As he leaves office, Lyonchhen Tshering Tobgay shares with Kuensel his thoughts on the government’s performance in the last five years. Excerpts
What would you consider the government’s biggest achievement in general?
The Golden Throne is the soul of our nation and for more than a century our beloved monarchs have ensured the security and sovereignty of our nation. As the second democratically elected government, our biggest achievement has been the continued safeguarding of our security and sovereignty of our nation in line with the enlightened vision of His Majesty. The past five years have seen unity and peace because of which people have enjoyed stability, prosperity and harmony.
The government couldn’t achieve, as promised, the average 10 percent GDP growth in the last five years. How satisfied are you with the government’s efforts to strengthen the economy? What is the government’s biggest economic achievement?
We are very satisfied with the growth trajectory of our economy given where we started. When we formed the government in 2013, the GDP growth rate was at an all time low of 2.1%, GDP was Nu 100 billion, inflation was at a high of 13.5%, bank loans were frozen for several sectors and foreign reserves were at a low of US$ 920 million.
Over the past five years, our economy has rebounded. The GDP has grown from Nu 100 to Nu 180 billion and inflation today stands below 5%. Foreign reserve has increased to $1.2 billion. Banks have started giving loans and the average loan interest rates have been reduced to 10.6% from 13.5%.
In 2013, we inherited an economy that needed to be corrected. In the past five years, we have not only managed to correct it but also revive the economy. Today, our economy is in good shape. However, given the fact that Punatshangchhu and Mangdechhu hydro projects could not be completed because of geological reasons, we did not achieve the growth rate of 10%. But Mangdechhu project will be completed this year and once commissioned, it will trigger the growth figure upwards. Moreover, we rolled out the largest five-year plan with an outlay of Nu 225 billion and we achieved a lot by implementing it successfully.
There is a call from some quarters of the society to diversify our hydropower market and also that we have put all our eggs in one basket. Where has the negotiation between Bhutan and Bangladesh reached on hydropower trading?
The PDP government has identified five jewels to trigger economic growth. The five jewels are hydropower, cottage and small industries, mining, tourism, and agriculture. Identifying the five jewels was a key strategy to diversify economic priorities to ensure that the people enjoy the economic benefits.
Diversification was prioritised even under the ecosystem of hydropower itself.
Bhutan Automation & Engineering Limited was started in Chukha and it specialises in manufacturing and delivery of state-of-the-art automation systems for hydropower applications.
Bhutan Hydropower Service Limited was started in Jigmeling, Gelephu, and it specialises in servicing and manufacturing hydro-mechanical components including hydro runners and allied underwater components for projects in Bhutan and for export.
Construction Development Corporation Limited (CDCL) has already started undertaking tunneling works for hydropower construction.
The negotiation on trading of hydropower with Bangladesh is a trilateral discussion involving India and it is in its initial stages.
There has been much emphasis on agriculture development. However, reports of lack of irrigation water are common across most parts of the country. Where did the efforts fail?
In the past five year, 2,600 kilometers of irrigation channels were built. The massive drive to build irrigation channels greatly enhanced agriculture, which in turn boosted agriculture production. The income from agriculture increased from Nu 17 billion to Nu 26 billion in the past five years. This is a clear indication that our efforts have not failed. But we have to confess that a lot more needs to be done. Thus, we have prioritised irrigation and water as top priorities in the 12th Five-Year Plan.
Decentralisation has been your party’s slogan. As part of the decentralisation programme, the government granted Nu 2 million to every gewog. What more do you think needs to be done to further strengthen our local governments?
Inspired by our ideology of Wangtse Chhirpel to empower our people, we devolved more authority to the local governments. We instituted the Gewog Development Grant (GDG) and allocated Nu 410 million to the gewogs to invest in activities not covered in the plans. The success of the GDG led to the establishment of the Dzongkhag Development Grant (DDG). Under the grant, each Dzongkhag received Nu 7 million and Nu 5 million for Human Resource Development.
The 12th Plan outlay is Nu 336billion out of which Nu 136 billion is capital budget. For the first time ever, the capital budget will be equally allocated to central agencies and the local governments. Each will receive Nu 58 million. In the 11th Plan, the local governments received only 23% of the Plan budget. This is expected to greatly empower local governments.
You had said that the Indo-Bhutan relationship was affected during the former government’s time. In what ways has the relationship improved today at the end of your government’s tenure?
As close neighbors, Bhutan and India have always enjoyed excellent friendship based on trust, cooperation and understanding. This special relationship has only grown stronger in the past five years.
Starting with my first official visit in 2013, I have visited India for official business 10 times with my last visit-taking place three weeks ago. In the past five years, I had the opportunity to work closely with Prime Minister Manmohan Singh, and subsequently with Prime Minister Narendra Modi. This shows regardless of which political party is in power in India, the relationship between Bhutan and India has always remained strong. The generous support and cooperation of the Government of India has contributed to the successful completion of the 11th FYP.
Furthermore, India also supported Bhutan with the Economic Stimulus Plan that help stabilized our economy. In addition, our existing ties of friendship and cooperation with neighboring states of West Bengal and Assam have been further strengthened. We opened the Royal Bhutanese Consulate in Guwahati in February this year. Drukair will also be soon operating flights from Guwahati to Singapore. In short, the relation between Bhutan and India has grown stronger, and I am confident that it will continue to grow from strength to strength and endure forever.
What in your view was the government unable to achieve during its tenure, and your take on the election promises that could not be fulfilled?
We tried our best to deliver with humility and dedication. We have stabilised the economy and created opportunities in all sectors. We have created opportunity windows through Priority Sector Lending (PSL) and the Rural Enterprise Development Corporation Limited (REDCL) and lowered loan interest rates, amongst others. But it is not enough. We have a lot more to do. Our people deserve a lot more.
One particular area I am worried about is the unemployed young people in our country. Today, there are many vacancies including about 500 vacancies in the SOEs but there are no takers. On the other hand, the youth unemployment figure stands at 10.6%, which is worrisome. This also shows that our young people have higher aspirations. I believe that it is our collective responsibility to match the aspirations of our young job seekers. All of us need to work harder at this. Employment will continue to be the main priority of future governments.
You were in the opposition before. What is your assessment of the Opposition party?
I would like to applaud the Opposition in their endeavor to fulfill their Constitutional responsibilities and in providing check and balances to ensure a vibrant democracy in our country as envisioned by our beloved Monarchs. On our part as the ruling government, we have engaged with them institutionally and reached out to them at personal levels at every opportunity.
The Law Review Taskforce has recommended that the election commission disallow horse-trading after the primary round of elections to the National Assembly. Do you agree with the taskforce?
I would like to acknowledge the herculean work of the taskforce and their dedication in fulfilling their mandate. It is not my prerogative to comment on the issue and I do not wish to preempt deliberations on their important recommendations.