Out of track on mission to self-reliant economy?
Increase in quota for Bhutan to burrow Indian rupee some months back is unlikely to resist the increasing trade deficit of the country with India – thanks to 32 percent increase in imports from India in 2010 compared to the previous year.
According to the report of Finance Ministry, if income from the electricity sale is not taken into account, Bhutan’s trade deficit stands at Nu 20 billion (Nu 13 billion with India). The gap is shortened to Nu 9.7 billion by the electricity (Nu 3.3 billion in case of India).
In one hand, the government has failed to supply power within the country at par with demand, the sale did not supplement the trade loss on the other. The government claim the trade deficit is due to increase import from India for booming construction industry including mega hydro power plants.
The new FDI policy outlines the importance of inviting new foreign investment to lift the national economy to the self-sufficiency. However, the year-by-year trade figures speak, the efforts are not sufficient to achieve the target. The failure is due to restrictive policies that were in place for centuries and present general sentiments that foreigners would erode the ‘pristine culture’ if they were given a long term stay.
The efforts through economic development policy, FDI policy and mastering in getting recognised the ‘happiness formula’ at the UN platform did less than expected to bring in economic prosperity in the country. As consumerism rules the surrounding societies, Bhutan has no strength to remain isolated to this culture just with advocating happiness and preserving pristine culture.
To lessen the increasing trade deficit, it is time that Bhutan reinvigorates is policy of concentrating in one product. A country’s survival would be in stake if multiple industries are not promoted. Bhutan’s current focus is on hydropower and in recent years, it has lost with the hype the western world created for it in the name of happiness.
Bhutan must produce commodities that are now imported from India. Today, the country relies on India from rice to chilli and IT to education. The eastern districts this year produce less than half the quantity of crop needed to fill the stomachs.
The iron industries, cement industries, wine industries and juice industries in the country are surrendering to the dominance of Indian giants – further increasing dependency on India. The stimulus plan to invite 100,000 tourists and build an education city failed to take shape.
The Bhutanese leadership might face question from general public in near future about the much-hyped ‘self-reliant’ economy by 2020.
Read the whole trade report here
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