Just as economic activities are starting to pick up, the Asian Development Bank, Bhutan’s development partner, is projecting a slowdown, even if by a few percentage points. This is not good for an economy trying to recover from the impact of Covid-19 pandemic and the global disruptions in logistics and supply chain. 

At home, the Covid-19 pandemic is long forgotten and the attention is on reviving the economy. We have an election this year and next. High on the agenda of all the political parties is to pave a way post Covid-19. Economic activities in an election year slows down as decisions to invest, especially capital works – one of the main drivers of GDP growth – are hampered in the transitory period.  

However, a positive outlook is that the economic growth saw a 0.6 percentage points revision up from the Bank’s earlier projection of September last year at four percent in 2023. Experts bank on the commissioning of two more hydropower projects for growth. This certainly will drive growth. However, real growth would come from economic activities that will help in creating jobs and drive the private sector.

While the manufacturing sector is optimistic of a better year, the service sector, which employs the most, is still complaining of lack of opportunities. For instance, the hotel industry is still waiting to get to the pre-pandemic level. Reforms in the tourism sector, of which the hotel industry is dependent on, has impacted the industry. They are hoping the government would undo its decisions. Many say that doing away with the SDF imposed on tourists entering the border towns has helped them already.

If they are hoping for the government to take a U-turn on the polices, they are wrong. It is more advisable to look for alternatives. Investing in marketing, for instance, would be a good decision. 

 What matters for Bhutan depends largely on what happens to the Indian economy. India is our economic reality. As the largest trading partner and the currency pegged to the INR, the Indian economy could shield ours or take it down together. Fortunately, the Indian economy is expected to witness a robust growth in 2023 and 2024. 

 While we can take confidence in this, we cannot rely on what happens to the Indian economy. There are some developments and agreements signed following the visit of His Majesty The King to India on the invitation of the President of India. We are seeing some progress in the areas of mutual cooperation like trade, investments, transport, and hydropower.

Beyond the government, the private sector, long-recognised as the engine of growth, should also see opportunities to grow. The private sector is after the government to relax regulations and let them grow. Restrictions hamper growth. 

At the same time, in chasing growth we should look beyond business as usual. The private sector should do more. They could do more if policies are private sector-friendly. Relying on import of noodles from Thailand, used garments from Bangladesh, cosmetics from South Korea or cars from India or Japan will not develop the sector besides depleting the hard currency reserves. The private sector should look into getting into important sectors like education, health, IT, agriculture, mega development projects and many more. Government policies should encourage them.