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PDP - People’s Democratic Party

OUR ECONOMY: Growth that Works for Everyone’s Well Being

Posted on Wednesday, February 27th, 2008 under Manifesto |

We will adhere to the GNH principle wherein economic growth itself is not the objective but an important means to achieve people’s well being. We will accordingly pursue a strategy of broad-based economic growth.

Such broad-based growth must alleviate poverty – a debilitating reality for one in every five Bhutanese, most of whom live in our villages. GNH will remain an elusive dream if our people are not secure from a life of poverty.

Growth must generate employment opportunity for all, which is how one thinks about full employment at the frontier of economic theory and practice today. Public policies must assist our people to equip themselves, to grasp growing and changing job opportunities. It goes without saying that public policies must not allow job market barriers to entry by Bhutanese citizens, including women and the youth with little work experience. It also goes without saying that public policies must disallow barriers that bar socially, physically and economically handicapped people from leading a productive life.

We will ensure that growth results in higher and equitable standards of living for the population. Economic growth that worsens income distribution is self-defeating for the health of the economy, as well as harmony of society and its politics.

In particular, the government must work provide a social safety net for vulnerable citizens, trapped in the shackles of poverty or prolonged unemployment, so that nobody goes hungry. We must also provide special support for disabled persons to enable them live a productive life and to enjoy well being.

Public policies, investment and services must also coalesce around small and self-employed business development, which can inject vitality to both the rural and urban economy. We must take on a new perspective on this oft-ignored business segment: They are the incubator of big business, sources of growth for today and even more for the future, and – most critically – the very agents of change who incur high personal risks in taking jobs to where people are, and not the other way around.

To be sure, rapid economic growth is highly desirable. But the strategic focus of policies must be on the character of economic growth and its outcomes:

  • WHO should be the leading engine of growth – private sector or the government;
  • WHAT the quality and diversity of goods and services produced should be, to survive in an increasingly competitive world economy;
  • HOW goods and services should be produced, regarding the balance with the nation’s heritage including its natural environment; and
  • WHERE, across regions and population, the distribution of employment opportunities, income and wealth should be going.

In the above context, what follows highlights key strategic views we hold, to guide policy choices for balanced growth.

Policy Framework:

Sound macroeconomic framework is the foundation of healthy economic growth. Macroeconomic stability impacts all economic activities directly, whether in farming, tourism, finance, manufacturing, trading, or household consumption and saving. Confidence in future macroeconomic stability is indispensable for rapid growth in private investment, employment and income. Growth can easily be fuelled by imprudent macroeconomic policies, but it can never be sustained and could even bankrupt an economy.

Growth must be driven by the private sector. Put bluntly, it is the life-or-death financial discipline of business competition and survival that drives cost efficiency, product and service quality, customer care, investor relations, innovation, business diversification and expansion. These are the structural character of efficient economic growth and dynamic employment generation we must seek.

Put bluntly, too, public sector by nature can never simulate that hard discipline, no matter how good the governance is. Government should not be in the business of running a business, unless there are clear and compelling reasons. Monopolistic and other non-competitive behaviour of the private sector are better managed by transparent regulatory regimes that are well implemented, and not by government’s ownership and management of business.

The government’s duty is two-fold. One is to create a stable and supportive environment for legitimate business, both new and the old, to thrive and succeed doing what it knows best. The other duty is to channel the energy of private business, strategically, to where it may not go on its own or not go fast enough – making what is good for the society also good for business, transforming market incentives or business risks on untapped opportunities, technologies and human resource, or on new ways of doing old business.

When left unguided by good policies, or guided by bad ones, the very efficiency and dynamism of the private sector can cause socially undesirable outcomes. Bad policies can also suffocate private sector development altogether.

Business-unfriendly government – such as excessive or badly administered licensing regime – causes “influence” to buy speedy service, raising the cost of doing business, leaving new or small entrepreneurs unattended and to give up, slowing down private sector growth, and making the rich richer and the poor poorer in all sorts of ways. Wealth and income opportunities can become even more concentrated in the hands of a few, without fiscally sound distributional policies.

Job opportunities for Bhutanese will be lost by lack of serious attention to strategic human resource development that prepares present and future job seekers with skills relevant to the job market requirements.

Over-concentration of business in urban centres will come with excessively urban-focused infrastructure, fuelling rural-urban migration and slowing down rates of poverty reduction in villages as well as in towns.

There is no denying that Bhutan has these issues. And, this is precisely why the people are voicing their concerns and asking for course corrections on the imbalanced growth path.

 

Doing business isn’t easy anywhere
But, it’s really hard in Bhutan!

The World Bank has been looking into how easy it is to do business in 178 countries, from Afghanistan to Zimbabwe. Laws, regulations and their enforcements are evaluated in each of the following 10 stages of business companies’ life:

1) starting a business

2) dealing with licenses

3) employing workers

4) registering property

5) getting credit

6) protecting investors

7) paying taxes

8) trading across borders

9) enforcing contracts

10) closing a business

Doing Business 2008, the fifth annual report on this investigation, ranks 178 countries on the ease of doing business. Singapore is at the top, followed by New Zealand, USA, and other industrialized countries. No surprise. Democratic Republic of Congo is at the bottom, along with a number of other African countries. No surprise there, either.

Bhutan is ranked the 119th out of 178. You might say “no surprise!” But, we do worse than some African countries (Zambia, Uganda), parts of the world badly affected by war and internal conflicts (Pakistan, West Bank and Gaza, Sri Lanka), and distinctly worse than Bangladesh and Nepal. Surprised? We should be.

It is really hard doing business in our country, especially if you are small or self-employed. No wonder the private sector is not flourishing. No wonder the young people are having a hard time finding jobs.

Bhutan is particularly weak in areas such as trading across borders where we are ranked 149th compared to India (79th) and Bangladesh (112th); and in access to credit where we are 158th compared to India (36th), Bangladesh (48th) and Nepal (97th).

These statistics beg the questions: why is government standing in the way of Bhutanese doing honest business, generating income and creating jobs? And how can we expect the private sector be the “engine of growth” in such a hostile environment?

Doing Business 2008 including its country results is available to anyone at www.doingbusiness.org. Reportedly, it is taken seriously by investors looking for business-friendly countries.

Creating an Enabling Policy Environment:

With a strong sense of urgency, then, we want to attend to the first duty expected of the government – to build a policy environment that makes it easy to do an honest business in the private sector. To begin with, we will need to take a comprehensive stock of policies, procedures, and their delivery. And, we will need to do so in true partnership with the private sector, so that perspectives of doing business and those of policy and administration for national interest work hand in hand. We will also need to do this work so that changes called for will not have to wait publication of a government report. Implementation can proceed as the stocktaking continues.

That is an easy part. No matter how good the resulting policy regime might be, it will fall short of expectation unless values, mindset, and habits of public servants shift to a culture of outstanding service delivery. We have already detailed our thinking on this topic in the GOOD GOVERNANCE section. It will be a challenging journey, but one that must be taken now to make all the difference for our future.
Accelerating Economic Growth:

  • Maintain sound macro-economic fundamentals, managing public expenditure prudently, and maintaining low fiscal deficits and conservatively sustainable levels of national debt and debt servicing;
  • Orient macro-economic policy and resource allocation strategies to address poverty and support balanced growth;
  • In partnership with the private sector, prepare and implement an Economic Roadmap especially focusing on strengthening and expanding the private sector and determining growth areas with pro-growth policies
  • In partnership with the private sector, frame transparent, consistent, predictable and business friendly policies, rules and regulations to galvanize private sector development
  • Streamline and implement transparent and simplified procedures including one-window service in all business related spheres including licensing, tendering, taxation and registering property, to ease the process of doing business
  • Boost productivity growth in all economic sectors through better management, human resource development, innovation and appropriate technological development
  • Assist small or self-employed businesses to overcome barriers to market information, basic business skills, credit and start-up procedures
  • Strengthen BCCI and other business organizations to effectively represent and support the business community, particularly SMEs and aspiring women and youth entrepreneurs
  • Review and reform policies and regulations to attract foreign direct investment and foreign collaboration to stimulate exports, develop international quality standards, build excellence in management skills, upgrade industrial productivity, and facilitate greater access to world markets and capital more effectively
  • Improve public oversight of corporate governance, including and especially in the financial sector, both in the regulatory regime and its practice

Infrastructure: The Growth Inducer

In the present condition of Bhutan, investments in physical infrastructure and ICT must be viewed as powerful “growth inducers”, creating markets where there are none, and reducing informational and logistical cost of doing business by an extraordinary margin.

We have long recognized that poverty is closely linked with access to basic infrastructure. Moreover, high transportation costs reduce the competitiveness of our exports and inflate the costs of goods imported into our country.

ICT offers our nation a means to move forward in all spheres through enhanced efficiency, creativity and access to information. It serves as a powerful tool to enhance transparency and enable convenient and timely delivery of public services. Moreover, the ICT industry including ITES (Information Technology Enabled Services) holds great potential for generating economic opportunities and employment for our youth.

Inducing Growth:

  • Prioritize rural infrastructure such as roads, drinking and irrigation water supply, rural electrification and telecommunication
  • Expand and improve economic infrastructure including roads, airports, heliports, rail links, dry ports, industrial estates, IT parks and special economic zones
  • Improve and expand our national highways including construction of the East-West highway across Southern Bhutan;
  • Construct airports in Gelephu, Bumthang and Trashigang and support domestic air services to open up tourism, enable export of high value produce, and promote regional balance in our economy;
  • Promote private sector engagements in the design, construction and operation of public infrastructure;
  • Enforce strict quality control and enhance capacity of supervision for high quality infrastructure construction;
  • Encourage private contractors to maintain high standards in construction of infrastructure through performance ratings that are factored into future bids;
  • Further integrate national electricity grid and expand transmission lines to enable rural electrification, industrial growth and improve reliability of electricity;

Promoting ICT:

  • Expand ICT infrastructure to enable e-services in all gewogs
  • Mainstream ICT across the board and enhance capacity of the Department of Information Technology to lead the transformation to a digital age
  • Promote ICT industry and ITES such as BPOs (Business Processing Overseas) through favourable policies and fiscal incentives
  • Establish IT parks in partnership with the private sector
  • Expand IT programs in educational institutions
  • Support IT institutes in the private sector to achieve standards of excellence

The Business of Agriculture:

Growth must strike a wholesome balance between rural and urban development, so that income-generating opportunities do not concentrate excessively in urban centres. Public investments in infrastructure needs to reach rural regions faster than in the past, to serve as the growth inducer. Apart from the impact on poverty alleviation and economic growth, there will otherwise be excessive rural-urban migration today, putting undue stress on people’s lives as well as on urban infrastructure, only to be reversed years and years later as seen among many industrialised nations.

In so doing, public policies, investment and services that support agriculture must take on an entirely new perspective on this time-honored sector: Agriculture is a private self-employed business sector with untapped potentials for higher productivity and diversification. This is particularly so, with rising export demand for our organic farm produce.

To underscore the importance of taking a different perspective, it flags new ways of engaging with agriculture, to the private sector and civil society organizations. One is banking and insurance products that enable farmers to manage high risks and uncertainties in terms of weather, pest and other conditions of Mother Nature. Another is helping farmers to organize as a modern co-operative company, owned and managed by the farmers themselves. Possibilities are endless, with imagination, innovation, strong community leaders, and knowledge of what worked in other countries around the world. The One Village One Product Movement, now spreading from Japan to other countries of Asia, is one sterling example that has galvanized the birth of new agriculture.

Our interventions in agriculture:

  • Invest for faster growth in agriculture and livestock, such as through the triple gem concept of enhancing productivity, access and marketing
  • Engage with the One Village One Product Movement, and invite villages for their community-driven participation
  • Support the development of exports such as horticulture and high value niche items including organic produce
  • Develop the skills and productivity of the rural work force
  • Provide support to integrate the rural economy more effectively with domestic and external markets
  • Work in collaboration with private business and civil society organizations to support rural cooperatives
  • Ensure new banking and insurance products and services to farmers either in partnership with existing financial institutions, or, in the event these do not materialize, establish a Farmers’ bank with the provision for reputable professional management and its privatization when ready as a going concern

One Village One Product (OVOP) Movement

Transforming our Villages

Ohita is a small village in Japan’s southernmost island of Kyushu, which is just about the size of Bhutan. Twenty years ago, Ohita was a sleepy backwater of Japan. Its young people were leaving for cities in droves, its economy was fast declining, and farmers increasingly depended on government subsidies that harmed Ohitaps’ spirit of self-reliance and self-respect.

Today, Ohita is a vibrant agro-based economy. It is a choice destination for Japanese looking for business and employment opportunities, and for foreign tourists looking for modern Japan steeped in tradition and pristine nature. “Made in Ohita” is recognized as the sign of unique farm produce of outstanding quality, and equally unique agro-industry products born of old heritage and new technology.

The One Village One Product Movement, started in 1979, is the power behind this transformation. The Movement was the brainchild of Ohita’s then-Governor Hiramatsu, who envisioned a dynamic and vibrant Ohita. But, he wanted to do it in ways that nurtured what he thought was the root of all sustained change: leaders who can inspire and move the community.

The Movement simply enables people and their community leaders to take up a product or an industry that is distinctive to their region, and transform it into a nationally or internationally accepted one. The government never used subsidies as a means to do so, for fear of hindering self-reliance and lasting success. Measures provided, instead, were leadership training, technical assistance, filling information gaps in marketing and distribution. (See http://ovop.jp/en/index.html for details.)

Around sixty communities of Ohita now produce more than 300 products of distinction bringing gainful employment and prosperity to the region. Among them are: “Shiitake” mushrooms regarded as the world’s best, commanding a lion’s share of Japan’s market; a flavorful “Kabosu” lime of ancient variety that is thought to have survived only in Ohita; a large number of processed products made from these unusual limes; “Bungo” meat that topped Japan’s Grand Championship; and various distilled barley spirits coveted for their smooth taste – like the best of our own ara.

The Movement’s success generated excitement elsewhere. It is spreading all over Japan and to many communities abroad – in Cambodia, China, Indonesia, Laos, Malaysia, Mongolia, Philippines, Thailand, and even USA and beyond.

Our people in villages are steeped in our cultural and natural heritage, in what they produce and how they live. One Product One Village Movement has a perfectly fertile soil, right here in Bhutan.

Possibilities are endless – limited only by our own imagination!

Heritage Industries: Symbiosis

Growth must cherish cultural and natural heritage of a people. Such heritage changes over time, just as economy does, so that striking a wholesome balance is bound to benefit all. And, it is now part of the international business common sense that “culture pays” and “green business pays”.

Good Bhutanese examples to name a few are: cultural industries such as our tourism sector; handicrafts, arts and entertainment industry where young people find opportunities for employment and artistic expression in traditional and modern genre; Bhutan’s hydropower generation valuing environment and generating export; increasing demand for non-timber forest products like high value mushrooms, herbs, spices and medicinal plants; rising export demand for organic farm produce or hand-loomed specialty textiles; and increasing recognition abroad of our cinema industry’s achievements and the efficacy of traditional medicine.

Cultural Industries:

The growth of our cultural industry offers promising prospects for generating economic opportunities and jobs. In concert with the One Village One Product program, micro and cottage cultural industries in rural areas can significantly impact generation of off-farms incomes and poverty alleviation. Support for cultural industries also serves as an effective means to value and promote our cultural heritage.

Promoting Cultural Industries:

  • Support marketing of cultural products within our country and abroad
  • Encourage formation of cooperatives to produce and market cultural goods and services
  • Support and expand institutes of Zorig Chusum and performing arts and other means of propagating and enhancing skills required for producing cultural goods and services
  • Support the development and commercialization of new and unique products including our traditional medicines
  • Promote the arts and entertainment industry, including cinema and music, and facilitate venues for their exhibition;
  • Offer tax incentives to support cultural industries such as tax holidays, duty-free import of raw materials, equipment and machinery
  • Promote the export of cultural products, including through our foreign missions
  • Assist young and rural entrepreneurs establish cultural industries by providing easier access to soft credit and marketing assistance

Tourism:

The phenomenal development in our tourism sector is indeed an excellent example, of strategic choice of the nation working in concert with private business initiatives. Even so, the sector’s full potential is yet to be tapped. It needs to overcome logistical constraints, limited attractions and in some cases hospitality standards. The low number of re-visits and seasonality of tourist arrivals must also be overcome by opening new destinations and attractions, and by cultivating new niche markets (e.g. Bhutan as the choice destination of international conferences and corporate executive retreats). The case of tourism development doubly underscores the need for the government to work holistically as one, in a dynamic partnership with the private sector.

We recognize the tremendous potential tourism offers in the years ahead to generate income and quality employment for our people, and further boost growth and diversification of our economy. But fully capitalizing on tourism’s potential requires supportive government policies and interventions.

Promoting Tourism:

  1. In close consultation with all stakeholders in the travel industry, prepare and implement a Tourism Master Plan and formulate transparent and consistent long term policies that stimulate growth of the travel industry while preventing degradation of our culture, environment and social values
  2. Plowback resources for tourism development activities such as HDR, marketing and infrastructure development, and encourage tourism service providers to do the same
  3. Open up new locations and attractions, and assist the tourism industry to diversify products beyond traditional tourism to boost arrivals and re-visits
  4. Open up tourism to create regional balance with benefits spread throughout the country, including through opening new overland entry points
  5. Encourage rural and community tourism that enhance rural income and helps alleviate poverty
  6. Construct domestic airports in Bumthang and Trashigang, and an all-weather international airport in Gelephu to remove transportation bottlenecks
  7. Launch visa-online and streamline other procedures for the convenience of tourists and tour operators
  8. Implement a human resource development plan for the tourism industry aiming for international best practice in hospitality standards
  9. Recognize the substantial investments and employment created by hoteliers, and incorporate their interests in tourism policy formulation including through representation in the National Tourism Board
  10. Enhance quality of hospitality services by allowing duty-free imports of equipment and non-consumables
  11. Strengthen ABTO, HAB and tour guide associations to effectively represent and support the tourism community

Hydropower:

Similarly, hydropower offers a win-win relationship between our natural heritage and economic development. Bhutan’s “green power” could also offer a coveted opportunity for foreign power companies and financial investors seeking “Socially Responsible Investment”.

Hydropower is the powerful common resource base that can finance the nation’s development while keeping the citizens’ tax burden low, and enable the nation to attain economic self-sufficiency faster, well within our lifetime. The infrastructure around project sites, spin-offs for our construction and trade sector, and power for energy intensive industries have tremendous socio-economic benefits for our people.

Accelerating hydropower development:

  • Enhance capacity and expertise in the energy sector
  • Scale up implementation of hydropower projects (HEPs) to surpass the minimum target of 5,000 MW for export to India by 2020 as laid down in the Indo-Bhutan Agreement on hydro-power development
  • Maintain close cooperation in hydropower with India – our principal partner in hydropower development and market for electricity exports
  • Encourage private and joint partnership investments for increasing energy export and providing reliable and high-quality power supply to domestic industries at predictable prices;
  • Promote development of domestic capacity through the participation of our private sector in HEP implementation, operations and maintenance
  • Initiate in advance feasibility studies, DPR’s (detailed project reports), and infrastructure development for future projects
  • Undertake multiple HEPs simultaneously, keeping regional balance in mind when selecting future projects

Financial Sector:

Banking, insurance and other financial services comprise a non-polluting business sector with yet untapped potentials for dynamic growth led by the private sector. The sector will also be viewed as the fuel that runs the engine of growth. As such, and as the custodian of people’s savings and financial wealth, impeccable corporate governance will be expected. Such corporate governance, combined with the good governance and macroeconomic stability of the nation as a whole, would be rare enough to create a coveted environment for foreign participation in the financial sector, including healthy offshore financial services.

The financial sector is also expected to find innovative business strategies and solutions to meet the risk-management needs of agriculture, and of small or self-employed businesses. In the event that no banking or insurance institutions in Bhutan are interested in this opportunity, the government may establish a farmer’s bank, with an arrangement for a reputable professional management and on an understanding that the bank will be privatised when it is ready as a going concern.

Financial Institutions:

  • Strengthen the financial sector to ensure that access to and quality of financial services, especially loans, are business friendly
  • Work in partnership with banking and insurance business to offer new financial products and services to small or self-employed businesses, including risk-sharing
  • Reduce collateral security for business loans, particularly for SMEs, while emphasizing enhanced project evaluation and monitoring capacity
  • Employ credit rating system across all financial institutions to ease credit access while at the same time ensuring accountability of loan recipients and deterring defaults
  • Encourage financial institutions to reinvest part of their profits into providing prompt and quality service to their clients
  • Base interest rates on market conditions with standard international norms used in its calculation
  • Explore liberalizing the banking and insurance sectors to lower rates and improve services through increased competition
  • Support establishment of offshore banking services in Bhutan
  • Ensure full autonomy of the Royal Monetary Authority, and enhance its capacity including its regulatory and monitoring functions

Education Industry: New Growth

Education, until recently, was the sole domain of government. In the last decade, however, a nascent education industry has emerged with a number of private daycare centers, PP-12 schools and IT institutes in operation. In a year’s time, we also expect to see the opening of the first private college in the country.

Our temperate climate, healthy natural and social environment, and safe surroundings make Bhutan an ideal location for high quality educational institutions. These could include regular schools and colleges, and specialized institutes in IT, management, hospitality, medicine, environment, and Buddhism. They will certainly attract foreign students who seek quality education and pay well for it – just as some Bhutanese do when they attend international schools and reputed colleges in India, Thailand and overseas.

Without compromising on our commitment to deliver free basic education to all Bhutanese, the PDP will vigorously promote the establishment of private educational institutions in our country catering to both domestic and foreign students. Not only for reasons spelled out in our chapter on EDUCATION, but also as a means to generate economic growth, income and jobs. With more parents able to afford private schools, it will also save expenses for the Royal Government that can be plowed back into improving the quality of existing public schools.

Creating an Education Industry:

  • Implement enabling policies, laws and regulations
  • Offer long-term tax incentives to attract both private sector investors and FDI
  • Enforce strict quality control
  • Permit use of the best international curricula in institutions catering to international students
  • Ease access to education services, products and technology from abroad
  • Facilitate visas and permits for foreign students and teachers
  • Assist with marketing, including through our foreign missions
  • Assist with human resource development to provide quality local faculty, administrative staff and managers

Employment For All:

Growth that is equitable and seeks to address poverty must generate employment opportunity for all. Moreover, if we do not productively engage all of the working age population our human resources are going to waste. Unemployment also poses a serious concern for the development of a harmonious society and polity.

Recent labour market studies confirm what most of us know only too well – unemployment is on a steep upward curve. And, it is our educated youth, their parents, and women bearing the brunt of this painful reality. Alongside, the less visible problem of underemployment prevents our nation from achieving its full productive potential and relegates substantial numbers – particularly in rural areas – to a life of poverty.

We need to create over 90,000 jobs in the next five years! A Herculean challenge for a small economy such as ours, but one the PDP must and will rise to.

Creating Employment

  • Accelerate economic growth, and encourage growth into sectors that generate employment;
  • Implement an HRD master plan in consultation with all stakeholders to match skills of present and future labour, to employment available now and those that will be created in the future;
  • Reform education to make it relevant to job market requirements and expand career counselling to guide students into streams offering favourable employment prospects;
  • Promote rural economies and enterprises to reduce the flow of rural-urban jobseekers;
  • Encourage, through tax incentives, enterprises that create new employment opportunities for Bhutanese both in-country and abroad such as BPO’s and security firms;
  • Expand and enhance quality of vocational training, and facilitate the entry of VTI graduates into relevant sectors of the labour market;
  • Establish certification system for skilled workers to enhance their quality;
  • Improve remuneration, working conditions and status (dignity) of blue collared jobs, including through enforcement of labour regulations;
  • Improve labour market information services;
  • As an interim measure facilitate youth employment abroad;
  • Operationalize the Employment Trust Fund as proposed by His Majesty the Fourth King

Building a GNH Economy:

Anticipating faster private sector growth, which will result as these changes go into effect, the other duty of government must not be ignored. Channelling the private sector growth to where it may not go, on its own, calls for clear strategic view on the future shape of our economy – one that powers Gross National Happiness as the everyday reality for everyone.

We see our future economy driven by export, where “made in Bhutan” is a trusted hallmark of excellence produced by socially responsible business. It goes without saying that hydropower export will remain a major driver, but with an enhanced reputation for its “green” business. Agriculture and associated agro-manufacturing business (e.g., dairy products) will bear “made in Bhutan” as the sign of safe, healthy and wholesome food produced organically. Service sectors such as tourism and its offshoots will earn foreign exchange while stimulating the preservation and evolution of our heritage. Financial services of Bhutan will have gained an international reputation as the safe-haven of honest money. And, Bhutan will provide a wholesome learning environment, where world-class schools and colleges give the challenge of highest educational standards to our children as well as international students.

To shape such a future, it calls for government to refrain from draconian measures that go against efficient use and allocation of our limited resources. Policy principles must be market-based, with interventions aimed to correct socially undesirable distortions in market incentives and business risks.

Last but not the least growth must be led by foresighted entrepreneurs who advance exemplary corporate governance in their enterprise. It must also be led by those who engage in business practice that are socially and environmentally responsible, driven by their conviction that it is good for business and for the society. Such business leaders who govern themselves with “Corporate Social Responsibility” are an emerging force internationally. World’s major capital markets are already offering CSR rating of corporations, guiding investors to support their enterprise because they are viewed as more sustainable and better risks for the long term. Banking, insurance and pension funds industry is also following suit, offering various financial products on “Socially Responsible Investment”. These are precisely the feature of GNH economy we want to see, right here in Bhutan.

 

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