Dorji Khandu

Journal of a Young Parliamentarian

On issues concerning the road to the Finance Minister

In today’s session, I raised the following issues to the Hon’ble Finance Minister during the Introduction of the Annual Budget at the National Council (2nd Sitting of the 25th Session).

The Government continues to accord high priority for the construction and maintenance of roads. For the fiscal year 2020-21, the budget allocation to the road sector is Nu. 4,225.957 million:  about 6 percent of the total budget appropriation.

Under the Economic Contingency Plan (ECP), the Government plans to initiate the improvement of about 1,447 km of farm roads with existing road connectivity (one farm road from each Gewog).

To stimulate economic growth, the Government has announced fiscal and monetary measures and started implementing economic contingency plan in the areas of tourism, agriculture and construction, and this includes improvement of one farm road each in all Gewogs.

In this regard, I urge the government to give importance to build new roads to gewogs that has no road such as Laya and Lunana in Gasa dzongkhag.

This is in line with the government’s expectation to improve access to the market, reduce transportation costs, and to enhance rural income. Moreover, this would improve the living standard of the highlanders and help the government realize the vision of Reducing Gap, besides many significant advantages.

I also recommended the Government to ensure issuing of the road-related clearances at the earliest possible with a new policy similar to that of the Government’s Procurement Rules and Regulations during emergencies.

The Department of Forests and Park Services, Wangchuk Centennial National Park, Bumthang accorded the Forest Clearance for construction of farm road measuring 15.5km from Bisha Goenpa to Gyentsa on March 2, 2020, and Jigme Dorji National Park, Gasa accorded the Forest Clearance for construction of farm road measuring 8km from Ramina to Jaziphu under Lunana Gewog on March 13, 2020. However, the Gewog is yet to receive the Environment Clearances for these road constructions.

The road to Laya was one of the significant pledges of the current Government and should consider it as the top priority. Although the preliminary survey was carried out recently, more needs to be done to complete the remaining 30% of the road to Laya from TongshuDra (Approximately 13 km). It has been more than 2 years now; the gewog is yet to receive the road clearances.

Moreover, as always I reminded the Government of the need to improve road conditions between Punakha and Gasa border, especially from Kabesa Sirigang to Shatem Draphu.

The road, despite being crucial for ensuring administrative ease, economic development through tourism, and livelihood enhancement through connectivity; the quality of the road, as mentioned earlier, remained a major stumbling block for more than two decades.  Thus disappointing the people.

However, it was encouraging to hear from the Hon’ble Finance Minister that the works to get clearances at the shortest time possible is taking good progress. The government including Gasa-Laya gewog centre road to be blacktopped along with 23 other GC roads was welcome news.

While sharing the concerns and views of the people, I revere and share the same thoughts of the need to secure our economy in times like today. There is a need to create employment and realize the consumption capacity of the people as mentioned by the minister.

The budget for FY 2020-21 is presented in the midst of COVID-19 pandemic which has caused a global health crisis and economic downturn.


Climate Change-induced Risks from GLOF in Bhutan

Climate change is a global concern today. It is hitting us hard, and that is due to an insatiable desire for so-called ‘unsustainable development; a concept propagated by some western thoughts.

Bhutan has already felt the impact of climate change and more than 17 events had occurred in the 19th century. The glaciers in the Himalayas; the world’s greatest repositories of snow and ice are retreating at a rapid pace. This has led to swelling of the glacier lakes and increasing risks to the fragile mountain ecosystem.

In Bhutan, 677 glaciers and 2,674 glacial lakes were identified. Of the total lakes, 24 were considered potentially dangerous (Mool et al. 2001). Over the past two centuries, we have experienced more than 20 glacial lake outburst floods (GLOF).

Four outburst cases were reported in the last forty years (UNDP 2013; Seth 2015). Significant GLOFs occurred in 1957, 1960, 1968, and 1994, devastating lives and property downstream (Komori 2008; SNC 2011; UNDP 2013; Sangam et al. 2015).

The threat of GLOF still looms large in the Himalaya. Bhutan has been acutely aware of its vulnerabilities due to climate change and frequent seismic activities. One of the recent GLOF events in the region was the outburst of Lemthang Tsho (lake) on July 28, 2015, and the breaching of subsidiary lake II of Thorthormi Lake on June 20, 2019.

Asian Development Bank highlighted that the glaciers of Bhutan, which covered about 10 percent of the total surface area in the 1980s, are an important renewable source of rivers in the country.

There are four major lakes located in Lunana namely-Thorthomi, Raphstreng, Luggye, and Baytsho. Thorthomi and Raphstreng are two of the 25 glacial lakes in Bhutan that pose serious GLOF risks. Pho Chhu sub-basin is the most vulnerable valley in terms of GLOFs (NCHM 2019).

The past records heavy damages on properties, livestock, and settlement because of GLOF incidents. The 2008 UN reported that Himalayan glaciers would melt within 25 years. In 2009, the rate of glacial melt in Bhutan was three times the world average.

Over the previous three decades, regional temperatures had risen by 2.7 °C (4.86 °F). According to the US geological survey report, 66 glaciers have decreased by 8.1 percent in the last 30 years in the country.

The Thorthormi glacial lake is considered the country’s likeliest climate-induced disaster. The lake, perched at the height of more than 4,400 metres, is swelling because of melting ice and is in danger of bursting its wall (www.downtoearth.org.in).

There are other external factors like earthquakes, avalanches, and falling of rocks, which have a triggering effect besides glacier retreat alone.

It was observed that Thorthormi is not a fully formed lake. It’s under the forming stage. Small ponds of melted glaciers are converging into larger lakes gradually. Just below Thorthormi, divided by a large moraine wall, lies the Raphstreng Lake.

It is evident from the NASA Earth Observatory image by Robert Simmon, 2009, that the moraine wall, which divides Thorthormi and Raphstreng, has a vast ice body at 80 meters depth. Scientists have raised concerns over the structural strength and stability of the moraine dam.

Studies confirm that Thorthormi Lake and other ponds in the Thorthormi glacier are expanding. The landmass is said to be shrinking by the year. Recent satellite images show the unsteady moraine dam is receding at an alarming 30 to 35 meters every year (www.downtoearth.org.in).

The moraine ridge will not hold forever, and that Thorthormi will spill over into Raphstreng Lake one day. The convergence of the two lakes could trigger a major GLOF (www.bbs.bt). If this happens, the water from Thorthormi would spill over to Rapstreng and both lakes might burst.

In the worst-case scenario, the convergence of Thorthormi and Raphstreng would cause severe floods that would affect regions in Punakha. The GLOF is expected to be three times more than the 1994 GLOF, according to a report from the third pole.

It would threaten communities of Lunana, Punakha-Wangdue district, and others in the downstream. The majority of Bhutan’s population and infrastructure are concentrated in the broad river valley and the climate-induced GLOFs would cause significant human and economic devastation.

The World Wildlife Fund (WWF) says half of the fertile land in Punakha and Wangdue valley will be submerged underwater. Punakha Dzong and much of Khuruthang could be submerged too.

The melting of ice at Thorthormi Lake caused an increase in the water level by almost two meters (www.drukgreen.bt). This incidence has prompted the government to issue a nationwide flood advisory last year.

The research further indicated that any significant disturbance on Thorthormi Lake could result in a GLOF, potentially with massive cost to life, property, and infrastructure.

Currently, the moraine dam has sufficient mass to withstand the hydrostatic (water) pressure from Thorthormi Lake. However, the local hydrologist raised concern that if the melting continues due to a rise in temperature, the moraine will not be able to hold.

If the two lakes combine and cause a GLOF, it will travel much faster this time because the river channels have already been cleared of debris and other hindrances by the 1994 flood.

One of the worst situations for Bhutan is a combination of a heavy rainstorm and GLOF happening at the same time. This could also have serious implications across the border downstream in India.

The countries in the region will have to rethink both disaster preparedness as well as infrastructure development (www.thethirdpole.net).

Climate change as a global concern is already impacting millions of people all over the world, making lives more vulnerable. The hardest hit in the world is the people living in developing countries like Bhutan.

A significant portion of the country’s revenue is derived from hydropower that involves considerable investments and requires sustainable water resources. The GLOF poses a direct threat to the economy since Bhutan’s core revenue rests on hydropower. The revenue from hydropower export to India constitutes 40% of the country’s revenue and it is expected to increase to 60%.

Two of the most significant hydropower projects in the country, the 1,200 MW Punatsangchu-I and 1,020 MW Punatsangchu-II, built downstream the Thorthormi Lake, will be in grave danger, and the biodiversity in the region would be affected.

What is more worrying is that the government has prioritized the construction of the 2,560 MW Sankosh hydropower project along with the same river system (www.thethirdpole.net).

GLOFs also possess risk on crucial development sectors like agriculture and forests in the Hindu Kush Himalayas, according to The International Centre for Integrated Mountain Development.

Agriculture in Bhutan provides livelihoods and employment to more than 75% of the population. The majority of the people practice subsistence farming on small marginal lands holdings. These are extremely vulnerable to flood impacts.

According to National Geographic, the Himalayan Mountains is home to the third-largest deposit of ice and snow in the world after Antarctica and the Arctic. It was warned that the Himalayan region could be facing an epic disaster between extreme heat waves and reduced water flows from the Himalayas.

Today there is a need for a societal awakening and to spend a significant part of the economy to avoid the catastrophic risks we are facing.

The 1994 GLOF was the catalyst for the need to establish an early warning system (EWS) giving downstream inhabitants time to evacuate (www.hydromet.gov.bt).

The Flood Warning System in Lunana is a crucial part of GLOF risk mitigation efforts. Early warning sirens have been set up and safety evacuation zones identified along the Punatshangchu and Pho Chhu basin.

The first automatic GLOF Early Warning System was operational since September 2011. The early warning systems are only to help us minimize the damage to lives and property.

Artificially draining the lake is one method of reducing risk. Preparing hazard zone maps of the downstream region to study the impact of the flood and several efforts have been undertaken to mitigate GLOF risks.

A three-year project to lower the Raphstreng lake water level by four meters was completed in 1998. A similar project was carried from 2008 and 2011 at the Thorthormi that saw 17 million cubic meters of water drained out from the lake.

With the risk becoming severe daily, the government is now looking to step up monitoring of temperature in the Thorthormi area by installing more sensors.

Without required measures in place, the lake outburst would have far-reaching impacts on the settlements, historical monuments, and hydropower, the most. Therefore, we need to be more sensitive to GLOF risks.

Having said that, in my capacity as a water resources engineer and decision-maker in the Parliament, I have made a site inspection to Raphstreng and Thorthomi Lake during the Constituency visit in October 2019 to observe the ground reality.

Despite my limited knowledge of climate change and its related impacts, it is evident that the GLOF is real, it is going to happen eventually and we should always be vigilant, as per my observations at the site.

Therefore, reducing climate change-induced risks and vulnerabilities from glacial lake outburst floods should be our priority and address the adverse impacts of climate change.

Studies revealed that there is a need for proper risk management practices, which starts from the identification of critical glacial lakes and to prioritize in-depth investigation.

As a long-term adaptation, Bhutan should prioritize water resource management, diversification of energy, climate proofing of hydropower and infrastructure, agriculture diversification, and awareness, among other things. Advocacy to cope with health risks, enhancing preparedness, and understanding of GLOFs triggered by climate change should be focused.

The Impact of Bhutan’s impending climate disaster in the future will be far more significant unless the government prioritizes the above-mentioned disaster mitigation efforts.

 

Disclaimer: Views expressed are those of the author’s own unless cited and concerns shared as the responsible people’s representative.


Revamping the TVET system in Bhutan

Technical and Vocational Education and Training (TVET) and skill development pose a serious challenge, particularly in countries with rapidly evolving labor markets (ADB 2009).

Recognizing the importance of Technical and Vocational Education and Training (TVET) in the overall socio-economic development process, the Royal Government of Bhutan had introduced the TVET system, right from the mid-1960s in the country.

Despite considerable investments made in the TVET sector over the past decades, it still faces significant challenges in terms of access, relevance and quality of skills in the wake of a rapid socio-economic transformation of the country.

The TVET is still a less preferred option for most youth in general while at the same time, TVET graduates continue to face difficulty in upgrading their educational qualification and career advancement. These factors have further aggravated the problem of the weak TVET system.

The National Council during the deliberation on employment policies, programs and strategies in its 16th Session had highlighted the need to conduct a comprehensive diagnostic study on the current TVET system. However, since the Ministry of Labour and Human Resources was in the process of developing a TVET Blueprint, the review work was shelved temporarily.

The issue on the need to review the TVET system in the country surfaced once again during the 3rd National Council’s retreat held at Paro in July 2018. A 5-member Special Committee for TVET was constituted to conduct the review.

The Special Committee conducted a series of one-on-one meetings with stakeholders and referred numerous documents such as TVET policy, reports, plan documents, TVET sector assessment reports, TVET Blueprint, etc.

The Committee submitted the Interim Report to the House during the 22nd Session of the National Council. The Final Report was submitted during the 23rd Session of the National Council where the House had an extensive deliberation on the report. 

Following are the key highlights of the report:

Currently, there are 797 trainees undergoing training in eight institutes including two Institutes for Zorig Chusum (IZC). The minimum entry qualification for the courses offered in Technical Training Institutes and Institute for Zorig Chusum is class X certificate holders. Of the total 153 trainees, 111 have diploma qualifications, 32 have a degree qualification and 10 trainers with a national certificate. 

Although the Bhutan Vocational Qualification Framework (BVQF) has been established to enhance the quality of vocational skills and to provide definitive career pathways for the vocational trade practitioners, a considerable gap remains in the effective implementation of the system. 

The Institutional linkages between the Vocational Training Institutes and the Industries are weak. 

The officials providing TVET support services in the Ministry are often bogged down with bureaucratic works that could partially be blamed for not being able to provide focused and timely professional TVET services, particularly in the fields of research & development, curriculum review & development, and professional development for instructors/trainers. Moreover, the civil service system’s strong emphasis on educational qualifications has created limited opportunity for most of the TVET instructors in terms of their career progression in the civil service. This has inadvertently affected their morale negatively.

Despite the increased intake capacity in TVET, the youth opting for TVET courses are under-subscribed. There is also a weak linkage between the TVET Institutes and Industries as well as limited collaboration/affiliation with the institutes overseas. The lack of adequate financial resources is one of the main factors confronting this area.

After extensive deliberations on the findings of the Committee’s review report, the National Council recommended the following to the Government:

  • To establish a TVET Council with members representing relevant sectors & TVET experts, and a TVET Sector Skills Council. 
  • To develop TVET HR Policy with a dedicated HRD budget for the professional development of instructors, including the provisions for recruiting experts with specialized expertise in the TVET sector.
  • To diversify areas of training programs and enrich the current curriculum that will impart soft skills. 
  • To strengthen industrial linkages so that it provides better employment opportunities for the TVET graduates as well as to ensure the relevancy of skills training to the labour market.
  • To provide adequate budgetary support to the TVET sector.

The Government of the day supported the yearlong TVET policy review carried out by the National Council and gave light to the Council’s recommendations.

Transformation of the Technical and Vocational Education and Training (TVET) should be the primary focus of the labour ministry, and the rest should follow, Prime Minister Dr. Lotay Tshering said at the review of the agency’s annual performance agreement on August 5, 2019.

To develop and revamp the image of Technical and Vocational Education and Training (TVET) in the country, a TVET Interim Office was established in Thimphu on March 17, 2020. 

The team comprising of five members will officially work towards the formation of an autonomous agency related to TVET. Leading the team as the Chief Executive Officer is Kinga Tshering, former Parliament member, who graduated from Harvard Kennedy School in recent years for the TVET Reform Initiative.

The team will have to report to the Prime Minister’s Office during the transition period until it takes off as an independent organization.

The Government pursued TVET reforms, since last year, following the Council’s recommendations. It had two expert groups working on the new curriculum for skills and competency relevant to the 21st century, and ensuring the governance structure of the revised system.

The team led by the new CEO presented follow up on the Councils Review Report on the TVET and held a brainstorming session on TVET Reforms on April 16, 2020.

Under the dynamic leadership of the newly appointed CEO, we are hopeful that the TVET system will grow to a greater height and we are proud to be part of the reform and to be working towards a common goal of the nation.

If Education is the key to Economic Development then TVET is the master Key to Sustainable Development. ~Dr. Prof. Shyamal Majumdar. 


Looming economy uncertainty with COVID-19 outbreak but are we prepared?

Looming economy uncertainty with COVID-19 outbreak, but are we prepared for the Worst Case Scenario?

 

According to a Bloomberg report by Cecile Daurat, the global economy has started to feel the strain of China’s viral outbreak- and the potential $160 billion hit in lost growth may be on the way.

The COVID-19 outbreak presents the global economy with its greatest danger since the 2008 financial crisis that was considered the most significant economic downturn since the Great Depression, according to the latest Interim Economic Outlook report from the Organisation for Economic Co-operation and Development (OECD).

The outbreak did not spare the isolated Himalayan kingdom of Bhutan, and it reported the first Coronavirus case after a US tourist tested positive on March 6, 2020.

Although, Bhutan’s GDP is expected to grow by 5.7% in 2019 and 6.0% in 2020 (ADB, 2019) the economic growth this fiscal year may record at the weakest pace due to the global outbreak of pandemic COVID-19.

According to the Royal Monetary Authority’s Annual Report 2019, domestic economic growth slumped to four year low of 3% in 2018 from 4.63% in 2017, mainly due to successive decline in hydroelectricity power production and a significant fall in prices of both domestic and imported goods.

Economic growth has not improved despite the Government going slow with the investment in hydropower projects. The dependency on hydropower has weakened the private sector and made the overall economy vulnerable.

Since 2018, the Government has started to invest heavily in education. Despite the laudable reform, jobs available remain vacant while educated youth remain unemployed.

It is evident from the RMA’s Annual Report 2019 that despite the increasing working-age population, the labour force participation rate remains more or less constant. In 2018, a total of 185,694 potential workers stayed out of the labour force, mainly students (43%), attending family duties (28%) and old age (15%). The total labour force as of 2018 is 310,856.

Moreover, Bhutan Statistical Bureau records the unemployment rate in 2018 at 3.4% and youth (15-24 years) unemployment rate at 15.7%.

The external imbalance continues to reflect weak underlying economic fundamentals of high dependency on imports (including a large expatriate labour force), grant and aid-driven investment, and high stock of external debt.

The current account deficit deteriorated to 23.7% of GDP in FY 2018/19 from the previous year (19.5%). The widening deficit was contributed by an increase in trade imbalance, net service payments, followed by a decline in net primary and secondary income receipts (RMA, 2019).

Research shows that external borrowing continues to be the key financing source of development activities. The country’s debt has increased over the years. The share of external debt to aggregate output slightly increased to 112.4% in FY 2018/19 from 110% in the FY 2017/18.

In absolute terms, the total outstanding external debt recorded as of June 2019 stood at USD 2.73 billion (~Nu. 191.10 billion), an increase of 3.3% from the previous year. It was mainly contributed by the rise in hydropower loan and convertible currency loans from multilateral institutions. The 1200 Megawatt Punatshangchu Hydroelectric Project I commission was pushed to 2024 due to geographical surprises. It escalated the initial project cost of Nu 35 billion to Nu 93.7 billion (as of 2019) which is almost three folds.

As per the Pay Commission’s recommendations 2019, the annual implication of the pay commission’s pay hike is Nu 4.238 billion a year and 17.913 billion in the next four years. But, with the commencement of the Pay Revision Act of Bhutan 2019, the financial implication far supersedes the estimated value. It was included in the outlay of the 12th FYP, and it is to be financed by the domestic revenue. The significant sources of financing would consist of revenue from the commission of the 720 MW Mangdechu Hydropower Project.

As per the Public Accounts Committee’s Report, the Government still has a total unresolved irregularities balance of Nu. 1.037 billion. At the fiscal level, it represents about 2% of the total outlay indicating opportunity cost to the economy. Balance unresolved irregularities from the Annual Audit Report 2010-2017 are Nu. 1.031 billion as of November 2019 and the unresolved balance of Nu. 198.118 million pertaining only to MHPA for non-levy of liquidated damages for non-completion of construction works for AAR 2015.

The revenue loss to the Government due to new tax exemptions is Nu. 826.03 million. The Government’s additional revenue from GST at the standard rate of 7% (annually) with limited exceptions is 3.0 billion a year, but it will be implemented only from July 1, 2021, which violates Section 46B of the Public Finance (Amendment) Act 2014.

The Government’s proposed introduction of Sustainable Development Fees on regional tourists is expected to earn Nu. 933.56 million. However, due to the recent outbreak of the Global epidemic Coronavirus (COVID-19), the revenue generation through tax enhancement is likely to be lower than the anticipated amount.

As per the Bhutan Tourism Monitor (BTM) 2018 published by the Tourism Council of Bhutan, the tourism industry in the country continued to grow in 2018 contributing significantly towards socio-economic development through revenue and foreign currency generation and employment creation, amongst others.

A total of 274,097 foreigners visited Bhutan in 2018, which is an increase of 7.61% over 2017. International leisure arrivals grew by 1.76% to 63,367 over 2017 while visitors from the regional market grew by 10.37%.

There are a total of 271 TCB certified tourist accommodation service providers in the country comprising of 136-star hotels and 1,495 Village Home Stays (VHS). There are over 2,300 tour operators and over 2,400 guides and drivers catering to the needs of the visitors in the country today.

Bhutan Development Report 2019, published by the World Bank Group indicated that the tourism sector generates more than US$280 million (Nu. 19.6 billion) annually in visitor spending and accounts for more than 20% of non-hydro exports.

Taking these points into account and as far as political sensitivity and soft diplomacy are concerned, I am convinced that the Government has made the right decision by not imposing a ban on tourists’ entry until March 6, 2020, despite massive public outcry on social media.

However, right after the confirmation of the first COVID-19 case, the Government imposed two weeks restriction on all incoming tourists, to enable rigorous monitoring, source assessment of infection, mitigate the situation and for the safety of visiting tourists and public in general.

If the outbreak continues to spread, and the situation gets worse, the nation should be prepared for a possible economic recession and slump of economic growth in the FY 2020/2021.

The recent publication on the World Economic Forum indeed emphasise that a crucial role of Government is to protect the well-being of its people—most crucially and visibly during emergencies such as the recent outbreak of the Coronavirus. Governments have a role to play in softening the economic impact of Coronavirus and from spending on healthcare to business continuity plans.

As for now, let us follow the guidance of our farsighted King, have faith in our Triple-Gem, strictly prescribe to the health advice and render full support to the Government with solidarity. Being a bona fide citizen, in the spirit of One Nation One People, we would triumph over global pandemic COVID-19; collectively and stronger together.

“We must always stand united in spirit and purpose, and we must always be one nation with one common goal.” ~His Majesty the King Jigme Khesar Namgyel Wangchuk, 2007.

Way forward:

  • Government should Prepare a massive Economic Stimulus Package to protect the economy from COVID-19 impact
  • Government should Re-prioritise the 12th Five Year Plan if necessary
  • Interim measures through Monetary and Fiscal Policy such as Tax Holiday
  • Food Corporation of Bhutan Limited should ensure food security for the nation at all times as per their mandate
  • RMA to ensure that the international reserves remain at a comfortable level, sufficient to finance 13 months of merchandise imports as per the Article 14 (7) of the Constitution. However, reserve utilisation should be the Government’s last option
  • We should support the Government’s activities towards COVID-19 preparedness and response by supporting fundraising and through other voluntary contributions.

 

Disclaimer: The views and opinions expressed in this article are those of the author based on existing information and literature review and do not necessarily reflect the position of National Council of Bhutan. 


National Council’s role on Tourism Levy Exemption explained

Introduction

The National Assembly had proposed five more Dzongkhags in the list to exempt payment of tourism levy taking the number to 11 and forwarded it to the National Council. The House of Review added four more dzongkhags making it to fifteen dzongkhags. This move surprised the general public, media, and including MPs from NA. But, we have learned enough lessons from past experiences and adopted the smart move this time. Here in this article, I will briefly explain the beginning from 2017, how deliberation happened in the National Assembly and National Council.

 

Tourism Levy Exemption Bill of Bhutan 2017

In 2017, when the former Finance Minister introduced the Tourism Levy Exemption Bill in the National Council, he said that the purpose of the Bill is mainly to exempt the existing royalty of USD 65 for international tourists visiting six eastern dzongkhags. The main objectives of the Bill were to ensure balanced regional development; provide tourism benefits the country as a whole, and improve the tourism business in the country. To achieve this, he said that the proposed Bill would exempt the levy for three years on a trial basis for international tourists visiting the eastern region.

As per the 20th session resolution of the National Council, the House comprehensively deliberated on the Tourism Levy Exemption Bill of Bhutan 2017 on 2/12/2017 and resolved to reject the Bill with six objections. In the 13th sitting of the National Council, the members voted against the Tourism Levy Exemption Bill of Bhutan 2017 (Money Bill). Of the 20 members present, 5 members voted “Yes”, 12 members voted “No” and 3 abstained. The Bill was then forwarded to the National Assembly on the grounds of rejecting the Money Bill for the re-deliberation.

However, the National Assembly on 4th December 2017, rejected the National Council’s resolution that asked the Government to scrap the Tourism Levy Exemption Bill 2017, which waives royalty of USD 65 in a day per tourist visiting eastern dzongkhags.

NA endorsed the Bill with the show of hands, 30 MPs, mostly from the ruling party, voted to reject NC’s recommendations.

Opposition members spoke in support of the NC’s objections although they voted in favour of the Bill with some reservations when the Assembly passed the Bill.

The exemptions in the past has never benefited the Dzongkhags and has achieved no visible increase in tourists flow in the Eastern Circuit.

 

National Assembly

On 16th January, eight Bills tabled for first and second readings in the National Assembly, and the six Bills were declared as Money Bills including Tourism Levy Exemption (Amendment) Bill of Bhutan 2020.

The Chairperson of the Environment and Climate Change Committee of National Assembly presented the Committee’s recommendation on Tourism Levy and Exemption Bill of Bhutan 2020 as a new Bill on 3rd February during the Third Reading of the Bill in the Assembly with 6 Chapters and 18 New Sections.

The National Assembly of Bhutan adopted Tourism Levy and Exemption Bill of Bhutan 2020 on 4th February with 43 Yes votes and 1 No vote out of 44 members present at the voting.

As per their adoption, a leisure tourist visiting selected Dzongkhags such as Lhuntse, Mongar, Trashigang, TrashiYangtse, Pemagatshel, Samdrup Jongkhar, Tsirang, Dagana, Zhemgang, Trongsa and Sarpang were exempted from payment of applicable tourism levy for the duration of their stay. However, the tourism levy exemption shall expire by 31st December 2024.

 

National Council

The National Council received the Tourism Levy and Exemption Bill of Bhutan 2020 (New) as Money Bill with the official letter on 4th February 2020 (Ref. NAS/SG-6/2020/3034) for re-deliberation.

Hon’ble Finance Minister introduced the Tourism Levy Exemption (Amendment) Bill of Bhutan 2020 in the 16th Sitting of the NC on 5th February 2020.

Subsequently, the House deliberated on the Tourism Levy & Exemption Bill of Bhutan 2020 on 6th February 2020.

During the deliberation, Hon’ble Members expressed their support on the amendment in Section 7; Chapter 2, which stated, “A regional leisure tourist shall be liable to pay concessional tourism levy of Nu. 1200 per night halt”. Therefore, the House adopted the section. However, general concerns shared were related to the mushrooming of many hotels.

The House extensively deliberated on section (8), under chapter (2) wherein the National Assembly has amended the exemption from payment of applicable tourism levy for the duration of their stay by listing 11 Dzongkhags to attract tourists. Fourteen members shared their views on two main points: firstly, in keeping the provision, the list of the dzongkhags should be based on proper research and the second was to delete the exemption list from the Bill as it creates inequality within the country.

While the House adopted most of the amendments proposed by the National Assembly on the Bill, the House directed the Committee to review the disputed sections during the in-house deliberation considering the view of the members and to prepare the Bill for the final adoption.

 

Committee’s in-house deliberation

There has been a much-heated debate amongst the members concerning the Exemption list of the Dzongkhags.

After thorough deliberation, members proposed three possible options as follow:

Option 1: To remove 11 Exempted Dzongkhags proposed by National Assembly

Option 2: To add the most deserving dzongkhags only

Option 3: To keep 11 Dzongkhags as it is and recommended to add the most deserving dzongkhags

 

Views and Analysis

Option 1: Removing 11 Exempted Dzongkhags proposed by National Assembly seems impossible

Justification: 

This Bill was introduced and declared as Money Bill in the National Assembly as per Article 13 (2) of the Constitution of Bhutan and Section 46D of the Public Finance (Amendment) Act 2012.

The National Assembly of Bhutan adopted Tourism Levy and Exemption Bill of Bhutan 2020 on 4th February with 43 Yes votes and 1 No vote out of 44 Members present at the voting.

The Public Finance (Amendment) Act 2012, Section 46G and 46H permits National Council to make only recommendations on money or financial Bill.

From the past experiences, removing 11 Exempted Dzongkhags or Rejecting the entire Bill is not a solution.

Therefore, the National Council’s recommendation on the Money Bill, adopted by 43 Yes Votes (97.7%) did not make much difference. Even if the House recommended doing away with the exempted dzongkhags, the NA might have followed with their previous decision without much thoughtful choice and debate. Otherwise, they should not have added 11 dzongkhags in the exempted list.

In the first instance, the Government is not clear with their objective to introduce the Bill; whether to regulate the visiting tourists or to ensure balanced regional development. But one thing is clear that it has been deeply politicized going by the map pattern and dzongkhag selections. They have focused more on the Opposition’s constituency, where there is a major population. Surprisingly, the matured Opposition fails to play a constructive role and to provide checks and balances to the Government simply because their dzongkhags are listed in the exemption and they didn’t realize the politics behind. The nation’s expectations were from the longest-serving MPs and the Opposition, but to no avail and hope in despair.

The Opposition should execute their mandates as per Article 18 of the Constitution to play a constructive role, providing healthy and dignified Opposition to the Government and shall not allow party interests to prevail over the national interest.

 

Option 2: Members proposal to add the most deserving dzongkhags was also not possible

Justification: 

As per the Publication of the Tourism Council of Bhutan on Bhutan Tourism Monitor 2018, the tourist visits in Haa, Chhukha, and Gasa are 6615, 2971 and 675 respectively and Samtse with no tourist visit record at all.

The NA should have considered these Dzongkhags instead of dzongkhag like Trongsa with 5864 tourists visit if their intention was on the regional distribution of tourists over political interest.

The 11 dzongkhags (Exempted List) are represented by 26 Constituency and 26 MPs in the National Assembly. The probability of rejecting the 4 Dzongkhags proposed by the National Council member is very high.

 

Option 3: Keeping 11 Dzongkhags as it is and proposed to add the most deserving Dzongkhags considered being the best “BARGAINING CHIP.”

Justification: 

Based on the research and latest statistics, the House recommended adding 4 Dzongkhags (Haa, Chhukha, Samtse, and Gasa) in addition to the 11 Dzongkhags adopted by the National Assembly with 43 Yes votes.

With the introduction of SDF of Nu. 1200 per night on regional tourists, the Government estimated the revenue of Nu. 933.56 million per annum, which is intended to compensate for the revenue loss of Nu. 826.03 million from tax exemptions such as Income slab, 5% Sales Tax on telecom services, Corporate Income Tax from 30% to 25% and others.

National Council’s recommendation made the Government and National Assembly think twice before they pass their final judgment and reflect once again on their previous decisions.

They are left with only two options either to remove all dzongkhags or accept all 15 Dzongkhags. Because if they go by the previous decision and reject NC’s recommendations, they have a fear of public backlash, which they have learned enough lessons from the recent Zhemgang flagship case and their previous selection of dzongkhags was not done based on the comprehensive research but rather with political interests.

If they accept all 15 Dzongkhags, the whole purpose of levying the SDF (Sustainable Development Fee) would be defeated, and the estimated revenue generations of Nu. 933.56 million per annum may be forgone.

The Government knows very well, how difficult it is to propose Tourism Levy, especially when the neighbouring country is concerned. In November 2019, Foreign minister Dr. Tandi Dorji visited India at the invitation of India’s External Affairs Minister S Jaishankar (Ph.D.). Lyonpo briefed the Indian foreign minister about Bhutan’s plans to implement a revised tourism policy, particularly regarding regional tourism, and sought the Government of India’s understanding and support in its implementation. It was learned that tourism levy was negotiated at 35% of USD 65 per night halt, but it was reduced to 25% due to pressure from the business communities within the country.

Therefore, the Government has no choice but to decide to remove all the Dzongkhags from the exemption list. The whole purpose of introducing the SDF is to give all tourists the best value for money irrespective of regional or international and regulate the flow of regional tourists.

 

Conclusion

In the 20th Session, the National Council raised concerns regarding the need to regulate the flow of regional tourists due to exponential growth in numbers that could exceed Bhutan’s ecological, cultural and infrastructural carrying capacity.

As far as the National Council is concerned, our conscious is very clear that we do not support to exempt any dzongkhags under the tourism levy SDF. But our smart approach worked for NA to overturns its decision on SDF.

On 19th February 2020, the House that once adopted the Bill with 43 Yes votes decides not to exempt any dzongkhag from the Nu 1,200 SDF. We appreciate the NA for reflecting on their previous decision and taking a complete U-turn this time.

Following a re-deliberation of the Bill, NA members felt that exemption of tourism levy would not help to promote tourism in the exempted dzongkhags. Prime Minister Dr. Lotay Tshering who in the earlier Session voted for exempting 11 dzongkhags supported the argument. He said that instead of creating disharmony due to such exemptions, SDF should be levied to all dzongkhags.

Therefore, the NA MPs who think that NC hasn’t done our task correctly should thank NC for letting you reflect on your previous decision. The Bill that has been adopted with 43 Yes votes previously, when finally making U-turn indicates that there is no moral and lack of research works on their part.

NA endorsed Tourism Levy Bill of Bhutan 2020 with 33 Yes votes. The decreasing votes from 43 to 33 Yes votes speak for itself.

 

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official position of the affiliated organization. 


Twist of fate for Zhemgang’s Flagship Program

The celebration of feathered friends at Tingtibi in Zhemgang highlighted the potential of the place is one of the best birding sites in the region during Bhutan Bird Festival held from 11-13th November 2019. Otherwise, the town slept throughout the year.

Zhemgang’s dream of exploring their richness in Eco-tourism could have received an enormous boost if the government had not removed the dzongkhag’s tourism flagship programme in June this year.

The decision to remove the flagship programme came under the scrutiny of the National Council and opposition party; rightful institutions under the sacred constitution to maintain checks and balance of the government.

A confused discourse took place on social media platforms questioning government’s intent and bias while replacing Zhemgang dzongkhag with Sarpang for the flagship programme.

The Government was adamant about its decision and disregarded the resolution passed by the parliament.

The decision of its kind based on the past precedent, as told by the Prime Minister was not healthy because we cannot afford to continue with flaws of the past to make the decision appear politically right. Everyone must uphold the constitution and its prestigious institutions.

The change could have been for better or worse reasons, but the removal of policy that was passed by the parliament undermined the wisdom of essential institutions: national council and the assembly.

If the Cabinet was to make the final decision, redoing all works done by the elected representatives, our role of being people’s representative is at stake.

The government should be reminded that the Parliament, which consists of the Druk Gyalpo (His Majesty the King of Bhutan), the National Council and the National Assembly, shall ensure Government safeguards the interest of the nation and fulfils the aspirations of the people through public review of policies and issues, Bills and other legislation, and scrutiny of State functions.

All said and done, and now it seems that the Government is trying hard to reconcile and heal the political wound they have created with their shortsighted decision.

The three days festival may have contributed to the local economy, but not in terms of the development in the district; significant infrastructure development required to trap tourism potential of the region, which the dzongkhag had been planning for a long time to attract increased numbers of tourists.

As per the Bhutan Poverty Analysis 2017, the poverty rate in Zhemgang stands at 25 per cent, one of the highest poverty rates in the country while Sarpang fares better with 12 per cent. On contrary budget approved for Zhemgang and Sarpang were 701.266 M and 741.903 M respectively in the Financial Year 2019-2020.

When Zhemgang was excluded from the focus group of tourism flagship programme, it became controversial. Some saw the move as being politically motivated.

But hope for Zhemgang still alive with a twist in the tourism flagship program. As per the Tourism Council of Bhutan, the plan would be implemented as a circuit-based programme instead of focused dzongkhag approach in its flagship programme. All dzongkhags will get equal opportunities or priorities depending upon their capacity and feasibility. As per TCB, every dzongkhag will have one or two projects in consultation with the local government and the private sector.

TCB plans to brand four dzongkhags—Zhemgang, Gasa, Lhuentse, and Sarpang in the current fiscal year. The promotion and branding of other dzongkhags will follow.

Although Zhemgang is considered as a paradise for botanists and bird watchers, the dzongkhag has received only 1,263 international tourists (332 arrival and 931 bed nights), which is 0.14 per cent of tourist arrival in the country. Considering the dzongkhag’s rich biodiversity and the unique attraction, the number of tourist arrival was a concern, and the dzongkhag does not have star-rated hotels and has only four village home-stays.

Zhemgang is most suitable for bird watching, river rafting and the government allocated Nu. 27 million to support the recent bird festival and to develop birding infrastructure.

The captive Siberian Rubythroat (a new bird species) set free by the Honorable Prime Minster during the festival may breathe fresh air of Zhemgang, and rapid growth of Eco-tourism in the region is very much anticipated.

The decisions we take will have a long-term impact, for better or for worse, on our country and our people. I wish the Government of the day would make their decision wisely as per the law and by upholding the sacred constitution of Bhutan.

 

Disclaimer: The views and opinions expressed in this article are those of the author based on literature review and do not necessarily reflect the position of National Council of Bhutan.


Legalization of Paris Polyphylla

The Natural Resource and Environment Committee and National Council members convened a consultation meeting with the Ministry of Agriculture and Forests on 12th September and Legal status of Paris Polyphylla was one of the issues discussed amongst others. In this article, I will briefly share the summary of the comprehensive presentations made by MoAF officials pertaining to the legal status and the way forward.

What is Paris Polyphylla?

Paris polyphylla is an Asian species of plants native to China, Taiwan, the Indian Subcontinent, and Indochina. It produces spider-like flowers that throw out long, thread-like, yellowish green petals throughout most of the warm summer months and into the autumn. In the fall, the flowers are followed by small, scarlet berries. It is a perennial, which slowly spreads, and survives in leafy, moist soil in either complete or partial shade. This flowering plant usually grows up to 90 cm (3 ft) high and spreads out about 30 cm (1 ft) wide. Its leaves grow in a single whorl below a flower growing in two whorls.

In Bhutan, it grows at an altitude up to 3300 meters and grows well in moist and humus-rich soil, under the forest canopy of full shade-partial shade. Rhizome is made up of modified stems of plants that usually grow underground, contains roots, and shoots from their nodes, and it grows in a creeping manner. Paris Polyphylla is known as Dou Sethochem or Dochu Kewa in Dzongkha, Thoksampa in sharchop kha and Satuwa in lhotsham kha.

The Paris polyphylla collection has been legalized with collection permit issued by the Ministry of Agriculture and Forests based on the Forest & Nature Conservation Act 1995. The collection can be done through management groups or individual basis as interim measure instructed by MoAF.

Rhizomes are allowed for collection from October to November after the fruits are fully ripened. Flowers during April & May and the collection of a plant during these months would seriously affect the sustainability of it in the wild.

With the legalization of the collection of the Paris Polyphylla, MoAF encountered some constraints such as the formation of the management group is not possible as it grows sporadically over a large area, Illegal collection by outsiders makes the resources unsustainable, Untimely collection of rhizome (before maturity) in this manner is likely to pose threat to its sustainability in the wild and It takes about 6 years to fully mature rhizome (3 layers of branch whorl).

The forest department issued an office order that anyone found collecting the roots of the plants without a permit or outside the harvesting season would be penalized.

Fines & compensation are as per the Forest and Nature Conservation Rules and Regulations 2017, Section 417- the commercial taking of restricted non-wood forest products. A fine minimum of Nu 5,000 with possible extension up to Nu 50,000 depending on the degree of offense and compensation at a fair market value of the forest produce involved will be imposed. The market value was fixed at Nu 3,000 a kilogram for dry and Nu 1,000 a kilogram for fresh roots. The fines and penalties were standardized for illegal collection to discourage illegal practices.

As part of the long-term sustainable harvest, the MoAF has started domestication Trial at Bjemina – where plants growing well but rhizome formation has not taken place and Deptsang, Shingkharlauri – nursery sells plants and plantation doing well. They have also done the upscaling of domestication and enterprise set up for product development and diversification.

Paris Polyphylla has been used in Traditional Chinese Medicines for years. The plant can be used as a pain reliever, antiphlogistic (removing heat), antispasmodic, diphtheria, for fever, headache, wounds, and burns, among others.

There are few field Manual or Guidelines for the sustainable production and management, guidance and instructions for nursery development, cultivation and domestication of Paris polyphylla such as Guidelines for resource assessment and management of Dou (2012) and A field manual on Nursery management and cultivation of Dou (2012).