The national task force on the 21st Century Economic Roadmap for Bhutan is working on two main ambitious economic targets by 2030—a GDP of Nu 1 trillion and a high-income society as per the World Bank’s definition
The national task force on the 21st Century Economic Roadmap for Bhutan is working on two main ambitious economic targets by 2030—a GDP of Nu 1 trillion and a high-income society as per the World Bank’s definition.
The current GDP is estimated at Nu 192.353B (billion), which means that the GDP should grow by more than five folds in 10 years to meet the target. The task force, however, is looking for more realistic targets not only on the GDP but also on the per capita income.
The taskforce was formed before the country recorded its first Covid-19 case. In the wake of the pandemic, the government has lowered the GDP growth to 2 percent from around 6 percent for the current fiscal year.
As per the World Bank’s definition, the country should achieve a per capita income of USD 12,376 or more to be classified as a high-income society. The current per capita income is about USD 3,412 or Nu 250,000.
This means that the average individual income should increase by three and a half times in 10 years to achieve the target. In the local currency, the per capita income in 10 years should come to around Nu 900,000.
One of the task force members was of the opinion that the country’s current economic situations were far from being good enough for all Bhutanese to realise happiness. He added that the targets were a bit too high to achieve.
About 8.21 percent of the population lives under the poverty line, with less than USD 1 a day, as per the Bhutan Poverty Analysis Report, 2017.
The 21st Century Economic Roadmap was launched in January. However, the document is yet to take shape even in six months, and there is no picture of how the economic roadmap would look like.
The national taskforce on the economic roadmap held a bilateral consultation with the National Assembly’s economic and finance committee last week to exchange ideas on the vision document.
Chairperson of the taskforce, Kinga Tshering, said that the key goals would be to boost generation of income and employment.
Members of the economic and finance committee were of the view that the 21st-century economic roadmap should encompass the rest of the remaining 80 years of the 21st century.
Vice chairperson of the taskforce, Karma Phuntsho (PhD) said the task force was working within the optimum space provided by the Constitution. The task force members said that not only should new laws and regulations be enacted, some of the existing ones needed to be amended to create conducive environment for the private sector.
While committee members said that focusing on employment generation and job creation alone would make the economic roadmap a “narrow document”, the task force reasoned that a higher income would help people realise happiness.
A task force member said that the challenge was to construct a vision of an economy that would be equitable and resilient. He elaborated that the economy should not depend on handouts from the state but thrive on the strengths of innovation and the creativity of the people.
Drawing a framework for the creation of jobs that citizens actually want to take up is one of the challenges for the taskforce. The taskforce member said that the private sector should play a crucial in employment generation and GDP growth in the 21st century economy.
He said that up to 90 percent of investments and growth in the economies that the taskforce had studied were led by the private sector and that the government-driven growth was not sustainable.
But the question that the task force is looking into is on how the country can unleash the private sector’s potential. The taskforce is of the view that the government should facilitate private sector-led growth.
One of the challenges, the task force member said, was that there has been no clear political ideology, based on which economic models are normally designed in most countries.
Assuring broad-based political support for the economic roadmap and its implementation is one of the major focuses of the taskforce. The government has involved all stakeholders including representatives from all the political parties so that the vision becomes a national document.
The unpredictability of laws and regulations has been one of the major hindrances against private sector growth, which the economic roadmap is expected to address. Many in the private sector feel that bureaucratic hurdles are still a major issue although Bhutan stands at 89th position in the ease of doing business index among 190 countries.
“It’s (drafting of the economic roadmap) is a very big task,” a task force member remarked.
If the Civil Service Act can be amended by Parliament so that there can be a system of hire and fire and recruit experienced people form the market is being looked into by the taskforce.
The task force is also seeking suggestions on a recommendation it has received from some “expert groups” that the country legalises and commercialises cannabis. The issue will have to be considered by Parliament.
Prioritisation of special economic zones and the establishment of an economic development board are also being considered as part of the exercise. The task force is also studying the relevance of the five-year Plan.