100 billion pledged by the government of India for the next five years of Bhutan’s development will be spent on developing hydropower, aiming to produce 10,000 MW by 2020, a railway from Hashimara to Phuentsholing, the 10th Plan programmes, and other new projects.Prime Minister Lyonchhen Jigmi Y Thinley said that his government was surprised and very happy with this astronomical sum. It would cover the government’s two project-tied assistance programmes, planned for the five-year period, as well as the those of the 10th Plan and the DPT manifesto, enabling the government to fulfill the high expectations of the people.Bhutanese officials are hoping to go into detailed Plan talks immediately. They hope to update the 10th FYP and to break down the Nu 100 billion into general developmental activities, specific project tied grants, and mega project financing. According to the foreign ministry, the Indian government has already been requested a discussion on the new developments. “The Indian delegation promised to get back as soon as possible, once they reached New Delhi to work out mutually convenient dates to discuss the Nu 100 billion package,” said an official. Meanwhile, the GNH commission has also already communicated to the foreign ministry and embassy in Delhi that it is ready for talks at any time.
Previous rounds of Plan talks had been in December 2007, and January 2008. The next round will cover the Nu 100 billion package, along with new expectations of the Bhutanese people.
“The 141 billion draft 10th Plan estimate may go up because the government will try to fulfill its commitments to the people through more schools, medical college, and other projects,” said Thinley Namgay, a GNH Commission member.
The government has already formed a committee led by Sangay Thinley, DPT’s Gasa candidate, who has compiled a list of all the promises made by MPs and handed it over to the GNH commission yesterday.
“I asked some of my ministry staff to help Sangay Thinley, so that we have an idea of what’s been promised,” said the finance minister, Lyonpo Wangdi Norbu.
“The draft 10th Plan will have to be merged with the commitments of the government, although most major points are similar and require no major changes” said GNH Commission member, Thinley Namgay. “Besides getting a break-up of the 100 billion total, we also need to establish with the government of India on the disbursement of money for the first year of the 10th Plan, from July 2008 to July 2009.”
The government had no ready money for developmental activities in the first year of the 10th Plan and would have to depend on the GoI package. “We also need to know from our government what are the additional needs and priorities that they want in the Plan before the talks,” he said.
The draft 10th Plan would be put up to the National Assembly in the next session, by the end of June, where it will be debated and passed, according to the minister for works and human settlement, Lyonpo Yeshey Zimba. With the Nu 100 billion announcement, the hopes of many MPs have been raised, with each of them eager to keep their local constituency promises.
He explained that the Nu 100 billion would only be used for developmental projects and mega projects and not for any administrative expenses like pay hikes. A former finance minister, he said that this was the most generous amount ever given by the government of India.
“I and my colleagues will question the Plan and ask specific justifications if we find that the new Plan has left out any developmental activities in our respective constituencies,” said DPT MP from Wangduephodrang, Pasang Thinley. “We’re also aware that unrealistic promises will be shelved and that programmes adopted in terms of priority.”
The secretary for economic affairs, Dasho Sonam Tshering, said that India’s commitment of Nu 100 billion for the next five years would give Bhutan more avenues to open new projects. New projects could be started without having to wait for the completion of an ongoing one. “Unlike the Chukha and Tala projects, where there was a gap of 20 years between them, we could start four to five projects simultaneously with a commitment of Nu 100 billion,” he said.
In the past, mega hydropower projects like the 336 MW Chukha and 1020 MW Tala projects were funded through a 60 percent grant and 40 percent loan arrangement by the government of India. “If we have a joint venture module, based on debt equity ratio, our government’s equity could be funded through this (Nu 100 billion), which would leave us room for more projects,” he added.
Punatsangchhu II is estimated to cost about Nu 45 billion and Mangdechhu about Nu 37 billion. Dasho Sonam Tshering said that, at the end of the 10th Plan, only about 20 to 30 percent of the two projects would be completed. “This means that whatever funds are available for power projects can be used to open more projects because whatever is committed for the 10th Plan Year would have to be finished in the 10th Plan.”
The mega project-funding module had already changed with the Indian government financing the Nu. 35 billion Punatsangchhu I project as 40 percent grant assistance and 60 percent loan at an interest rate of 10 percent. Chukha and Tala were financed with 60 percent grant assistance and 40 percent loan.
India’s ambassador to Bhutan, Mr Sudhir Vyas, also confirmed that bilateral interaction between Bhutan and India would look at the economic cooperation projects and the vision behind the economic engagement for the future. “The Rs 100 billion draws all the threads together,” he said. “We’re not just talking about the Plans, not just talking about one aspect or the other … that is how we should view our engagement,” he said.
The billion-dollar question today is what’s with the Rs 100 billion? The Indian prime minister’s announcement in the Assembly hall was met with a strong sense of appreciation symbolized by the dramatic silent ovation that the Parliamentarians offered Dr. Manmohan Singh. But the information should be distilled and understood before we start spending.While the joke at Paro airport over the weekend was that finance ministry officials were gazing expectantly at the metal boxes being unloaded from the Indian prime minister’s aircraft, we know that the prime minister’s pledge was a broad total of India’s assistance to Bhutan. That’s why he called it “bilateral economic engagement”. It is up to the government officials of the two governments to tell us what this means.We learn that the discussions on India’s assistance to the 10th Plan are underway. We also understand that this is the process of finalising the details, including India’s grant for the 10th Plan and other assistance for Bhutan’s overall development. And we know that this is not the easiest of processes. In the new democratic environment there is more public interest in details, and more pressure on the media, than there has been before. On the eve of the Plan, with a new government required to prove its worth, there are more questions than ever before. What struck the people of Bhutan was that the prime minister chose to spell out India’s own vision of Bhutan as its “closest neighbour and friend … a Bhutan that is sovereign, prosperous, and secure”. Fifty years after the first prime minister, Pandit Jawaharlal Nehru, visited Bhutan, he repeated Prime Minister Nehru’s wish that Bhutan remains an independent country choosing its own way of life.
The prime minister was encouraging in his admiration for Bhutan’s wholesome approach to change, the values of Gross National Happiness. This is where we have seen, over the decades, India’s commitment to development in Bhutan, to the priorities that Bhutan identifies.
But what struck us most was that good friendship is not just about economic cooperation and political niceties. It is about people.
The prime minister of India himself came to Bhutan as the head of the government of India. He went back to India as Dr Manmohan Singh. We would like to think that it was the vibes he received in Bhutan that made this important world leader relax enough to shed his official persona and be the nice man that we met.
The Plan talks and power projects will go on, not without the frustrations of official dialogue. Negotiations will go back and forth and at various levels. But, as long as such genuine vibes are established, the long-term picture can only be good.
“The fence that makes good neighbors needs a gate to make good friends”
