Bhutan’s star-crossed romance with hydropower is now as good as over. Its appeal as a technology of choice has lost its sheen across the world - a number of other less costly and less harmful technologies have taken center stage. Hydropower is now viewed as costlier and more environmentally destructive way of producing energy. It is now old hat. It is for this reason the Bhutan has rightly halted further hydropower development – until all the hydropower projects currently under construction is completed and brought on stream. Our lone egg basket - India - has seen quantum jump is energy production. They are now energy surplus. For the past many years, India’s investment in hydropower has been next to nothing - they are focusing on more efficient and less destructive technologies.
The Land of Happiness is now a place of confounding confusion
With hydropower having made to eat humble pie, what are Bhutan’s options? There are a few that we can bank on:
~ Forestry
~ Mining
~ Agriculture
~ Tourism
Harvesting of forest produce: According to figures released by the government, harvesting of our rotting forests is said to present phenomenal potential - far in excess of hydropower. Forestry analyst Dr. Phuntsho Namgyel has been going hoarse making the point that we are destroying our forest stand due to rotting and mismanagement, and that we should harvest what is going to waste and ruining our ecology. But either the figures put out by the government are whole lot of hogwash or, Dr. Phuntsho Namgyel has the wrong color of skin.
Mining: To be sure we are doing pretty OK with mining and export of minerals, including boulders. But this is a high volume low value commodity and it can only do so much.
Agriculture: Less said the better about this sector’s utter failure, recorded over many decades. The agriculture production has seen unfailing decline over the years. Even while boasting of phenomenal altitudinal range and soil types, we are unable to produce enough to feed ourselves – let alone for the export market.
Tourism: This should now qualify as the shining star of the day. In terms of real net gain and employment generation, tourism has always been at the top. It holds top slot for foreign exchange earning as well. Few understand the real cost behind hydropower projects – not even when faced with the reality that imported energy – such as LPG gas and kerosene as a source of energy - are cheaper than our own electricity which we are told we produce in abundance. Few know that what we earn from export of electricity is more or less spent on import of fossil fuel.
Tourism has thus far been the only business in Bhutan where there is 100% collection of tax - without the possibility of concealment. There is perhaps no other business that generates tax at multiple levels: SDF from tourists at the first instance, followed by tax from tour operators, from hotel owners, handicraft business establishments, transport companies, guides etc. etc. - from one and the same tourist group.
Bhutan’s tourism industry stakeholders have been unrelenting in their pursuit for a workable and conducive atmosphere in which to do business. Recently, the sector heads of tourism had a meeting with the Tourism Council of Bhutan - to try and humanize the rules and regulations that are being proposed for adoption. We are not certain if the industry managed to make a dent into the rigid thinking of the TCB. Today - 8th September, 2022, the sector heads are once again participating in the meeting of the Council Members of the TCBS. We expect that the sector heads will not fail to impress upon the TCB Council why it is important to operate in an atmosphere of cooperation and congeniality. If they fail to do so, we will all fail.
The proposed rules and regulations, once discussed at the Board Meeting today, is due to be submitted to the Cabinet Members - on September 10, 2022. The industry remains hopeful that the rules and regulations will be rationalized at that stage.
My exit line: There seems to be a notion afloat that increasing the SDF from US$65.00 to US$200.00 will mean a triple jump in the inflow of $$. The reality will be that even if the number of arrivals exceed that of the pre-COVID era, the inflow of $$ will be far less than that which could have been generated under a MDPR regime.
The proverbial coffin is already being nailed. Does it make any difference whether you hammer it hard or softly!
ReplyDeleteIn Bhutan forest exploitation is a taboo subject, no go zone. We look everywhere for big economic ideas but cannot see the bountiful treasure chest right under our nose. There is a saying that the treasure hidden out in the open is the most difficult to see. The international conservation NGOs have cast a spell on us.
ReplyDeleteThank you la for seeing merit in my forestry opinion pieces and for taking the ideas to a wider audience.
Yes indeed the forest in Bhutan is the most mismanaged resource. For instance, a country with 84% forest cover is a net importer of wood and wood products. Its contribution to GDP is less than 3%.
Our forests have grown obese from decades of protection. This in a warming world is bad for the forests themselves as they die from competition for water and pests and diseases.
Sometimes truth lies in contradiction. To save our forests we need to urgently undertake the operation of forest thinning at a national scale.
We have in Bhutan made forest conservation and development exclusive of each other. It is either forest preservation or destruction. This is the greatest misconception propagated by conservationists in general and foresters in particular. Foresters are actually trained to manage conflicting forest objectives but as I said earlier international conservation NGOs have cast a spell on Bhutanese foresters. It is the greatest disservice to nature, people, country and the world.
Our rich forest resource can be the backbone for a flourishing green inclusive economy. Because of its extent and coverage, the remotest of the remote villages can reap economic benefits.
Thank you Dr.Phuntsho, a very clear insight.
ReplyDeleteForest is conserved not to benefit the people or the country but to fatten the Bhutan trust fund dollars which would be in tens of millions by now which very few can have hands in.... in fact the forest conservation pressure hurts farmers the most... thus have i heard
ReplyDeleteAs a hydroelectric power generating country, electricity should be made comparatively cheaper. Making electricity cheaper would make cost per unit less. This would enable manufacturer to achieve economies of scale.
ReplyDeleteOn the contrary, making electricity tariff high makes cost for production high thereby making one difficult to complete in the international market.
Bravo! In this seminal tweet, and in Dr Phuntsho's elaboration, we have an eloquent and concise "state of the nation" assessment, to which I would wholly concur. I would only add two matters: 1) under Minerals, let's not forget the "copper mountain" (where likely there will also be gold): and 2) let's also add *Hi-tech industry* - yet to seriously come up (let alone flourish) but which has high potential for employment and income in mid-term and perhaps beyond.
ReplyDeleteAnd: have the Trust Funds prospered? - little news has reached my ears