With the government’s much-awaited Nu 15 billion economic stimulus Programme (ESP) launched, and the first tranche of Nu 2.5 billion secured, there is hope in the air that investment in the economy will help revive the economy on the much-needed path.

The Covid-19 pandemic and the risks it brought has long gone, Bhutanese are still reeling from the impact, as the economy is yet to kickstart or gain steam to make a difference. The unofficial discussion after the grand launch on Saturday is who and how will the plan benefit. The  private sector is convinced it is for them! 

The ESP should benefit all those dependent on the economy.  

Simple economic rules say that if there are investment and economic activities, everybody gains. The hope is that lifting the ban on loans and import of vehicles would revive the economy. It is a false hope. In fact, the repercussions could be severe, as we start the revival process. The government is right in its decision to set conditions on the import of vehicles and being cautious on lifting moratoriums on loans.

Importing or selling thousands of vehicles could drain out the scarce convertible currency. From records, Bhutanese love vehicles imported from third countries. It would not be wrong to say that while we are importing more vehicles from India, the value is higher for the Toyotas and Hyundais imported from South Korea and Japan. Every car imported has to be paid in convertible currency- USD in our case. We should not have a hard currency poor central bank with more people driving Prados at the cost of foreign currency reserves.

If real economic growth translates into job creation, for instance, importing cars or dishing loans to build hotel and commercial buildings, will not generate employment. The government got it right in aiming the ESP to revive key sectors, create jobs, and improve overall economic health.

Low-interest loans, loan deferment options for businesses, and livelihood support programmes, subsidised loans for farmers, cultural enterprises, CSI, startups, youths to pursue education, home ownership, especially for civil servants, and businesses under distress will benefit more.

We are on the right path if the ESP is going to prioritise agriculture, cottage and small industries, and the creative sector through targeted investments and financial support. The Prime Minister called on collective effort from all for  the ESP to succeed and ensure a swift economic recovery. The demands and wishes will be many given the size of the ESP. Prioritizing where it goes and how will determine the success.

While an economic plan outside our Five Year plans is not new to Bhutan, prioritising the sectors for the ESP is already a good start. Otherwise, it will be like the many past economic development plans and roadmaps that hit the wall before it began.

 Tourism is important for Bhutan and the plans to invest in tourism infrastructure, developing new tourism products, subsidising air connections and other promotions sound wholesome. If we can stay true to the plan, the whole tourism and allied sector will benefit as we try to revive tourism which could play a crucial role in reviving the economy.