The Knowledge Economy

I write this in my Tshendhen Hotel room in Gelephu while my wife with thousands of others is out for Lam Namkhai Ningpo’s “wang” (blessing) expected to go on for next 45 days. We are here for only initial ten days. I met quite a few of my old friends who have come for spiritual intake before the inevitable "one-way-voyage". Why people become more religious as they grow older? I do not think it is anything to do with spiritual depth and/or dimension. 

The other day Lam, concluding his regular rituals, told all devotees that they should avoid going to Bhutan-India border mainly because on 16 November 2012 a village astrologer from Hilley in Sarpang was kidnapped and ambushed to India at gunpoint, second kidnapping of Bhutanese subsequent to a taxi driver who was kidnapped and released earlier after pretty handsome ransom.

I think it is important for intelligence and security personnel to analyse the root cause of  incidents keeping in mind that politics often uses mean means through scapegoats to scrape  corners. I normally like people who are tough to convince but once convinced they do a good job. They think and analyse. Unfortunately we do not seem to fall in that category.

Mostly qualified but poorly educated persons parroting basic principles and espousing the mantras that support individual status/wealth greed (not aspirations – greed chase cheap profit/profile while aspiration create value) and/or near-feudal style concern for the masses will lead us to the crippling squeeze before even realizing what is in the front, no doubt about it. Most of us simply lack analytical ability and any deep understanding of the overall evolution footsteps and foresight. As an  observer I see the footprints of these in all actions/outcomes.  Frankly, I fear moral failure of the society obsessed with wealth and status. So is Bhutan showing signs of political and/or social dysfunction? It is about time we ask such very serious questions while I sincerely think “tight squeeze” is ahead of us (bookmark if you want to).

What do we stand for: liberal economic reforms; defensive nationalism; welfare expansion; a trust fund baby? Reorganising and strengthening the structures, systems, strategies, policies, ideas and vision on how best Bhutan should handle itself in pragmatic way is the priority concern. It is time for coalition of positive to come forward and face the challenges posed by the concern. There is nothing we cannot face and not overcome. We need impetus of positive forces.

The “positives” do not try to find fault from past mistakes, but correct mistakes and draw lessons. They would be willing to cultivate motivation, and surrender “what you are”, for “what you could become”. So we should not be afraid of the rational reforms. Change is the essence of life. That reminds me of Winston Churchill’s words: the pessimist sees difficulty in every opportunity, the optimist sees the opportunity in every difficulty. For us today, seeing alone is not good enough. The opportunities have to be translated into reality with concrete outcomes. So, creating healthy systems and conducive environment are important aspects of the change to take deep root and gain strength like the Chinese bamboo does.

I like Chinese bamboo. It takes more than four years to grow its complex and strong root system underground.  At the end of 5th year it suddenly shoots to the height of more than 20 m.  Then, it is strong as ever. Bends under pressure and goes back to original shape once pressure is off. But, does not break easily!

You cannot take the pressure without complex and strong root system, can you? You may now say, so?  So....

First, the culture and tradition, driglam-namza and modern development have to have their own digital space of harmonious co-existence and complementary interface.  Interference of one on other is bound to divert the positive prospects of latter. The cultural diversity is a strength, not weakness, and modern development is inevitable. I am not sure if we understand this well to maintain an intricate balance that is required to prosper to the path of Gross National Happiness (if you like). Let not the short-sightedness now impair the longer-term perspective. For start it is important to comprehend how people behave and streamline ingrained principles, procedures and/or practices mainstreaming all sections of the society based on new vision to influence positive changes.

Second, strengthen institutions balancing power, authority, responsibility and accountability. Take a look at existing legal and policy documents, structures and systems, and see if  power, authority, responsibility and accountability at all levels of Executive, Legislative and Judiciary   functionaries (most importantly Executive) are well structured, balanced and harmonized with adequate checks-and-balances. The government strength and capacity flow out of such institutional establishment. If not, erosion of governance is inescapable. The strengthening government institutions with an aim to reinvigorate them, in addition to undertaking their routine responsibilities, without major reforms seems not possible. The reforms may aim, among others, at :

• improving the core structural strength including institutional and individual capability aimed to improve performance,  with creativity (thinking new things) and innovation (doing new things);
• attracting high quality knowledge workers;
• undertaking austerity measures for regulating economic activities and  financial discipline, and mobilizing resources  to ease financial squeeze, debt and rupee crunch;
• administrating mega power projects and analyzing country’s hydropower strength to serve national interest,  including on the move by governments of countries in the region towards collaborating more and pooling their resources for electricity grids; and
• coming out from dormant attitude towards relationship of gratitude and gratefulness to understanding the merger of nationalism with new geopolitical reality to carve out balanced and comfortable geopolitical space.

Third, private sector development on right foothold brings dynamism to the economy. Here in Gelephu  I went to fix wiring of my car. There was an auto-electrician from West Bengal who lived in Dadgiri (Indian side of Bhutan-India border). He commuted every morning inside Bhutan  and worked through a dirty small workplace attached to shabby structure on a dusty compound they called workshop set up in a leased land. I asked how much was his salary? He said he did not work for salary. He just paid Nu 5,000 per month to “malik” (master, meaning owner) for using the premises and the earning was entirely his. The work in my car required soldering a wire. He had no soldering machine. When I asked why he did not have soldering machine, he said “malik” did not give him. I asked why he did not have a Bhutanese boy (instead of a boy from Dadgiri) as his helper. He said Bhutanese did not want to do helper jobs. Some business model! What can I (a client) expect – quality work and value for money? What can the country look forward to – transfer of knowledge, training, capacity development, proper service to car owners, contribution to local economy?

The private sector development on right footings and positive public-private partnership with proper allocation of responsibilities are key to fostering socio-economic development. The reform and restructuring will need to properly identify effective roles of private and public sectors. The activities that can be best performed through proper platform by private sector can never be performed effectively by government. The  government's role should be proper focus on regulation, control and supervision with strong system, policies and procedures.

Fourth, with strengthened government institutions and private sector, modernizing the growth models and making slow longer-term shift from existing to new economy will be sensible:

Existing Economy	New Economy
Economic development is resource-based, government-led and credit-fueled.	Knowledge economy in partnerships with business, government and non-profit sector lead change.
Growth model: import-driven internal consumption-based pattern characterized by high credit growth and internal and external imbalances.	Growth model: slow and step-by-step shift towards export-led growth model.
Socio-economic development model: Service-oriented-inward-looking gewog focused	Socio-economic development model: Talent-based out-ward looking and identifying the high-growth firms that disproportionately drive economic activity and jobs.
Success = fixed competitive advantage in national resource including hydro-power.	Success = organizations and individuals with ability to learn and adapt, and create value.
Attracting cheap low-grade people from neighbouring country for low quality works is the key.	Attracting qualified and educated people is the key.
Attracting low quality workers that are mostly unemployed in their native land. No recognition of attributes for attracting knowledge workers.	Natural environment, political stability, physical facilities, cultural amenities and attractive benefits are key in attracting knowledge workers.
Pay low for all and service utilization not effective.	Pay high for talents and use them effectively.
Input-oriented work process	Result-oriented work process
......and......

Politicking aside, it's time to build the real legacy -- strong and able --  that can take pressure, like the Chinese bamboo. The beginning has to be modest. Let the best ideas rather than hierarchical organizational structure control the meetings. Yes, I am talking about step-by-step shift towards the knowledge economy. If you think longer-term there are choices, I will not be the first to be convinced for I do not get convinced so easily. And so will many others.  Therefore, earlier we start, better off we will be!

continuation.....................The Knowledge Economy..........(2)