GMC, the Dragon and the Tricolor

GMC, the Dragon and the Tricolor

Since embarking on the road towards planned economic development, India has been Bhutan’s core partner. The 1961 first five year plan (FYP) for Bhutan was funded entirely by the Indian government. So were others, including the first major hydro-power project, airport, roads and others. As Bhutan takes a giant step, the most ambitious economic plan in the form of the Gelephu Mindfulness City (GMC), what assistance or role can India play? How can Bhutan and India symbiotically benefit?

India has been actively involved in the development of Sarpang district, even before the GMC vision was unveiled by His Majesty the King. The construction of Sarpang Dzong over an area spanning 11 acres began in 2017, with Nu 1 billion funding support from the government of India (GoI). So was the Gyassung center at Taraythang. The GMC would now require massive investments for greater physical connectivity with India and other parts of the world through air, road and railway linkages.

The extension of the Gelephu international airport will be through Indian support. Similarly, the 57.5 km train connectivity from the Indian town of Kokhrajhar to Gelephu, is due for completion by 2026. The estimated fund is Nu 10 billion and would be fully supported by the Indian government. Indian companies and the government would want to capitalize on the benefits from a region they supported and would further support.

Apart from support in the form of funds, GMC, as it develops will require accelerated construction of infrastructure, especially roads, bridges and housing. Thousands of skilled and semi-skilled workers will be required. Though Bhutan has the pool of Dessups and other artisans, it is too little for a project that spans over 1000 sq km. Bhutan will need to depend on Indian workers. Some, who are currently working in Thimphu are already asking if they would be able to work at GMC, with the anticipation that the perks would be higher.

Similarly, though the construction company in Bhutan has grown extensively compared to the past, projects related to connectivity would see giant and experienced Indian and global construction companies coming in. Indian media has already named a company, though it has not been confirmed.

An article earlier by the South China Morning Post said that “Bhutan seeks India deals in US$15 billion hydropower push..” Cooperation in hydropower has been a cornerstone of the ties between the two countries with India importing from hydropower from Bhutan. The article also saw Druk Holding Investment’s Chief Executive Officer (CEO) Ujjwal Deep Dahal  saying that Bhutan is talking to a lot of strategic partners in India today, and looking forward to strategic credible international partners.  GMC will need immense energy and in this section too, India has a lot to benefit.

Though India is pushing for alternative and renewable sources of energy, hydropower has its benefits. It firstly provides grid stabilizing energies. Hydropower can be ramped up and down in a short time to address sudden demand fluctuations, unlike other sources such as wind and solar. Further, the main utility of hydro is to support wind and solar. Unlike hydro, wind power is harder to forecast and control, as it varies by local weather conditions. And the unavailability of solar at night exacerbates shortfalls in countries including India.

According to an analysis of Indian government data in September 2023, hydropower generation fell 6.2% during the eight months ended August in the sharpest decline since 2016. Its share of power output plunged to 9.2%, the lowest in at least 19 years. Additionally, despite much attention paid to the deployment of solar and wind, hydropower will remain important for a long time to come – making this an area of continued collaboration between Bhutan and strategic partners in India and beyond.

The other areas in energy that Bhutan is looking forward to are solar, geothermal and batteries. In this area too, credible Indian and international partners are important for Bhutan.

Though tucked between two huge economies, Bhutan has not been able to capitalize on the opportunities offered. Towards the South, the numbers of wealthy Indians have been growing every year. India’s billionaire population rose to 161 in 2022 from 145 in the previous year and is estimated to rise to 195 individuals by 2027. The same is happening in other countries of Asia, namely China.

Forbes 2024 list of 10 richest persons in Asia, comprise 3 Indians, 4 from mainland China and 1 from Hongkong and 1 each from Indonesia and Japan. These are indications of the amount of money in countries around and in close proximity with Bhutan. These people are those who need money managers at their disposal. The world’s largest asset manager, BlackRock, Inc. an American multinational investment company, with $9.42 trillion in assets as of June 30, 2023 has 70 offices in 30 countries and clients in 100 countries. Their offices include 2 in Hongkong, 3 in India and one each in Japan and Singapore. Its competitors, such as Julius Baer, are also expanding in the region. And local banks are steadily raising the quality of their services, sometimes through partnerships with foreign banks. Money comes into countries that have low regulatory barriers and bureaucratic red tapes, political stability and low taxes. GMC would be offering all these and more. Both Bhutan and India stand to benefit.

Moving a step ahead, the GMC would be very strategic for India. While the location (Gelephu) is in itself strategic, as it borders the Indian state of Assam, GMC would have strategic investors from other parts of the world. Observers say that besides the benefits that a special administrative region (SAR) just next to it offers, India would not want investors from other countries to dominate. Thus, there will be Indian investors at the GMC, in different areas like clean energy, hospitality and others.

In essence, the journey towards realizing the Gelephu Mindfulness City embodies a testament to the enduring partnership between Bhutan and India, underpinned by shared economic aspirations and mutual prosperity. It also provides Bhutan the opportunity to liaise with other strategic partners, who are devoted to promoting GMC in line with the core principles of the majestic vision.

Ugyen Tenzin from Thimphu