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Tuesday, April 21st, 2015 - 12:31 PM
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Health check: Parliament members donate blood and undergo screening for non-communicable diseases yesterday at the National Assembly building’s courtyard. The donation kicked off health ministry’s nation wide blood donation drive and screening for NCDs until February 26, which is organsied to commemorate His Majesty’s birth anniversary.

 

Inflation hits double digits

The value of the ngultrum has dropped by a whopping 11 percent in just one year

Lastq2013:Prices of goods and services have increased drastically touching double figures at 11.3 percent in the last quarter of 2013.

This means inflation grew by that rate since the last quarter of 2012.  In the previous quarter, (July, August, September) inflation was 9.1 percent.

The rise in prices came mainly from alcohol and narcotics, registering a 31.4 percent increase, and clothing and footwear at 16 percent.  Narcotics reflect only betel nut and do not include tobacco, as NSB officials claimed it was difficult to collect its prices after it was banned.

This high growth in the rate of inflation will further reduce the purchasing power of the ngultrum, thereby increasing the cost of living.

In just one year, the value of the ngultrum has depreciated by a huge 11 percent.  In other words, if Nu 91 could fetch, for example, a packet of biscuit in 2012, it costs Nu 100 today.

Economists said the high growth of inflation was one major reason why the saving culture is poor in the country.  Savings, an economist said, were usually made when there is surplus income.  But with inflation increasing the cost of living, there is not much income left to save.

This will also have implications on the banks, as they will not be able to garner more deposits to make investments.

Between November and December, prices of goods and services increased by 0.46 percent.  In the same months, domestic inflation was more than imported inflation, recording 0.50 percent against 0.44 percent imported.

In the same months, rise in price of food was more than the rise in price of non-food products.  Food prices increased by 0.6 percent between November and December, and non-food increased by 0.2 percent.

If the revision in salaries is based on the cost of living, salaries must be revised by a minimum 22 percent of the basic pay.

Salary increments, which civil servants receive annually, have not been able to keep up with inflation so far.  While annual increment is 2 percent, inflation grows by an average 9 percent annually.

Another economist said consistent increase in salary revision would also increase household debt, as more people will acquire credit because of less income.

He said it would also pose serious challenge in reducing poverty, as more people will be pushed below the poverty line with increase in the cost of living.

By Nidup Gyeltshen 

Breaking into the top 100 by 2016

Ranking: Besides aiming to improve the economy, the government is also targeting to advance on to the list of top 100 countries of “ease of doing business index” within the next two years.

A high ranking on the ease of doing business index, an international method to rank economies, meant the regulatory environment was more conducive to the starting and operation of a local firm.

This was highlighted at the assembly yesterday, when north Thimphu assembly representative, Kinga Tshering, during the question hour, asked the economic affairs minister to share areas and parameters where Bhutan was falling behind, and plans to improve the ranking.

He said the prime minister announced earlier that Bhutan would advance to the top 100 from its current position of 141 out of the 189 countries listed.

Ease of obtaining business licenses, getting permits, availability of power and debts, Kinga Tshering said, were a few parameters considered for the ranking.

The economics affairs minister, Norbu Wangchuk, said the ministry has been assigned with the task.

“The ministry is ready, plans are laid and we have a clear picture as to what must be done,” he said.

To make the procedure of availing business licenses easier, and to do away with licenses for “low risk” business, lyonpo said the ministry would be proposing an enterprise bill in the coming session.

He said even the Companies Act needed to be amended.

“There are many “regulatory burdens” on firms imposed by the current Act,” he said. “We should strike off unnecessary ones and retain the important provisions.”

Lyonpo Norbu Wangchuk said the immigration act too needed to be amended. The act, he said, posed inconveniences to those, who exit and enter the country for business.

The minister also pointed out that environmental clearance was another issue that delayed business activities, thus inviting the need to review the procedures.

“Since the environment is very important, there must be good procedures to obtain clearance,” he said.

He said the government would also be introducing electronic signature, which would ease the process of obtaining signatures in necessary documents.

However, he said, although the country kept fluctuating around 140 in last five years, it would be a big challenge to emerge in the top 100 position.

“Thus our primary target should be to improve our economy,” he said.

Meanwhile, compared with eight SAARC countries, lyonpo Norbu Wangchuk highlighted that Bhutan ranked seventh, just a few points above Afghanistan.  The SAARC region was ranked lowest in the world.

By Tshering Dorji

A win-win contract

The department of forest and park services’ policy of paying for environmental services, also called as paying for ecosystem in some countries, is a good policy that should be welcomed, if it can be translated into action.

If such a policy can help both reduce poverty and save natural resources, both priorities of the government for a long time, it deserves full support and top priority.  It is, like we often say, to kill two birds with a stone.

Alleviating poverty has become the cornerstone of our five-year Plans in recent years, while emanating from the wise leadership at the helm, preserving our natural resources had been our top policy for years.  If such a simple scheme could help achieve two important goals, we should go for it.

The good thing about the policy is that both service providers and buyers, who are already doing it, are looking forward to renew their agreements.  This indicates that the policy is good and popular; all the more reason to encourage it.

The policy sounds simple, whereby incentives are offered to those, who take initiative to maintain and preserve natural resources, by those using the services.  If, for instance, farmers or landowners, in exchange for managing their land, are provided some sort of ecological service, they will be encouraged to persist.  There are ample examples of how successful paying for environment services can be.  In China, farmers are offered grain in exchange for not cutting down trees for cultivation.

The policy is about giving responsibility, by creating a sense of ownership among the rural folks, who will take pride in what they do.  Phobjikha farmers have, for many decades, sacrificed electricity, because electric lines, they were convinced, could endanger the habitat of the endangered black-necked cranes.  We have individuals, including farmers, who grow private forests.

With a mission to tap 10,000 MW of hydropower by 2020, and hydroelectric projects deemed to be the backbone of the country’s economy, such a policy would help ensure the continuity of water to run the turbines.  If watersheds and catchments are not protected, the flow of water in our snow and rain fed rivers could be erratic.  This would incur huge losses after investing billions of ngultrum in the sector.

The policy should not be left to volunteerism, especially if it benefits farmers and the mega projects.  Given the scarce source of income for our rural folks, they will, for instance, agree to plant resource-conserving covers to improve water quality, control soil erosion and enhance flora and fauna, if there are incentives.

Such an idea would sound strange to farmers, but it is up to the policy makers to convince them.  Farmers or community groups, and even organisations, should be encouraged with specific program designs as planned.

Targeting the Thai market

As per the PM’s directions, tour operators are preparing packages for the lean season 

Tourism: Following the prime minister’s instructions, tour operators and hoteliers in the country have begun working on developing packages to attract Thai tourists during the leaner months of June, July, and August this year.

Some tour operators have already set targets and started appointing marketing representatives in Thailand, while hoteliers are working out discounts they could offer besides Thai specific services.

Last month, lyonchhoen instructed the tour operators to develop packages to attract Thai to commemorate Bhutan’s 25 years of diplomatic relation with Thailand.  The initiative was also expected to help promote tourism during lean seasons and make Bhutan an all year round tourist destination.

The target is to bring in 3,000 to 4,000 Thai tourists in June, July and August this year.  The least visited months of June, July and August in 2012 saw 6,580 tourists, while 3,229 visited Bhutan in January and February.

Tour operators said, although they have just about three months to market, the proximity with Thailand didn’t require much preparation.

“We have to try our best to bring in more Thai tourists,” a tour operator said. “It means competition, unlike the peak season, when we have the protective tariff where our cut is already included.”

Being a new initiative, another tour operator said they have to bring down their profit margins. “The amount of profit will depend on our bargaining power with hotels, guides and transporters.”

But despite the short notice, many tour operators appreciated the initiative, as it would help everyone in tourism to upgrade their services.

For instance, it would help hotels recruit permanent staff even during lean seasons.

“We’re hoping the initiative would help take the weight off the peak season, during which we lack capacity,” said another tour operator, whose agency is targeting 600 Thai tourists.

Hoteliers are working out room charges, depending on the number of tourists tour operators bring in.  All tourists are required to be provided accommodation in hotels rated three-stars and above.

A three star hotel in Thimphu charges Nu 3,000 to 4,000 a night, depending on the facilities.

One of the hoteliers in Thimphu said he would be able to give up to 30 percent discounts during the lean months for Thai tourists. “It’s a good initiative and our business depends on how many tourists we’re able to attract,” he said, adding they were hopeful that the initiative works, so that there is something to look forward to during leaner months.

An official from Zhiwaling hotel said they were preparing for Thai tourists with certain products. “We’re planning to hire a Thai chef, besides providing a lean season discount of about 25 percent,” the official said.

There are 75 tourist standard hotels in the country categorised three-star and above.  Paro has the highest number of hotels, resorts and guesthouse at 37, followed by Thimphu and Bumthang with 27 and 23 each.  Another 63 are currently under construction, records with TCB show.

The association of Bhutanese tour operators’ president, Karma Lotey, said, more than 30 tour operators have signed up with the tourism council to attend a travel fair in Bangkok.

The national airlines, Drukair, is also exploring off-season discounts of more than 30 percent.

Drukair’s chief executive officer, Tandin Jamso, said they would provide a discount of more than 30 percent from June to August to attract Thai tourists. “In collaboration with local tour operators, packages are also being developed.”

Today, the airfare for foreigners for the Bangkok-Paro sector, inclusive of taxes, is about USD 830 for a round trip, and about USD 420 for a one-way ticket.

From 2,235 Thai tourists in 2011, the country recorded 3,573 Thai tourists in 2012, making Thailand the fourth top source market.  Last year, there was a slight drop with 3494 visitors.

By Kinga Dema

Electrification of Lauri and Serthi deferred again

IMG_20131206_124729Trucks wait to be loaded with electrical equipment at Samdrupjongkhar

The hitch now is Indian police disallowing equipment through on ‘unauthorised route’ 

REP: After missing the first deadline on December 17 last year, and extending it until March this year, the electrification of Lauri and Serthi gewogs is again extended and expected to complete some time in May.

The Indian border police in Nunai, Assam, disallowing the transportation of equipment, on grounds that it was an unauthorised route, has halted work on the 21.5km long trunk line from Pemathang gewog via Samrang gewog until Borlapam.

The 21.5km trunk line is one part of the 65.1km trunk line.  The other part extends from Serthi gewog and will reach Borlapam, where the two lines are supposed to meet.  The trunk line is a 33KV medium transmission line.

“Our trucks were sent back from Nunai, and it’s been two months since a lot of work has come to a halt,” the officiating manager with the rural electrification and construction sub division (RECD) in Jomotshangkha, Tshewang Dorji, said. “Otherwise it’s about a five-hour walk to reach Borlapam, and passing through Nunai is the only route available.”

According to Tshewang Dorji, they were initially allowed to use the route to ferry equipment.  Starting January 1, Indian police closed the route, saying it was sealed during the insurgency problem of 2004.

The dzongkhag administration also intervened and appealed to the Indian counterparts to open the route.  The matter has been forwarded to Delhi for consideration.

“We’re optimistic and are waiting for their positive response in a week’s time,” Tshewang Dorji said. “The tapping point is at Pemathang, and the trunk line until Kalanadi village is completed to date.”

Another problem the team has been facing is at the elephant prone area between Samrang and Nunai.  Although it’s about three hours walking distance, it takes more time for the villagers with their head loads.

“The area’s known for elephants and is a threat to people carrying the equipment; villagers have to travel in groups of 15,” Tshewang Dorji said, adding it becomes more risky with poachers and smugglers operating in the area.

What worsened the situation more was that Borla has no inhabitants, making it difficult to get manpower.  So far, about 15km of work on the trunk line has been completed.

Meanwhile, about 38km was completed on the other part of the trunk line, which is about 43.6km long stretching from Serthi gewog to Borlapam, the deputy manager with RECD, Jomotshangkha, Choni Dorji, said.

“The construction has reached Kharpajuli top but we can’t say when the remaining works would complete,” Choni Dorji said, attributing the delay to risks from elephants and difficult working conditions.

Almost 90 percent of the equipment has reached the sites to date, according to officials.  They are waiting for the delivery of high-tension polls, conductors and energy meters.

Funded by the Asian Development Bank, the rural electrification project that would benefit 870 households was handed over to RECD, Jomotshangkha in March 2012.

Tshering Wangdi, Samdrupjongkhar

What went wrong with the 4th SDP?

If the fund doesn’t come through, it could upset the 11th Plan apple cart

GoI: The government of India has, in writing, stated that they won’t be able to sanction Nu 660M grant for the fourth small development project (SDP) initiated in the 10th plan.

Finance minister Namgay Dorji said that was because the previous government refused to pay heed to certain procedures and guidelines that the two countries were required to adhere to.

“Some works were undertaken without proper approval,” lyonpo Namgay Dorji informed the assembly yesterday.

He was responding to queries from the Nubi-Tangsibji representative, Nidup Zangpo, and Dophuchen-Tading assembly member, Tek Bahadhur Subba, during the question hour.

Lyonpo Namgay Dorji said, although the Indian government committed a grant of Nu 7B to finance 63 SDPs under the previous plan, besides the procedures and guidelines, some paperwork and inspections were required to be carried out.

“Irrespective of the amount, many paper works must be carried out,” he said.

However, he said, while everything went smooth until the third SDP, in 2012, talks for the fourth SDP did not go well.  He said some documents were not produced.

The finance minister said the previous government spent Nu 660M from the coffer to complete the 63 SDPs.

“With the hope that Indian government would release the fund, which would replace the amount used, we’ve included that in the budget,” he said, adding it would now hamper the activities in the 11th plan.

However, he said, this government has been requesting the Indian government to release the fund.

“Even if they can’t release the entire amount, we’ve requested for half the amount,” he said.

If the SDP fund doesn’t come through, finance minister said the government must explore other avenues.

As for the 11th plan, he said, the Indian government has already committed Nu 8.5B for SDP, and that there are some 65 projects proposed.

Hereafter, finance minister said the government would sit and discuss with Indian counterparts, and that works would be initiated only after the consent of the Indian government.

Meanwhile, the finance minister said the memorandum of understanding drawn for the SDP has been relaxed.

“We’re currently reviewing the financial rules and regulations to bring it in line with other international financial norms,” he said, adding it wasn’t reviewed since 2001.

He also said spillover from the previous plan has increased by 243 percent, as compared with that of 9th Plan spillover.

Stating that the government received Nu 769M for the 10th plan’s spillover, he said Nu 681M has already been spent.

By Tshering Dorji

Pay hike deliberation in summer session

Parliament: The findings of the pay commission will be presented only in the third session of the Parliament, which will happen only sometime mid year.

Finance minister Namgay Dorji, in presenting the status of the pay commission’s report at the session yesterday, said upon the commission’s request, the government gave the pay commission a month’s time to wrap up the report.

The minister said the pay commission took longer to research and review because of poor economic conditions, which complicated the objectives.

“The commission members were also involved in talks on increasing Chukha power tariff and had to go to Delhi,” he said.

In an earlier interview, the commission’s chairperson, Dasho Chhewang Rinzin, said the report was in its final stage.

With the extension, the pay commission, established in November 13 for a three-month term, will now submit its findings to the government on March 12.  Having missed this session, which ends tomorrow, the report will be presented to Parliament only in the next one.

However, opposition leader, (Dr) Pema Gyamtsho, suggested to the assembly that the cabinet could decide on the pay hike before the next session and seek Parliament’s endorsement later.

However, other members were quick to argue that the cabinet deciding on the commission’s report prior to its presentation in Parliament could result in breach of provisions of the Constitution.

Assembly speaker Jigmi Zangpo said the government should do it properly rather than in haste.

The finance minister said the commission was mandated to look at seven points: introducing housing allowance for civil servants, revising salary and allowances for local government officials, introducing rural posting allowance, reviewing the first Parliament’s recommendations on the salary of prime minister and ministers, among others.

The commission would also study cost cutting measures, particularly doing away with the government pool vehicle system and vehicle quota for senior civil servants.

Meanwhile, home minister Damcho Dorji said it was important to establish a system for increasing salary of local government and civil servants, so that future political parties do not promise salary hikes.

“Without such a system in place, it’s possible the economy could suffer as a result of political parties’ pledges on pay hikes,” he said.

The home minister also said the inflation rate in the country alone should determine whether there should be a pay hike or not.

“If we could institute such a system, government needn’t constitute a pay commission or have the Parliament’s deliberation on the subject time and again,” he said.

By Tshering Palden

To be inaugurated albeit incomplete

This piquant situation has arisen thanks to the many wrangles and delays that plagued the project

SC Complex: After being mired in controversy, which delayed its construction for about four years, the new Supreme Court complex in Hejo, Thimphu will be inaugurated next month.

But although March 14 is set as the inauguration date, it does not mean the court’s construction has been completed. “It may take another year to complete the entire project of the Supreme Court construction,” an architect from the judiciary said. “But we’re trying to complete the basic infrastructure in the five completed structures for the inaugural ceremony.”

Several contractors, who were awarded different work packages, have been racing against time after the Supreme Court’s chief justice, lyonpo Sonam Tobgye, announced that the new SC complex would be inaugurated on March 14.

Judiciary officials said, as per the tentative program, the chief justice of the Supreme Court of India, P Sathasivam, is scheduled to inaugurate the new complex, which spans on 11.421 acres and has eight buildings, including five courts.  It also house s the chief justice’s office and four separate offices for four justices.

The five buildings are constructed in traditional Bhutanese architecture and appear like a dzong.  The main building, which houses the chief justice’s office and a full bench, is named  Singye thrimthri (lion bench), while the other four are named as Langchhen ( elephant), Tachog  (horse), Maja (peacock) and Khading (Garuda) thrimthri, which all have separate hearing benches.

Judiciary officials said a serto (golden pinnacle) will be installed on the Singye building, while the other four buildings would have gyeltshens (banner of victory)  installed on March 5.

The other three blocks will serve as administrative blocks, a bar association council, judicial commission, libraries, registry offices, the attorney general’s office, offices for government prosecutors and defense lawyers,  a security room for police, and a cafeteria.

After the inauguration, Supreme Court officials will work from the new complex.

The Supreme Court, the highest appellate authority, was instituted at the Kinga Chholing guesthouse in Motithang on February 21, 2010.

Chief justice lyonpo Sonam Tobgye said the government of India (GoI) funded Nu 700M for the court’s construction. “It was a rewarding association with GoI, which symbolises generosity, trust and magnanimous gesture,” lyonpo Sonam Tobgye said. “This magnificent structure will constantly and consistently remind and make us remember the pervasive and enduring friendship and the generous contribution made by India.”

The foundation stone for the Supreme Court was laid in October 2005, but construction work didn’t take off following a dispute over its location and compensation sought by Hejo landowners.

The dispute over the location was settled in early 2007, when the land compensation rate was revised from Nu100 to Nu 150 a square foot.  The project was scheduled to start in June 2007 and complete in June 2010, but it got delayed again because of complications in the tendering process.

In the first tender, three class ‘A’ contractors, Yarkay, Nima and Chapcha, bid Nu 580M, Nu 639M and Nu 782M respectively.  The controversy surfaced in October 2007, after works and human settlement ministry disqualified Yarkay from partaking in the Supreme Court construction project.

Yarkay Construction filed a case against the department of urban development and engineering services (DUDES) of the works and human settlement ministry, saying the department was the source of irregularities involved in the tendering process.  The case went to the Supreme Court, which established the committee members had attempted to favour Nima Construction in awarding the work through manipulation and tampering with tender documents.

After five years of legal battle between Yarkay and the ministry of works and human settlement, the Supreme Court on December 11, 2012 directed the High Court for works and human settlement ministry to take administrative actions against tender committee members.  Minutes of the inter-ministerial tender committee meeting signed by the members on October 16, 2007 showed 11 members on the committee.

The construction of the Supreme Court then began only towards the end of 2009, judiciary officials said.

By Rinzin Wangchuk

Picture story

Interaction: Dzongsar Jamyang Khentse Rinpoche interacts with participants at the on-going “Excellence in Leadership and Management” workshop in Kathmandu, Nepal. The six-day leadership training for young Buddhist leaders started on February 14. Representatives from various monasteries and lineages of Tibetan Buddhism from across Asia and the west are attending the program. The Khentse Foundation is funding the workshop, which ends today. Photo courtesy: Stacey Stein