Opposition asks the govt. to work on the economy on a war footing
Economy: Contradicting the government’s claim of inheriting an “empty coffer” and making a vigorous improvement in the economic front, the opposition party claims that the government has put the economy in distress.
The state of the country’s economy, from the government’s perspective, is embedded in the growth of gross domestic product (GDP) from 2.05 percent to 5.6 percent.
Gross domestic product (GDP) is the monetary value of all the goods and services produced within a country in a certain time period. It includes all private and public consumption, government outlays, investments and exports minus imports that occur within a defined territory. Put simply, GDP is a broad measurement of a nation’s overall economic activity.
However, the opposition party in a press release stated that the government’s pledge to fix the economy on national debt, unemployment and the rupee shortage, has not changed at all.
“The economy is in real distress and the government is clueless on economic policy and financial discipline,” the press release from the opposition party stated.
It stated that the government has already spent Nu 140 billion of the Nu 213 billion allotted in the 11th Plan. “Minus the trade deficit of Nu 32 B, shortfall of domestic revenue by Nu 16 billion and budget deficit of Nu 4 billion, the government has effectively emptied its coffer,” it stated.
Trade deficit has widened and domestic revenue is falling short because initial projections were based on the fact that three projects of Punatshangchhu-I, II and Mangdechhu would be commissioned on time.
While the government boasts of subdued inflation, most of it can be attributed to global fuel price decrease and subdued inflation in India.
The government’s manifesto stated that solving the rupee crisis would be key to stabilising the economy. The People’s Democratic Party manifesto stated that an in-depth study of the rupee crisis would be taken to evaluate if there is a need for a major revamping of foreign exchange and trade policies.
“There is still no policy on the most pressing issue on rupee shortage and the national debt,” the press release stated.
Druk Phuensum Tshogpa (DPT) had only Nu 140 billion budgeted for the entire 10 Plan. “Now, we have a situation of a gross deficit burden.”
DPT’s North-Thimphu representative, Kinga Tshering said the government has used a lot of money without substantial results.
The opposition also quantified the five jewels of the economy the government identified as something that lacked luster.
While the government initially targeted to start seven new hydropower projects, the opposition claims that only Kholongchhu has been initiated.
But Nikachhu project has also taken off with pre-construction works. The government of India has also approved other three projects of Bunakha, Chamkharchu and Wangchu two years ago. However, these projects are still at an infant stage.
The government also affirmed that only 5,000 MW of the 10,000MW by 2020 could be developed. “Acceleration of hydropower development has come to a grinding halt while the agro revolution is smothered in the slaughter-houses,” the press release stated.
The opposition further stated that the “Rising East” is eclipsed by the controversy on regional politicking and BOiC has been bogged down in legality issues. With endless complaints from the BOiC loan applicants, DPT has also mentioned that the contribution of small and medium enterprise to the GDP is still less than 5 percent against the target of 10 percent.
The ESP was aimed to create 5,605 new businesses and 7,525 new jobs in five years. As of 2014, only 589 projects were approved generating 905 jobs out of BOiC fund.
From the injection of Nu 2.1 billion of Economic Stimulus Plan (ESP) fund into the banks, the opposition claims that it has only stimulated an import of over 10,000 vehicles into the country. With no clear guidelines, the ESP fund was injected into the banks to ease the liquidity crunch.
Kinga Tshering said the loan portfolio of the banks indicate a rise in personal and vehicle loan, both of which could have been availed to buy cars.
The Royal Monetary Authority’s bulletin reveals that cumulative transport loan has grown from Nu 2.3 billion in December 2014 to more than Nu 3 billion in November last year. Personal loan stands at more than Nu 11.6B in the same period.
While the government claims that rupee situation has improved, the prime minister in one of the meet the press session also cautioned that it is not solved once for all.
The opposition categorized the government’s pledge to solve the rupee issue as unachieved in the view of no clear policy or plan.
The opposition also questioned initiatives like restarting the lottery business within 100 days, comprehensive private sector development, and amusement park in south to attract tourism and industrial estates that the government is yet to achieve and nothing has been done.
“All macro-economic indicators are on negative side and that’s most worrying,” Kinga Tshering said.
The government has pledged to open an amusement theme park in Southern Bhutan to encourage tourism and develop the local economy, prioritise the construction of the south-north highways, including the Samtse-Haa national highway and start traditional medicine wellness centres in all dzongkhags.
“The opposition would like to urge the government to work on the economy on a war footing towards achieving our overarching goal of self reliance by 2020. Otherwise we are compromising this cherished goal and undermining the time, effort and the capabilities of our efficient bureaucracy,” the press release stated.
Meanwhile, the economic affairs minister Lyonpo Norbu Wangchuk said that he needed some time to respond on the issues raised by the opposition, as he was not aware of the opposition’s stands in detail when contacted yesterday.