Understanding our vulnerabilities in times of the pandemic

The Covid-19 pandemic has brought the economy to a standstill. Businesses are down. People have lost jobs. Apart from those in the civil service and the corporate sector, employees in the private sector are left to the mercy of their employers, all of who cannot afford to keep on paying employees with their own pockets running dry. It has resulted in major layoffs in the private sector. Those getting reduced salaries can be deemed lucky. And we know one thing for sure โ€“ the situation is not going to improve at least for a few months more or it could even last more than a year or two.

This has forced economies around the world to adopt more locally sustainable measures. Countries have to break away from the otherwise normal trend of relying on import dictated by comparative advantage theories. The pandemic has shattered normal laws of economics. Sustenance has taken precedence and safety has become the primary priority. 

As a country heavily reliant on India, Bhutan is faced with challenges of sustainability like never before. A small country disadvantaged with economies of scale, self-sufficiency has suddenly gained utmost urgency. The government is doing what it can but is handicapped with resources and also ideas.

The price of import has skyrocketed. Consider this, at the border town of Phuentsholing, the price of loading a truck of goods has increased from Nu 2,800 paid to Indian laborers to almost Nu 18,000 when local labor is engaged. Importers are missing the experienced service of Indian laborers as local hands are able to fit goods in two trucks that otherwise went into one. All this manifests in higher product prices which are ultimately borne by final consumers – us.

This pandemic is exposing us to lessons we hardly thought ever existed.

The attempt to use local labor in the construction industry has also brought bitter experiences. Local hands are charging more than double the daily wages and contractors complain that they arenโ€™t dedicated enough. The unskilled local laborers charge wages more than skilled Indian laborers. This has forced contractors to bring in laborers from India despite the quarantine requirements and it has resulted in the late surge in corona positive cases of late.

The pandemic has also triggered a new interest in agriculture and the government has gone all out to support agro-ventures giving full support and incentive packages which is a much needed boost for a tiny nation challenged with food sustainability. Only 8% of Bhutanโ€™s land area is arable and of the total, agriculture is practiced in less than 3% of where it is possible and its unlikely yet true that more than 57% of the population are still dependent on agriculture.

Although the pandemic has brought about various challenges, it has also exposed us of our vulnerabilities and addressing these vulnerabilities should be the biggest challenge for us. The vulnerabilities need to be mapped and addressed even after the pandemic eases down. It is the only way for Bhutan to carve out a niche economic development vision.