Too good

May 31, 2012Posted inEconomy, Government32 Comments
Yesterday’s economic forum was scripted and implemented to perfection. The forum, which was organised by GNHC and supported by the UNDP, was called “Macroeconomic Challenges, Opportunities and Policy Options for Bhutna” and held at the National Convention Centre. The forum was attended by the prime minister, cabinet ministers, senior civil servants and The forum was NOT attended by the governor of the Royal Monetary Authority and his two deputies. The CEOs of the financial institutions could not attend as they were summoned, by the RMA governor, for a separate meeting. The experts at the forum included Professor Joeseph Stiglitz…

Crunch time

March 7, 2012Posted inEconomy63 Comments
A severe rupee shortage threatens to cause an economic crisis. But the government is in denial. As recently as last week, the finance minister blamed the media for blowing up the issue. On the other hand, the RMA governor has declared that, “we have no money.” And he has already stopped issuing rupees to commercial banks. He has also warned that we can no longer sell our foreign reserves to buy rupees. The RMA has had to borrow rupees to allow for the import fuel and other essential items. But traders are already complaining that they cannot do business.…

Nu confidence

December 16, 2011Posted inEconomy9 Comments
The government recently approved airfares for our two airlines. This is how the fares were reported in Kuensel: Druk Air is charging USD 170 (single) and USD 340 (return) for Paro-Bumthang, while Bhutan Air will charge USD 250 (single) and USD 400 (return). For Paro-Trashigang, Druk Air is charging USD 215 (single) and USD 430 (return). Bhutan Air is charging USD 350 (single) and USD 600 (return). From Bumthang to Trashigang, Druk Air will cost USD 110 (single) and USD 220 (return), while Bhutan Air costs USD 150 (single) and USD 250 (return). When I read the fares, two…

Mistaken government

December 7, 2011Posted inEconomy27 Comments
The Government has used our foreign currency reserves to address a severe rupee crunch in the kingdom. Last week they sold US$ 200 million from our reserves to pay off the Rs 8 billion outstanding debt on an overdraft account with the State Bank of India. The Royal Monetary Authority borrows rupees from a special credit line with the Government of India and an overdraft facility maintained with the State Bank of India. The special arrangement with the Government of India permits our government to borrow rupees up to a maximum of Rs 3 billion, and the overdraft facility…

Financial services … for who?

May 27, 2011Posted inLegislature11 Comments
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…

Favouring foreigners over locals

July 13, 2010Posted inGovernment, Legislature
The National Assembly passed the Financial Services Bill last week. I voted against it. I did so because the Bill seems to favour foreign investors over our own people and companies. Section 50, on restrictions on ownership of financial institution and investments by financial institutions, reads: No person shall hold more than the following percentage of interest in shares of a financial institution: (a) in case of an individual, 10 percent, (b) in the case of a company not being a financial institution, 20 percent (c) in the case of a company being a financial institution, as per the…

Unanimous support

June 2, 2010Posted inLegislature
Support for the Royal Monetary Authority Bill was unanimous. Every one of the 66 MPs present in the Parliament today endorsed the Bill. But if the Bill is so popular, why hadn’t the two Houses each passed it on its own? Why was a joint sitting needed? In fact, there were differences. And the most critical one concerned the chairperson of the RMA Board. The RMA Board comprises of seven members – the governor, two deputy governors, and four other members. The governor is appointed by His Majesty the King at the recommendation of the prime minister. The two…

Monetary authority?

December 1, 2009Posted inLegislature
The National Assembly passed the Royal Monetary Authority Bill yesterday. I did not support the bill. My objections were based on a simple principle: that the proposed legislation gave the government too much influence over the RMA. True, it’s important for the RMA and the government to work together to achieve our common national objectives. Yes, I expect the RMA’s monetary policies to compliment the government’s fiscal policies as we, collectively, build an economy that we can call robust and vibrant. And yes, the RMA should be accountable to the government. But, our central bank must also have sufficient…