1. The economic growth these days cross-cuts every other field even ideology, not the other way
round. If economic policies, planning and growth get subdued priority,
overall development stagnates. The programs and projects will have minimum
impacts on the lives of the people. In our situation, we need far-reaching economic foresight and robust policies, strong institutional measures, and mainstreaming thereof. The key to this will be a strong government
organization/agency to act as the driver of economic policies (maybe my impression of the Planning Commission of early 1980s is still fresh). We are at very
critical juncture, the reason why economic mainstreaming now is so very
crucial. That is why change is necessary or inevitable to put it more frankly.
The change is never easy and quick. What is at stake, I believe, is bigger than
transformation that we may think is tough for mainstreaming the economy. The future
is not to be feared, but embraced and to be made stronger if we have to leave
better a place for our children/grandchildren.
2. The economy seems directionless (para. 5 below) and highly
government-centric. So private sector/NGO at this stage has capacity to neither complement change initiatives nor leverage any move to influence proper economic
directional adjustment. Private sector is partner not subordinate. Without sound private
sector and strong system of checks and balances, government (with
low capacity) managing the economy (finance in specific) is always unstable and
exposed to high risk for misuse, mismanagement, fraud, corruption etc. The
change may need government to devolve powers, the reason why the
changes/reforms are resisted. The resistance will increase once revenue flow increases substantially. Before that if the economy is in right direction set with
courageous policy and institutional measures, all that is needed is "keep on walking".
3. The IMF has cautioned that “Risks are linked mainly to the high public
external debt and the need to manage projected large hydropower-related
revenues. If not properly managed, the large pickup in hydropower exports and
the projected increase in export earnings and budget revenues could undermine
macroeconomic stability and the competitiveness of the economy, resulting in
overheating and external imbalances akin to those seen during 2012-13. In
addition, Bhutan’s growth could be adversely affected by a growth slowdown in
India triggered by delays in structural reforms.” I wonder if we can
afford to remain status quo!
4. “The fiscal incentives rendered to the business establishments through
the Economic Development Policy (EDP) did not benefit the cottage and small
industries but 39 high-end hotels and nearly 80 percent of business entities
availing tax holidays located in Thimphu, Paro and Bumthang.” “After 20-months
of operations, the Business Opportunity and Information Centre (BOiC) has
closed shop and passed its mandate to the Rural Enterprise Development
Corporation Ltd (REDCL), which was launched on May 21.” “Most activities
executed under the Gewog Development Grant (GDG) in the last two fiscal years
(2013-14 and 2014-15) are of no economic value to the local economy, the Royal
Audit Authority (RAA) has found.” These words are from daily news, not mine.
Obviously all these programs have been shallow for any in-depth impact on the
economy. Also the Guaranteed Employment Program is only good as numbers (take a
look at MOLHR's Employment Agreement Form). These programs have failed to
vitalize economic activities, and may have even acted counter-productive
to initializing stabilization required which IMF is cautioning us about. The lack of accountabilty is appaling!
5. It is time we be clear about the type of economic system we want to
put in place that will best suit us taking into account our overall situation, heavy hydropower investments
and externalities including globalization trend. Every country has potential to do
well. The potential is lost if its citizens’ days do not take definite
direction and are spread thin. The country’s ability to deliver requires
combined efforts and core structural strength, individual as well as
institutional, to perform, more specifically, in this digital age, ability to
perform with creativity and innovation to a common goal.
6.
Once a firm decision on the economic system is taken, step by step
transition to the new system with proper institutional measures is key to
economic success. It will take time but taking a direction will make us move
forward rather than every person/entity/organization circling around the
hotch-potch of traditional, command, market and mixed economies based on their
own (mis)interpretation/(mis)perception. For instance, the recent flash
floods in southern Bhutan call for a strong capacity for river training and
flood protection. It is highly specialized area that requires years of study,
research, data analysis and implementation capacity. And the need for an
institutional structure to take stock of and manage the country’s water
resources and watersheds cannot be overlooked. Water is the most import
resource of the world.
7. The transition will call for high
political willpower, commitment and foresight. The short-sightedness now will impair the longer-term perspective. It is going to be politically
tough but will be good for the nation longer term. Take the case of Bangladesh, Bhutan, India, & Nepal (BBIN) transport agreement. We need to see longer-term interest of the consumers, not short-term
benefits to transporters. Let the transporters be slowly exposed to competition
and come out strong. It will be good for consumers and also eventually for
transporters. I cannot believe people seem to think there is alternative. The notion that the days of keeping economy closed, with unending flow of external
assistance, will never end is simply mistaken. And so is the argument that bigger transporters from the region will overflow and
dominate us. What matters is how smart we are, not how big we are because globalization knocks on every
door and gives only two options: embrace or face force-entry!
9. The change, in my view, is more
inevitable than our misperception of its need. The approaches on how best to manage
the change may differ. Ideas may flow in, some solid others sugar-coated hollow. Only open contest of bright ideas will drive the nation much ahead.
10. Late Lee Kuan Yew of Singapore said, "Well, we are pragmatists. If in order to survive, we have to open up a sector, we open it up. Because the best test - the yardstick is, is this necessary for survival and progress? If it is, let's do it. We are ideology-free. What would make the place work, let's do it." Very True, for small nations particularly!
10. Late Lee Kuan Yew of Singapore said, "Well, we are pragmatists. If in order to survive, we have to open up a sector, we open it up. Because the best test - the yardstick is, is this necessary for survival and progress? If it is, let's do it. We are ideology-free. What would make the place work, let's do it." Very True, for small nations particularly!
