Embassy of India
Thimphu
No. THI/POL/101/1/2009 4 November, 2010
Economic and Commercial Report for October 2010
PART –I INTERNAL
Foreign Workers Issue
About 50 foreign workers have been issued permits to work for the service industry in Phuentsholing this month, following a notification from Ministry of Labour and Human Resources (MoLHR), RGoB in August 2010 that made work permits mandatory. With a focus on restricting the number of non-Bhutanese workers in the border towns, work permits were made mandatory in the nine listed enterprises - hotel, restaurant, electronic repair shop, tailoring shop, hair saloon, bakery, smithery, shoe repair shop and pharmacy. The notification stated foreign workers could be employed only if no Bhutanese was available. It also restricted the number of foreign workers to three an establishment, to be replaced by Bhutanese workers within the next two years. There were about 4,000 expatriate workers in Phuentsholing before the notification. Bhutanese business persons are, however, not happy with this rule. According to them, it is difficult to find Bhutanese workers to take up the jobs left by Indians. It was important to study the ground reality in the border towns before coming up with such rules. In 2007, there was a similar notification from the MoLHR that was never implemented.
To streamline recruitment of foreign workers, MoLHR has also authorised Foreign Workers Recruitment Agencies (FWRAs) to recruit foreign workers. However, the labourers and expatriate contractors have complained of some of the FWRAs of indulging in illegal activities like recruiting labourers with fake voter’s card (a must document when applying for work permit in Bhutan) made across the border for Nu 1,000 by the middlemen. There is huge demand for labourers for Bhutan’s booming construction industry. The Regional Immigration Department said that the department does not have the expertise to carry out proper verification of the voter identity cards produced by the labourers. Recruitment agencies charge Nu 250 to Nu 400 a labourer for processing work permit, Nu 150 each for medical check up, Nu 200 as card fee and Nu 500 each as security deposit. If the recruitment agencies, through consultancies in West Bengal, bring in labourers from the neighbouring states of India, they charge the contractors about Nu 500 to Nu 600.
Southern Highway Project
The first two packages (of 7) of the USD 55m national southern highway construction project under the ADB funding have been floated for interested local and international contractors for bidding.These include the 37 km Manitar-Raidak road under Chukha dzongkhag and the 20 km Raidak-Lhamoizingkha road under Dagana. Design works for other sections - the 55 km road between Pangbang and Nanglam, 21 km Samdrupcholing-Samrang road and the 57 km feeder road between Tsebar and Mikuri – are expected to be completed by the end of this year.
Cooperatives
As a follow up to the cooperatives rules and regulations of Bhutan 2010 passed by RGoB in July 2010, the Ministry of Agriculture & Forests conferred legal status to 15 farmers groups and cooperatives in different parts of the country. A new Department of Agricultural Marketing and Cooperatives was established in the Ministry in March, 2010 to support the cooperatives in Bhutan.
Bhutan Foundation
The Bhutan Foundation (BF), in partnership with the Home Ministry, has mobilised a grant of about USD 200,000 to restore two historical monuments - Trashigang dzong and Drametse lhakhang. BF has secured USD 100,000 from the cultural emergency response programme under the Prince Claus Fund for Culture and Development in the Netherlands and another USD 100,000 committed by the World Monument Fund in New York. The Bhutan Foundation was established in the United States to support government and non-governmental organisations in Bhutan that are concerned with the issues of the community, education and youth, healthcare, culture and art, economic opportunity and the natural environment.
No more commercial banks till 2015
Country’s Central Bank RMA has said that it will not issue licenses for new commercial banks till 2015. Presently, there are four commercial banks in the country.
Aviation Sector
The Department of Civil Aviation, RGoB is looking at possibility of providing night landing facility to Galephu Domestic Airport and later extending it to all airports.
Country's first paid medical clinical services
The year long trial run of special consultation services began on October 14 at the Thimphu national referral hospital JDWNRH. The hospital will offer these services on payment basis (different rates for Bhutanese and other nationals) between 4 pm to 7 pm, every day, except during weekends and government holidays. The service has been initiated by the hospital to decongest crowds during regular hours, meet people’s demand for better services, and also to retain its already small pool of doctors. Medical services so far in the country are provided free by the Government.
Poverty Data
According to a report prepared by the National Statistical Bureau (NSB) and the World Bank, 146,101 people live below poverty line in Bhutan (20%). The national poverty line has been taken as Nu 1096.94 (USD 24.6) a person a month, of which Nu 867 is for food and the balance considered as non-food expenditure. Southern districts have the maximum number of people below poverty line. In 2003, 31.7 percent of the population was poor. This came down to 23.2 percent at the start of the 10th plan in 2008. RGoB has made a commitment to reduce poverty to 15 percent, by the end of the current plan.
PART – II BILATERAL
Visit of Lyonpo Khandu Wangchuk
Lyonpo Khandu Wangchuk, Minister for Economic Affairs, RGoB visited India for attending the 4th Ministerial Conference on Renewable Energy from October 25-29, 2010 and the 9th International Oil & Gas Conference and Exhibition from October 30-November 3, 2010. During his stay, he called on Minister for Renewable Energy, Minister for Power, Minister for Petroleum & Gas, and Minister for Commerce.
Ground breaking ceremony for construction of Tango Buddhist College
Ground breaking ceremony for construction of Tango Buddhist College, Thimphu was held on 14th October, 2010. Ambassador was the Chief Guest of the function. The construction/expansion of Tango Buddhist College is a GoI funded 10th Plan PTA project (approved cost Rs. 25 crores).
DTAA negotiations
A two member delegation led by Shri K. Ramalingam, Joint Secretary, Ministry of Finance visited Bhutan from 17-21 October, 2010 for 2nd round of negotiations for the proposed Double Taxation Avoidance Agreement between India and Bhutan.
4th International Trade Festival
Assam Chamber of Commerce, Guwahati has invited Bhutanese delegation for the 4th International Trade Festival being organized from 29th December to 10th January at Guwahati.
TATA Group expressed interest in SEZ
TATA Reality and Infrastructure, the real estate arm of TATA Group has expressed interest to partner with DHI in developing Special Economic Zones in Bhutan. DHI is currently studying market and ground realities of developing SEZs. RGoB, in near future, is looking into turning one of the three proposed industrial estates to be established in Dhamdun (Smaste), Jigmilling (Galehu) and Motanga (Samdrup Zonkhar) into SEZ. As per revised FDI policy, 100% FDI is allowed in SEZ or industrial assistance with the minimum capital of Rs. 20 crores. The TATA group’s proposal came after the investment road show held by RGoB in India. TATA group has also shown interest in agro and food processing industries specially in potato sector in Bhutan.
Kingfisher to train Bhutanese in airline and hospitality industry
The Kingfisher Academy (KA) of India and the Ministry of Labour and Human Resources (MOLHR), RGoB signed an MoU on 22nd October, 2010 under which KA will provide training to Bhutanese students in airline and hospitality industry. The MoU is for three years’ duration. It is a cost sharing mechanism where MOLHR would bear half of the cost while KA will offer 10% discount from actual expenses of the training. Training will be from 6-12 months duration. KA has also guaranteed 100% placement for the students. Presently, there are 18 Bhutanese students undergoing training in the airline sector and 12 in the hospitality sector at KA, India.
Jain Irrigation Systems Ltd
An Indian Irrigation Company based in Maharashtra (also country’s largest) signed an MoU with the Ministry of Agriculture & Forests, RGoB for a long term collaboration to develop Bhutanese agriculture and irrigation systems.
Druk Air began Guwahati flight
Bhutan's national and only airline, Drukair, inaugurated its flight to Guwahati on October 26. Flights will be operational from October 31. Drukair currently operates into Bangkok, Delhi, Dhaka, Kathmandu, Kolkata, Gaya and Bagdogra. Plans to expand flights to Hong Kong, Singapore, Mumbai and Chennai are in the pipeline.
RMA to tie up with IIM, Bangalore
A delegation from the Ministry of Labour & Human Resources and Royal University of Bhutan visited Bangalore and held discussions with the Management of IIM, Bangalore for development of human resources capacity in IT/ITES sector in Bhutan.
PART- III EXTERNAL/ MULTILATERAL
HM Queen Mother’s visit to Europe
Her Majesty Queen Mother Ashi Dorji Wangmo Wangchuck visited Belgium on 19th October, 2010. This was the first royal visit from Bhutan to Belgium following establishment of diplomatic relations between the two countries in 2009. Queen Mother met H.M. Queen Paula of Belgium who visited Bhutan in November 2009. Apart from Belgium, Queen Mother also briefly visited France, Italy and Sweden in her capacity as Chairperson of Tarayana Foundation to share foundation’s experiences as well as explore possibilities of cooperation projects with the counterpart NGOs in these countries.
Austria
Royal Institute for Tourism and Hospitality(RITH) was inaugurated by Her Majesty the Queen Mother, Ashi Dorji Wangmo Wangchuck on 16 October, 2010. A delegation from the Austrian Development Assistance visited Bhutan for the inaugural ceremony. RITH was built with Austrian Assistance at a cost of Nu 462m. Austrian Development Assistance (ADA) would continue to provide financial assistance for consultancy services by experts from the consortium of tourism institute in Salzburg, Austria until 2016 to ensure that the RITH is well established and of an international standard. RITH has also signed an MOU to affiliate RITH to the University of Applied Science, Salzburg, and for joint research, technical assistance, exchange of students, teachers and researchers. The institute will initially be offering a diploma program in tourism and hotel management and will later offer degree courses. Austria has been contributing to Bhutan’s tourism development since 1970s. The Government of Austria has committed Nu 625.7 million to Bhutan over next four years (from 2010-13) to develop energy, tourism and governance in the country.
Denmark
About 120,000 religious texts and books, which Bhutanese researchers and librarians call as the national written heritage of Bhutan, are now accessible online worldwide, both in English and Dzongkha. The process of digitalising the national library's entire collections took 14 years. The project called library twinning project, a joint research project between the national library of Bhutan (NLB) and the royal library, Copenhagen, with support from DANIDA. Completed in four phases, it included catalogueing, survey and the preservation of Bhutanese and Tibetan books at the national library, and in temples and monasteries across the country. NLB today has instituted the ALEPH system, an automated library system used to process library materials and provide public access to a database for cataloging books. The system contains 7,534 records of foreign language books, 11,800 records of Chokye and Dzongkha, 3,175 records of microfilms, 64 archival materials and 423 records of legal deposits. The data base is hosted in Denmark.
Japan
Ministry of Heath, RGoB has signed an MoU with the Research Institute for Humanity and Nature, Japan to pilot feasibility study for community based medical care for elderly in Khaling, Bhutan for two years.
US
A delegation from the National Board for Certified Counseling (NBCC), the premier counsel certification
board in US, visited Bhutan from 4-8 October, 2010. The delegation discussed with RENEW, the NGO in
Bhutan a number of initiatives aimed at expanding the counseling and monitoring health services
available to citizens of Bhutan.
World Bank
World Bank has committed to provide USD 500,000 to RGoB to preserve the big cat. According to PM Thinley, WB had committed funds on account of Bhutan's success with respect to conservation of tigers and its willingness to participate in the international forum and endeavour to preserve and promote the conservation of tigers.
UNDP/ EC
Department of Disaster Management, with support from the Regional Climate Risk Reduction Project and Bhutan Recovery and Reconstruction Project (UNDP), and the European Commission for humanitarian aid organized a 12-day training in disaster management at the Tashi Gatshel police training centre in Chukha. The training costing about Nu 310,000 had engaged five trainers from an institute in Himachal Pradesh, India.
PART- IV TRADE ENQUIRIES/TENDER NOTICES
Five (5) Trade Enquiries received from India during the month of October.
PART- V TRADE FAIRS/ EXHIBITIONS/ SEMINARS ETC.
30th India International Trade Fair (IITF)
A commercial delegation from Bhutan will participate in 30th IITF scheduled to be held in Delhi from 14-27 November 2010. Government of India (GoI) is providing a financial assistance to the Bhutanese delegation for hiring of 36 sq. mtrs space for their stalls.
This issues with the approval of the CDA.
(Piyush Srivastava)
First Secretary (Eco & Info)