Bhutan stands at a critical crossroads in its pursuit of Gross National Happiness (GNH), confronting a fundamental challenge that strikes at the heart of its constitutional principles: ensuring truly inclusive financial access for all citizens. The current financial system inadvertently marginalizes a substantial portion of the population, presenting a stark contradiction to the nation’s most deeply held constitutional values and fundamentally undermining the economic rights of its people.
The Constitution of Bhutan, through Article 9, places an unequivocal obligation on the State to promote conditions that enable the pursuit of GNH. This mandate encompasses minimizing income inequalities, ensuring equitable distribution of public facilities, and creating circumstances that allow citizens to secure adequate livelihoods. However, the lived reality for many Bhutanese citizens stands in sharp contrast to these noble constitutional ideals.
The recent Economic Stimulus Plan (ESP), launched in the wake of the COVID-19 pandemic with promises of over Nu 5 billion in collateral-free, low-interest loans, epitomizes the systemic disconnect. As discussed in the National Assembly yesterday, despite its ostensibly progressive design, many citizens find themselves unable to access these crucial financial resources, trapped by bureaucratic complexity and opaque eligibility criteria that effectively render the support inaccessible.
Perhaps the most egregious manifestation of this systemic failure is the treatment of collateral-free loans as collateral required loans by financial institutions (FIUs). This is aggregated by the FIUs consistently refuse to accept rural land and assets as collateral, effectively rendering these properties economically valueless for loan purposes. This practice perpetuates a cycle of rural poverty and accelerates urban migration, dramatically widening the economic divide within Bhutanese society.
Drawing inspiration from successful models in Scandinavian countries and Singapore which are often referred to as models for us to look at, where governments actively intervene to ensure citizens’ economic well-being. For example, a Universal Basic Income program particularly for senior citizens and economically disadvantaged families would provide a critical safety net, ensuring no citizen falls below a basic living standard.
The government should explore dedicating Bhutan Development Bank (BDBL) as a public bank with a focus on supporting economically marginalized individuals and small businesses while developing fair valuation methods for rural properties as legitimate collateral. Otherwise, the gap between rich and poor in the country will only increase considering the increasing income gap between rich and poor in the country.
A comprehensive microfinance network, coupled with robust national credit schemes, would extend financial services to every community. Digital financial technologies can “overcome geographical barriers, providing accessible and transparent financial tools”. Implementing clear loan turnaround time and extensive financial literacy programmed will further empower citizens.
These strategic interventions may help to transform our financial landscape, democratizing economic opportunities and ensuring that access to financial resources becomes a fundamental right rather than a privilege for the few. The goal is to create an inclusive economic ecosystem that supports every Bhutanese citizen’s potential for growth and prosperity rather than only those who can pay loans.
We can’t achieve the constitutional mandates of GNH while a significant portion of the population remains trapped in financial purgatory. The economically disadvantaged are effectively treated as second-class economic entities, systematically denied the basic financial tools necessary for lifting themselves out of poverty.
The above solutions may create a more equitable financial landscape that genuinely empowers all citizens to participate fully in the nation’s economic growth and prosperity and claim our constitutional commitment to create true GNH.
Sonam Tshering
Lawyer, Thimphu
Disclaimer: The views expressed in this article are author’s own