Review 2011

Bhutan: growing democratisation and the China factor

A synoptic overview of Bhutan reveals that ties with India continue to be characterized by regular high level political interactions, which have been instrumental in strengthening relations at the governmental level. Writes Medha Bisht

Dec 30, 2011


By Medha Bisht

222532.jpgA synoptic overview of Bhutan reveals that ties with India continue to be characterized by regular high level political interactions, which have been instrumental in strengthening relations at the governmental level. Since Bhutan made a transition to democracy in 2008, both countries have also paced up institutional interaction.While the fifth King of Bhutan, Khesar Namgyal Wangchuk, and the Queen visited India after their wedding in October, Indian visits have included those by External Affairs Minister S M Krishna and Foreign Secretary Ranjan Mathai.

A grant of Rs 15 crores (USD 3 million) was made and was directed to areas related to education development and preservation of environmental and cultural heritage.

 On November 24, 2011, a MoU between the National Assembly and the   Lok Sabha was signed by Meira Kumar and Jigme Tshultim.  The purpose was to provide a framework for enhanced partnership, cooperation and continuous interaction between the National Assembly of Bhutan and Lok Sabha of India. Continuing the spirit of cooperation, Bhutanese premier Jigmi Y Thinley delivered the fourth Professor Hiren Mukerjee Memorial Lecture before the Indian Parliament on December 21, 2011. The title of the lecture was "Gross National Happiness (GNH): A holistic paradigm for sustainable well-being."

An important political development in Bhutan was the successful completion of two rounds of local government elections in 2011, an issue which was being debated for the last two years. An important pattern which emerged was the conspicuous visibility of vacant positions, an issue attributed to the casting of negative votes. While women candidates were under represented, total voter turnout during the first and second round of elections was 56 % and 27 % respectively.

On the economic front, Bhutan has maintained a growth rate, exceeding 6 %. According to National Statistic Bureau of Bhutan, Bhutanese economy will see an annual growth rate of 9% from 2011 to 2019. Reasons for this growth rate are sourced to the generation of hydro electric power. While meetings at the official level have been taking place on periodic basis, with reassuring claims on the promising returns/ prospects of completing the 10,000 MW deal signed by both the countries in 2009;  at the implementation level there have been some glitches. For instance, a major issue impinging on hydel cooperation is the 51 per cent equity, which Indian companies plan to hold in joint venture projects. Various reports in Bhutanese media caution that this would be against the principles of the hydropower policy, which rejects majority ownership to a foreign entity. Also, with 51 % ownership and management control to India, there is some anxiety in Bhutan about Indian power companies dominating the Bhutanese market.

Economic relations can strongly influence diplomatic relations. As hydel power cooperation is an important area in Indo-Bhutan relations, India's role and impact as a development partner could take centre stage in democratic Bhutan in the years to come.

After hosting the sixteenth SAARC Summit, which thematically focused on climate change, Bhutan has also been expressing interest to engage in sub-regional initiatives. A "climate summit for Living Himalayas", was held at Thimpu on November 2011, where a framework on cooperation was signed by Bhutan, India, Bangladesh and Nepal to undertake regional cooperative action on climate change.

Transit is another key issue for Bhutan. However, developments on this front are still evolving and depend a great deal on the conditions Bangladesh puts for facilitating trade with neighbouring countries. However, Bhutan for its part, got access to eleven more transit routes, in addition to existing sixteen to conduct trade with India.  Four routes which have been prioritized and will be used by Bhutan are: Upper Khogla in Bengal to Passakha, Birpara-Dalmori near Gomtu and Pugli, Bokajhuli in Assam to Samdrupjongkhar and Rangpani in Assam for Dungsam Cement Project.

While no formal diplomatic relations exist between Bhutan and China, China however has been silently contributing to Bhutan's modernisation process by exporting farming and telecommunication equipments. The fifth session of the National Assembly debate which took place on May 2010, noted,  that China has already vied for investing in projects relating to health and education services.

Decades ago, Bhutan due to its own security compulsions proactively moved south to engage India and chose to maintain cautious but cordial relations with China. In the last three decades the North Western sector of Bhutan (strategically important to India due to its proximity to the Siliguri corridor), has been an area of contention in Sino-Bhutan relations.  China has so far built six roads close to Bhutan's border towns in Bhutan's North and North West and since 2007, several unmanned posts have been dismantled by the Chinese soldiers.

While such incursions may be regarded as typical of Chinese behaviour to keep Bhutan on tenterhooks, it has been successful in generating a great deal of pressure on the incumbent government to solve the border dispute. While nineteen rounds of border talks have been held so far, both countries have decided on a joint field survey to harmonise the reference points and names of the disputed areas.

Formalising diplomatic relations with China will occupy an important place in Bhutan's foreign policy in the coming years. As public pressure builds up in the coming years to resolve the disputed boundary issue, the strategic weight of Bhutan would become more relevant in shaping the future contours of India-Bhutan bilateral relations.

(Medha Bisht is Associate Fellow, Institute for Defence Studies and Analyses (IDSA), New Dellhi. She can be contacted at

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