rupee – Tshering Tobgay

Too good

May 31, 2012Economy, 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…

Really important business

May 29, 2012Economy6 Comments

Doing business in Bhutan is already difficult. But it’s getting even more difficult. Each year, the World Bank publishes a “Doing Business” report in which they rank countries according to the “ease of doing business” in those countries. Here’s how our country has fared in their report over the last few years. In 2008, Bhutan was ranked 119 out of the 178 countries that the project studied. In 2009, we fell to 124 out of 181 countries. In 2010, we were placed at 126 out of 186 countries. In 2011, we plummeted to 146 out of 183 countries And…

More essential stuff

April 17, 2012Economy, Legislature21 Comments

In my previous post I had proposed that, “the government is getting ready to sell even more foreign currency from our reserves.” What if I am correct? What if the government is, indeed, preparing to sell foreign currency to alleviate the rupee crunch? If so, what is the procedure? Last year, four months ago, the government sold US$ 200 million of our foreign currency reserves. At that time, US$ 200 million worked out to Nu 10.3 billion, which in turn worked out to 14% of our GDP. That was, and is, a lot of money. But no one questioned…

Essential stuff

April 13, 2012Government27 Comments

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…

Stop the bleeding

April 10, 2012Economy19 Comments

During their interview with BBS TV last week, Lyonpo Yeshey Zimba and Lyonpo Wangdi Norbu went to great lengths to inform us that the so-called rupee crunch wasn’t a crisis. They told us that the situation was normal; that they’d been aware of it for a long time; and that they were in full control of it. They told us that we should not be worried, that we should not panic. And they warned us that any talk about a crisis “could be deliberate attempts to discredit the government.” I’m not one to worry needlessly. But I’m not reckless…

Thank you

April 4, 2012Economy, Government23 Comments

A couple of late meetings prevented me from watching TV last night. So I watched BBS TV’s rebroadcast this morning. In particular, I watched Lyonpo Yeshey Zimba, the officiating prime minister, and Lyonpo Wangdi Norbu, the finance minister, talk about the current economic situation. I thank the government for going on national TV to explain the ongoing currency situation to the public at large. The two ministers are our most experienced financial experts. The two of them have served as finance ministers for a combined total of 14 years, and as finance secretaries for more than 10 years. So…

Rupee statement

April 2, 2012Economy30 Comments

Some friends have suggested that I should use my YouTube account to incorporate a bit more audio-visual in this blog. I agree. Here is the statement I recently made on BBS TV urging the government to inform the people about the rupee situation. I'm happy to report that, according to BBS, the acting prime minister and finance minister will appear on TV tomorrow, Tuesday, 3 April. I've posted the English transcript of my statement after the video. Our economy is in a crisis. Just last year, the government was forced to sell US$ 200 million from the country’s…

GNH and Bhutan

March 30, 2012Government54 Comments

Here's an insightful cartoon from Bhutan Observer. The message is loud and clear. There's no need to elaborate. But one dangerous element is missing in the murky background: the rupee crunch and the growing economic crisis, about which the prime minister has not yet uttered a word.

Bhutanese food

March 18, 2012Economy21 Comments

A couple of friends and I went out for lunch the other day. We ate at Cousins, a new restaurant that specializes in authentic Bhutanese food. You'll find the restaurant on the first floor of the new building opposite the BNB. The food at Cousins is good. We had ribs (with dried red chillies and spring onions in a hot garlic sauce),chopped dried beef (in a chilli and cheese sauce), kewa-datsi, dal, rice and, for desert, fresh apples in cream. The food, like I said earlier, was good. And it was mainly traditional Bhutanese fare. But in fact, there…

Crunch time

March 7, 2012Economy63 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.…

Rupee questions

January 16, 2012Economy11 Comments

Last Tuesday, during question hour, I asked the Prime Minister to explain the rupee crisis: what has caused it, what the government is doing about it, and when we can expect it to be over. I directed the question to the PM as I had assumed that our head of government would be the most concerned and, as such, would be happy to reassure the nation that he has contained the crisis, and that the rupee deficit will not spiral out of control. Too bad then, that the PM made the Finance Minister answer on his behalf. Too bad…

Mistaken government

December 7, 2011Economy27 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…

Real money

August 11, 2009Economy

Recently, on the 9th of August, Kuensel published a story about the Rs. 5 billion that our central bank had borrowed in 2008 to meet the rupee requirements in the country. On that overdraft, our central bank is pays more than Rs. 500,000 every day on interest alone. That same story also informed us that the government total rupee debt with India stands at Rs. 22 billion, Rs 17 billion of which is for hydropower projects. The next day, on the 10th of August, Kuensel ran an editorial telling us that we need to expand our economy – to…