Govt. to respond to concerns raised by second half of September
Draft Economic Development Policy 6 August, 2009 – The Economic Development Policy doocuent will be a consensual document that is dynamic and evolves as conditions change, said prime minister Lyonchhoen Jigmi Y Thinley at the close of a five-hour marathon discussion with representatives of the Bhutan chamber of commerce and industry (BCCI) and the private sector in Thimphu yesterday.

Also taking part in the exchange to finalise the draft policy were the entire cabinet, seated against one wall, senior bureaucrats of the royal government and top business representatives all crammed in half the BCCI conference hall and partially concealed by a huge projector screen for half the session.

“No do*****ent, policies or otherwise will have undergone such an active, prolonged and extensive discussion between the government and the private sector,” said the prime minister. “But, regardless of that, we all must be prepared to accept the reality that not every section, every clause in this policy do*****ent will be good for everyone.”

The discussions, which began at 10 am, saw private sector representatives making nine power point presentations on general issues related to doing business, taxation and excise duties, reconsidering restriction on external commercial borrowings and use of domestic foreign exchange reserves, building capacity of contractors to take part in hydropower construction, maintaining present industrial electricity tariff for three to five years, standardising tourism rules and regulations and not allowing 100 percent foreign equity in four and five star hotel ventures in Bhutan.

After the presentations, the senior bureaucrats took turns to express the governments view on the issues of concern raised by the private sector. The issue of external commercial borrowings saw some extensive discussions with the managing director of the royal monetary authority, Daw Tenzin, cautioning against too liberal a policy of borrowing from outside and calling attention to the 1997 Asian crisis. On the rupee reserves, he said, the government already had a debt of 5 billion.

The secretary of the ministry of economic affairs, Dasho Sonam Tshering, said many of the issues raised by the private sector were already addressed in the policy. On building capacity of contractors to participate in the hydropower sector, the secretary said the draft policy already identifies construction as a major opportunity for Bhutan. It was up to the private sector to find the right partners to bring about technology transfer.

The prime minister praised the presentations made by the private sector, calling it a role reversal from a time when it was the private sector that listened to the speeches and lectures of the government.

“What was clear was that the private sector was not making demands that were unreasonable. And where you were making requests that appeared from the government’s side to be unreasonable, we could see that you were making efforts to inform us that you’re doing so responsibly,” said the prime minister.

But he stressed that their contribution to the economy in terms of revenue was still not impressive, if Bhutan was to be made into a country that is no longer dependent on foreign aid.

On specific issues like taxation and excise duties, the government decided that representatives of the finance ministry, ministry of economic affairs and BCCI should sit together and re-look at those issues, to go far as possible to meet requests made.

“The government will write to BCCI in the second half of September and let the private sector know what the government agrees and does not agree with,” said the prime minister. “But you must understand that what we decide is in the greater interest, not only of the private sector, but the economy and the country as a whole. What private sector needs is a predictable environment.”

The BCCI president, Tobgyel Dorji, described the meeting as a successful seminar, where the government agreed to take a second look at some of their concerns. “The economic development policy is an important road map for our economic policy and so far we’ve had four consultative discussions with the government on it.”