The emigration of Bhutanese to Australia is a concern. The only way is to make Bhutan rich. This is what everyone agrees, particularly those at the helm of leadership from the Prime Minister to the transformation team. Bhutan is a least developed nation and with a pandemic, Bhutan has become poorer… alarming rate of the Indian Rupee reduction and hard currency aggravated by a reduction in remittances from outside. Yet going by the news, financial inclusion is becoming even more difficult. The Kuensel reported that contractors are finding it much easier to pay the penalty for breach of contract by terminating the obligations than to fulfil their promises.  One major factor in this is the access to finance due to too many requirements to secure even a small loan. When finance stops, everything stops. The right to financial inclusivity is becoming increasingly difficult. Unless there is a major reform on financial inclusiveness, the gap between rich and poor may further widen and the exodus rush to Australia will continue.

World Bank defines financial inclusiveness as “that individuals and businesses have access to useful and affordable financial products and services that meet their needs – transactions, payments, savings, credit and insurance – delivered in a responsible and sustainable way.” The World Bank index (2022) shows that “only 76.08 percent of eligible Bhutanese have a savings account. And about 67 percent of the rural population have savings account as opposed to about 95 percent in the urban areas.”

His Majesty said that “in this globalised and modern world there can only be one answer– a strong dynamic economy. We need resources, our country needs national wealth, and this can only come from our own economy.” His Majesty further said that “a nation’s success is determined by the strength and competitiveness of her economy. If we are to succeed in this globalized world, we need a strong economy.” The Constitution guarantees the right to security, the right to life and the right to equal opportunities including the right to lawful vocation and intellectual property. With rapid economic growth and a free market system, financial inclusiveness is indispensable in fostering and building a strong economy as it will force more economic activity.

The United Nations Capital Development Fund (UNCDF) states that financial inclusion will help in achieving many sustainable development goals (SDGs) which Bhutan is a party. This includes, “eradicating poverty (SDG1), ending hunger, achieving food security and promoting sustainable agriculture (SDG2),  profiting health and well-being (; SDG 3), achieving gender equality and economic empowerment of women (SDG 5),  promoting economic growth and jobs (SDG 8), supporting industry, innovation, and infrastructure (SDG 9), and reducing inequality (SDG 10).”

While there are reports and cases against individuals for getting multiple loans on single asset, the general population has almost no access to any form of collateral-free loans. Only those who have assets and high income can have access to loans. Further, Bhutan also has one of the highest interest rates in the world for lending. While financial discipline is necessary and important for a small country like Bhutan, it should not be too stringent that poorer sections of society are cut off from financial accessibility. If the private sector must grow and individuals prosper and contribute to economic development, financial inclusion is the only way which will also help realise His Majesty’s vision.

Sonam Tshering

Lawyer, Thimphu

Disclaimer: The views expressed in this article are author’s own.