Export dropped to 20 percent during lockdown

Economic affairs minister optimistic about minimising the economic impact of lockdown

MB Subba

Export of goods from major industries declined to around 20 percent of the normal export capacity during the three-week nationwide lockdown, according to the economic affairs minister Loknath Sharma.

Overall export (export from major industries and other goods), however, he said could have decreased to 10 percent. This comes in the light of GDP having contracted by 6.7 percent and the domestic revenue reduced by 70 percent in view of the nationwide lockdown.

The economic affairs minister said that the government was able to facilitate the export and import activities since the second week of the lockdown although the country could not export anything in the first week.

“We exported whatever was manufactured by our industries in Pasakha in Phuentsholing and Motanga in Samdrupjongkhar from the second week of the lockdown,” he said.

He said that about 52 industries, especially the big ones, functioned in a self-contained mode during the lockdown.

The recently opened land customs station at Allay in Pasakha, he said, also helped export and import of goods between Bhutan and India. Import mainly was of raw materials for the manufacturing industries.

“There was no complete halt in the export of goods. Even now, we are facilitating the export of cash crops like potatoes from Samdrupjongkhar and other points,” Lyonpo Loknath Sharma said.

The government, he said, also tried to continue importing goods, mostly industrial raw materials, from Phuentsholing and the Alay land customs station by following the Covid-19 safety protocols to keep the economy running. 

Import of goods reduced to around 10 percent during the lockdown.

“We did not have to rush to import essentials as we had maintained a buffer of such goods. That strategy really worked well and those goods imported by the Food Corporation of Bhutan Limited (FCB) and other wholesalers are still helping us,” he said.

The country, economic affairs minister said, did not face much problem during the lockdown in terms of availability of essential goods. He said that the government, however, continued to facilitate the import of goods like fuel and LPG.

Lyonpo Loknath Sharma said that export of goods, including apples, would not be affected despite the Covid-19 situation. He said that a standard operating procedure (SOP) has been put in place to carry on with export activities.

“As it is, we have allowed normal activities in gewogs and villages. The offices will open from tomorrow and things are expected to return to normalcy to some extent,” he said, adding that the Phuentsholing mini dry port is also preparing to facilitate the export of all goods.

The economic affairs minister said that the damage of the 21-day should not be “too bad” on the economy if further lockdowns do not come. Except for the agricultural works in rural areas, economic activities came to a halt during the lockdown.

The positive side of the lockdown, he said, was that the export of electricity continued unaffected.

The lockdown, he said, helped the government stop transmission of Covid-19 although some damage has been done to the economy. He said that the government was trying to maintain a balance between the need to protect the people’s health from Covid-19 and to keep the economic activities running.

“Life is very important. At the same time, livelihood is important,” he said.

Lyonpo Loknath Sharma said that although the Covid-19 pandemic and the lockdown have impacted the economy, the “devastating impact” can be saved if the economic activities resume quickly with the lifting of the lockdown,” he said.

Citing the examples from other countries, he also highlighted the challenges involved in unlocking the country saying that such countries have seen spikes in Covid-19 cases.

He also highlighted the challenges of operating small business houses in small economies like Bhutan during the pandemic. The country, he said, had many small family-run industries and that they are difficult to be operated in a self-contained mode.

 

Import substitution

On import substitution, the minister said that it was difficult to substitute almost everything due to the small economies of scale. “The ministry has carried out a study on the possible areas of import substitution. The cost of labour and production is high in many cases,” he said.

The government, he said, was facilitating Cottage and Small Industries (CSI) in production of goods like noodles and tissue papers with the aim of substituting imports. He said that the government would help farmers with technology in production and preservation of dairy products.

Lyonpo said that it has been a challenge so far to make the dairy products non-perishable. “These are ongoing works and the Covid-19 has stressed our focus on import substitution,” he said, adding that the government would help those industries that will contribute in import substitution.

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