The country’s import bill is ballooning. It shot up by 12 percent to Nu 56.34 billion in the first six months (January to June) of this year compared to the same period last year. The increase is largely due to import of electricity during winter when we have to resort to import of electricity.

Should we be worried? As an import-dependent country, the widening trade deficit should be a concern. The repercussions are many. If it is increasing the dependency, it is leading to lethargy and draining out the hard-earned foreign currency including the scarce Indian Rupee, without which a lot of activities are grounded.

Rice growing Bhutan imported Nu 1.51 billion worth of rice in six months. In the meantime, our paddy fields are overgrown with thickets and farmers are locking their homes to move to towns and cities. There are more googtongs (empty households) than rice-growing households.

There is not much we can do when we look at the top 10 goods imported. Diesel and petrol, an indispensable item that is not produced in the country, tops the list. What is concerning is the increasing import of essential food items like rice and luxuries like smartphones. If we delve deeper, we will see policy gaps in letting the export-import widen. Import of Smartphones in 2023  was worth Nu 2.2 billion.

On the other hand, there are not many benefiting from our increasing exports.  Our top exports are minerals like ferrosilicon, boulders and dolomite. Bhutan exported Nu 7.02 billion worth of ferrosilicon, Nu 1.71 billion boulders, and Nu 1.26 billion dolomite. How many Bhutanese are benefiting from the 7.02 worth of export?

As an import-driven country, there is not much we can do. At the same time, we are also not doing much to substitute imports. The few agricultural products that could benefit farmers are facing competition from cheap imports. Why should we import agri-based produce when our farmers are struggling to find markets? The citrus mandarin (orange) and apple we export comes back in the form of squash or juices. The economics of scale in neighbouring countries means local produce cannot compete with imported goods.

On the other hand, Bhutanese produce cannot penetrate markets outside the country because of the strict standards – some genuine, some politically motivated to protect local produce. If we are to improve the trade balance, we should either improve export or restrict import. We can surmise that at least 10 percent of the goods, especially food items will fail import standards if we have one or implement it.

Why should we allow import of cigarettes or noodles all the way from Korea or the numerous products that come with health warnings or with labels that we cannot read? Depending on the export of electricity to improve the trade deficit is a mistake. We know the deficit will be reduced when the PII project is commissioned and starts exporting electricity.

A good way to measure the deficit is by taking out electricity. For a nation that prioritised food self-sufficiency decades ago, it is unfortunate that we rely on cheap imports by abandoning our farms and villages.