Monday, July 29, 2013

To the New Government

Tashi Delek, Hon'ble Prime Minister, Ministers and Members of Parliament!

You govern the country for next five years.  There are challenges ahead. When you face challenges, I suggest you go often to Reinhold Neibuhr’s words in The Serenity of Prayer: “ God, give us the grace to accept with serenity the things that cannot be changed, courage to change the things which should be changed, and the wisdom to distinguish one from other.” Do not let your inner voice be drowned. We would like to see your courage following your intuition and heart, and your wisdom to know and to transform the community, society, and the nation for good.

I do not wish to remind you of your election promises and pledges. That was politics, a cocktail politics. Let us talk politics, not exactly politics but political development so far. Even though we are just two-election old and cannot call it a trend by any standard, it is worth talking about it in the interest of politics. If Druk Phuensum Tshogpa (DPT) in 2008 and People's Democratic Party (PDP) in 2013 think that they won the elections on their capability and credibility, I beg to disagree.  The DPT's landslide victory in  2008 was mainly because, I was told,  people did not want PDP to come to power. And, I do not attribute PDP's recent victory entirely to your competence and credibility. No sir, it was more of the people not wanting  DPT  continuation in power for another five years.  Why do you think DPT's votes in 43 out of 47 constituencies declined in general round from their primary round total? It was mainly "I do not want" rather than "I want". In plain political terms both the wins are mostly attributable to negative votes.


So the question is -- why are the Bhutanese getting used to casting negative votes?  The simple answer: it is easy to pinpoint mistakes of others, particularly of the government (with the help of press, civil servants and words of mouth), than to understand the real capability and competence of candidates/political parties in few days. Then there are always internal and external elements to add and multiply the impact through even your day-to-day living . The optimist will argue that negative votes will keep ruling party on their toes, but the fact is negative votes elect incompetent people. We have no time to waste another five years. How can you keep an incompetent person on the toes for five years? When competency of candidates/political parties is not an issue, voters are easily influenced by external factors. The politics gets dirty, and does not attract bright persons. The result, we land up having incompetent puppet government. In my opinion this will be simply disastrous. Can we afford people in power who has no sense to understand the difference between economic/financial assistance and strategic economic squeeze? If there are such people why blame others. It is an abstract, not deduction. I do not have an  opinion yet on your team. For now I give you the benefit of doubt. You now prove that you were elected to serve the nation, and not you were elected because the electorates did not want the other person.  


As I mentioned I do not want to make an issue out of your promises, not even on governance pledge (on which many have started muttering) like: 


"The PDP government will not increase government ministries. The prime minister will also assume the portfolio of at least one ministry to ensure that there is no need to have too many ministers. We will ensure that the prime minister’s office is not bloated. The prime minister and cabinet ministers will have minimum security. On completing the term, PDP cabinet will return the duty vehicles to the government."



The Bhutanese should not care much about these as long as the manner in which power exercised in the management of country's economic and social resources is only in the overall interest of the nation.  Without such exercise of power you know "Wangtse Chhirpel : Prosperity for All" is meaningless. 


There are far more important issues right on your plate. First and foremost, the economy needs all the attention.  The economy is expected to decline if it is not addressed through sound macroeconomic management, a strong domestic revenue base, and efficient physical infrastructure.  We know that macroeconomic management challenges due to widening domestic and external imbalances, coupled with rising inflation and the rupee liquidity squeeze, are complex.   Generating strong domestic revenue is tough, but not impossible. For efficient physical infrastructure, we need strong technical capacities in both government and private sectors.  

We are not asking you to perform miracles. You have the wisdom to make the right head-start, and with the blessing of His Majesty,  I am sure the country will be behind you. Be positive about this!








9 comments:

  1. Indian banks are facing liquidity deficit and the rupee breached Rs 61.00 per dollar in early trades on 31 July 2013. "Rupee is skydiving without a parachute again. A signal that unsterilised band-aid isn't the solution. Choking liquidity is a death wish," says Anand Mahindra, Chairman and Managing Director of Mahindra & Mahindra. He says that the enduring remedy is more reform, across ministries, & incentivization of manufacturing & exports.

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    Replies
    1. “Raghuram Rajan: Engineer-turned economist with a rockstar’s appeal

      Traditionally, the chief economic advisor, a professional economist in a sea of bureaucrats, sat in one corner of the North Block. But weeks after taking charge as the government's chief economist, Raghuram Rajan moved into a first floor room, adjacent to finance minister P. Chidambaram's, signalling a shift in power equations....
      ....... The sharp slide in the rupee prompted the government to draft Rajan in as one of the main fire fighters to draw up a plan to increase dollar inflows. Unlike the hush-hush way in which decisions were taken in the past, Rajan invited private and foreign bankers to North Block to stitch up a plan to navigate the rupee out of choppy waters. Based on his inputs, the government announced its intent to go for quasi-sovereign bonds, without ruling out the possibility of India's first sovereign fund-raising.......”
      http://timesofindia.indiatimes.com/business/india-business/Raghuram-Rajan-Engineer-turned-economist-with-a-rockstars-appeal/articleshow/21667769.cms

      Raghuram Rajan takes up the top job of the Reserve Bank of India as governor on 4 September 2013.

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  2. I sincerely hope that the Government is fully aware of the implications of sharp devaluation of the Indian rupee.

    "Fundamentally the rupee is undervalued and has overshot its equilibrium level substantially... under a scenario of deep pessimism, currencies can overshoot substantially and remain so for a long time. India, we fear, is entering such a zone. We now believe that the rupee could touch 70 to the USD in a month or so, although we expect some revival of the currency by the end of the year as the reality of taper turns out to be less disruptive down the road than it is now, and the current account deficit continues to decline," Deutsche Bank said.
    http://economictimes.indiatimes.com/markets/forex/rupee-could-touch-70/dollar-in-a-month-or-so-says-deutsche-bank/articleshow/21950573.cms

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    Replies
    1. Rupee plunges to a new low of 65 against the dollar
      http://timesofindia.indiatimes.com/business/india-business/Rupee-plunges-to-a-new-low-of-65-against-the-dollar/articleshow/21971341.cms

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  3. PDP government, better be good at hedging our bets. If not, we do not need to second guess the consequences. Nichey rajniti hava palat nahi rahi hai kya (Isn’t the political wind changing direction down there)?

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  4. No Question of Chinese Embassy in Bhutan: PM Tshering Tobgay
    http://www.ndtv.com/article/india/no-question-of-chinese-embassy-in-bhutan-pm-tshering-tobgay-to-ndtv-542868?curl=1403057526

    Do I need to recap my first point at:
    http://sangpatamang.blogspot.com/2014/06/prime-minister-modis-first-state-visit.html ?

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    Replies
    1. "Bhutan needs to shift away from New Delhi’s long-cast shadow

      A month after Indian Prime Minister Narendra Modi made his maiden visit to Bhutan after assuming office, he still remains the talk of the town. His huge cutouts and banners linger on the streets of Thimphu.

      There is an unequivocal consensus among all quarters in the kingdom that visit was an astounding success. But beneath this, limping yet significant voices are emerging that question Bhutan's propensity to India while ignoring others, especially China.

      Soon after Modi returned to India on June 16, the enthralled Bhutanese Prime Minister Tshering Tobgay left no stone unturned in dispelling New Delhi's biggest fear. Talking to Indian media about the possibility of his government permitting China to open an embassy in Thimpu, Tobgay said, "There is no question [of this]," indicating that Bhutan has no intention of having any independent bilateral relations with China. This statement is likely to do more harm to Bhutan than good......."

      http://www.globaltimes.cn/content/871948.shtml

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  5. Narendra Modi government now wants a SAARC bank
    http://economictimes.indiatimes.com/news/politics-and-nation/narendra-modi-government-now-wants-a-saarc-bank/articleshow/38893776.cms

    Smart move with Modi characteristics! Those who can, take advantage of, and benefit from it. Those who cannot get economically integrated!

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  6. The inability of the concerned people to see through FY 2013-14 GDP growth of 2.05% is frightening. The nominal GDP takes into account both production and price increases over the year. With 2.05% GDP growth (inclusive hydropower), I do not wish to speculate our (in)ability to increase production during past FY and also that the entire growth may have been attributed to price increase alone. Isn’t it quite clear from mounting debt (Nu 100 billion, 106% of GDP), current account deficit (Nu 24 billion, 25% of GDP), unemployment, inflation, rupee shortage, et al that these are crossing our ability to produce goods and services threshold? I think full attention is required to be given on the economy. How much the current programs such as Nu 5 billion ESP, BOIC to develop small cottages industries, and Guaranteed Employment Program will help ease the debt, CAD, unemployment, inflation, and rupee shortage is not very difficult to fathom.

    ReplyDelete