The pledges and debates among representatives of the five parties in the primary round of the fourth National Assembly Elections have been substantial. A few have also drawn attention on social media, as expected. 

The party representatives displayed a good understanding of crucial issues facing the country today, presenting pathways to achieve intended outcomes, including boosting the economy, developing the private sector, addressing human-wildlife conflict, and countering the adverse impact of depopulation.

However, policies in place, along with strategies and action plans, have not yielded the desired outcomes, particularly for the private sector in the country.

According to ADB’s Asian Development Outlook 2023, the private sector in Bhutan, envisioned as an engine of growth, has stalled. The difficulties in doing business in Bhutan, such as burdensome government regulations, licensing, uncertain policies, unmatched workforce skills, tax regimes, and lack of access to finances, have hindered private firms from seizing economic opportunities and achieving economies of scale.

Despite being identified as crucial 36 years ago during the Sixth Five Year Plan (1987-1992), the largest employer, the biggest contributor to GDP growth, and an investment attraction elsewhere, the private sector in Bhutan has failed in its role.

Recent studies indicate that the private sector, excluding farming, employs only around 29 percent. The rest is employed by the public sector, farming, and state-owned enterprises (SOEs). The increase in SOEs has further constrained the opportunities and business space available for the private sector.

Its share of the GDP, at around 40 percent, is considered much lower than the average of an emerging economy.

“Those of us in the private sector are the least appreciated,” says a hardware retailer in Thimphu.

The scenario is pressing, and the necessary actions are clear. In recent years, the government has taken steps towards simplifying the administrative approval process and digitalization. Reforms have become urgent to ensure an environment of trust and policy certainty, promote private-public partnerships, privatise loss-running SOEs, and support skills development and product innovation.

A robust start-up culture and dynamic SMEs (small and medium-sized enterprises) are essential for healthy economic growth. Leveling the economic playing field is crucial for inclusive economic success. Opportunities and incentives could become attractive to the upcoming Bhutanese youth. We look forward to their participation.