FDIs in the mineral sectors are steadily increasing and the government does not prohibit FDI in the country,
according to Economic Affairs minister Loknath Sharm
The government has taken up measures to improve the ease of doing business – both for Foreign Direct Investment (FDI) and domestic investments, according to the economic affairs minister, Loknath Sharma.
“The government is working with stakeholder agencies to reduce the rules and regulations that govern FDI investment,” Lyonpo said adding that business processes are being streamlined and an integrated system to obtain licenses and clearances from different agencies is also being developed.
Based on recent FDI interest in a few projects, Lyonpo said it is clear that FDI is focused on profitable sectors. FDIs in the mineral sector are steadily increasing and the government does not prohibit FDI in the country.
“We also have to understand that even if we proclaim FDI as investment friendly country and open up, investment flows may not skyrocket due to our geographical position, cost of production, access to market, competition scenario, and convertible currency issues,” Lyonpo said.
In addition, Lyonpo said that the country does have an opportunity of attracting FDIs in education, health, high-end agro and food products, tourism and hospitality, cosmetics, etc. besides IT which is doing good.
“We must continue working towards it with better infrastructure and logistics for export
management besides documentation in the region,” he added.
Meanwhile, after the discontinuation of the Druk Gyalpo Relief Kidu Fund (DGRKF) and interest waivers by the banks, private sectors have suggested to Bhutan Chamber and Commerce Industry (BCCI) to find possible ways to venture into the FDI projects.
However, under the FDI policy, it is currently difficult for private sectors to obtain the government’s clearance quickly.
President of BCCI, Tandy Wangchuk said that to make the strategy more palatable for both investors and local partners, BCCI has requested the ministry of economic affairs to make the policy a bit more flexible.
He said that the government has been generous in providing FDIs with various benefits such as tax incentives, and leased land that private sectors get to establish the industries to be placed as equity of the local partner for time being but some minor issues need to be considered.
“For instance, chefs are given a year or two, and then after a six months cooling-off period, who will replace them at hotels?” he said adding that the actions are out of line and hinder the business.
Some members of the private sector shared that everyone is aware of the country’s current economic situation, if the private sector can bring in one to two projects, then it will help not only us but also the country’s economic development.
“We are having trouble getting the Royal Monetary Authority (RMA) to respond to their proposal after the announcement of the fourth phase of monetary measures,” they said.
President, Tandy Wangchuk said that neither the banks nor the private sectors must struggle if the government expressly grants us the opportunity to engage in FDIs. BCCI has also made suggestions to MoEA but the ministry denied their suggestions.
He claimed that the infrastructure for the four industrial estates- Motanga in Samdrup Jongkhar, Bongdeyma in Mongar, Dhamdum in Samtse, and Jigmeling in Sarpang has not yet been completed.
He added that a foreign investor has expressed interest to take the entire infrastructure on the Built operated transfer (BOOT) model.
“If there are empty lands, the investor will build the infrastructure as per the requirements of local industries and they want to rent it to local industries for 20-30 years, thereafter the investors have to surrender the entire property to the government,” he said adding that’s an advantage of FDI projects.
He added that despite speaking to local industries, BCCI was unable to process and obtain the government’s permission.
One of the private sectors said that the main reason the private sector wants to venture into FDI is that there are already several investors interested to invest in various industries. With this, the private sector also can give employment to the people.
According to the annual FDI report 2021, a total of 96 FDI projects with new 6 approved as of 2021. Bhutan opened to FDI with the adoption of the FDI Policy in 2002.
Tshering Pelden from Thimphu