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Country’s total debt stands at over Nu 78B

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Q&A: The country’s total debt as of December 31, 2012 was Nu 78.65B, so revealed finance minister Wangdi Norbu at the assembly yesterday.

He was responding to opposition leader Tshering Tobgay’s question during the “question hour” that lasted almost two hours, out of which the answer took almost an hour.

He raised several other questions about how much of that amount went into the hydropower projects, what was left of the short-term borrowings and how much the country was paying in interest of the borrowed money.

The Nu 78.65B loan, finance minister said accounted for about 78.4 percent of the country’s GDP.


Total public debt as

of 31/12/2012 - Nu 78.65B

Of that external
debt – Nu 75.6B

Internal debt – Nu 3.3B

Debt invested in
hydropower
projects – Nu 45.45B

Total interest RMA
paid – Nu 703.5M

Repayment of short-term borrowing and overdraft facility as of 31/01/2013 – Nu 11.46B

 

Of that, and what the country had to worry about, the external debt, he said as of December 31, 2012 was more than Nu 75.6B, accounting for 96 percent of the country’s total debt.

The internal debt, meaning money borrowed from financial institutions within the country, he said was Nu 3.35B, which was used in buying an aircraft for the country.

Most loans, he said were, however, used for hydropower projects.

“As of December 31, 2012 hydropower debt was Nu 45.45B,” he said, adding they were invested in Kurichhu, Tala, Punatsangchhu I and II, Mangdechhu, Dagachhu and Basochhu projects.

He said they accounted for 60.1 percent of the total loan the country has.

In response to concerns that members expressed with regards the country’s inability export or repay the borrowed money, Lyonpo Wangdi Norbu said the fact that Indian government committed to import electricity the various hydropower projects will generate should allay those concerns.

“Our concern should not be with the 60 percent of the loan component that is for hydropower projects but the other 40 percent,” he said.

On short-term borrowings, he said that as of January 31, 2013, the country had to pay back Rs 11.46B.

Coming to paying back debts, he said Royal Monetary Authority had paid a total interest amount of Nu 703.5M between January 2012 and January 2013 for overdraft to the State Bank of India and Punjab National Bank.

He also pointed out that Dungsam cement and Dagachhu hydropower projects also contributed to Rupee shortage.

The lottery business that earned the country Rupees had to be closed following various media reports of it.

Following finance minister’s response, opposition’s Damcho Dorji said it sounded more like what the minister had said in the past when the opposition, based on media reports raised the issue at the assembly.

“The minister also said the issue, caused mainly by hydropower projects, would be solved within two or three years,” he said. “But instead it rolled into one big problem, a solution for which were still haven’t found.”

Economic affairs minister Khandu Wangchuk said if the government really wish to clear the loans, it could be done within next five to six years.

“But we have to bear in mind the economic developments the country is pursuing so it eventually brings the country economic independence,” he said.

Works and human settlement minister Yeshey Zimba added that, had the country not taken any loans choosing to play safe, the country would not have reached where it has today, in terms of development, employment and changes in lifestyles.

“Borrow we still must, for many of our people still live in the far flung remote areas,” he said.

Hydropower project, he said would definitely elevate the country in terms of development.

Because of Chukha hydropower plant, he said the industrial estate could begin and electricity for people dropped from 80 Cheltrums to 40.

“Tala boosted the country’s economic development further,” he said. “In the not so distant future our problem will be not knowing where to take and spend the Rupees, with tourism, hydropower and exports improving.

Until one or two of the ongoing hydropower projects complete, he said it would be difficult to solve the Rupee shortage immediately, unless through tax raises, which nobody was for.

By Samten Wangchuk

8 Comments to “Country’s total debt stands at over Nu 78B”
  1. jabchor | February 27th, 2013 at 22:45:37

    DPT Gov is taking Bhutan to a path of risk zone……and gov is very poor in resource priortization…..by building huge new dzongs like chukha…Tsirang n Pema Gatshel…..what benefits those Dzongs will contribute to bhutan…after all a three storeyed building will serve as the offices of dzongkhag staff……

  2. lasola | February 27th, 2013 at 22:20:02

    this debt is a deadly poison. please let us move with the available resources in hand. please don’t make us slaves to others at your thrust. why too much rush for the development if it is to be enjoyed by others.

  3. logical | February 27th, 2013 at 14:59:49

    Nu 78.65B public debt stands at Nu.112, 357 against every Bhutanese individual. Last year it was reported to be Nu.94, 500 per Bhutanese. The charges for this mishap are laid to various developments in the country that is eating away the nation on multi-fronts: social, cultural, economical, spiritual etc. and has the potential to turn into threat to SECURITY and SOVEREIGNTY which was familiar word of the self proclaimed patriots in the past when they marched with armed forces exploiting and coercing the loyal citizens into difficult situations.

    Why are the same PATRIOTS selling us today to uncontrolled development where common people loose from the very beginning? We are going through difficult time and some do not have any more strength even to cry! We should have taken up on the DEVELOPMENT works OURSELVES according to our ability to handle them. That would solve more problems than adding more to our sufferings with constrains that we endure now with much grief! The common Bhutanese will be reduced to SLAVES to these butter lipped servants serving us with the growing debt on us. Pray that we soon have a republic of our own to break away from these deceitful servants drowning us in debt with the money of their foreign masters…

  4. Truly Concerned_Bhutan | February 27th, 2013 at 14:58:54

    I fear if our Hydro Electricity Projects fail, how could Bhutan repay all these debts.

  5. really | February 27th, 2013 at 13:15:24

    One One hand the construction and purchase of vehicles have been put on hold because of this problem.

    But i dont understand how DHI can carry out such huge project costing 15 billion.Wont this projects require Indian currency.

    IT park was itself a big flop and now we are going ahead with the education city project.

  6. Ap Gasep | February 27th, 2013 at 12:46:46

    This DPT government made such a big debt. And they are now making the people poorer and poorer by increasing tax. Don’t we have a capable government that can bring prosperous to our happy(but now just a shadow of it) nation?

  7. Activist | February 27th, 2013 at 12:11:44

    How could those Ministers sleep so soundly keeping country under the threat of huge debt? Do they not think that MPs and Ministers also equally contributed towards rupee shortage? They have heavy machinery deployed in big projects in Bhutan. From where did they buy those machinery? Did they pay Nu. or Rupee?

    If developments within the country are on such huge debts, what is their value? If government still insist to borrow more, people of Pelden Drukpa won’t be able to enjoy bliss of borrowed development.

    We must change Ministers and MPs in 2013. Otherwise, some bad will conquer tranquility and happiness (not GNH) of Bhutanese citizens.

    People must think critically. Stop listening to the lip services of those 45 impotent country rulers. Let us choose the best for the best of everything.

  8. snowman | February 27th, 2013 at 11:24:12

    Rupee shortage can’t be addressed by simply increasing taxes. Increased tax would only generate Ngultrum and not Rupee.
    So I guess, it is a lame excuse

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