NGULTRUM / CHHETRUM: When & Why

Few of the remaining puzzles that I was faced with in my relentless research into everything related to Bhutan’s ancient hammered coins was the issue relating to when the terms NGULTRUM and CHHETRUM were coined and came into use. This was important since Bhutan formerly did not express our coins in any unit of currency. It was simply called “Maartang”, or red coin. Even when the Second King introduced modern milled silver coins for the first time in 1929, they were simply called “Thala” but inscribed with the words “Jatum Chaed” - or half Indian Rupee, on the reverse of the coin.

The right way and the wrong way of spelling

Until the terms Ngultrum and Chhetrum came into use, the Bhutanese used a variety of terms to describe money:

Ngingtang    Old Coin

Maartang    Red Coin

Zangtang    Bronze Coin

Ngueltang    Silver Coin

Sertang            Gold Coin

Thala            Half Rupee

Tikchang    Nickel Thala

Tiru                    Money

Shiki            1⁄4 Ngultrum

Shog Lor            Paper Money 

The term “Shiki” is the closest to the use of a monetary unit - it literally means "quarter of a Ngultrum", or 25 units of a currency.

There were two other terms that were in use to describe coins that were current in ancient Bhutan: "Baltang" and "Boetang". However, I am not referring to them since they were/are coins belonging to foreign countries.

Exactly when the terms Ngultrum/Chhetrum came into use is rather confusing. According to the accepted official version, they were coined and used upon the introduction of our paper currency in 1974. However, historical written records show that the terms were in existence more than a decade before 1974.

The abbreviated terms Nu. and Ch. appears in the earliest definitive stamps of Bhutan - a set of seven stamps - issued in 1962. This conclusively proves that the terms were coined in or before 1962, and not in 1974, as recorded.

Bhutan's earliest postage stamps issued in 1962. They bear the abbreviations Nu. and Ch. - twelve years before the issue of our earliest bank notes in 1974 for which history records that the terms Ngultrum and Chhetrum were coined.

What is intriguing is this: Why were the currency units Ngultrum/Chhetrum coined and used, when Bhutan did not have a designated currency in place? Why did it become necessary to introduce these units of currency? My persistent deep delve finally connects me to a collector of Bhutanese stamps and an accomplished historian from the Netherlands - Mr. Leo van der Velden - who offers the following interesting theory.

Certain articles in the successive treaties with British India government, followed by that with the government of independent India tended to give rise to some ambiguity as to the true standing of Bhutan - is it an independent state, is it not?. Thus, foremost in the minds of the Bhutanese monarchy was the need to assert the Kingdom of Bhutan’s status as an independent state, with the right to self-determination. One of the means to make that assertion was seen to be to obtain memberships to world bodies such as the Colombo Plan, the UPU and the United Nations.

Bhutan gained membership to the Colombo Plan in 1962. It now began to work on becoming a member of the UPU (Universal Postal Union). As a rule, to become a member of the UPU a country must be a member of the UN. However, an independent country could also become a member, as long as it has the support of two-thirds of existing UN members. Other requirements were supposedly that a country should have a postal service in place and should have postage stamps already printed and in use. Bhutan did not have those - thus the next step on the journey towards qualifying to become a Member of the UPU was to print our own stamps and set up a postal service. Bhutan achieved both of the requirements in 1962 - we issued our first postage stamp in 1962. In the same year we also set up our first post office in Phuentsholing.

Obviously internationally recognized postage stamps have to be denominated in units of the country’s currency. We did not have currency units those days. Thus, according to Mr. Leo van der Velden, Bhutan coined the terms Ngultrum and Chhetrum to meet the requirement of having to denominate the stamps.

A PROBLEM HALF A CENTURY OLD: Coining of the terms Ngultrum/Chhetrum may have gotten us our membership to the UPU but in our desperation to do so, we have been stuck with an anomaly that, to this day - after half a century - remains uncorrected/unrectified:

We are calling our paper money : Ngultrum = Silver Coin; and

We are calling our metal coin         : Chhetrum = Half Coin

Bhutan's paper currency superimposed with metal coin. Note the mistakes - both in English, and also in Dzongkha - both on the metal coin, as well as on the bank note.

Enterprise Of Epic Tragedy

My connection with the DrukAir dates back to the very start of its birth in 1981. I have the honor of having contributed to its graduation - from a tottering fledgling to a full-grown swashbuckler with international reach and spread. Even before the airline started its commercial operations, at the request of its first Calcutta-based Regional Director P S Joseph, I volunteered to fly, multiple times, their first aircraft on its many dangerously unsafe test flights between Paro and Calcutta. I even got my personal cook and my office peon and the gatekeeper to ride the aircraft - to make up the load - in order that the airline may test the airplane’s carrying capacity, and maneuverability, under diverse weather conditions and emergency situations. Much later, when the company started their commercial operations in 1983, I was among the most frequent flyers - so often that Christopher Francis, one of the earliest officers of the DrukAir declared me CIP - Commercially Important Person.

A national liability

I never thought that I would live to see the day when the state would use the same airline company as an apparatus to cause pain and grief to the very people and institutions that it was created to complement and assist. Few would have any idea of the pains and tribulations the creator of the airline - His Majesty the IVth Druk Gyalpo - went through before he was able to establish the National Flag Carrier.

I can truly commiserate with the DrukAir - if they are unable to make profit from their operations. No one can deny that they are faced with insurmountable challenges posed by nature, including the fact that achieving economies of scale is near impossible given the realities of our smallness. No sensible person with any brain can fail to accept that there are certain challenges that are beyond human competence to surmount.

I keep repeating over and over that the DrukAir was not created as an enterprise of profit. But the managers at the DHI simply cannot get the message. Sadly, that is the peril of entrusting the affairs of corporations in the hands of bureaucrats with no corporate culture or training, let alone business acumen.

DrukAir is a national institution behind which thousands of millions of public money has been spent. The least it can do is try and work towards serving the interest of the industry and the people in whose service it was created. Sadly today there does not seem to be a single person in this country with the wherewithal to see the destruction the airline is causing the people of Bhutan.

I wonder if the DrukAir is generating enough business - I repeat business, not profit - to enable it to make its monthly loan installments and the annual insurance premium on their aircrafts?

If the DrukAir is making claims that it is making profit from its operations, it has got to be at the cost of others. It should not be acceptable that for the profit of one institution, hundred others are forced to suffer. If this has been the case, clearly they are a burden to the state and the people of Bhutan.

The people of Bhutan do not need any further proof that the DrukAir is instrumental in large-scale diversion of business to others across the border, even while their own brethren are suffering, for want of opportunities. If that were not enough, it is also apparent that they have directly contributed to the drastic fall in the inflow of hundreds of millions of foreign exchange. And yet, they remain adamantly blind to the folly of their misadventures.

Look at the images of the following hotels that are among our shiniest and brightest - behold the look of gloom and darkness they wear today. Every time I pass by these hotels - my heart bleeds because they should not be looking so forlorn and gloomy. Bhutan is touted as a preferred and prize-winning destination for tourism. If that were true - these bastions of tourism should be shimmering and sparkling like a trillion stars in the night sky. Tens of thousands of tourists should be jostling for space and accommodation.

Ariya Hotel

Dorji Elementts

dusitD2 Yarkay Thimphu

Hotel Druk

Hotel Tashi Yoedling

Hotel Thimphu Towers

Le Meridien Thimphu

Norkhil Boutique Hotel & Spa

Pemako Thimphu

ThePema by Realm

Thimphu DeLuxe Hotel

The above images were shot during late evening to show the occupancy status of each of the hotels. They were shot between 23rd to 25th July, 2023; 07:12PM to 08:53PM. There were some hotels where not even one room was lit up - in difference to the sentiments of the property owners, I choose not to show them here.

From what I hear, the government is yet again contemplating another deferment of repayment of outstanding loans. That is so terribly unfair to the people of Bhutan - such a move will actually aggravate the problem even further - not solve it. Over time such mindless acts will be the cause of the collapse of the financial institutions. When that happens, it will not be the financial institutions - but the common men in the street who will lose their life’s savings.

The day may not be long in coming when the financial institutions may be left with no other choice - than to write off all the outstanding loans - and claim their dues from the Royal Government of Bhutan and the DHI/DrukAir - because they willfully and forcibly engineered the ongoing disaster prevailing in the country!

BHUTAN, Land Of Paradoxes

One cannot help but marvel at our indomitable spirit. Even as we are overwhelmed by a sense of extreme anxiety at our uncertain future, we do not fail to derive a sense of comic and humor in our countless failures. Let it not be said that the Bhutanese are NOT a spirited lot of people. 😂😂😂

For proof, check out the following:

WORSENING INEFFICEINCY

In the past the inefficiency in the service delivery by the civil service was blamed on the lazy and non-performing government employees. Now they have even better reason for the current, and even poorer service delivery: it is attributed to the large-scale exodus of the petrified public employees to Australia.

NOT SO FUNNY

In the hope of curtailing tax evasion, the Department of Revenue and Customs (DRC) had, few months back, announced that they would be checking the bank balances in the savings bank accounts of the people. It is not clear how successful the drive would have been - but one thing was left in no doubt - it is rumored that the announcement caused a dangerous, and historic, even if minor, “bank run” - resulting in a massive withdrawal of cash from the banks by worried depositors. Unconfirmed reports say that it caused an unheard of situation of shortage of bank notes! The falling foreign exchange reserve was problem enough - but this was so unexpected. It is not very common that banks run out of currency notes. By itself this is not a problem - currency notes can be printed and reissued, and replenished. Now, had the banks run out of deposits, that would have been a different matter. But obviously the problem was not so severe - few, if any, seem to have heard of the "run".

SHORTAGE OF TEACHERS

The Education Minister recently declared that the country has a shortage of 842 teachers across the country.

The Royal Government of Bhutan spends millions every year - in training schoolteachers in two of the country’s teacher training colleges. At the end of the training period they are required to sit for an interview to qualify to be employed as teachers in government schools, conducted by the RCSC. Strangely, during the selection process a large number of them are declared unfit to teach. It does not seem like a creative thing to do - to train the teachers absolutely free of cost - only to be declared unfit for the job for which the government had trained them, over many years.

Train them until they are unfit for the job!

THE DARK SIDE OF OUR HYDROPOWER PROJECTS

Bhutan claims that our hydropower projects are run-of-the-river projects that produce “clean” energy. Our claim to being the world’s only carbon negative country is primarily based on our claim that we help off-set use of fossil fuel and that 70% of our country is forested.

And yet, the truth is that the planned PHPA-I Dam will rise to a staggering height of 130 Mtrs. (426 ft.) when completed, if ever. The massive destruction caused to the environment during and after the construction phase, including the emission of methane gas, post construction, goes unreported. Also, we ignore the fact that not all our forests contain CO2 sequestering trees.

The true face of hydropower projects revealed!

COUNTRY WITH THE MOST PRISTINE ENVIRONMENT

We pride ourselves as a champion of environmental conservation with strong laws to safeguard the natural world. Protection of the environment is supposed to be one of the four pillars of our famous GNH philosophy. But it does not appear that our record is as clean, or admirable, as we would like to believe, or put out. We may be among the only countries in the world against which a PIL is filed in the Supreme Court - by a foreign country.

Historic incidence of acid rain in the country

Another historic event for Bhutan - champion of environmental conservation being slapped with a PIL in India's Supreme Court - for extreme pollution!

COUNTRY WITH THE WORLD’s HIGHEST WATER RESOURCE

Bhutan has one of the highest per capita availability of water in the world. Official figures show that Bhutan generates about 70,500 million m3 of water annually, meaning each Bhutanese should ideally have access to about 94,500 m3 of water per person per year. And yet, we suffer from problem of chronic water shortage - both for drinking as well as for farming/irrigation.

Water, Water everywhere, not a drop to drink

OUR CLAIM OF ORGANIC FARMING

For the past many decades we have made the claim that our farm produces are organically grown and have pooh-poohed at the imported stuff. The ugly truth seems to be something else. It appears that we are clueless as to what constitutes organic farming. Contrary to claims, going by the figures released by the Department of Agriculture last year, it is clear that we impregnate 2% (current total land area under cultivation) of our land with incredible 3,405,500.00 KGs of chemical substances such as fertilizer/weedicide/pesticide etc.

Proof that we practice organic farming?

44% Dip In The Inflow Of Indian Rupee

Today's KUENSEL reports that Indian Rupee earning has dipped by 44%!

The writing on the wall

According to the most recent data released by the Department of Tourism (DoT), during the 9 months period between September 2022 to June 26, 2023, a staggering 49,714 Indian tourists visited Bhutan. Based on these figures, let us do a simple math.

Let us consider that one Indian would spend a minimum of Rs.2,500.00 per day, including SDF, hotel, food, guide, monument fees, transportation and other small expenses. Let us say that they spend on the average four nights in the country. This would work out to:

49,714 x 2,500.00 x 4 = Rs.497,140,000.00

In addition to the expense listed above, they would have to have spent a good bit of amount on airfare. But the truth is that not even 2,000 of the total 49,714 Indian tourists travelled by DrukAir - given the extremely exorbitant airfare charged by the airline, they chose to fly into Bagdogra and travel overland through Jaigaon.

For a moment lets say that the DrukAir dismounts from their high horse and slashes their fare by 50% of the current round trip fare charged by them. Even at that amount, the sum would work out to roughly:

49,714 x Rs.40,000.00 = Rs.1,988,560,000.00

The sad reality is that there is not even a trickle of the Indian Rupee coming into Bhutan because the Jaigaon operators who usurp the tourism business from national operators pay tour payments in local Ngultrum.

Because the DrukAir charges unreasonably exorbitant airfare, the Indian tourists do not fly DrukAir. Instead they enter through Jaigaon - causing loss of revenue for the airline and wholesale deflection of tourist traffic to Jaigaon operators.

If the DrukAir were to be reasonable with their fares, all the Indian tourists would enter through Paro airport …. meaning all of them would come through Bhutanese tour operators thereby necessitating the tourists to make payment in Rupees directly to Bhutanese operators - instead of the payments ending up into the bank accounts of the Jaigaon operators.

And you wonder why there is 44% dip in the inflow of Indian Rupee?

I keep saying that we should tap into the Indian tourist market - they represent the most substantial and the most lucrative for Bhutan. Handled with care, Indian tourist arrivals could go as high as half a million per year!

Remember, our imports from India is as high as 80% …. meaning the Rupee is as important as the $$, if not more.

The Waning Ngar & The Failing Bhutanese GenZ

I do not expect that it will make much difference even if I should climb atop the Mt. Gungkhar Puensoom and yell from its peak - in all likelihood it would be no more than a cry in the wilderness. And yet, no person with any conscience can remain calm and unaffected, in the face of so much recklessness. It is not that I find fault behind the reason or the cause of the sudden stampede for Australia - it is the fact that it appears that most of the dream chasers are doing so with their EYES SHUT TIGHT.

It is sad. I am aware - and I have said this so many times in the past - that the Bhutanese are not a thinking lot. But we do have a mind - although even that is now becoming doubtful. No one appointed me moral guardian of the Bhutanese people - unfortunately I cannot help but worry that what is happening today has the potential to completely derail the country and cause it mortal injury.

The mindless chase for the Australian Visa seems to have awoken the hitherto slumbering Lucifer in us - the latent scoundrel has risen. Our moral probity has fallen so low that parents and siblings think nothing of condoning adultery and even incest. Even the law seems to willingly put its stamp of approval on the many cases of false declarations. Our immorality knows no bound - I am told that some stoop so low as to allow his/her spouse to be pronounced legally wedded to someone else - merely for the sake of a piece of paper called Australian Visa, and to be able to embark on a journey of infinite uncertainty.

Money? Human decency? I think we know which one will win over the other. The question then arises: Is it worth losing sleep over something that apparently is already a lost cause?

I believe that it may still be worth it, despite the apparent hopelessness. Some people have finally begun to speak of the dark side of the great Australian dream - as opposed to the fairy tale that has so far been put out. At last, some conversation is happening. The Kuensel’s last Friday issue (15/07/2023) carried the following front-page article:

The start of the rumblings

In response to my last post titled “The Irresistible Bhutanese Itch”, a retired senior member of the society decided to finally squeak a few words - he wrote:

     “Is it fair for children born as Bhutanese who were educated by the state to leave everything to the

     head of the state?”

One anonymous reader commented on my blog:

     “I beg to differ from the negative outlook on the Aussie exodus but shall not argue my case here”

In response to the above comment, a brilliant reader from the USA sends me a WhatsApp message that reads:

     “I wish the anonymous commenter would have argued his case in public on your blog. I’d be curious

     how he is justifying the exodus to Australia”.

Another friend outside the country commented:

     “It may be time Bhutan opens up. Or there may be no Bhutan GenZs left”.

Yet another reader comments:

     “Bhutan should seriously consider dual citizenship to attract that ‘70%’ back home”.

We need to talk about this and we need to do it yesterday - tomorrow may be too late. Perhaps one way to halt the zombie-like march is to counter it with what lies hidden underneath the carpet - expose the inconvenient truths! Or, may be we are destined, like I said in my last post, to wait for nature’s curative ways to come to our rescue.

Most will likely say that there is no opportunity within the country. That would be too simplistic a viewpoint to take. For a change we could learn to look at the issue from another point of view: opportunities do not exist - we create them for ourselves!

Now you know where His Majesty’s talk of waning of the “Ngar” comes from - and the letdown by the GenZ that my friend spoke about above.

I know that the issue is very complex and taking the moral high ground is least of the answer to solving our many problems. The human animal has always been a habitual wanderer - journeying across the far-flung continents and the seven seas. It would be so terribly wrong to see fault in our modern day fortune seekers. But we have to remember that we never failed to balance our priorities - the voyages have always brought back home wealth, prosperity, and human progress.

We need to make sure hat we remain true to our basic nature.

The Irresistible Bhutanese Itch

Hi Nel,

Thank you for your WhatsApp message - I chose to reply to you in an eMail since your questions call for lengthy answers. And thank you for asking ---- I am well, including all my family members.

I am surprised that the matter got reported in the local papers in the UK - amazing that a pint-sized Bhutan gets to feature in international news - actually we also made it to a respectable newspaper in Australia - on the 5th of this month.

As much as I wish I could deny it, the reports are true --- there has been a steady exodus of young and educated Bhutanese to Australia. It is a worrisome trend that does not look like it is going to halt until the country is completely drained of the young and the educated. And you are right - it is a disturbing problem - even worst, it is a complex problem. Tiny Bhutan is now straddled with a problem so COLOSSAL that we are not sure that we have the wherewithal to handle it. Any which way we look at it, it does not seem like there is one single magic formula to solve the problem that confronts us. In fact indications are that desperation is now beginning to cloud our better judgment. And yet there is no sign that the glitter and sparkle in the eyes of the Bhutanese youth are going to dim anytime soon.

WHAT ARE MY THOUGHTS?

You ask what my thoughts are. May be a little jumbled and haphazard but the following are the ones that mostly invade my mind - first thing in the morning as I wake up, and through out the rest of the day.

At the core of our problem is the famous Bhutanese herd mentality - we cannot help but succumb to a nature that is intrinsic to our personality. Like the Army Ants, we march because every one else is marching - unmindful of what is being trampled on our path. It is easy to trigger an itch in us - we do not need a reason or a justification - we just need an excuse - an excuse that every one else is itching.

And that proves my long held belief - that we Bhutanese are as unique as every one else; that Bhutan will embrace modernity as every one else have done before us - that we will get where everyone already have - it is just a matter of time. Give us time and the Bhutanese will do even worst!

I believe that behind the exodus to Australia there is no sound logic, it is not a result of a properly researched outcome - it is not a quest driven by reason. I fear that a large number of them are going simply because everyone else are seen to be going. It will not be fair to say that they have been driven by greed - I am told that there are a variety of reasons, some of them even justifiable.

Unfortunately the reality will be that the country they love will suffer; over the long haul, their kith and kin will feel the impact of their unfounded haste and, perhaps, the very life most of them had hoped for, and the dreams they choose to dream - will turn out be just that - a distant dream.

From all accounts Bhutan is headed for a seriously rough time. All the signs are that we have already hit the stormy waters. People even opine that there is already a palpable air of doom - certainly there is cause for worry. But I believe that the moment of despair is not yet upon us.

Your connection with Bhutan dates back to the 1960’s - but the truth is that your connection to Bhutan has been, at best, superficial. I do not believe that you have had any reason, or occasion, to study Bhutan from close quarters.

Officially the Wangchuck Dynasty has ruled us since 1907 - unofficially they have been doing so since 1853. Since then, Bhutan has survived natural and man-made calamities galore, external threats and internal strife - but we have emerged unscathed. The Bhutanese people have every reason and faith that this time too, we will be ably steered to safety by our Monarch. He is working tirelessly - and He understands that He is the King - and that it is not in His job description to give up.

And, like my blog masthead reads, we all pray that He Never Gives Up Hope!

As to the problem of the exodus, I do not see how we can solve it without upsetting the apple cart. Perhaps nature will do it for us - I have great faith in it - nature is a great equalizer. And nature has always been kind to Bhutan. May be there will be a great natural calamity - may be there will be another devastating pandemic that will cause and kick off the reversal of Bhutanese migration. One never knows - nature has been unfailing in its well-timed interventions - it gave us Genghis Khan, the Black Death, Mata Hari, Rasputin, Hitler, Mussolini, WW I & II, The Little Boy and The Fat Man, Mahatma Gandhi, Israel, Osama bin Laden etc.

The unspoken and unwritten financial burden (outside of the borrowings from financial institutions) caused by the migration is massive - not many have an understanding of its extent and enormity. Regardless, there is increasing indication that the country and the people of Bhutan may not be able to recoup the financial outlay that has gone behind financing the migration. This doubt arises out of most people’s fear that more than 70% of the migrants are unlikely to return home. Couple that with the falling birth rate of the country ….. and you have a perfect recipe for disaster that calls for serious consideration.

But we have not lost our hope - in our Monarch, and history, we trust!

Bye and take care …. I will reply to your other matters in a day or two.

Yeshey

On The Wings Of The Dragon: Part X

Beginning Sunday the 3rd March of 2019, I embarked on a series of articles on our national flag carrier - DrukAir, titled “On The Wings Of The Dragon”. More than four years have gone by and I am on to my 10th article in the series. But the pitiful state of affairs at the DrukAir remains unchanged.

If it hadn't been for the ever-surging exodus of Bhutanese youth to Australia, the Druk Thuksey recipient would be the proverbial "Ghost on Wings"

It was in my 5th article in the series published on Saturday 9th of March, 2019 that I had written as follows:

“Thus, only a national flag carrier with a social mandate has the compulsion to operate in Bhutan’s existing conditions. This also means that we have to accept that Druk Air cannot be mandated to make profits - there is simply no way it can, UNLESS IT DOES SO AT THE COST OF OTHERS, AND OUR NATIONAL INTEREST. Therefore, the next best thing for the government and for the airline company is to focus on up-scaling carrying capacity, service, safety and security - to work towards creating the enabling conditions for others to generate jobs and income. In other words: support the tourism industry - by rationalizing their fares and increasing carrying capacity. What the airline cannot make, the tourism industry will augment a hundred fold.”

My last article - the 9th in the series - will prove that I have been right all along - the DrukAir has consistently stood in the way of progress of Bhutan’s tourism industry - policy failure being another!

My ten articles on the DrukAir can be read at the following - I encourage you to read them so that you have a grasp of the realities behind the creation of the DrukAir:

https://yesheydorji.blogspot.com/search/label/On%20The%20Wings%20Of%20The%20Dragon

I have said this before and I am saying it again - the DrukAir should be delinked from the DHI and categorize it as a social enterprise - at par with FCB, Bhutan Post, FMCL, BDBL, CSI Bank etc. Thousands of millions of Ngultrum of the Bhutanese people’s money have been spent in the creation of the airline - it must serve the Bhutanese people's interest - not some private individual interest.

Billions of Indian Rupees, and hundreds of millions of $$ in company revenue is being lost to competing airlines - resulting from the DrukAir’s pigheadedness and incapacity to read the writing on the wall. If that were not enough, they directly contribute to the falling numbers in tourist arrivals - by pricing their fares at a level that deter potential travelers.

Comparative study of DrukAir's fare as opposed to that of Qatar Airways'

When His Majesty the Fourth Druk Gyalpo created the DrukAir in 1981, it was not that He had any lofty commercial aspirations - not with one unpressurised 18-seater Dornier 228-200 turbo-prop aircraft and one solitary airstrip measuring less than one-and-a-half miles long. It was a statement of nationhood - an assertion of independence - an announcement to the world that Druk Yuel was an independent nation with the necessary apparatus of nationhood in place.

It was to unshackle a gagged nation, a baby step towards setting free a choked nation - to give it wings to take flight and transcend boundaries - to swim and float in the infinite skies of freedom and opportunity.

It is criminal that the same enterprise of hope and deliverance is now being used to shackle the Bhutanese people’s spirit of enterprise.

No further proof should be needed - it has sufficiently been proven that DrukAir is one of the contributing agents to the country's dangerously depleting foreign exchange reserve, which includes the precious Indian Rupee. Their unreasonably exorbitant airfare helps divert revenue to competing airlines - this is in a situation where they have complete monopoly over the Bhutanese skies. It is for the same reason that Bhutanese tour operators have lost their clients to competing tourism destinations elsewhere - because Bhutan as a tourist destination is becoming more and more expensive - even to the rich and the upwardly mobile.

END NOTE

Institutions do not have conscience - but the people who run them are supposed to. And, if there is even one person among those who run and manage the institution, he/she ought to understand that as an institution behind which the country has invested thousands of millions of citizens' money, the DrukAir's first duty and obligation is to the nation and the people of Bhutan - not its narrow objective of profit making. The DrukAir cannot make profit - it is simply impossible - the odds are stacked against it.

But certainly the DrukAir can ably act as a vehicle on which a thousand other institutions can ride to great success; it can lend its wings to a thousand other establishments to help them scale great heights and achieve success and glory; it can help few hundred thousand people across the country to see the light of day.

It could, perhaps, even help slow down the GREAT MIGRATION!

But all these will happen only when the leaders of this country accept that it is not fair to forsake the interest of thousand others, in order that they can protect the interest of a few.

As You Sow, So Shall You Reap

According to the most recent data released by the Department of Tourism (DoT) through TheBhutanese newspaper of July 1, 2023, for the 9 months period between September 2022 to June 26, 2023, Bhutan recorded a total tourist arrival of 71,951. Out of this total, at 49,714, Indian tourists made up more than 50% of the total arrivals. This works out to an average total arrival of 7,995 per month. This is a terribly dismal performance compared to a total of 315,599 for the 12 months period during the pre-pandemic period of 2019, when the average total arrivals stood at 26,300 per month – almost four times higher than this year’s average.

What natural law says

The shamefully dismal performance was expected - so racking up the issue is akin to flogging a dead horse. What is a matter of interest is the solid numbers that represent Indian arrivals. As much as it is encouraging to see such staggering numbers from a tourism market that, I believe, has the highest potential for Bhutan, the question to ask is this:

Of the 49,714 Indians who visited Bhutan, how many of them entered the country by air, and how many of them by road?

The answer I am told is: NO MORE THAN TWO THOUSAND Indians entered Bhutan by air!

On the face of it, this innocuous issue would seem irrelevant and inconsequential. Really? Think again - the issue is not so simple and straightforward - its implications are complex and its consequences far-reaching and CALAMITOUS for the country’s dwindling tourism business!

Imagination at work

Caused by the Druk Air’s unreasonably exorbitant airfare, more than 95% of Bhutan bound Indian tourist traffic is diverted to enter overland through neighboring Jaigaon. Couple that with the recent rule that tourists are not required to be regulated by requiring them to be hosted by a local tour operator, the situation is wide open and rife for entrapment by the operators across the border. Given the enabling conditions that have been created by this twin situation of the exorbitant Druk Air fare and the tourist traffic being forced to enter through Jaigaon, the following situations developed:

1. Takeover of business by Jaigaon operators which otherwise would have been handled by the Bhutanese operators. This proves my point made more than a year ago that the new tourism policy would enable outside players to step in and usurp local business opportunities.
2. A situation is created where Bhutanese tour operators become secondary players - even act as mere commission agents to foreign operators - something that I said would happen.
3. Under this situation, all tour payments are collected/routed through the principal operators at Jaigaon. This means that Bhutan bound Indian Rupees terminate their journey inside the bank accounts of Jaigaon operators. Payments to service providers within Bhutan - such as transport operators, hotels, guides, restaurants etc. are transected in local Ngultrums. This explains why Bhutan has seen dramatic drop in the inflow of precious Indian Rupees.
4. Since the business is unregulated and mostly handled by the Jaigaon operators, taxable tourism business turnover goes undeclared - resulting in a drop in tax collection by the DRC.
5. Over time, the Indian Rupees earned by the Jaigaon operators from business usurped from Bhutanese tour operators, is sold back to the Bhutanese - at a premium ranging between 3-5%, thereby devaluing our Ngultrum that is usually traded at par with the Indian Rupee. Also, the unofficially traded Indian Rupees is used to under invoice imports from India - further impeding tax collection.

I cannot believe that powers that be can remain clueless forever - it is hoped that they have the humility to accept that they have boo-booed big time …. and make amends soon enough before the situation spirals out of control. I believe that there is still a chance that we can retrieve the situation. Any further delay and the situation will be out of our hands.

Please Shed The Accountant’s Mentality

I have said this often enough on this blog - that it is time that the government shed its Accountant’s mentality and learn to think like a Financial Manager. By now they ought to be wiser to the fact that their precious new SDF rule has been, if anything, a total disaster for the country's tourism business. The government cannot fail to notice that the SDF’s contribution continues to be, at best, woeful. In fact, the economic fallout from the new SDF rule has been disastrous.

And yet, the government is adamant at tooting their tattered horn - causing us to waste time in countering the falsehood:

The ZOOMING SDF earning

It should not be difficult for the government and their “experts” to understand that the SDF has only a minor role in creating and supporting a vibrant business opportunity the country frantically needs. Does the government and their supposed experts know that tourism industry affords the most varied business opportunity and provides livelihood to the largest number of Bhutanese - across the broad spectrum of skills? Even at the risk of sounding stupid, let me list out the following impacts that result from the government’s ill-conceived notion that increased SDF will result in greater benefit to the country and its most vital tourism sector:

The journey that is downhill all the way

The well thought out Duration Discounts under the old MDPR rules was done away with. But it would appear that the TCB/DoT found it prudent to reintroduce it - but with a twist. It is so simply twisted that firstly, it is said to be illegal as per the country’s Constitution and, secondly, most tour operators are unsure as to how to do the maths, based on their famous SDF waiver rule. It got so bad that recently the TCB/DoT had to circulate a tabulated sheet - showing how to work the maths. It cannot get any funnier - I mean why should a rule be so confusing that grown up people are required to be instructed like kindergarten kids?

I believe that I have said enough - so I leave you with the following to chew on:

At SDF rate of US$200.00 per person per night halt, a total SDF collection of US$5,000,000.00 will bring in 5,000 tourists, with average night halt of 5 nights.

At SDF rate of US$65.00 per person per night halt, a total SDF collection of US$5,000,000.00 will bring in 15,385 tourists, with the same average night halt.

If you still cannot get the drift, the following are the approximate numbers:

SDF US$200.00 per person = 5,000 tourist arrivals = 5 nights = total economic contribution of Nu.1.039 billion

SDF US$65.00 per person = 15,385 tourist arrivals = 5 nights = total economic contribution of Nu.2.325 billion

The above figures have been arrived at as follows:

At the new higher SDF of US$200.00 the economic value is less than half compared to the old lower rate

At the old lower SDF rate of US$65.00 the economic value is more than double of that of the new higher rate

Can you still "Believe"?