Private sector must renew its role as the country shifts from subsistence to market-oriented economy.
This was the takeaway from the second day of the Bhutan Economic Forum for Innovative Transformation.
Alving Ung, a leadership expert faculty at Royal Institute of Governance and Strategic Studies (RIGSS) said businesses must discern its core values, develop to strengthen communities, design life-giving goals and discover the calling to love and serve.
Reflecting on His Majesty’s address at RIGSS, Alvin Ung said that three core values – adaptiveness, ability to look at problems from different perspectives and learning everyday – were passed on from His Majesty The Fourth King, which His Majesty would now like to pass on to HRH the Gyalsey. “As a business, if you are not certain about your calling in your life, look at the words of His Majesty to guide you and find your calling,” he said.
While entrepreneurs are often called the problem solvers, the conference saw speakers advocating businesses to align their goals with the SDGs, besides profit. The conference also introduced Bhutanese businesses and entrepreneurs to the concept of impact investing and sustainable investing.
However, for the SDG agenda to move forward, Aniket Shah, head of sustainable investing at a global asset management firm, Oppenheimer Funds, said the world needs a breakthrough and leadership to show the way in how to develop sustainably and that Bhutan is well positioned for the task.
To accelerate economic transformation, he said, a smart institution that attracts foreign capital, ability of domestic industries to export and domestic development financial institutions with clear mandate are prerequisite. “There is no need of too many complex financial institutions but you must make sure that domestic institutions are serving the mandate,” he said.
Managing director of Borneo Eco Tours, Malaysia, Albert Teo Chin Kion shared his experience on running a social business. “I have worked on my businesses in Borneo with the goal of empowering my employees and the community, by training them, giving them access to loans, and helping them grow. Employment is the first step out of poverty. It is at the core of economic development and social stability,” he said.
He however, said there is a need to “detox the free-mentality” from the people’s mind. “Welfare creates unhealthy dependency,” he said adding that people construe welfare as their entitlement with frequent freebies.
Access to finance
Access to finance is the biggest obstacle for startups and enterprises. To ensure that businesses don’t drown from risks that are beyond human control and improve access to finance, Dr Suresh Balakrishnan, technical director of UNCDF (UN capital development fund) spoke on risk sharing, insurance cover and subsidising risks by financial institutions to encourage them to lend more. Use of FinTech, he said will help make better credit decisions as well as allow borrowers to explore multiple options.
Bhutan, he said is disadvantaged geographically. Lack of coordination among institutions and preparedness are challenges to ease credit access.
“Instead of using grants to finance few individual investment, development agencies could incentivise institutions to finance bankable CSIs by giving risk cover,” he said.
While various initiatives to kick start businesses exist, Sangay Tshering, managing partner of Green e-solution whose entrepreneurial journey began in 2010 said there is lack of support to build human capital.
The biggest constraint businesses face, he said is in scaling up production. This is the time when demand is picking up. The private sector, he said also lose good people because employees working in private firms are treated as ‘second class citizens.’
He indicated that businesses not only suffer deficiency of financing, but individual financing is also not rendered to people working in private sector.
However, the BEFIT conference yesterday saw finance minister issuing in-principle approval for Bhutan’s first CSI bank. The Rural Enterprise Development Corporation Ltd would now be converted into a CSI bank.
A domestic crowd-funding platform developed by the Royal Securities Exchange was also launched yesterday.It is a digital platform, bhutancrowdfunding.rsebl.org.bt that offers new businesses to explore finance and public investors to explore avenues.