan’s total debt outstanding is Nu 35,109.3 million. That’s about 56.7% of our GDP.

In other words, every citizen owes Nu 64,000 of that debt. Or, assuming the average family has five members, every family would owe Nu 320,000.

The good news is that most of that debt – about 61 per cent – consists of hydropower construction loans. These loans, we are told, will pay for themselves, and generate huge revenues for the government. Good.

But, let’s not completely ignore the risks. An overdependence on one source of revenue – in this case, hydropower – is not good for our economy. And, the almost complete dependence on one buyer, India, for the electricity that’s produced should be cause for concern. And, there’s the risk of an unforeseen natural calamity.

I’m not advocating for a halt to the investments in hydropower projects. But, I’m calling for a better awareness of the risks. And for measures to address these risks, however unlikely they may appear today.

What should we do to insure ourselves properly? Diversity our economy. And, strengthen the private sector.

In the meantime, prepare for more loans. According to the Finance Minister’s report, by next year, our collective debt will have ballooned to Nu 44,718.71 million.

Poor planning

Yesterday, the National Assembly approved the revised budget estimates for the financial year 2008-09. Like the previous year (see earlier entry), the last financial year also saw a huge difference between the approved budget and the most recent revised estimates. This time, however, the difference was completely on the other side of the spectrum – the government expects to spend much, much more than what had been approved.

How much more? The total outlay for 2008-09 approved by the National Assembly last year was Nu 21,096.281 million. The government’s revised estimate for 2008-09 is a whopping Nu 25,519.695. That’s an upward revision of Nu 4423.414 million. And, that amounts to a difference of 21%.

Again, poor planning. Or, poor implementation. Or both.

Some have argued that the upward revision is good; that that indicates that our government has done more than what was approved. And, that may be so. But, at 21%, the difference is big, too big to be conveniently ignored. Especially if changes to the original plan are not well considered, but are ad hoc.

This is how the upward revision was sanction. During the winter session of the Parliament, a supplementary budget of Nu 488.439 million was approved. During this session, a request to approve another supplementary budget of Nu 4,238.447 million was submitted.

But, the government also reported to the National Assembly that about 10% of the original budget has still not been used. That would work out to Nu 2,158 million!

Confusing? Yes. Why? Poor planning. And poor implementation.

In total darkness

We’ll be up by five tomorrow morning, to take in the total eclipse of the sun from Kuenselphodrang. Many of my neighbours – indeed, many Bhutanese – will also enjoy this very rare natural phenomenon when the moon completely blocks out the sun. Bhutan, after all, falls bang on the path of the total eclipse.

But you won’t find many tourists. We didn’t market the occasion. The heavens have blessed Bhutan with the longest total eclipse, of about three minutes, in the 21st century. And we have not used it to boost tourism.

The Finance Minister reported today that, in 2008, about 27,000 tourists visited Bhutan, and that the government would generate revenue of about Nu 490.1 million from tourism. But, that the government expects tourist arrivals to decrease in 2009, due to the global recession, and that, as such, the government estimates revenue of only Nu 417 million during the 2009 – 10 financial year.

Yes, tourism generates important revenue for the government. But, more importantly, it creates jobs. And, it distributes wealth. So, we should not sit on our hands, waiting out the recession. We must be imaginative and proactive in marketing our wonderful country as a preferred tourist destination.

Just imagine: totality packages to Bhutan. Many tourists would have flocked here, and paid good money, to view the total eclipse of the sun from Tashichhodzong. Or from Trongsa Dzong. Or from the Phajoding lakes. Or from Laya. Or from Merak, if it is open to tourists. Or from any other part of our blessed kingdom.

Planning implementation

Today the finance minister presented the National Budget bill for the year 2009 – 2010. I’ll post a few entries on the status of our kingdom’s finances in the next couple of days.

Following the Finance Minister’s presentation, the National Assembly discussed the first part of the report, the annual financial statement for the financial year 2007 – 08. The budget for that year was prepared by the previous government. And, most of it was implemented by the interim government. The current government was in office for the final three months of that financial year.

The total approved outlay for 2007 – 08 was Nu 23,051.839 million. But, the actual outcome was only Nu 17,913.359 million. That’s a decrease of Nu 5,138.480 million between the estimated and actual outlays for that financial year. And, that works out to a decrease of about 22% of the approved outlays for that year.

The huge discrepancy between the estimated and actual budget figures can mean that the planning was poor, or that the implementation was poor. Or, that both, planning and implementation, were poor.

Whatever the case, we have underperformed: our farmers lost out; our economy lost out; and our job seekers lost out.

Noble king

Bhutan's kings-2A year ago, on 21 July, during the first sitting of the Parliament after the signing of the Constitution, I proposed a motion to nominate His Majesty the Fourth Druk Gyalpo for the Nobel Peace Prize. To recall the importance of that motion, I’m featuring a photograph of our beloved kings, taken during the signing of the Constitution, in the banner. And, I’m posting a rough translation of the statement I made in the Parliament last year.

On the 15th day of the 5th month of our calendar, His Majesty the King affixed his signature, in pure gold, to the Constitution of the Kingdom of Bhutan. That historic moment, which took place in the Grand Assembly Hall of the Trashichho Dzong amid the sacred representations of the Lord Buddha, was witnessed by the monks of the Zhung Dratshang; His Majesty the Fourth Druk Gyalpo; Their Majesties the Queen Mothers, members of the Royal Family; ministers, members of the Parliament; officers of the security forces, civil servants; and the thousands of people who had congregated from many dzongkhags.

By this royal action, His Majesty the King gifted the Constitution, and, with it, the complete powers of governance, to the people of Bhutan.

In 1907, one hundred years ago, our forefathers had voluntarily given up all powers of the government to our first king, Gongsar Ugyen Wangchuck. Since then, under the golden reigns of successive Wangchuck monarchs, the people of Bhutan have enjoyed unprecedented peace, prosperity and happiness.

Now, by introducing democracy, along with the Constitution, His Majesty the King has ensured that the sun of peace and happiness will never set on Bhutan and the Bhutanese people. This is a most precious gift. So, together with all our people, from all corners of our country, I respectfully submit my heartfelt gratitude and tashi delek to His Majesty the King, Jigme Khesar Namgyel Wangchuck.

The Constitution of the Kingdom of Bhutan is without equal. No where else in the world, and at no time in history, has a constitution such as ours been constructed. Similarly, no other monarchy in the world, at no time in history, has given their powers to their people. The devolution of absolute powers from the Golden Throne to the people is, indeed, unique to Bhutan. In addition, in no other country has democracy been introduced in an environment of complete peace and stability, for in practically every other country, the transition to democracy has invariably been accompanied by war and strife.

All this has been made possible in Bhutan because of our visionary monarch, His Majesty the Fourth Druk Gyalpo, Jigme Singye Wangchuck, a true Dharma King. His Majesty has transmitted his noble thoughts and deeds, through the Constitution, to the Bhutanese people. Peace, prosperity and happiness will, therefore, continue to favour Bhutan and her people.

We must also allow other peoples, in other countries, throughout the world, to learn about and to benefit from the unparalleled wisdom and compassion of our beloved monarch. For this, it will be fitting to present His Majesty the Fourth Druk Gyalpo the Nobel Peace Prize.

The Prime Minister should, therefore, on behalf of all the Bhutanese people and members of the Parliament, submit a proposal nominating His Majesty the Fourth Druk Gyalpo for the Nobel Peace Prize. I propose that the nomination, along with complete justifications, be sent to the Nobel Peace Prize Committee, based in Norway, as soon as possible.

The construction of a constitution such as ours is, in itself, sufficient reason to be presented the award. But, in addition, His Majesty has, at the height of his popularity, devolved all powers of government, introduced democracy and abdicated from the throne . His Majesty has ensured peace, stability and the security for our country; developed the social wellbeing of our people; promoted our unique culture and heritage, and protected our pristine environment. This is why Bhutan, a small country, enjoys so much peace and happiness. And, this is why it is most appropriate to present His Majesty the Nobel Peace Prize.

But that is not all. His Majesty the Fourth Druk Gyalpo, a King of Destiny, has given Bhutan and the world, Gross National Happiness. This timeless development philosophy is already gaining widespread acceptance and is guiding development in many parts of the world.

We, parliamentarians, recently celebrated the signing of the Constitution together. Similarly, I call upon all my fellow parliamentarians to collectively support this proposal to nominate our beloved monarch for the Nobel Peace Prize.

Gift from the Golden Throne

Priceless

Priceless

One year ago, on 18th July 2008, His Majesty the King signed the Constitution of the Kingdom of Bhutan. I am pleased to reproduce below, His Majesty the King’s address to the Nation on that historic day.

On this day of destiny, in the blessed land of Pelden Drukpa we, a fortunate People and King, hereby resolve to bring into effect the root and foundation – the very source – of all law in our nation.

On such an auspicious occasion, on behalf of the people I offer gratitude to His Majesty the Fourth Druk Gyalpo. During his reign His Majesty built a strong nation and secured the hopes and aspirations of the people through the process of democratization and the enlightened vision of Gross National Happiness. His Majesty has also laid a clear path for our future through this Constitution.

The significance of His Majesty’s unique achievements as leader has transcended the experiences of our country and been acknowledged by the world. In our own country, many generations into the future, the Constitution will continue to inspire our people as it stands testimony to a selfless and extraordinary leadership.

This Constitution is the most profound achievement of generations of endeavor and service. As it is granted to us today, we must remember that even more important than the wise and judicious use of the powers it confers, is the unconditional fulfillment of the responsibilities we must shoulder. Only in understanding our duties will the exercise of our powers be fruitful. If we can serve our nation with this knowledge and in this spirit, then an even brighter future awaits our country.

It is my fervent prayer that through this Constitution we will, with our body, speech and mind work with complete commitment and conviction as we strengthen the sovereignty and security of Bhutan; secure the blessings of liberty; ensure justice and peace and enhance the unity and happiness of all Bhutanese, now and always.

Lastly, this Constitution was placed before the people of the twenty dzongkhags by the King. Each word has earned its sacred place with the blessings of every citizen in our nation. This is the People’s Constitution.

And today, through this, my Hand and Seal, I affix on to the Constitution of the Kingdom of Bhutan, the hopes and prayers of my People.