The Economist
July 6, 2013
Debt and discontent are growing.
Arrows thud into a wooden target, and the men with bows sing in celebration. One of those watching the archery tournament is Gyeltshen, an 89-year-old who remembers Thimphu, Bhutan’s sprawling capital, as a “few houses and a forest”. Entering it without wearing your gho, a knee-length Bhutanese robe, meant risking arrest and a fine.
Much is changing. He approves of how the king “granted us democracy” in 2008, when the Himalayan country had its first election. On July 13th Mr Gyeltshen will vote in the second. Like many in Thimphu, he says the ruling Druk Phuensum Tshogpa (Peace and Prosperity Party) kept its promises to build roads and airports and to provide hydro power. Almost everyone has a mobile phone, and most of the country has electricity. The party expects to win.
In a preliminary round of voting on May 31st, involving four parties, it got 45% of votes, compared with 33% for the main opposition, the People’s Democratic Party (PDP). The two now face off. The prime minister, Jigme Thinley, will probably win a second five-year term, though he is confronted by an opposition that is much stronger than before.
Beyond parliament, there is grumbling. A population of fewer than 800,000 now has a dozen newspapers. The more assertive of them allege incipient corruption among ruling politicians. They warn against Indian-style dynastic electoral politics and the entrenchment of power. One concern is that a law barring over-65s from contesting elections might be dropped to suit politicians in their early 60s.
By South Asian standards, politics in Bhutan remains exceptionally clean and gentle. The electoral commission forbids even serving beer or yak cheese, chili and rice at campaign meetings. Each night the sole national television channel shows respectful debates between candidates. Policy differences are slight, and parties vie in their adoration for the monarchy.
Hardly anyone mentions the “gross national happiness”, or GNH, that Bhutan’s leaders trumpet abroad as the national credo and an alternative to the pursuit of economic growth. The notion means little to the rural majority. Among educated Bhutanese, scepticism is high. “It’s such a con,” a well-connected Thimphu resident snorts. “People are sick of the talk.”
A member of the interim government admits that, in practical terms, “reconciling GNH and GDP hasn’t happened”—though he points to good conservation of forests and wildlife. Officials grow defensive when asked how the philosophy squares with the violent expulsion of nearly 100,000 long-settled ethnic Nepalese—almost a sixth of the population—in the early 1990s. Some eventually won asylum in America and Europe, where an increasingly outspoken diaspora criticises Bhutan’s rulers. Bhutanese leaders retort that they were resisting a “demographic threat”.
Old-fashioned worries about GDP are anyway more pressing. Bhutan’s steady recent growth has been fuelled by rising national indebtedness. Politicians insist the debt is manageable. Large revenues are expected from 2020, when ten Indian-backed hydropower plants, with a total capacity of 10 gigawatts, come on stream. Economists are more vexed. Work has begun on only three of the stations, and costs are soaring. India used to give grants for hydropower projects; now it makes loans. Only India will buy the electricity, and it will have undue influence over the price.
Given a splurge in imports and other spending—especially for housing, fancy cars and higher salaries for officials—Bhutan already faces a shortage of foreign currency. Building work has stalled in Thimphu valley. Eventually, says a well-placed figure in government, Bhutan risks using all its earnings from hydropower to service Indian debt. The main job of the next government, he concedes, will be to negotiate with India for more aid.
Bhutan has long relied on its big neighbour. Most of the country’s construction is carried out by 100,000 Indian labourers. Most goods, including food, come via India. And economic and foreign policies are, in effect, set in Delhi. Bhutan’s say over its own future is limited. In private, India sharply disapproved when Mr Thinley met China’s prime minister in 2012, in Brazil, making clear such encounters will not be repeated and vetoing a proposal that Bhutan form diplomatic ties with China.
But at least one example of international co-operation exists. A massive golden statue of Buddha, over 50 metres (160 feet) tall, is nearly finished on a hillside overlooking the capital. Intended as a place of pilgrimage and as a tourist spot, the Buddha was made in China and paid for by Singaporean and Hong Kong backers. Indians helped erect it. Hike up, and the view is extraordinary: enough to make anybody happy.
