The dollar issue that is dominating the news today has no link to the movie “For a Few Dollars More”, yet the story and the plot of how dollar-starved Bhutan is facing an issue of smuggling out USD could be a better story, perhaps a blockbuster.
It’s about a small country with a smaller economy where commoners wanting to travel for their first holiday or medical tourism outside Bhutan and India are deprived of the Greenback and those with means have access to hundreds of thousands. In the recent foreign currency smuggling bust, authorities managed to seize USD 500,000 in two separate incidents.
Hats off to the officials who did that; at least this time the USD went to the Central Bank not to Thai custom officials. Last year, we lost USD 450,000 to Thai customs. We (including the media) are not aware who managed to put USD 450,000 in whisky bottle cover. The case is subjudice (under judicial consideration and, therefore, prohibited from public discussion elsewhere).
Starved with USD, the most powerful currency will be an issue – who gets it, how much, how they get it and many more. How we regulate it is the question. Regulations have it that a Bhutanese travelling abroad is entitled to USD 1,000 in cash for a year and USD 2,000 in their account (if they are carrying international debit cards). It is a problem. Not many carry international debit cards and many businesses in countries where an average Bhutanese travels accept cards.
Take for instance the night markets in Thailand where we love to shop for gifts. Two in three shops do not accept cards. They need cash. Thai Baht 30,000 is a lot of money for some; for many, it is too little when it is spread across three trips to Thailand. The alternative is to get AUD or SGD (Australian and Singapore dollars).
As an import dependent country without much export in USD, we need to limit the outflow of the scarce USD. It should not, however, be at the cost of people wanting USD for genuine reasons. It is as if the government is not trusting our people when hundreds of thousands of dollars are flowing out for reasons we cannot comprehend.
Convertible currency is a big issue in small Bhutan. The smuggling issue arises for a lot of reasons, including the restriction on how much an individual is entitled to. We need to relook into our policies. Even as we try to control the USD quota for individual traveller, we are importing tobacco and junk from as far as South Korea. Our shops, including the little paan shops, are stocked with junk imported in USD even if they are against the mandate of other institutions.
What value is there in approving imports of USD paying for tobacco or unhealthy food that would burden our already overwhelmed health system? How do our importers get access to USD to encourage consumerism or deplete the forex reserve?
As we discuss smuggling of forex, it is time to relook into our policies too. Why should conservative Bhutan not have policies to restrict imports of junk? Why should we not encourage dollar earning ventures? And above all, why should Bhutan be the route to smuggle out USD?
When restrictions are tough, people will try to do anything for a few dollars more!