The Difference: I Can Never Swallow

Let's start plain and simple. 

Kado and Nado are good friends in 1979. So are Chendu and Dhendu but in different time, 2019. Kado borrows from Nado Nu 10,000 and Dhendu lends same amount to Chendu. Just a 40-year time gap. Those who have been through both these years would have always felt the difference, but for others who have had not slightest of sensation of the contrast, it may just be a casual "So what? Time's changed". Yes, time's changed but so have "you" indifferently. The two scenes:

SCENE 1 (1979) Kado: We have had some difficult time this year. I cannot even say frankly. But I also have no other option. Nado: What happened? Is everything all right? I heard your wife was sick? Is she ok now? Kado: My wife was sick but now she seems to be getting better . But I still have to attend to her regularly. Nado: What's the problem? You tell me. How may I help you? Kado: (keeps quiet, his eyes fixed on floor) Nado: Can I help you with some money? You don't need to feel so bad. You can pay me back later. Kado: What can I say? Nado: How much you want? Kado: Any amount you say. Nado: Ok. Take Nu 10,000 now and if you need more, do not hesitate to come back. Kado: Thank you so much. I and my family will be ever grateful for your kindness. I will return the money as soon as possible. Nado: Don't worry. You can pay me slowly in 6 months. Kado: Thank you so much. (Kado leaves with cash Kado returns in 2 months, much before the given time) Kado: Thank you very much for your kind help. (Kado returns Nado Nu 10,000 and keeps one "yathra" (handloom woolen shawl from Bumthang, costing Nu 500 then) in front of Nado) Kado: Thank you once again. Nado: Are you sure you don't need the money? How is your wife? And why you have to bring "yathra"? It is so expensive these days. Kado: She is much better. We are from Bumthang. My wife says we should offer this “yathra” as a small token of our gratitude. It was lying at home. We did not buy. Kindly accept, we will feel nice. Nado: Ok. But you come again if you have any problem. And that time don't bring anything. (Nado thinks Kado might feel offended if he did not accept the gift) Kado: Yes, we will come. (both happy: Kado for his friend's kind help, and Nado for being of help to his friend)

Sounds untopian? Fast forward, here's latest

SCENE 2 (2019) Chendu: Sir, I have small problem. I have done some work and submitted my bill of Nu 20 lakhs.The accountant is on leave. He will come to office in about a month. Can I borrow Nu 1 lakh for a month? I will pay you 10% interest for a month. Dhendu: I don't have such big sum. You know I had to take my wife to Thimphu for treatment last year. Thimphu is such an expensive place, we even had to borrow from my brother. From where will I have 1 lakh? Chendu: Ah, yes someone told me about your wife . Actually I can manage with Nu 50,000. Just for one month. You are my friend. With 10% interest I will pay you Nu 55,000. You don't get such rate anywhere. Dhendu: I had Nu 50,000 but I had to give to my brother last month. He is planning to go to Australia. You need so much money to apply for visa, you know. Chendu: Sir, I really am in a problem. I would have had no problem but for this rascal accountant. I wanted Nu 50,000 but in this desperate situation I have to manage with Nu 20,000. Can you please lend me Nu 10,000? I will borrow additional Nu 10,000 from Nala . Now you cannot say you don't have even Nu 10,000. Dhendu: I will give you Nu 10,000 on one condition. Chendu: Whatever you say.  Dhendu: You give a cheque dated next month. Chendu: Of course, I'll give you. I was also thinking about it myself. (Chendu gives a cheque for Nu 10,000 and walks away with Nu 10,000 cash.  After 1 month the cheque bounces) Dhendu: Your cheque bounced. Can you pay my money? It’s one month now.  Chendu: Do you think I'll run away with your Nu 10,000? I will pay you later. (cuts the call) (After 1 week, Dhendu calls again Chendu) Chendu: I am busy. Why the hell do you call me again and again? Am I a thief?  (Dhendu calls later, no response...may be SIM changed...and feels sad how unscrupulous his friend has turned into!!)

Neither everyone was Kado/Nado then nor all are Chendus and Dhendus now. It's a reflection of societal moral values then and now. Some may think I am exaggerating. If you are a millennial, go and read it through with your dad/grand-dad. They may think the Scenes are a bit of exaggerations but will never ever say its false, its fake. They have "it" in their hearts, I guarantee. Yes, I have sprinkled some sweet/citrus juice on purpose...to exhibit the difference, the stark difference in moral standards, I can never swallow.

When and where did we exchange our human values (gratefulness, kindness, empathy, humility, modesty, sympathy, compassion...) so completely for money? Forty years have gone by, time has changed. More are into religion, more are educated. There seems no relationship between education (of any kind) and morality. Why "more education" does not knock some moral sense into the intellect? Why is education (throughout the world by and large), only turning in sycophants for powerful and wealthy? Humans have become cold, as cold as cold cash collected by all means, and sold their morality for cheap showmanship with no substance.

It is possible to be wealthy and of high moral characters, of high human values, of high class and dignity, and of high respect and responsibility. Wealth is not a sin when it is the testimony of your intelligence, your hard work, and the purity of your mind and soul. Without these wealth is a sin. Money is not a goal, it is just a mode. When money becomes your goal, you will not know when your wealth has turned into curse. Those poor human facades with twisted minds and rotten souls resting on curse will never ever understand the depth and dimensions of humankind, the likes  of Kado and Nado, their warm hearts and happiness!!

I pin this on our grandchildren generation, not yet in high school now. They are our hope and our future (despite decades of general stink and garbage), our real hope leading to increased awareness of reality, not escaping but sinking into reality, to redefine  life of success as one filled with peace, harmony, love, affection, kindness and compassion  against the failure of divide, hatred, desperation, corruption, evil and degeneration. Evil is an evil even if one is filthy rich and/or most powerful in this world. No body can resurrect evil, not even God (my strong belief)!!

For What It Is Worth

1.       In societies that are dominated by highly incompatible capability-earning nexus and  therefore lacking in economic openness, the shift of political economy towards centre-left is improbable. The policies and regulations are made that are imbalanced and government-centric right, and are formulated with no inputs whatsoever from public/civil societies. The programs and projects prepared by, and mostly with the governments are more skewed towards consolidating and centralizing bureaucratic hold, and self-serving the clandestine needs of individuals, groups, parties  and/or establishments than serving the overall interest of the nations. The bureaucrats therefore expect private sectors to 'serve' them. The private sectors are passive and do oblige deriving their own bootleg benefits. The perverse incentivisation and lack of strategic investment on system development and human capital obviously erode administrative capacity and capacity to implement. The public and/or civil society leverages for checks-and-balances remain far from reality. How can the private sectors be looked upon as equal development partners (or "engine of growth" as often parroted)?

2.        In current situation do I believe the public servants will make solid contribution in managing transitions to smooth and inclusive governance enabling a gradual political shifts to a point that is best suited for the nations today? Or for that matter and given the present day geopolitical realities, will they make efforts to find the most politically sound places to be? Why would those in comfort zones with very low/no accountabilities move and divest themselves of their almost eternal power/authorities/advantages that enable them procedural, policy, regulatory, systemic  and political corruptions for illicit benefits? Political handouts exacerbate polarization. Corruption is neither a necessity nor an obligation. It's a choice. One has to be either a stupid or a visionary to forego such discretionary choice. They are neither.  So given the differentials, where would the transformational driver of workforce change for innovation, creativity and entrepreneurship come from? Nowhere, in normal circumstances.

3.              But the time now is not normal by any standards. Make no mistake about it. The changes are coming without our being aware of their taking place. The way the three actors - government, commerce and civil society - share power to influence the actions of elected policy-makers and businesses will change substantially in future. The underpinnings are being entwined, public and/or civil society voices are resonating with more clout than ever before .... thanks to the era of social media, big data, analytics and artificial intelligence. These are likely to give further spur to public and/or civil societies on issues like civil liberties, better education systems, result-oriented actions with full accountabilities and others. The reason why some governments frequently seem to court them one day and vilify them in another. But the fact is neither the government nor the public can dictate the pace of the power-share shifts for policy making and business development.

4.              The areas that three actors will have to positively collaborate will include: (i) holding institutions, public as well as private, to account and promoting transparency including in finance; (ii) raising awareness of societal issues; (iii) delivering services to people to meet education, health, food and security needs; (iv) implementing disaster management, preparedness and emergency response; (v) bringing expert knowledge and experience to shape policy and strategy; (vi) giving power to the marginalized; and (vii) encouraging citizen engagement.

5.        The ability to raise concerns, influence government policies and create meaningful dialogue between policy-makers and the public will not come easy but will find their way through. More people than ever before are already able to inform the governments everyday about what they think is wrong and what is right (e.g., issues concerning civil service salary increase are live).  As more substantive issues will come and start to produce outcomes, more people will be motivated to take this route. On those accounts people will always be ahead and will have upper hand eventually. No doubt about it.

6.            Amnesty International, for example, is experimenting with a form of artificial intelligence (machine learning) looking into areas such as policing, criminal justice, the development of autonomous tools and its possible impacts on rights to work and earn a living. The WWF is developing aerial drone technology, animal tracking devices and infrared cameras to fight against illegal poaching of endangered species.

7.        Others have taken partnership approach. For example UNICEF has created bot software for young people to be engaged on social media platforms. Its U-Report is gaining impetus as a free SMS social monitoring tool, and assesses how young people feel about important issues based on responses to SMS polls and alerts. In 2015, U-Report helped uncover a scandal in which teachers were found to be exploiting children by awarding grades and pass marks in return for favours. Within 24 hours, 13,000 people responded that enabled appropriate action to be taken quickly. In another recent U-Report poll in three African nations, 94% of 34,000 children and young people called for concrete steps to end corruption and increase investment in services for children and their families. 

8.       President Barack Obama said "The challenge we have today in politics in every country is conforming facts to their opinions and biases, as opposed to shape their opinions based on facts." I am sure he was referring to far right political practice, more like an unwritten ideology. Even if it is ideology it is temporary, it cannot stand against the worldwide digital wave. Under the same tone Mr. Obama also said, "If you don't know what you stand for, what your values are and what you believe in; you also don't know what can be compromised and what can't be compromised, what is lasting values and what is situation and temporary."

9.            It is important to know what you stand for, what is lasting value and what is temporary. Temporary is temporary -- even if it is as big and alarming as far-rightist movement in the west that most believe is triggered by events that undermined faith in the mainstream parties and led to a far-left backlash -- and do not last. Everyone knows. We have the genes to cooperate, to remodel and harmonize peacefully and to weigh the costs of discord against its benefits. We must move smooth or will get moved  ruffled, for what it is worth!!!

MY/YOUR VOTE, YOUR/MY FUTURE!

1.    The year 2018 is set to be year of elections worldwide. In queue are a number of countries[1]. The Italians and Russians have voted in March. No political party won out-right majority in Italy and the political chaos continues. In Russia it was all about Vladimir Putin who won his second consecutive (fourth overall) term in office with 77% of the vote. And so continue the elections and political distinctness.......showing signs in some countries of evolving far-right politics.

2.    In politics the process of electing leaders varies widely, more so after digitization influence - the sensation of smartphone era - came into play.  I wonder what it would be like in AI (Artificial Intelligence) age. And the understanding of an election varies from person to person. I look election in Bhutan through pretty simple angle: a process of electing legislators, possibly the best among the candidates even though best candidate getting elected through electoral process in other countries is too idealistic a notion. And we have seen apolitical bazaar, geographical concourse and even theological undertones in recent National Council election. Haven't we?

3.    In the process of making laws, legislators should understand and anticipate political and policy landscapes and development profiles in and outside the country, and be sensitive to emerging duality: one with concentration of intense responsibilities with feeble structured support machinery, and other executive functionary with frail accountability often shying away from core responsibility. Also, the pace of shift from right-wing politics,  politics-people disconnect and bureaucracy "floating and fishing" on hierarchical dysfunctionality are key issues.

4.    The election need not be zero-sum game. Why can't politics be positive-sum process competing to work together? Both winners and losers (one leading other supporting) proactively participate in flourishing democracy, economy and society and equally derive benefits through nation’s progress? I mean through nation's progress, not resources at source. Why don't the politicians understand that in politics close embrace of opponents proves extremely effective in diminishing the misplaced appeals of both even in highly chaotic world of politics and governance? 

5.    In Bhutan politics and governance need not be messy like in many big economies, not if we choose so, are willing to work hard and in right way, yes the right "way", and address also the conflicts of interests all along. There is no need for the voters to carry the partisan baggage after the election is over. Once EVM[2] button is pressed, it should be the end of the five-year "over" and every one should congregate towards achieving common mission. Unfortunately it is not. They do carry partisan stigma, and backpack it quite seriously, even emotionally, dividing friends and families. The important question is why should the people feel compelled to curry favour with politicians.

6.    I have never registered myself as member of a political party. The pseudo-nationalistic ideologies (casual common platform) do not fascinate me. I loathe partisan politics. The issues of national importance do not seem to penetrate the core of mainstream politics. It is, as usual, downplay or even sweep-under-the-carpet of the inconvenient truths, and an embedded hope that things will work out for better. These seem the main reason why politics is not a positive-sum process even in Bhutan. Addressing the US Congress on 25 April 2018 French President Emmanuel Macron said, "Without reason and without truth there is no real democracy. Because democracy is about true choices and rational decisions."

7.    The mobilization of combined efforts of both election winners and losers into policy making apparatus is easier said than done. But not impossible if only it is backed by new standards, new rules and new ethic of governance to have space for elected leaders, their supporters and opponents to come together, cooperate and not allow partisan self-serving agendas that undermine the national interests to dictate. Effective leadership demands not only boldness but also requires to exercise restraint when holding back is toughest thing to do. Also it requires analytical depth and dimensions to take opposition alternatives on board, and manage the political shift towards center which some how is inevitable in modern world.

8.    Failures of others to act is no excuse for one’s inaction, and that during difficult times leaders - if they really hope to lead - must be ready to act and  not be afraid to face calculated consequences. I hope we are electing leaders, even if they are not of the caliber I have in mind here. It is too naive to address the action based only on what is told, reported or just for a sideshow rather than after analyzing the causes and consequences of such action and addressing the causes. The true leaders do not put on the table nation's interest, prestige and dignity.

9.    The understanding of the nation’s mission and vision cannot be different, but the ways to achieve the national vision may differ depending on the ideologies of the political parties. The key word is "achieve", not make it up. I do not know why I get an impression that the politicians do not get it. The reason why their focus center only around the “way” that enable them use/misuse of state resources through political power for individual and/or political gains but not on policies and ideas that give rise to the right "way" and the mission to achieve the national objectives and goals. Have you heard any politician saying anything on these lines? I have heard none. And the reason why partisan politics has started to gain momentum.

10.    Without right policies and regulations, and their strong enforcement; easy money flow into the system with loose accountability is not only spoiling segments of bureaucracy and society but also contaminating youth attitudes while the youths of today in rich countries are becoming more alert and responsive. The cover-up of misdeeds parroting nationalism that has no analytical bearing on national interest, mission and aspiration is laying very weak governance foundation. The general disconnect with people and bureaucratic sleaziness are quite common. The reasons why polarization is gaining momentum, and also we see more and more activities geared towards partisan politics. It is up to you to analyze the seriousness of these in an environment we live today.

11.    In this regard we cannot assume human behavior towards politics to improve - not in the least, if it is offshoots of political patronage - through education, not even over experience. There are two ways to change: either institute deterrence-based system or prepare for misdeeds in advance by eliminating opportunities for misuse of power and authority (Singapore model). 

12.    In early 1960s Singapore had neither sizable markets or industry to build on nor commodities or other natural resources to exploit. Most Singaporeans were poorly educated, and about 50% lived in slums. The place was malarial swamp. As a result conditions at independence was grim. Then Singapore realized quickly how to turn its poverty of resources into an asset by giving its leaders the freedom to think and act radically including in good governance giving excellent reliability and predictability, and constructing comprehensive anticorruption systems the world has ever seen. This was a major politcal shift towards the center and the shift continues even today. It was the only way out for them. And I do not need to tell you more about today's Singapore where added emphasis on collective wisdom and leadership is being strategised and how political shift is being managed. 

13.    In today's political environment when you vote, look for one who cares more about policies and ideas, and less about politics. Almost a radical with buck-stops-here sense of responsibility for the constituency's welfare, and with ruthless determination to do whatever to advance it. A typical pragmatist who is not bothered by handicaps of politics. Also idealists only trust and therefore are ineffective. Look for realists. They trust and verify through even system of checks and balances. In plain language 'Vote for Best Candidate, Do not Vote for Political Party' in Primary Round. Meaning cast your primary round votes based on qualities and credibilities of candidates, but not based on issues presented by political parties because no party has addressed the issues of national importance (how they will address the mounting debt, how they will mobilize massive finance required for huge programs/projects they pledge/promise all over, what are the issues that stiffle economic development and how they will be addressed, and others).

14.  Do you believe bureaucrats retired/resigned from service fill the bill? Not necessarily. They mostly are far-rightists with very little to offer in managing the smooth and inclusive governance enabling political shift to a point that is best suited for the nation today. The more you take control of the shift and manage its pace and position, better it is. 

15.    Therefore, let us give full support to merit-based candidates and give absolutely no regard to the notion that which party should form the next government. The government formation on collective wisdom and leadership is best for us. It is hard but not impossible, and will reject/reduce all political party-based implicit biases. If people are fully committed to meritocracy rather than party-based dirty game, the possibility hinges on the question that if the rule of law is serving the best interest of Tsa-Wa-Sum (King, Country and People). If not let constitutional experts clear/open "the way" forward. I do not see any reason why the ministers cannot be selected based on merits from both ruling and opposition parties. 

16.    The politics seems moving virtually blind-folded, and needs to be shown the light of the day. Individual diligence and devotion to the nation’s mission have never been more necessary. Its a question of finding ways to consolidate democracy, accountability and rule of law.

17.    Therefore cast your vote judiciously, it’s my future. More importantly for millennials: my vote, your future!

Every wish cannot be fulfilled

Don't you toss-up the crystal bulb

Neither your indifference is an option,
nor luck coins the future

The way to predict it, is to create

Because,

Destiny will bear no guilt of your inaction 

and my reticence
For reason now you understand not
that far more powerful than fear,
the motivators are 
guilt and affection!

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[1] Malaysia (May), Cambodia (July), Mexico (July), Bhutan (April, September), Japan (September), Brazil (October), United States (November), Thailand (November) and others. 

[2]  EVM = Electronic Voting Machine.

"Today is only one day in all the days that will ever be. But what will happen in all the other days that ever come can depend on what you do today." - Ernest Hemingway

GST: If we cannot help ourselves, who can?

The Government of India (GOI) has undertaken very bold and courageous reforms that include demonitisation and the goods and services tax (GST) taking full responsibility for success and failure alike. Given the gigantic efforts required for the implementation of demonitisation and GST, near-term economic slowdown is obvious. India is not the country which takes monumental challenges to its stride with pride on political consensus. For all you may expect, the growth turn-around may be further away than International Monetary Funds (IMF) forecast of 2018 as upward push. IMF may not have factored in “babu culture” of the Indian bureaucracy and old-fashioned private enterprises, and politicians always on lookout for political scissor-kick to score a goal. These cannot be easily parted with yet even if there is effort to modernize systems and corporate management. India may come around the lethargic what-is-there-for-me (personally as well as politically) work culture but that may take much longer than expected.

The IMF expects India to regain its fastest growing major economy status by next year, and  forecasts  7.4% growth (against China's 6.5%) next year and 8% in the medium term once reforms are firmly rooted into the system. The IMF chief Christine Lagarde said, “Indian economy is on a solid growth track in the medium and long term due to the structural reforms undertaken by the government, and the current slowdown due to implementation of GST and demonitisation is short term.” The IMF has lowered 2017-18 forecast to 6.7% from 7.2%.

The Indian economic turn-around is not going to be spontaneous. To overcome the economic slowdown, IMF has suggested a three-pronged structural reforms including (i) addressing the corporate and banking sector weaknesses[1]; (ii) continued fiscal consolidation[2]; and (iii) improving the efficiency of labour and product markets[3].

The fact is India is on a solid growth trajectory and we cannot afford being off-the-track, not us. Our economy is India import-dependent. Leaving aside few high-end and luxury items, all essential goods (and services) are imported from India. The dependency will increase further with Indian economy moving at faster pace on a strong track unless alternatives somehow emerge. We seem to judge ourselves by our uncertain intentions, and do not realize the pace with which we need to catch up with neighbours. The world will judge us by our actions, not by intentions. Move, we have to make this way or that. There is no choice. The options are: we either move ourselves smartly or get towed along. The signs so far show we are heading towards latter, unfortunately. If we cannot help ourselves, I do not know who will help us!

With GST in place, India exports us zero-rated goods and services. The Bhutanese bureaucracy has no clue and private sector is too inept to work out details to take full advantages of GST-free Indian supplies. What can you say to we-can-do-ourselves-everything kind of persons who cannot think beyond nationalism as credential or cover-up for them to be engaged in corrupt, fraudulent, coercive and collusive practices parroting dedication and commitment to Tsawa-Sum (The King, Country and People)?  Nothing. Because when the model is wrong, it cannot be right in any sense of the word. If these do not bring in forth the need for course correction, I really do not know what will!

The interpretation that revenue shortfall  of Nu 14 billion in 12^th Plan due to subsuming of excise duty into GST by GOI leading to increase trade deficit and adverse impact on the economy is shocking shallow. Can we not think beyond this? The cheaper imports from India increase business volumes as well as modes and models, enable savings, decrease expenditures, generate economic activities and new jobs, and make the economy vibrant. But these are subject to one condition: hard work. The question is who will work hard when mindset is too used to plucking easy handouts. We need to grow-up to enter into the real world, seriously!

If we see through things, details can be worked out. Let us take a simple example. You want to buy 2 truck tyres, which cost Rs 30,300 per pair (including 28% GST). If you buy from India, 2 tyres will cost you Nu 32,115 [30,300 price + 1,515 (5%BST) + 300 (transport & handling)]. The same items if you buy from Bhutanese dealer (who imports GST-free) will cost Nu 27,117 [23,672 GST-free cost + 1,184 5% BST + 1,740 (7% Bhutanese dealer profit)+ 521 BIT]. The tyres are delivered to dealer by manufacturer. You will save Nu 4,998 (or about 18% of your cost) and the Bhutanese dealer benefits Nu 1,740. This is not an arbitrary example.

This is plain arithmetic, reality is much harder. You want to buy for instance 10 ton CGI sheet and ask an Indian retailer/dealer anywhere to supply you GST-exempt 10 ton CGI sheet. He will say no way because you are one-time buyer. Why should he go through the rigorous process of GST-free supply for one-time Rs. 60,000 supply for no subsequent process  benefits? But if the Bhutanese CGI sheet retailer goes and establishes business relationship with Indian supplier for regular supply of CGI sheet, the seller may agree to go through GST-free supply process. The Indian suppliers have to be convinced (even pushed) where business relationship, dealings, reputation, trust and future scope between both Indian and Bhutanese business houses come into play. Also, the sales figures will be recorded in GST database, which can be retrieved to counter-check/reconciled with the figures at Indo-Bhutan gate to help make clean transaction, free from corruption. Initial stages are pretty tough but beneficial to both Bhutanese buyers and Indian sellers longer-term, and eventually consumers.  To expect Bhutanese businesses who are so used to living on proxy system practising unfair means to move in the direction that benefits all and upgrades themselves on value chain is an irony of pretty tall order.

Having understood the business dynamics, the government role should be to make policy and regulatory environment conducive to Bhutanese business entities to enable smooth GST exempt import from India. This is a high hope! Any bureaucratic efforts along these lines would be a pleasant surprise. On contrary nitpicking the dated regulations to make the import process regressive is no exception. There is neither responsibility nor accountability for such actions. The rudimentary systems for checks and balances are as good as non-existence. And its like you cannot ask someone to do something who is benefiting from not doing it. Much bigger irony!

People may do whatsoever they feel deemed right, but we are not willing to give the opportunity a free pass.  No sir, we aren't. Like I say if we cannot help ourselves, who can!

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[1]  Accelerating the resolution of non-performing loans, rebuilding the capital buffers for the public sector banks, and enhancing banks’ debt recovery mechanisms.

[2]   Consolidating revenue measure as well as further reductions in subsidies.

[3]  Reforming the market regulations, including reducing labour laws, in order to create a more favorable environment for investment and employment.

What a price tag of Doklam standoff

          Mr. Yuji Kuronuma, staff writer of Nikkei Asian Review, derives his argument from his headline “China woos Bhutan with 10 billion in standoff with India”. He quoted no credible sources of such a courtship, and reported that China was offering Bhutan $10 billion(b) in economic assistance to soften its stance and since then Bhutan toned down its allegations that China was violating its territorial claims.

From beginning till end of Doklam standoff, the world knows that Bhutan toned neither up nor down. And it is not fair to put presumed $10 b Chinese economic assistance as price tag on us to an event in which arm forces of two Asian giants were standing face-to-face with guns on their shoulders but pointed downward to the ground. And also $10 b is too arbitrary a figure for serious contemplation (see below). Therefore let us leave aside this as vested message conduit through, or spiced-up rhetoric from Mr. Kuronuma of Nikkei Asian Review, a fairly credible news media. The figure aside the words 'Chinese economic assistance' should ring our bell hard.

It may be innately insane to assume that the Chinese economic assistance will never ever flow into the country and the northern border will remain sealed for all time to come. The issue for us is and will be -- what exactly will be the significance of  the Chinese economic assistance? Even though the tense Doklam standoff has ended for now with "necessary adjustments and deployments according to the changes", the better option for us would be to understand fully the significance of such an economic assistance from north without being carried away and attaching neither too much hyperbole nor dry sarcasm. So let us take a look through following perspectives that, I think, are of very vital effect, the significance then ought to enter into the Bhutanese minds in one form or other (with regard to both unanticipated and current development assistance). 

What comprises Chinese economic assistance?

The Chinese development finance to Africa provides a fair insights into China’s strategic approach to outward investment and economic diplomacy, even if exact figures and in-depth strategies are difficult to ascertain. While  the modern association between China and Africa stretches back to the 1950s, the past decade has witnessed dramatic growth in Sino-African trade. Then it became clear that financial flows do not constitute normal official development aid (ODA) as defined by OECD.[1]

 The Chinese financial architecture is made up of two distinct types of financial flow: ODA and Other Official Flows (OOF). The Chinese ODA comprises three instruments: grants, zero-interest loans and concessional (fixed-rate, low-interest) loans. Under these instruments they finance Chinese government scholarships for students; Chinese medical teams; ‘turn-key’ construction of stadiums, government buildings, telecommunications networks and other infrastructure; technical assistance teams in agriculture and other sectors; short-term training programs; youth volunteers; and material aid (normally Chinese goods). The concessional loans were introduced in 1995. Only large projects with a value of at least US$2.4 million, and that make a minimum 50% use of Chinese goods and services, are funded with concessional loans.

The government-provided finance to Africa falls primarily into the OOF category. China’s OOF in Africa consists of export buyers’ credits, official loans at commercial rates and strategic lines of credit and suppliers’ credits.

So, the $10 b or any package from Chinese purse will not be exactly what you thought it to be. You will know much more about Chinese Development Aid in Africa if you go through the details in Prof. Deborah Brautigam's Report, my source for above summary.

Do we have absorptive capacity?

Any bilateral assistance may initially sound like a good spread of wealth. But it also comes with the spread of influence depending on how effective are the ability to negotiate aid and capacity to absorb assistance by the recipient country. The development assistance is not "one-shot pot-luck lunch". It is a program spread over a number of years and continuation thereafter. We know these well but tend to forget often.

Let us take  Kuronuma's $10 b as example. The Chinese economic assistance, roughly about Nu 650 b, will have to have a spread of at least 10-15 years. The $1 b (Nu 65 b) per year or in project size terms about 2 hydropower projects (of about 600 MW, slightly smaller than Mangdechu Hydropower Project) every year for 10 years will choke us. Or on a loose schedule of 15 years, one Mangdechu[2] equivalent per year for next 15 years will also spill over our brim, to be honest. It makes no sense given our ability in dealing with international issues and capacity to implement projects, and the Chinese probably know it looking at cost and time overruns of our ongoing mega projects.

The economic finances -- grants, zero-interest and/or concessional loans -- need strong in-house capacity for beneficial use of the resources, including for (i) project design and feasibility study, (ii) project execution, management and administration, (iii) financial management and control, and (iv) project operation and maintenance. Strong internal ability to deal with issues and capacity to implement and absorb external funds productively over the period spread across several priority sectors is pre-requisite to improve the country's competitiveness.

If undermined by the ability and capacity shortcomings, the projects will be dependent on deals made at high political levels, our leverage at such levels for all purposes will be insignificant considering our overall standing vis-à-vis theirs. As in Africa the projects will then lack competitive and transparent bidding processes, and most of the work force employed at those ventures will be Chinese. It is difficult to foresee how successful would be the promises of job creation, local employment and technology transfer. Under such configuration it may turn out to be a recipe for degeneration of national interests. As the old saying goes you will only get choked if you try swallow too big a chicken-bone. A size that can be chewed, swallowed and digested is a better healthy option.

And the influence

Compared with China's $3,200 b foreign exchange reserve, $10 b may look like a pocket-change for them.  But in terms of an aid it is a huge amount for any country. For China, aid in Africa has primarily been a diplomatic tool. As a consequence, Beijing offers development assistance to most African countries with which it maintains relations including South Africa, which has a higher per capita GDP than China. Aid is part of a historical and diplomatic narrative, not simply a device for snapping up resources of Africa. And large part of the narrative is influence, which mostly is true for any country that gives economic assistance bilaterally. No bilateral donor is a saint. Who will know it better than the Bhutanese? Or I say to myself, steady man!

The arbitrary figure of $10 b economic aid may even have been coined to instigate a purpose. The purpose could be anything from showing an alternative source of development finance to influencing 2018 election results. The figure may be arbitrary and standoff may have ended but the purpose looks neither arbitrary nor at an end. For all we know the initial purpose of instilling in the minds of people the need for diplomatic relation and development finance alternative may have been achieved, however small.  It is not how much that matters now but mere thought of the needs may prove utilitarian eventually.

The display of strength, power, money and even commonality in religion, language, culture to influence thinking of common people will likely continue Doklam or no Doklam. The stand-off may have been disengaged but the message that the Chinese would like to keep their interest in, and engagement with Bhutan (consequently influence obviously) alive is loud and clear. We better understand it well and think hard how best to deal with the future situations.

Is it all about water?

Water is the most important resource in the world. The Tibetan Plateau holds more ice than any place on Earth that isn't a pole. The glaciers from the Plateau supply most of Asia's rivers and, by extension, some 2 billion, out of total 7.3 billion people of the world.  The region's mountain ice is so great that it's often called the "third pole" or the "water tower of Asia."

As the two giants may figure out how to live together, we need to know how to smartly live knowing well what is at stake.  Bhutan sits on the southern slope of the Tibetan Plateau. As per FAO Bhutan’s total annual internal renewable surface water resources are estimated 78 km³ (78,000 million m³) without accounting groundwater resources (ground water mostly gets drained by the surface water network because of hilly terrain). The internal renewable water resources (IRWR) comprises both ground and surface water. As per the World Bank Bhutan's IRWR of 101,960 m³/per capita is one of the highest in the world.[3] In 2008, total water withdrawal by entire country was estimated at 338 million m³, representing a mere 0.35% of the annual IRWR.

According to the World Resources Institute 33 countries will face extremely high water stress by 2040 (see map below). The water resources management requires years of study, research, data analysis and implementation capacity. The need for a strong institution to take stock of and manage the country’s water resources and watersheds cannot be overlooked at any cost.

Yes, Bhutan's natural resources are important in the region. And our trade balance with Chinese will be one-sided from day one. The inflow of Chinese tourists will not off-set the anticipated import from China. The only substantial potential export I can think of is hydropower subject to overcoming the conditions, restrictions and shortcomings. The current investments in our water resources through hydropower comprise run-off-the-river projects. But should Chinese investments flow into hydropower somehow, the justifications will be more for reservoir projects, that I can tell you, for the reasons of strategic play and their lead on it. Everyone knows Chinese are far ahead on reservoir power generation. The three gorges dam, the world's biggest, with installed capacity of 20,500 MW is a vivid attestation. The question for us would be -- what a difference of perspectives on same issue?

            The United Nations says fight for and control over water resources will get more and more intense in future. Who will know better than the Chinese and Indians because Tibet reportedly provide fresh water for half of the Earth's population through ten watersheds and China keeps it under direct control. And Prime Minister Narendra Modi says northeast is India's "Laxmi" (Goddess of Wealth).

Can we work to make comfortable living in our country that sits on southern slope of Tibetan Plateau and north-east of Indian subcontinent? What concerns me most, as always, is the intellectual development backlog, more than the debt buildup, inhibiting home capabilities to come out small but smart!

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"Half of being smart is knowing what you are dumb about." - Solomon Short

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[1]    The concessionary funding given to developing countries and multilateral institutions primarily for the purpose of promoting welfare and economic development in the recipient country. Funding must be ‘concessional in character’ (i.e. involving government subsidies) and loans must have a grant element of at least 25 per cent, using a 10 per cent discount rate.

[2]      Installed capacity of 720 MW at a cost of $670 million or Nu 43.50 b.

[3]   Asian IRWR average: 3,300 m³/per capita, Bangladesh: 660 m³/per capita, China: 2,062 m³/per capita, India: 1,116 m³/per capita, Nepal: 7,034 m³/per capita and Pakistan: 297m³/per capita.