NC’s consensus required
The National Assembly will vote today to adopt European Investment Bank (EIB) framework agreement.
The Assembly completed deliberation on EIB framework agreement yesterday.
A majority of the Assembly’s economic and finance committee members who met to review the agreement last week agreed that the agreement qualified as an urgent Bill in view of the country’s financial needs arising from the Covid-19 situation.
The committee’s chairman, Kinley Wangchuk, said that the country would benefit from borrowings once the agreement is ratified. However, the agreement requires the National Council’s agreement to pass it as an urgent Bill.
As per the Legislative Rules of Procedure (LRoP), either the government, a member or committee shall propose a Bill to be declared as urgent to the Speaker with justifications.
An “Urgent Bill” may be declared when the government is required to respond instantly to the effects and impacts of unforeseen natural or manmade calamities.
The LRoP also states that the Speaker shall consult the chairperson of the National Council (NC) and the Legislature apropos of the proposal.
If the NC considers the agreement as an urgent Bill, it will have to be passed in the same session.
In 2015, NC rejected the initial EIB agreement with 13 objections. It said that the agreement undermined Bhutan’s sovereignty and violated national laws and policies, including the external borrowing guidelines.
The government recently negotiated with the EIB and signed the agreement with some changes, one of which was on who shall be the beneficiary of the agreement. With the change, only the government, as a beneficiary under the agreement, will be able to borrow from EIB.
Ratification of the agreement will pave the way for borrowing from the EIB. The EIB is a publicly-owned international financial institution whose shareholders are the EU member states.
Finance Minister Namgay Tshering said that the government had carried out national interest analysis and found that ratification of the agreement was in the country’s interest.
Opposition Leader Dorji Wangdi asked the government if it was possible for the government to avail grants under the agreement. The finance minister said that there were possibilities of getting some portion of borrowings as grants based on projects that EIB would fund.
Lyonpo Namgay Tshering said that a country office of EIB could be opened in Bhutan should Bhutan receive investments from EIB in big scales.
Some members said ratification of the agreement would also create jobs for Bhutanese.
Prime Minister Dr Lotay Tshering said that most of the South Asian countries, including India and Nepal, had availed loans from EIB. “I feel we have missed the opportunity,” he said.
Bartsham Songphu MP Passang Dorji (PhD) expressed concerns about the need to travel to the international court in the Netherlands in case of legal proceedings between Bhutan and the bank.
“Travelling to the Hague would be expensive for a country like ours,” he said.