An Autopsy of the Economic pledges

Through a post mortem of their manifestos, Business Bhutan takes a look on the economic pledges made by each political party for the upcoming general elections

Soon after the discussion on the manifestos and the subsequent presidential debate, it was clear that all five parties have placed bringing back the economy on track as one of their main pledges. There are similarities and differences in how different parties plan to do this. From blending service delivery and economic development to the concept of Sunomics, the political parties are spread across the country informing the people about their respective economic vision. Business Bhutan briefly looks at the economic pledges of the parties.

Bhutan Tendrel Party (BTP)

With a vision to create a vibrant and prosperous Bhutan, Bhutan Tendrel Party (BTP) recognizes every individual and household as the foundation of a robust national economy. In laymen terms, their principle is simple – if people are economically empowered, the nation’s economy will boost. However, the party has another tool to assist the people and subsequently the country – improved service delivery. The party believes that if service delivery and bureaucratic red-tapes are not removed, economic growth will be hampered. And this goes from people at the grassroots having to knock at the doors of several offices even to get a license for a small business firm to bringing foreign direct investment (FDI) into the country.

The party aims to constitute an Economic Advisory Council to advise the government on various aspects of the economy to achieve a high-income nation status by doubling GDP value to Nu 500 billion and Nu 1 trillion by 2029 and 2034 respectively. The party has identified the nation’s five jewels including hydropower, Tourism and others as the drivers of the economy.

On the poverty level, the party aims to reduce it by half towards the end of 2029 and increase average annual household income by seven-fold, from the existing Nu 406,134 to Nu 3 million by the end of 2029.

The party manifesto also includes managing balance of trade, public debt, and fiscal sustainability improving the financial sector, attracting foreign direct investments and simplifying taxation system, amongst others. Like other parties, BTP has also attached importance to the private sector.

Druk Nyamrup Tshogpa (DNT)

The party which has just seen the 12th plan through and fought the raging pandemic emphasizes on ‘continuity’ as its main agenda in the party manifesto for the upcoming elections. It stresses economic development through long-terms goals with short-term outlook to align with the government’s tenure of five years.

DNT envisions a developed Bhutan by 2030, with an economy of USD 5 billion by 2029 and USD 10 billion by 2034. Under the economic growth cluster, DNT aspires to create Bhutan into a high-income country driven by innovation and sustainability. “To achieve this goal, we will need to accelerate and drive economic growth. To stir growth, our plan is to enhance productivity, diversify production, and re-strengthen markets,” the party’s manifesto states.

Druk Phuensum Tshogpa (DPT)

Druk PhuensumTshogpa’s (DPT) theme “Economic Prosperity and Social Well-being” seeks to attain a comprehensive socio-economic development with ‘equity and justice’ for fostering prosperity, integrity, and harmony.

The party manifesto emphasizes on economic self-reliance and high-income status by 2035, developing a new National Export Strategy within the first six months, developing a comprehensive and coordinated National Investing Strategy, instituting Bhutan’s Economic Development Council and instituting of high-level Private Sector Development Committee within 100 days and Instituting a Private Sector Development Council.

On hydropower generation, the party manifesto underlines starting three new mega hydropower projects in collaboration with the Government of India. On the tourism front, DPT will amend the Tourism Act of 2022, review and revise the existing FDI policy and improve legislative and policy instruments to protect intellectual property rights to ensure businesses innovate and grow, amongst others. Fiscal policies are also included amidst the many pledges on economic prosperity, enhancing rural prosperity, national food security, livestock farming, improving road networks and monetary policy.

Druk Thuendrel Tshogpa (DTT)

All the while, Druk Thuendrel Tshogpa (DTT) has launched ‘Sunomics’, which literally translates to blending Buddhist capitalism with the spirit of GNH, as the party puts it. Most of all the party pledges are similar to each other. However, DTT pledges a 500MW ‘Sunshine Solar Project’ which will epitomize the philosophy of Sunomics.

In the banking and finance sector, DTT would set up additional banks, venture capital and private equity funds. It also pledges reviewing taxation policies on PIT, rural and urban properties. The party pledges to establish green channel for FDI over Nu 100 million, divest loss-making SoEs to raise at least Nu 10 billion, remove double taxation for holding companies, establish an Investment Trust Fund, a Mutual Fund and a Hedge Fund. DTT also promises to inject equity of Nu 2B into existing banks and financial institutions as government equity to support the growth and development of the CSI sector. This will lead to a derivative asset of Nu 7 billion.

It recommends that banks also explore other products based on trust, community groups, movable assets, tax and cash flow based receipts; initiate a conclusive study on the currency peg with INR, its impact on local inflation, production comparative advantage and overall trade balance.

People’s Democratic Party (PDP)

With the slogan ‘A Contract with Bhutan,’ People’s Democratic Party (PDP) pledge to rebuild economy and make it thrive for a developed Bhutan.’ The pledge includes economic goals and key initiatives, namely, increasing the GDP from USD 2.5 billion to an ambitious USD 5 billion (which includes the investments in hydropower in the next five years), amongst others.

The party’s economic development pledge also includes boosting private sector investment from 40% to a robust 60% in the next five years, increasing the contribution of manufacturing sector to GDP from 6% to a substantial 30%, increasing the number of tourist arrivals.

The party says that a high-powered and dynamic Economic Development Board (EDB) will be established to fast track the establishment of businesses and Foreign Direct Investments and the party shall promptly mobilize Nu 15 billion immediately upon assuming government leadership and utilize this stimulus fund to facilitate the achievement of the macro-economic goals. The party also have pledges related to hydropower.

The party also pledges to review the existing mining policy to attract investments for mineral resource optimization and provide equitable opportunities for the private sector, policy reforms to ease of doing business by undertaking initiatives such as reviving general conditions, access to foreign exchange, amongst others.

Sherab Dorji and Tashi Namgyal from Thimphu