Strengthening the country’s economy is important to ensure self-reliance. This is either articulated or indicated in the manifesto of all the political parties.
In fact, there are glaring commonalities concerning the economy based on ubiquitous issues.
Economic diversification with simultaneous investment in hydropower, tourism, mining, industries, access to finance, export promotion, correcting the deficits in current account, private sector development, and employment generation are the bedrock of all the pledges concerning the economy.
The difference is in how it is packaged and sold.
All parties have capitalised on the on-going initiatives like the micro-financial institutions such as Rural Enterprise Development Corporation, priority sector lending schemes, industrial parks and strengthening the tax administration. Reducing the lending rates in consultation with the central bank and reviewing the minimum lending rate has also made to pledges of all the parties.
Containing the level of public debt and reviewing the fiscal incentives are also on the cards.
Most parties excluding PDP, have pledged to withdraw communication tax of five percent.
To stimulate an average economic growth of 8 percent, the BKP in its manifesto stated that it would endeavour to sustain broad-based and regionally balanced economic development and growth.
The party pledged to give economic opportunity through sound public finance and enabling policies, and initiate a smart planning and timely implementation of hydropower projects to avoid macro-economic imbalances.
The party, if elected would carry out a thorough review of the status of the ongoing hydropower projects as well as those in the pipeline and if the JV model of project financing does not work, the party would explore other funding options.
The party will view hydropower development from the lens of job creation, business development for the private sector, domestic capacity development, vocational training opportunities, markets and townships in the community.
The party has also plans to fund research and development and will emphasise on shifting the development into the rural areas by creating “growth centers” based on comparative advantage.
Unlike others, BKP has pledged to promote domestic bond market as an alternative source of long term financing to meet financing gap and induce competition in the market.
If elected the party would review and implement all policies concerning state resources and make it inclusive, broad-based, equitable and sustainable. The Mines and Minerals Management Act 1995 would also be amended to keep with changing times.
“We will form a group of experts from within the country and seek assistance from renowned institutions outside to frame a dynamic policy on economic self-reliance along with strategies, timelines and costs to implement the policy, by applying a well-established evidence-based methodology,” the manifesto stated.
BKP pledged to optimise the use of government resources by curtailing unnecessary and excessive spending.
“We will come up with clear rules and guidelines for entertainment and hospitality of the cabinet ministers during travels within the country and outside will avoid excessive and uncontrolled spending during ministerial visits,” it stated. The ministers will not purchase new duty vehicles.
BKP, if elected would form a debt management committee to screen and vet all government proposals requiring loan financing.
It plans to replace the existing sales tax regime with a more dynamic General Service Tax (GST).
Given Bhutan’s limited financial sector and its currency being pegged to the Indian Rupee, the party’s attention will be to build a robust economy that contributes to the self-reliance.
The party pledged to add 5,200MW of hydropower through Sankosh, Kuri-Gongri and other projects to the national grid.
“The composition of the export basket is even more worrying. Hydropower alone accounts for more than 30 percent of the total exports. Bhutan’s external trade situation is very fragile and highly vulnerable to exogenous shocks,” the manifesto stated.
The party has pledged to reform and strengthen the manpower and institutional capacity in hydropower development by enhancing the capacity of CDCL, DGPC and BHSL.
DNT has pledged to increase the PIT ceiling to Nu 300,000 and recoup Nu 10B by strengthening tax administration. If elected, DNT would exempt BIT for businesses and firms that have less than Nu 200,000 turn over.
DNT’s manifesto also stated that it would invest 10 percent of tourism royalty in promoting and marketing tourism and enhancing connectivity.
The party would also legalise informal sector and establish an agency to protect, promote and support approximately 70 percent of the workforce engaged in it with a possibility of providing loans to such sector.
A vision 2045, according to the party will ensure that economic plans follow a trajectory that will take this country forward with sustainable development goals.
“We are determined more than any other party to diversify the economy by accelerating private sector growth and investing in agriculture,” it stated.
Establishment of business incubation centres in the four regions and expansion of PSL scheme are in the DNT store, should they come to power.
It plans to strengthen the FDI division and review its policy to improve and enhance simpler and smoother mechanisms to attract FDI projects.
Reviewing the tariff for tourists and streamlining regional tourism to improve services are some of the DNT pledges.
Economic self-reliance by 2025 is DPT’s main agenda. It has pledged to maintain an average economic growth rate of 10 percent in five years.
The party, if elected, would reduce interest rates to maximum 10 percent, enhance access to finance and reduce trade deficits from 81 percent to 50 percent.
DPT also pledged to maintain non-hydropower loans at 20 percent of total debt.
Within the first six month, DPT would develop new Economic Development Policy and FDI policy.
DPT has plans to revamp the national target of increasing electricity generation to 10,000MW by 2030.
In addition, the party has plans to develop and use reservoir-based hydropower to meet the peak electricity demand in India and promote private sector participation in hydropower projects.
If elected, the DPT would redouble the efforts to accelerate the growth of the private sector through fiscal and tax reforms and institutional and infrastructural development. “We will transform it to be the robust bedrock of economy and true engine of economic growth and mainstay of employment, through the main mechanism of continuous dialogues with the stakeholders in the sector.”
Should the party come to power, it would ensure policy stability and consistency to gain the confidence of private sector.
The party would also establish a Macroeconomic Advisory Panel to advise the Cabinet on economic affairs.
To pursue economic diversification, DPT’s manifesto stated that it would conduct feasibility studies for different types of industries.
The party also pledged to frame CSMI Policy and Action Plan to create an enabling environment for the growth of CSMIs, adopt a financial inclusion policy and institute a targeted micro-credit finance schemes.
DPT has plans to convert REDCL into an agricultural bank to provide targeted low interest rate loans at 4 percent per annum for farming and agro-business.
The party plans to revisit its tourism policy without any compromise on national security.
“DPT will develop a comprehensive Hotel Services Policy in consultation with all stakeholders; review the regulations on engagement of expatriate employees and improve coordination between hoteliers and travel agents for improving the hospitality industry.”
In mining, the party has also pledged to review the existing mining policy to diversify opportunities, ensure transparency and fairness in allotment and leasing of mines, and promote participation and ownership of local communities in the extraction of natural resources.
PDP believes that Bhutan has all the ingredients to become an economic powerhouse in the region.
According to its manifesto, a dynamic fiscal policy and a prudent fiscal discipline are fundamental to achieve sustainable economic growth with stable macroeconomic environment.
While the party manifesto highlighted that 72 percent of the total debt is self-liquidating hydropower debt, PDP pledged to redouble efforts towards earning hard currency to sustain external debt service.
The party also pledged to deliver an average growth rate of 10 percent in the next five years.
The party plans to review the Economic Development Policy to make it more relevant to our emerging economic needs and challenges.
In hydropower, the party’s vision is to develop Bhutan as a knowledge centre for hydropower and related services both in the region and the world.
Accelerated measures for timely completion of hydropower projects under construction comes with a pledge to achieve a minimum power generation of 5,000MW by the end of 2022 in the PDP manifesto
“We shall work with Local Governments to stimulate growth of rural economy. We shall explore urban and export markets to promote rural economy. Cottage and Small Industries with economic potential shall be promoted with the objective to generate employment,” the manifesto states.
E-payment initiative shall be accorded high priority, should PDP come back.
“We shall review the Minimum Lending Rates in close consultation with the central bank and explore all options to continue lowering the commercial lending rates of loans and credits,” the manifesto stated.
Priority Sector Lending (PSL) to rural and agriculture based entrepreneurs and different modalities to ensure that access to loans would be prioritsed by the PDP.
PDP has plans to establish Economic Early Warning System to strengthen coordination, reporting and policy formulation.
The party has plans to boost the local economy in the dzongkhags and gewogs by providing more grants, which has been earlier declared during the launch of their manifesto.