Although the economic roadmap indicates that the Cottage and Small Industries (CSI), which provides employment to about 22,000 people, could employ about 50,000 people by 2030, those engaged in CSI today are quitting their jobs.
According to the chief executive officer of the CSI market in Thimphu, Sonam Chophel, 80 to 90 percent of the people working in CSIs are going abroad or taking other jobs.
He said that CSI constitutes 95 percent of the total industries in the country and contributes less than five percent to the gross domestic product (GDP). “But it has the potential to contribute up to 20 percent and could substitute imports if the government empowers us.”
Sonam Chophel said the agriculture sector is not a lucrative business, as its products do not reach value-adders or entrepreneurs due to the lack of a supply and delivery system. “CSI Market, which houses 500 CSIs, receives only five percent of the product.”
He said excessive importsares a challenge for them, as 90 percent of the market is flooded with imported products.
He claimed there should be more incentives to CSIs to make it attractive. “The government is financially supporting us through the National Credit Guarantee Scheme and National CSI Bank, but there is a lack of coordination.”
Sonam Chophel said that they cannot produce plastics but every packaged product in the market is wrapped in plastics. “If there are restrictions in the plastics-packaged goods, it will provide a more level playing field to the local producers.”
He also suggested a single-window facilitation centre for access to finance, clearances, and procedures.
Entrepreneurs also voiced similar challenges.
The owner of Kuen-gha Potato Fingerling, Jangchub Dorji, said that during the lockdown in Phuentsholing, he sold 200 to 300kg of frozen french fries. “But I could not sell at that level after imports resumed in Phuentsholing.”
Another entrepreneur, Thinley Tenzin, who is a former tour guide, started a soap business but is now producing potato chips. He said that the country has the potential to produce many of the products imported from other countries.
Meanwhile, Asian Development Bank states there is huge potential for youth to take up CSIs, as employment where Bhutan’s first demographic dividend phase started after 1995 is expected to last until 2038.
It also states the demographic dividend peaked in 2013 and is expected to last for 43 years, and the dividend is expected to steadily decline and turn into demographic tax after 2038.
“In Bhutan’s 43-year demographic dividend phase, demographic dividends could have attributed an estimated 1.6 percentage points to economic growth each year,” the report states.
The government approved Nu 1.2 billion under the CSI flagship program for CSI development in the 12th Five-Year Plan to promote high-growth-potential CSIs to enable them to create a competitive niche in regional and international markets, and to mainstream CSIs into the economy.