Should the country limit its non-hydro debt to 35 percent of the total debt when Bhutan is eligible for highly concessional loans extended to the least developed countries (LDC) or should it take advantage of this facility before graduation?
This was the concern Lyonchhen Dr Lotay Tshering raised when reviewing the Annual Performance Agreement (APA) of the finance ministry yesterday.
Once the country graduates, he said, Bhutan would no longer be eligible for concessional loans with long grace period and interest rates as high as one percent. However, the public debt policy, which was framed by the previous government, states that non-hydro loan should be capped at 35 percent of the portfolio. The rationale behind this was that hydro loans are self-liquidating in nature and that non-hydro loan was a concern.
“I personally feel that this policy should be re-looked and 35 percent should be increased,” he said adding that such facility would no longer be available after five year, if the country graduates.
Another APA target was to bring down the debt to GDP ratio from 117 percent to 106 percent by the end of the fiscal year. Should the government decide to extend this concessional loan facility, this target would fall short.
The target to achieve more than 7 percent GDP growth, contain fiscal deficit and enhance domestic revenue is not as per the initial projection, mainly due to delay in commissioning of Mangdechhu project.
“I am little disappointed with the intelligence used because from day one, revenue from Mangdechhu is calculated at full capacity,” Lyonchhen said.
While officials claimed that development in hydropower sector is beyond control of the ministry and the government, Lyonchhen said that this is a misconception. For instance, he said the government of Bhutan has scrapped the 20,000MW by 2020 policy. The government of the day, he said has decided to pursue no other joint venture projects until Kholongchhu is completed. Similarly, Lyonchhen said that Sunkosh would be implemented at a time when Punatsangchhu projects near completion. “After Sunkosh, then we will negotiate for another project,” he said.
Lyonchhen added that the Macroeconomic Framework Coordination Committee (MFCC), which involves key stakeholder in the economy and serves as macroeconomic advisory committee to the government, must involve international expertise to review their reports.
Amidst all the reforms, Lyonchhen said that the e-procurement, tax reforms, e-PEMS and other online tools should come under the purview of flagship programme, Digital Drukyul.
On one hand, he said, clients and users alike are performing operations online and on the other, officials do most assessments and evaluations manually in printed form.
This, he said is impeding digitisation and that manual procedures could be more efficient in some cases. “It is time we legalise e-signatures,” he said.
The Department of National Properties’ main target is to expand the e-procurement system. So far the department has trained more than 1,800 individuals representing more than 400 procuring agencies, suppliers and bidders.
The department plans to train more people and integrate the e-tool provided by the Construction Development Board, price schedule and bill of quantity into the e-GP.
Lyonchhen also said that procurement norms in the country should facilitate local products. For instance, he said the recycled printer cartridges produced by Bhutan Alternatives (BA) must be given an opportunity for a year or two, to really see its efficiency.
Citing the BA’s stand, Lyonchhen also touched on the import figures pertaining to cartridges, which is staggeringly low compared to usage. “BA cartridges don’t qualify for bidding because it has labelled itself as recycled produce. Many imported cartridges are also recycled, but branded as original,” he said.