On April 10 and 11, more than 80 percent of the shops in Phuentsholing were closed. The town was free of traffic congestion with few people on the roads.
An election across the border had shut the country’s commercial hub.
Shops were closed in these two days because the shopkeepers, who are from across the border, and run these businesses had gone to vote. The situation got many talking about the old issue of fronting Phuentsholing remains entangled in.
Fronting, exclusively in the case of Phuentsholing, means to lease out business licenses to people from across the border.
Trade office in Phuentsholing has counted about 98 shops as closed during these days.
Regional trade director in Phuentsholing, Pem Bidha said their office is as concerned.
“We sent our team to the field in all the three days to check,” she said, adding that they have taken note of the development.
Pem Bidha also said they already have data on fronting cases. The trade office, she claims, has been compiling data for a long time. But people are given the benefit of the doubt and it was difficult to prove, she said.
The trade regional director also said that she would like to discuss with all stakeholders after she compiled the findings. Fronting is a responsibility of all the agencies.
As per Rule 3 of “rules and regulations for establishment and operation of industries and commercial ventures in Bhutan (1995),” fronting is not allowed.
It states: “A license shall not engage in ‘fronting,’ in other words, leasing of the license to another party to run the business. Violation of this rule shall result in cancellation of the license and immediate closure of business.”
This is the only guiding policy, which many say is not strong and does not truly supplement the rules while enforcing it.
Owing to the porous border and the relation the two peoples share, fronting is an increasing trend in Phuentsholing. All sectors, from small to large scale are affected. Export of apple, cardamom, and oranges, even export of boulders is affected.
In most cases, Bhutanese offer their business licenses for a meager exchange of commission for retail licenses. Many a times, Phuentsholing trade office has let go after asking license holders for undertakings and warnings.
After the April 10-11 development, many Bhutanese from Phuentsholing and afar took to social media. However, not everyone is pleased with the posts.
One civil servant, wishing anonymity said most pictures posted were of those shops owned with legitimate license by people from across the border.
“Not all closed shops are a case of fronting,” he said. “However, it should be noted that all the prime business locations are taken away.”
He said that those shops that had employees from across the border were also closed.
On the fronting cases in Phuentsholing, he said Bhutanese people should be blamed and not those from across the border.
A businessman, Sonam said that many building owners have leased out their houses to fronting businesses.
“I think they should give opportunity to our youth who are interested,” he said, adding that youth can easily start businesses given the loans banks lend these days.
In Chukha, trade records show 5,053 registered licenses and most are in Phuentsholing. These are categorised into six—micro-trade, wholesale trade, retail, production and manufacturing, services, and contract.
Kuensel learnt that there are more than 140 shops run by people from across the border who are legitimate license holders. Most have been doing business since the 1960s and 1970s.
Bhutan Hardware Agency is one such enterprise that was licensed in the 70s. Its owner Jaideep Agarwal said he opened his shop for half a day.
“There were also not many customers as people knew about the closing,” he said.
Thrompon Uttar Kumar Rai said he would like to see Phuentsholing town without fronting issues.
“But there is no particular rules and regulations that give authority to local government to look into it,” he said.
The issue, he said, has to be looked into by the lawmakers. Thromde would implement the policies, he said.
Uttar Kumar Rai also said that Bhutanese have tried running businesses and they lease out their licenses when they failed.
Rajesh Rai | Phuentsholing