Business: While it is often said that electricity is the country’s largest export, industrialists claim otherwise.
Going by the trade statistics, the country earned Nu 10.6B from electricity export in 2014. However, save for potatoes, cardamom and others, rest of the country’s top 10 export commodities consist of industrial products.
The value of industrial export like ferro-silicon, products of iron, cement and dolomite, among others, come to about Nu 16B. Ferro-silicon alone amounts to export value of Nu 8.5B. That’s against the country’s potato export worth Nu 688M and cardamom worth Nu 789M.
Similarly, last year, the electricity export was about Nu 12.12B while proceeds from export of industrial products amounted to Nu 14B.
The provisional trade statistics until September this year also revealed that industrial products accounted for Nu 10.3B worth of export value. Electricity export until September this year hit Nu 9.3B.
An Industrialist said that these figures are clear enough to break the notion that electricity is the country largest export commodity.
But, again, electricity generation fluctuates. For instance, between January and March this year, electricity export was valued at Nu 345M. It however increased to Nu 2.2B in the second quarter and then to Nu 6.8B in the third quarter. In other words, electricity generation is seasonal.
Another industrialist said that taking into consideration the earning from electricity export being pumped into its loan repayment and deducting for the import during lean seasons, industries are far more reliable source of INR.
“However, without electricity, Industries are useless. A policy intervention from the government’s side could make the industries thrive and generate more INR,” he said.
Some industrialists are of the view that electricity tariff could play a vital role in making the industries thrive. The members of the private sector through the Bhutan Chamber of Commerce and Industry (BCCI) appealed to the government when the tariff was being revised.
While the tariff revision cycle was due on July 1, the proposals from the Bhutan Power Corporation and Druk Green are still being studied.
Sources from the Bhutan Electricity Authority (BEA) said that the proposal is with the economic affairs ministry.
Industrialists also acknwledged that they spend some portion of their export earnings to import raw metrials.
But the fiscal incentive policy, one said, limits their access to foreign currency becasue the policy allows the companies to avail foreign currency in the currency of earning. For instance, companies earning INR get access to INR but not USD.
A member from private sector said this limits their capacity to import cheaper raw materials from third countries.