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.