South Asia

Bhutan Briefing: Demonetisation Woes; Rampant Corruption

A round-up of major happenings in Bhutan in the last week.


Royal Monetary Authority in Bhutan. Credit: Twitter

Demonetisation woes

The large number of Bhutanese pilgrims making a beeline for Kalchakra initiation at Bodh Gaya has also led to Indian rupees being sold at high rates at the Indo-Bhutan borderKuensel reported that while there had been Bhutanese pilgrims, ticketing agents and exporters were paying between Nu 108-120 for every 100 rupees.

The Bhutanese Ngultrum is officially pegged to the Indian rupee and therefore, the demonetisation of high-value Indian notes has impacted the Himalayan nation. Indian currency is currently being doled out in a very restricted manner at the office of the Royal Monetary Authority (RMA) in Thimphu.

Kuensel carried a detailed report about the negative impact of demonetisation in which the Association of Bhutanese Industries (ABI) have asked the RMA to let them operate their Indian rupee accounts – frozen after November 8 as a short-term measure. “Should the restrictions to withdraw equivalent amounts of INR in Ngultrum continue and if the banks don’t provide INR for daily dispatch of goods, [ABI general secretary] Jochu Thinley said the companies may have to shut down some of the business operations”.

After the local government elections in 2016, a notification by the concerned line ministry about the start of the tenure of the elected local authorities led to much confusion. This led the Election Commission of Bhutan and the Upper House, National Council to weigh in and declare that “members of local government are ‘declared elected’ from the day the election results are declared, and not on the day they are administered oath”. The date is important as it will mark the beginning of their government emoluments.

Rampant corruption

On December 22, Bhutan Transparency Initiative had launched a report on the National Corruption Barometer Survey, which found high level of tolerance for corrupt practices. Around a quarter of the respondents surveyed said that corruption was ‘normal’. About 31.5% believed that corruption had “increased somewhat” after the advent of democracy. The survey listed favouritism and nepotism in recruitment, promotion and transfer as the most common forms of corrupt practice in Bhutan.

In an editorial, Kuensel noted that the survey showed “corruption is pervasive in our society and is accepted as something that is part of our national life.”

“This means if the initiative doesn’t come from the top, corruption will only grow. What is important is that there must be uniform application of laws and rules. At the same time, it is vitally important that media be given the space to exercise their mandate without fear of possible repercussions.”