Bhutan Votes !

I write with no individual,  organization and/or political party in mind. It is about the issues that are of extreme importance for the nation.  If you think  the issue relate to an individual/organization/party, it is because no issue exists in isolation. And, my conscience does not permit me stooping low to target anyone.

First, let us look at the political democracy. After technical success of National Council (NC) election, we are in the midst for selecting National Assembly members: members of parliament (MPs). With four political parties in the run, primary round (on 31 May 2013) will select the winner and a runner-up parties, who will go for general election (13 July 2013). The party candidates have been introducing themselves, party presidents , party ideologies/manifestos, their plans/programs and/or “khicheri” (hotchpotch) of everything at high-school-level deliberations, as far as substance is concerned, in Dzongkha. The presentations by southern and eastern candidates are entertaining and humorous. I am not saying… those smart villagers with Dzongkha as their mother tongue are. They even have compiled few pieces for their comical amusement I was told.

So, the campaign continues with normal political bickering and the candidates’ own perception of why they/their parties are best suited to represent the constituencies. Mostly they think they can resort to seduction of societies, and live life on their own terms once His Majesty bestows dhar on them. In my humble view dhar representing delegation of power and authority is a dated interpretation.  His Majesty’s address on 25 May 2013 to the newly elected NC members emphasized on importance of shouldering genkha (duties and responsibilities); serving  to achieve the national goal to fulfill the aspiration of the people; upholding democratic values including rule of law, good governance and equitable prosperity; maintaining tranquility and safeguarding security of the nation.  It would really make a difference if the NC members (and MPs later) deeply understood the difference!

So NC members and MPs need to show complete commitment to living a life that is true and honest and authentic to themselves. People bowing and begging for kidu (favour) to their own elected representatives is not democratically authentic. They should not underestimate the power of authenticity and also the power of word of mouth.

The primary round result will be party-based and decided on overall national electoral votes. I am not sure if the logic of identifying the candidates before the primary round while the vote buttons are to be pressed against bird/horse/flower/duck will give clear idea of primary round democratic selection process. If the purpose of party-based primary round is aimed at selecting a political party best suited to serve the King, country and the people; the people are likely to cast their primary round vote mostly keeping in mind which candidate should get through to general election. And so, is the environment leveled for four parties to compete for party-based national electoral votes? I am not sure!

If primary round performance of a party (essentially candidate because candidates have been going around blowing their own trumpets) in a constituency is poor fourth position but party is voted top two nationally,  the party (and the candidate) is through to general election. I am not convinced if it is democratic.

Second, frankly I have had no time (and patience) to sit and listened to all parties and candidates. I heard nothing, absolutely nothing, about where we are and where we are going. Have they told us anything on the following?

(i)                    What policies,  strategies, plans and programs they will pursue to enable the people of the country to enhance their capacity to earn;

(ii)                  How will they ease rupee crunch and what specific plans and programs they will pursue for it? What is the time frame?;

(iii)                 How they will deal with the mounting debt, and what is the economic model;

(iv)                 Is the current open-ended development investment model  (hydropower projects, domestic airports, feeder roads, IT park, Supreme court buildings, education city etc.) appropriate for the country?  If not, what is the appropriate model?

(v)                  How they will mobilize resources to meet their pledges (bulldozer for every gewog, Phuentsholing-Thimphu railway, Phuentsholing-Samdrupjongkhar railway, encouraging foreign direct investments (FDIs) and unending lists)?

(vi)                 What is their financial forecast for next five years, and  standby plan if there is hard landing of economy?

It is worth asking hard questions if your NCs and MPs have to be authentic to themselves first and to you next, so that His Majesty’s words of shouldering genkha (duties and responsibilities); serving  to achieve the national goal to fulfill the aspiration of the people; upholding democratic values including rule of law, good governance and  equitable prosperity; maintaining tranquility and safeguarding security of the nation reverberate next five years into their ears!

Third, on the political commitment, the ruling party candidates seem more relaxed on assumption that they will ride on the party's shoulder to general election. I saw neither deep commitment taking into account their past experience nor in-depth understanding of the trend set with NC election. People say power is intoxicating. I do not know. I have never been in the position. The other three are more on "enemy's enemy is a friend" pitch. When 47 is just a number, why worry front-footing three times over. There we go, the 2013 general election with results that will not really shock anyone this time!

The Macro-financial Reform

One of the best advices to me came from a traditional Chinese doctor in Beijing. She spoke beautiful fluent English (traditional doctor and fluent English are rare but impressive combination I thought). I had gone with a pre-conceived notion that all traditional treatments are good for chronic diseases and have low side-effects. In my case it was not even chronic. After  “dungso” (Bhutanese traditional doctor), Korean ginseng , fish-oil capsules and western medications failed to produce satisfactory result, I had the opportunity to try traditional Chinese medication to lower my cholesterol level : the higher it got, lower became my body energy level.

Of the one hour consultation only 10 minutes were allocated on check-up, the rest were more of question (hers) and answer (mine) session including why I had so much trust on traditional Chinese medication, why I thought traditional medicines had low side-effects and so on.  At the end she prescribed food and exercise regimes and told me to come after a month for next consultation. No medication! In the next visit, cholesterol  level showed slight decline.  Good, she said and so I thought, thinking Chinese drugs would now be apt. This time she spoke and I listened.  It was all about “adjusting life style with time”.  Yes, “with time” including age, environment, situation and pace. People destroy their lives because at 60 they still live the life-style of 25, she said.  I understood but what about the cholesterol medicine. “Adjust your life-style  to properly suit you to live long”, and that was her medication for cholesterol. In other words, if I did not change my life-style with time ( “reform” in structural context) I will not live long.

The Asian Development Bank (ADB) recently approved a grant of $20.81 million and program loan of SDR 9.224 million (a total of $35.00 million equivalent) under the Strengthening Economic Management Program (the Program). The Program is aimed at pursuing policy reforms through budget support for the Government, “which currently faces weakening growth prospects and challenges in macroeconomic management.” The figures look generous. Generally, the generosity of ADB (for that matter all international financial institutions) is associated with seriousness. So “budget support”, “weakening growth prospects” and “challenges in macroeconomic management” are not to be taken lightly by any stretch of ingenuity.

And, the Program is pinned around “Over time, as construction (of hydropower projects) is completed and plants go onstream, exports increase, the trade balance gradually improves, and export earnings meet loan servicing requirements. In the meantime, sizable positive capital inflows from capital grants and development assistance keeps Bhutan’s balance of payments in surplus.” With no analytical support some may find the deduction cautious, I do not. In fact I am happy with it given the natural environment, technology, management and capacity factor of the existing hydropower plants. These may be the reasons why the Program outcome and performance targets and indicators are net of hydropower loans, meaning risks associated with hydropower loans are not taken into account in the Program formulation. If we add, it is heavy!

The ADB’s Program is generous with serious forewarnings:

 “If the critical factors are not properly addressed, the economy may be headed for a hard landing with potentially large economic losses reversing recent gains in socioeconomic development”

“In the absence of reform measures—with inflation, fiscal deficit, and current account deficit increasing and already at relatively high levels—the economy may run the risk of a hard landing and even recession.”

I read several places the words “hard landing”. Believe me, I know what goes into writing such sentences.  I am not implying anything but emphasizing at this critical juncture the importance of sound macroeconomic reform. The general attitude that program loan/grant  agreement covenants are to be implemented lightly aiming mostly at timely release of loans/grants, with low priority on in-depth  longer-term policy impacts because reforms are politically difficult to swallow, is misguided.  It would be a big mistake if we take lightly ADB’s timely offer to improve (i) budget and debt management system, (ii) revenue management system, (iii) macro-prudential management framework, and (iv) external and internal audit operations. If we just consider the Program as an instrument to meet the resource gap, we will miss the boat. I am quite definite about it.

I do not believe the macro-financial reforms under the Program are adequate to ensure macroeconomic stability and/or even ease rupee liquidity crunch near-term, but it is a good beginning in the right direction. I do see small weaknesses  on some aspects of the Program, e.g. the shallow mitigating measures for the risks identified and so on, but then it is up to the Government to go deeper. The fact is we live in a globalized world that moves fast, and  have to move with the flow with step-by-step integration of the economy with ICT sector. Those who do not follow the pace are bound to get dragged or even stepped on.  The choice right now is still with us: the wrong pick will take us to hard landing of economy. If you have doubt read carefully ADB’s Report and Recommendation of the President to the Board of Directors for Strengthening Economic Management Program, and Financing Agreement.

It would make much difference if the new Government is capable and credible to understand and undertake the reforms agreed with ADB with sincerity and diligence. To ADB the change of government  would not make a difference considering that the "Beneficiary" (changed from  "Borrower" for the Program) is the Kingdom of Bhutan, not Government of Bhutan.  The Financing Agreement is between the Kingdom of Bhutan and ADB.

The Knowledge Economy..(3) - Positive Contribution

            I do not feel comfortable chasing name, fame, limelight and/or attention. May be  because I always thought power, position and/or authority as outcomes, not objectives.  Some might think I am insane and talking rubbish. The fact is I have never been desperate for success. I enjoy creating value, no matter how small. I believe success follows automatically. If I think I did something of a substance that is of some benefit, I am happy. But it is not charity. If I am not good to myself how can I be good to others. If others fail to recognize and/or appreciate what I did, its up to them and not my problem. I move on. A simple bloke with a straightforward thought, I am.

I worked for the Royal Government of Bhutan from 1973-90, of which 16 years were with Public Works Department (still known around as PWD), the biggest department in terms of number of workers and budget in 1980s. I started as a young civil engineer. By 1985 at 35, I was the head of PWD and put my young energy and time -- most valuable resources -- into the department. Today, no one remembers who was responsible for constructing Tangmachu bridge  and driving the first motor vehicle to Lhuntse Dzong in 1982. No one cares who contributed most in the construction of road from Tsirang to Dagana Dzong including first bridge over Sunkosh river enabling 1986 National Day celebration in Dagana. No one knows who walked on foot from Wangdue to Damphu to finalize the Wangdue-Tsirang road alignment (initially planned as 2-lane) that forms today vital link of the national road network interconnecting south with west.  No one is interested in finding out who negotiated the PWD take-over of Simtokha-Trashigang and Trongsa-Gelephu highways from Dantak. And, so on. To me none of those impressions/opinions/views/appreciations/condemnations are important. What I value most is my fulfillment that I enjoyed working and made some contribution. I gave my energy and time to the benefit of the people.

I sincerely believed then and am convinced now that construction sector plays a very important role in positioning private sector on strong footing and therefore in building the nation. This is particularly so in a small landlocked country. During 1980s and before, PWD was undertaking most of the construction works in the country and therefore led construction sector by setting professional standards, ethics and discipline. Strong support was provided by senior engineers on deputation from Government of India. I, as head of PWD, wanted to put into proper footsteps the development of road construction with the help of Asian Development Bank. We formulated the Road Works Mechanization Project  under the guidance of late Dasho Lam Penjor, then Deputy Minister of Planning Commission, to enable systematic development of private sector  to take up road works within the country first, and in the region, yes in the region,  longer term. The concept involved  setting up of mechanized road construction units (in three specialized categories: formation cutting - 4 units, basecourse - 2 units and bituminious sealing - 1 unit), corporatizing first and then privatizing those units eventually. This, in my view, would have helped not only road construction but development of construction sector as a whole. The disciplined construction sector has positive influence on the environment in which private sector operates.

Dasho Lam Penjor died in a road accident in 1985. The new road construction equipment under the Roadworks Mechanization Project started to arrive in 1988. In 1989 I was asked to hand-over PWD to Dorji Tenzing, a semi-literate bigot who did not know  "E" of engineering, and was transferred to the then National Urban Development Corporation (NUDC) that had nothing to do with road works. That was the first time in the history of PWD, the department was being headed by non-engineering person whose qualification and competency were nothing compared with what were required of a head of PWD position. Thus the beginning of an era of treating all senior positions as favours, instead of high level professionally responsible positions requiring dedicated hard work. 

   Tenzing sold all road mechanization equipment to private individuals who believed road engineering was nothing more than owning bulldozers, excavators, road rollers, dump trucks. The road works mechanization and modernization concept, and strategy to develop competent private road contractors died with it. The skeptics  may have argued then that as the beginning of a technical attrition. I know where we would have been today if specialized and technically competent road construction units had been created, developed, corporatized and privatized. But I do not know where the sector currently is in terms of technical discipline, ownership and commitment. Do these carry any meaning in today’s Bhutanese professional world? You do not need to go too far for an answer. The writing is on the wall. I tried technical mainstreaming but it did not materialize. I have the satisfaction of trying my best. I did not worry then and do not now. Worry weakens the mind of its power to think and analyze, and takes us on more negative track. I opt for positive route. So I moved on. As simple as that, as far as I am concerned! But the fact is heavy prices are being paid. If you pretend not to see now, the forces will multiply and events will catch-up one day, not very far from now. 

            So, did I do enough to offset the fact that I, a son of poor villager who could not afford a pair shoes for his son, had an opportunity to study in India including in prestigious Indian Institute of Technology (IIT), Kharagpur? I do not wish to put myself on the weighing machine. I'd rather see from an angle if I am making any contribution to benefit human kind. I feel good that road financing in Mongolia, Kazakhstan, and Kyrgyz Republic are more efficient because of the influence of the ADB-financed projects that I developed introducing road fund concept. It makes me feel happy in learning that Pakistani private contractors are gaining better traction in dealing with their government clients by signing more balanced contracts, and gives me good feeling that the Chinese are going ahead with the showcase workshops, the concept I introduced to mobilize their in-country knowledge products from advanced eastern coastal region to backward western and inner provinces. I believe positive contributions, as long as they benefit human kind, have neither boundary nor expiry date.

Positive contribution emanates from knowledge/wisdom and is the way to fostering knowledge economy. Loyalty is a poor substitute of knowledge/wisdom.. Those who do not believe, pay the price. There is no other way!

The Knowledge Economy..(2) - Positive Balance

I do not believe that our level of creativity and innovation is to be interpreted in terms of  doing anything near the development of general theory of relativity by Albert Einstein,   invention of the World Wide Web by British computer scientist Timothy John Berners-Lee, or the level of “deep collaboration”, “cross-pollination” and “concurrent engineering”  applied for innovation by Steve Jobs in Apple Inc.  Our creativity and innovation are about thinking and doing new things on whatever we are doing regularly and adding positive incremental value, in whatever small way or amount, to the routine works instead of heading in reverse direction with negative attributes.

Even for such creativity and innovation, you need adequate time and space in addition to positive attitude and some ability to explore (I prefer the word analyze) things at the individual’s level enabling minute incremental value addition. The Bhutanese by nature are with positive attitude, leaving aside some exceptions. The analytical ability develops through an atmosphere of positive cross-pollination culture. It is almost impossible to create such positive, in the context of development, environment with over-loading of responsibilities which creates time and space (mostly functional space but also physical many times) congestion. The gridlock impairs  individual’s as well as institution’s ability to perform with creativity and innovation.

I earnestly believe that first step towards balancing power, authority, responsibility and accountability is through provision of proper time and functional space in a work environment with an aim to achieve shared balanced responsibilities. The responsibility defines an individual’s work and institution’s function, and therefore has to fit well in the time and space slots.

First, the government and private sector have to share the responsibilities pertinently allocating the tasks that can be best performed by private sectors to private, and leaving government to carry out its functions effectively. In a government-led economy, the government tend to do practically everything exercising its authority leaving largely the uncertainties to private sector. This, in my view, is one of the main reasons for  brewing/incubating/fostering corrupt, coercive, collusive and fraudulent practices (example below). The Anti Corruption Commission (Bhutan), Discipline Commission (China), and Central Bureau of Investigation and Income Tax Department (India) are not the solution to minimizing such practices. Nowhere it has worked, not even in China with very high level Discipline Commission to take severe actions to curb corruption with the help of networks of informers and complete control over personal files.

The step-by-step transformation of economy to knowledge-based is difficult if it is mostly government-led and does not enjoy the confidence of private  and non-profit sectors. I talked to several prominent contractors and private entrepreneurs. All of them felt that Bhutanese economy is predominantly government-led and private  entrepreneurs did not have conducive environment and  opportunities in equal footings for competing and performing with creativity and innovation because the business environment favoured "interfaced influential” (ii) or simply (i2) or those with unfair means as an edge over others. The contractors say, ”we are treated shabbily. If I raise my voice or protest against government wrongdoing, I become the black sheep and  will be out of future tendering process. It is like a system of informal blacklisting of contractors. Where is question of my performing with creativity and innovation?”  A emotional outburst and sign of frustration! The fact is the development model is imbalanced and government-led. The government does not want to share its responsibilities (which essentially means doing away with its power) and therefore land up doing practically everything creating time and functional space congestion for staff. As an ordinary citizen, I have had experience of mostly not being able to meet or talk to the government officials for my legitimate work: it is always a meeting, tour, leave, hospital or just too busy. Appointments without links seldom work.

Few contractors pointed out that the construction business is highly imbalanced. As an example they pointed out that there was no cost escalation clause in Standard Bidding Document (SBD): Procurement of Small Works (up to Nu 4 million). The  Clause 14.3 under C. Preparation of Bids of Section 1: Instructions to Bidder  of SBD stipulates:

“The Bid price shall take into account the cost of materials, transportation, labour, taxes, levies, overheads and profit and any other cost. The Bid price shall be fixed for the duration of performance of the Contract and shall not be subject to any adjustment on any account. The Bid price shall be applicable for the whole works described in the Drawings, Specifications and Schedule of Works.”

I explained with an example of a water supply project involving galvanized iron (GI) pipes, and asked what happened if there was global increase in iron price after contractor signs the contract for a water supply project with the government. As per Clause 14.3 the contractor is not eligible for additional payment due to such global price increase. They said they “managed somehow”. The “managed somehow” refers to following practices I mentioned above, sacrificing work quality, using substandard materials, underpaying contractor’s labour, and/or so on. The government supervisors have to be kept satisfied obviously. I asked if “managed somehow” referred to offsetting the price increase with contractor’s efficiency gain.  They said it was just not possible because the government  supervisors were to be kept pleased. Even if it was, efficiency gain should go to profit, not offsetting price increase upon which they have no control what-so-ever. An example of contractors routing their creativity and innovation to the heinous inclination because of imbalanced sharing of the contractual responsibility and risk.

Also I have had few personal experiences to substantiate the imbalance, but do not wish to narrate here now. The realization of the environment and trend is more important than disturbed outburst. Because it is important that the current trend makes a hair-pin turn with improved environment enabling the creative and innovative minds with shared responsibilities to move  slowly and steadily towards knowledge economy.

There are 8 students doing manual work in our Gelephu workshop under construction now. Yesterday I met them and told them that:

(i)            I appreciated their positive attitude towards work and thanked them for working in our workshop during their winter holidays. There is no small or big work. But there is sincerity, dedication, commitment and hard work to any thing they did. They should remember that there is no shortcut on these aspects.

(ii)        when they spend their money, think about the hard work they did. They should appreciate and value their hard-earned money and realize the difference between hard-earned money and easy money that their rich friends may have got from their parents.

(iii)           when they work -- no matter what, be it carrying bricks, moving stones or digging pits – they should keep their minds open and learn new things. In the workshop they should try to understand functions of different rooms, and what and how we are trying to establish the workshop and the business model. Ask questions and learn new things!

(iv)         at the end we would be  giving them a certificate of appreciation to each student. They should show the certificate to their friends and teachers, and be proud of the fact that they spent their winter holidays doing some constructive works. Try to influence their colleagues to be positive and productive.

The private sectors do have shared responsibility towards developing young  minds in the direction of creativity and innovation. It is the mindset that needs adjustment.

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)

Geopolitics of Environment

The geopolitics as plain link between political power and geographic space is more traditional. The ensemble of relations between the interests of international political actors; interests focused to an area, space, geographical element or ways; and relations which create a geopolitical system is contemporary. No two countries have similar geopolitical environment. Therefore dimensions are intricate or even “sensitive” if one is unequal “among equals”. If sandwiched as unequal “among equals” the intricacies multiply.

The geography cannot be altered. Politics bears the brunt of shouldering the national geostrategic interest through its potent depth. If the institutions of democracy are still young and are yet to take firm root to provide a solid foundation for ensuring the rule of law and transparent governance with adequate checks and balances, the key concern is the ability to safeguard national interest in international arena. There is need for matching intellectual depth and maturity to understand the multi-dimensional changing geopolitical atmosphere and to have strategic foresight.

Let us take a look at our geopolitical situation down south as well as up north!

 Bhutan is bounded on three sides by the Indian states of Sikkim, West Bengal, Assam, and Arunachal Pradesh. The first friendship treaty between India and Bhutan was signed in November 11, 1865 when India was under British rule. In the 1870s and 1880s, there was renewed competition between pro-British Penlop of Tongsa and the anti-British, pro-Tibetan Penlop of Paro. The Tongsa Penlop defeated his political enemies and united the country. Thereafter British India was the first country to recognize Bhutan when it became a monarchy and the friendship treaty was renewed in 1910. Bhutan reciprocated and was the first country to recognize Indian independence. The India-Bhutan treaty was revised in 1949. On August 8, 1949 India and Bhutan signed the Treaty of Friendship (TOF) in Darjeeling by Sri Harishwar Dayal, representing India and Gongzin Sonam Topgye Dorji, Yangbi Lopon Sonam and Ha Drung Jigme Palden Dorji representing Bhutan.

The ten-article treaty, in force in perpetuity, called for peace between the two nations and non-interference in each other's internal affairs. While the TOF also established free trade and extradition protocols, Article 2 of TOF read: "The Government of India undertakes to exercise no interference in the internal administration of Bhutan. On its part the Government of Bhutan agrees to be guided by the advice of the Government of India in regard to its external relations." The Indian non-interference in Bhutan's internal affairs in return for Bhutan's agreeing to Indian guidance in regard to its external relations was quite clear. During those days India’s relations with Bhutan were looked after by a Political Officer from the Ministry of External Affairs in Sikkim. In his first visit to Bhutan in 1958, Indian prime minister Pandit Jawaharlal Nehru reiterated India's wish that Bhutan remain an independent country, "taking the path of progress according to your will." The full diplomatic relation between India and Bhutan was established in 1968 affirming Pandit Nehru's statement.

Bhutan joined the United Nation in 1971, and its perspective of the world broadened. Two years later, Bhutan and Bangladesh exchanged diplomatic recognition. A new interpretation of the India-Bhutan relationship began to emerge in 1974 when Lyonpo Dawa Tsering, Bhutan's minister of foreign affairs, said that whether or not Bhutan followed India's advice and guidance on foreign policy matters was optional. The statement in 1979 by Druk Gyalpo that the 1949 treaty needed to be "updated" was still another signal of a need to incorporate in the treaty the changed reality. The country needed to put forth its own stance on a number of smaller issues and identity in international forums. For instance at the Non-Aligned Movement summit conference in Havana in 1979, Bhutan voted with other Asian countries rather than with India allowing Cambodia's Khmer Rouge to be seated at the conference. Also Bhutan's votes in the UN on such issues as the status of landlocked nations also did not follow fully the Indian leads.

On February 8, 2007, the India-Bhutan Friendship Treaty (IBFT) updating the TOF was signed and came into force following the exchange of Instruments of Ratification between the two governments in Thimphu on March 2, 2007. Under the IBFT Article 2 reads as, "In keeping with the abiding ties of close friendship and cooperation between Bhutan and India, the Government of the Kingdom of Bhutan and the Government of the Republic of India shall cooperate closely with each other on issues relating to their national interests. Neither government shall allow the use of its territory for activities harmful to the national security and interest of the other."

The notion of the IBFT strengthening Bhutan’s sovereign nation status was apparent as its preamble included "Reaffirming their respect for each other's independence, sovereignty and territorial integrity", a feature that was absent in the earlier version. The updated IBTF laid the foundation for future development and provided, among others, for perpetual peace and friendship, free trade and commerce, and equal justice to each other's citizens. With improvements in communications and transportation, geopolitical factors need to take time-adjusted shape to influence foreign policies. Also, haven't we all grown to greater balance and neutrality, and respect for such a growth?

To the north Bhutan shares a contiguous 470 km border with China. Bhutan and part of China that borders Bhutan --Tibet, or the Xinjiang Autonomous Region -- shares historical, cultural, and religious ties. Bhutan has had neither a tributary relationship with Beijing then (even though Bhutanese delegations to the Dalai Lama came into contact with the Chinese representatives in Lhasa) nor diplomatic relations now. Those days even relations with Tibet was never particularly good when Bhutan sided with British India. And, China trying to secure its southwestern edge claiming a vague suzerainty over Bhutan just before the Chinese Revolution of 1911 did not help foster links. The new People's Republic of China let the claim elapse, and it has never again been raised publicly.

The fall of Tibet under the Chinese in 1951 increased tension in Bhutan-China relation. The 1959 Tibetan uprisings and the flight of the H.H. Dalai Lama to India followed by massive presence of Chinese People's Liberation Army along northern border running through eight enclaves administered by Bhutan since 17th century alerted Bhutan to the potential threat it faced. Bhutan’s representative in Tibet was also withdrawn. India intervened with Beijing on behalf of Bhutan, but the Chinese refused to discuss what they considered a matter between China and Bhutan. Also there was problem with regard to the flight of some 6,000 Tibetan refugees to Bhutan. Then China published a map in 1961 that showed alterations of traditional Sino-Bhutanese and other Himalayan borders raising renewed claim to its southwest including Bhutan, Sikkim, and Nepal. Bhutan responded with cross-border trade embargo and closer ties with India.

Then Sino-Indian border war broke out in 1962. Bhutan became more apprehensive of China. Since then there were cross-border intrusions by Chinese soldiers and Tibetan herders starting in 1966, and a larger than usual annual incursion by Tibetan herders into Bhutan in 1979. Both Thimphu and New Delhi protested to Beijing. China responded to open direct talks with Bhutan.

A series of 20 border talks has been held between the ministers of foreign of affairs of Bhutan and China since April 1984. The 20th talk led by Chinese Vice Foreign Minister and Bhutanese Foreign Minister-in-Charge was held in Thimphu on August 20, 2012, soon after Bhutanese Prime Minister Jigmi Y. Thinley had a meeting for the first time with Chinese Premier Wen Jiabao on June 21, 2012 on the sidelines of the UN Conference on Sustainable Development at Rio de Janeiro.  The Chinese state-run news agency Xinhua  reported that two leaders “expressed willingness to establish formal diplomatic ties between their countries” and were willing to settle border issues in a cooperative manner.

The Xinhua report was picked by Indian media with a perspective of border dispute: “Any settlement of the Bhutan-China border is significant for India as Chumbi Valley – a vital tri-junction between Bhutan, India and China border - is 500 km from Siliguri corridor and the “Chicken’s Neck” which connects India to its Northeast states and Nepal to Bhutan. Indian strategic analysts say that the Chumbi Valley is of geo-strategic importance to China because of its shared borders with Tibet and Sikkim.”

A joint study conducted by the Indian Ministry of External Affairs (MEA) and Institute of Defence Studies and Analysis (IDSA), released in New Delhi on July 13, 2012 by foreign secretary Ranjan Mathai, discussed potential shift in Bhutan’s foreign policy, having far reaching impact on India’s strategic and political interests.

“There are already concerns on the Indian side over increasing Chinese foray into Bhutanese territory and efforts to engage Bhutan at various for a in the past years. China has so far built 6 roads closer to Bhutan’s border towns in the north and northwest,” says the joint MEA-IDSA study.

Also the study pointed out public resentment regarding the location of Indian Army Military Training Team in Haa.

Indian media reported that “With the increasing democratisation, communists consolidating their position, coupled with “sub-standard” works of Indian contractors, is costing India its long-term and the closest ally in South Asia. The tiny Himalayan nation Bhutan is increasing moving away from it.” 

During 20^th border talk the Chinese Vice Foreign Minister  Fu Ying said  “We are willing to work with Bhutan towards early establishment of diplomatic relations between the two countries. The border dispute between the two countries does not cover a wide area. The two sides should speed up border talks in the spirit of mutual understanding and accommodation, with a view to arriving at a fair and reasonable and mutually acceptable solution. This will contribute to peace and stability in our border areas.” All these were picked in an  IDSA Comment. 

Following the border talks a quiet visit by security personnel and goodwill visit by Indian army chief from August 25-29, 2012 are quite understandable. What is not, is the geopolitics not having wider and broader digital age significance.

The challenge lies in coming out from dormant attitude on relationship of gratitude and gratefulness to understanding the merger of nationalism with new geopolitical thinking to carve out a comfortable geopolitical space. How many will properly understand the nationalism trends, including reading signs of an advancement towards so called "geopolitik nationalism"? Can we think in terms of the possibility of being an instrument of confidence building?

“We know states come and go like human beings, countries evolve so there is no reason for countries like Bhutan or India or China to remain the same in 40 years time. So in some sense we need to be aware of our history so that we can prepare our future. Those who ignore history will also be ignored,” says Prof. Dibyesh Anand of London’s Westminster University.