As we are an import-dependent nation, Lyonpo Loknath Sharma says we are suffering from price increases
Optimistic that the relaxations of COVID-19 restrictions will ensure the smooth functioning of businesses and enhance industrial exports, Economic Affairs Minister Loknath Sharma said issues confronted at the border areas are being discussed with the counterparts in India.
“The economic affairs ministry is taking such matters with the state governments of Assam, Meghalaya, and West Bengal,” the minister said, adding that the issues are more on the ground and there are no one-time fixes to the problems.
“Dialogue, coordination, and collaboration must continue where associations and businesses have an equally important role to play,” the minister said.
According to the minister, the export of boulders is taking place, however, the exporters are facing issues at the border areas and these issues are being discussed with the counterparts.
Further, with the easing of COVID restrictions, Lyonpo Loknath Sharma said the government is hopeful that the tourism business will restart and come to normal as before. For that, the Tourism Council of Bhutan is continuously working with the relevant stakeholders and its allied sectors to revive the tourism business.
“The government’s plans of reviving tourism as well as diversifying the export markets will address the issue of convertible currency pressure,” the minister said.
Lyonpo also said that the economic recovery plan targeted toward building productive capacity will contribute to economic activities in the country.
“We should encourage the use of locally produced materials as raw materials which will help to reduce imports,” the minister said.
On domestic food, Lyonpo shared that prices remain elevated due to disruptions in the supply chain and the spillover effect of inflationary pressure from India.
As a result, inflation has been persistent over the past two years and signs of persistent inflation continue as both food and non-food prices are on the rise, which pose a risk of depressing an already weak economy.
“It’s been unfortunate that the global pandemic shutdown over the last two years has disrupted supply chains and as a result, we are suffering from price increases as we are an import-dependent nation,” Lyonpo said.
Lyonpo explained that the global supply chain remains tight and the adverse geopolitical situation with the ongoing Ukraine crisis has further added to the pressure on the supply chains. Commodities prices are increasing and normalization of production and supply systems will take time.
“Immediate remedial measures are to responsibly remove as many COVID-related restrictions as possible and further ease doing business conditions but the lasting solution is for us to build our domestic productive capacities wherever viable,” Lyonpo said.
Lyonpo added that at all costs, stagflation and further high unemployment will be avoided with already noticeable economic activities, pursuing new industries in the identified industrial parks, constructions resuming with restrictions on the number of workers lifted, and utilizing available quarantine facilities.
“The ministry is optimistic that the economy will improve, and all short-term efforts within the disposal of the ministry are being implemented besides recommending fiscal and monetary measures,” Lyonpo said.
Meanwhile, with the lifting of restrictions on bringing foreign workers into the country and certain relaxation of COVID-19 restrictions, the government is hopeful that the commission of Punatsangchhu II will happen on the scheduled timeline of 2023.
“We are periodically monitoring the progress of the project,” Lyonpo said, adding that the government is always there to support the project management team in facilitating and bringing laborers and materials for the project for timely completion of the project.
Lyonpo shared that economic growth is multi-sector and multi-faced, and that efforts from each one of us matter- producers, consumers, processors, besides the critical role of land, labour, and capital.
The minister said that the government is concerned about the challenges and gradually unleashing the economic drivers and enablers.
“It is not a one size fits all situation; instead it is changing, dynamic and unpredictable.”
Kinley Yonten from Thimphu