Bhutan government is working towards establishing ICT and e-governance

Bhutan government is now working hard to adopt ICT and e-governance. In its 10^th Five Year Plan, the government allocated a budget of Nu 500 million for the development of e-Governance and another Nu 950 million for developing a state-of-the-art National Broadband core network that would connect all the the 205 Gewogs (Group of villages) through Internet.

The government also approved a Nu 220 million project to establish 205 community centers in the Gewogs in order to provide public services to rural people via Internet.

Jigme Tenzing, senior ICT officer at the department of information technology and telecom (DIT&T), Ministry of Information and Communications, said, “The e-governance project will focus primarily on providing public services online in addition to other priority electronic government systems.”

In order to meet the growing demands, the department of Information technology and telecom also increased its personnel from 20 to 50 and number of ICT officers in the ministries and dzongkhags has been increased to 2003.

Government also undertook another ambitious project of Nu 2.05 billion called the “Chiphen RigPyel” project, under this project various training programs will be conducted where government officials, rural people and young people would be trained on Internet.

Dungsam Cement Company gets huge loan from local financial institutions

A consortium formed by the local financial institutions of Bhutan will lend Nu 2.1 billion to Dungsam, a subsidiary of Druk Holdings and Investments (DHI), to build Dungsam Cement Company Limited’s (DCCL), the largest cement factory of the country.

This is the biggest consortium ever formed in the country’s history for a single project. The factory will be built at the south eastern border town of Nganglam. The total cost of the project is estimated to be Nu 7.17 billion.

On August 19, 2010, in Thimpu, the heads of the financial institutions and Managing Director of DCCL signed a loan agreement that is to be repaid over 10 years at an interest of 10 percent.

Indian government is also financing the project. It promised to provide a grant worth Nu 3 billion.

Officials of Dungsam proposed to borrow Nu 2.1 billion from inside the country and Rs.2 billion from the Indian government. The loan from Indian government had been taken on a purely commercial basis without any government backing for the high viability of the project.

Dorji Nobu, Managing Director, DCCL said that the directors made a good investment in a commodity whose value is rising and the project will be completed on time despite delays caused by monsoon rain. Petron Civil Engineering Pvt. Ltd., a Mumbai based firm is overlooking the construction of the project.

Bhutan government revised electricity tariffs

Bhutan government revised its subsidy on electricity tariff. The current electricity tariff of Bhutan Power Corp. expired on June 30, 2010. The new tariffs came into effect from August 1, 2010 and will be revised after every three years.

In order to ensure efficient use of power and generate revenue for other socio-economic activities, the government revised power tariffs.

Khandu Wangchuk, Economic Affairs Minister, Bhutan, said that the cabinet considered many aspects such as affordability, price stability etc. before revising the tariff rates.

Under the revised subsidy plan, the cabinet decided to provide 81 percent subsidy to lower voltage consumers from its royalty energy volume of 1,028.268 GWh earned from the Druk Green Power Corporation.

The LV block I subsidy has been increased to 0 to 100kWh from 0 to 80 kWh. An LV block I consumer will pay Nu0.85 for one kWh for the next three years from Nu 0.75 kWh. The price of one kWh has been fixed at Nu 4.21 by Bhutan Power Corp. and out of this, government will pay Nu 3.36 for every unit of energy consumed by village households.

The subsidy of LV block II has been increased from 81 to 300 units to 101 to 300 units. For per kWh, an LV block II consumer will have to pay Nu 1.47 per kWh.

For LV block III users (300 kWh and above) the tariff has been fixed to Nu 1.94 per kWh. For medium voltage (MV) consumers, the tariff has been increased to Nu 96.63 per kWh which also includes demand charges.

The higher voltage (HV) consumers will pay the existing Nu 86.51 per kWh till June 2011 after which it will be increased to Nu 1.54 per kWh from Nu 1.51.

Bhutan government is thinking about starting crop insurance for farmers

Bhutan government might introduce crop insurance from April next year. The government is still thinking about the insurance and it did not make any announcement but if introduced, it would highly benefit the farmers.

The Royal Insurance Corporation of Bhutan (RICBL), in collaboration with the Agriculture Ministry, submitted the proposal of crop insurance to the Finance Ministry in September 2008 but the government is still working on the matter.

The two government agencies decided to introduce the proposal after they received requests from many farmers for compensation for crop damages from the government.

Tenzin Chophel, Chief policy and planning division, Agriculture Ministry, said that they are still waiting for the response of finance ministry. This is more like a social service than a profit generating business. He also said that such a scheme would create communal resilience for communities which would protect the farmers.

The crop insurance will be categorized based on marginal, small and big land owners. Land less then an acre will be considered marginal, between one and three acres would be small and more than three acres would be considered big.

Marginal land holders will be given Nu 40,000 in case if they are struck by minor disasters. Small land owners will be given Nu 60,000 and big land holders will be provided Nu 100,000. In case of a major disaster, the government will intervene.

Hazelnuts: The Answer to Farmers and Economy of Bhutan?

Bhutan is a very mysterious country and it is most of the time out of the international media headlines. However, I have a long term interest about the country because first of all, it is my neighboring country and secondly I am very interested and passionate about anything related to South Asia and its economy. If you search about Bhutanese economy in Google or even Wikipedia, you will find hardly any information. Well, the problem is that modernization in Bhutan has not taken place that much. Only now, it is gradually becoming a modern country. It is behind neighboring countries like Nepal and Bangladesh when it comes to modernization and information but I have to admit that Bhutan is one of the most peaceful countries on earth.

Today I found an interesting report about agriculture in Bhutan. It is about hazelnut cultivation in the country. In fact, 20,000 hectors of land will be brought under hazelnut cultivation. If you know about hazelnut then you should know that it is a lucrative cash crop and its production is limited to only a few countries. Hazelnut is extensively used in confectionary items and these days, many people in the Western countries are interested about it because of its health benefits. The main point of this report is that Bhutanese farmers have been cultivating the same crops over and over again and they are also grazing their animals in the same land and thus the land has lost its quality. It is a common problem in many third world countries and I am happy that Bhutanese government has come forward in working with a private company called Sage Partner Limited in helping the farmers. Of course, the main goal it to make profit and still, I am very happy for this kind of initiative.

The cultivation will start from 2010 and the project is going to start very soon. In the west part of the country, the plantation will be carried out mainly but land from the whole country will be brought under project. It is a project worth of US $30 million and it has its benefits and challenges.

I feel that there are some benefits of the project. The first and immediate benefit that I can see is that it will ensure better utilization of land. One good aspect of the country is that its population is not that much and it still has some barren land. So, utilization of land is very important in the country. Utilization of land will result into bringing more money for the farmers and the government will also get some more revenue.

Hazelnuts will be exported and thus it will help the government to get some foreign currency. Here, I like to inform you that the main aspect of Bhutanese economy is that most people are farmers and they are dependant on their land. The country’s economy is totally dependant on agriculture, tourism and hydro electricity export. So, if hazelnuts are exported then it will also contribute in improving the life of the common people. I am also happy for another thing. This is perhaps for the first time a new approach of cultivation has been taken into consideration in Bhutan.

I am worried for certain things. First of all, it is a very large project in Bhutan. So, if it fails then its implication will be some disaster. Secondly, the farmers of Bhutan do not have any idea about hazelnut cultivation. So, it will be a challenging thing for them to do it properly. One thing that makes me worried a lot is the fact that if the project fails then many farmers will loss their hope about modernization of farming. Of course, the rate of education is not very high in the rural area and that is why; the farmers are still reluctant about modern techniques of agriculture farming.

Well, I feel that modernization is a must for Bhutan. If the country wants to improve its condition then only modernization of farming can bring the best result.