Not ratifying EIB agreement will be a big loss

… Says Chairperson of the Foreign Relations Committee 

Parliament: The failure to ratify the European Investment Bank (EIB) framework agreement would mean missing out on an opportunity and even embarrassment for Bhutan, according to the chairperson of the National Assembly’s Foreign Relations Committee, Rinzin Dorji.

Rinzin Dorji said that the concerns expressed and warnings from the National Council were genuine, but joining the EIB would not bring consequences as alarming as the NC sounded. However, the Member of Parliament from Phuentsholing said his views did not reflect that of the government.

Rinzin Dorji said it was a privilege for the country to be a signatory of EIB framework agreement since the EIB signs the agreement with only selected countries. “Bhutan was considered because of its clean image in corruption,” he said. “It was offered to us.”

He added that signing the agreement was timely as donor agencies would be phasing out their financial support from the country as the country graduates from a least developed country status. “The agreement is expected to provide us additional financing alternatives to support our developmental activities,” he said.

The chairperson who was asked to lead a committee to deliberate on the concerns expressed by the NC said that if the framework agreement becomes a dead bill, the EIB might have reservations for Bhutan in the future.

Asked if there was a chance to amend the Articles objected by the Council, he said there was no room for such amendments. “I think there is no room for amendment. The agreement might become a dead bill,” he said.

The Council withdrew the agreement saying it is not in consonance with the country’s external commercial borrowing guidelines and that it could undermine sovereignty. However, Rinzin Dorji was of the view that the country’s sovereignty would not be undermined and that no laws would be overridden by the ratification of the agreement.

He also said that Bhutan could borrow from EIB only after fulfilling the legal requirements and that signing the agreement is not forcing the country to borrow from the bank. “The signing of the agreement does not mean it is mandatory to borrow from the EIB.”

One of the reservations the Council expressed was on the agreement’s condition to provide immunity to staff of the EIB. The Council feels that the immunity enjoyed by the EIB personnel are similar to that enjoyed by staff of diplomatic missions and international organizations.

Rinzin Dorji said that the privileges and immunities in the agreement are reasonable and that they are provided depending on existing diplomatic relations.  Such privileges, he said, are granted by EU member states, which are shareholders of EIB, to the employees and are found in EIB statutes.

Although EIB is a financial institution of shareholder countries of European Union, it also lends to countries, which are not its shareholders. Hence, when EIB carries out activities in a non-EU country, similar privileges and immunities are expected to be recognized and ensured.

The agreement requires Bhutan to accord EIB financed projects and contracts similar treatment to World Bank and ADB activities in Bhutan. If EIB finances private projects, the Council recommended government and private projects should be differentiated.

Rinzin Dorji refuted that all projects will have to be subjected for clearance by the government, which gives opportunity to examine and decide whether the proposed projects meet the standards for specific sectors.

A detailed report will however be submitted to the National Assembly. A committee, Rinzin Dorji said, is discussing it. “It will be deliberated in the Assembly taking into consideration the concerns of the National Council,” he said

MB Subba

1 reply
  1. logical
    logical says:

    The LOSS or BENEFIT issue comes as the RESULT of mutual deal that can be known only after full actions.
    In this case, the RESULT is only EXPECTATION that might steer to different course in practice. As such, the ALARM is FALSE and may not be heeded.

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply