Is there a silver lining to the rupee crunch?

It’s obvious that a lot of people are worried about the rupee crunch that’s upon us Bhutanese this spring. People have children in India who they have to send money to, businessmen are worried about imports, vegetable vendors are complaining about the increased value of the rupee compared to the ngultrum and subsequently the increased price of the vegetables, everyone is worried about inflation, people who are halfway through constructing buildings are having a hard time completing their work, and the crisis may threaten the ngultrum-rupee peg itself.

But is there a flip side to the whole crisis? We have been aware for a very long time, that we have a very unhealthy practice of buying almost everything from India, while not selling enough to it, and this rupee crisis is a result of that lack of self sustenance. Will the rupee shortage force us to become a little more self sufficient?

I mentioned an interesting conversation with a friend in my last post, and he certainly thinks so. He cites the example of the lack of eggs due to the bird flu scares, and how that has led to a complete replacement of imported (and inferior quality) eggs with local eggs, and how, despite the increase in price, people still eat eggs.  In fact, he says, people won’t want to go back to eating the small white eggs again, even if they are cheaply available in the market. Sounds like a success story.

So, will that happen? When we find that Indian vegetables and other commodities are no longer available in the market, or are as expensive as the local ones because of the informal increase in rupee value, will people start consuming local goods, thus replacing the imported goods with local goods permanently?

I don’t know. I sure hope so, but I also get the nagging feeling that it isn’t going be all that automatic as my friend suggests. We can work this situation into an advantage, and use it to boost our local economy, but that definitely needs some active, conscious action.

We should have been able to replace imported items with local ones already. Local products are supposedly of better quality, healthier, and tastier. So why hasn’t the average Bhutanese preferred local goods to imported ones? Of course, reasons vary for different items, but lets talk food products here.

The first answer is probably because of the higher cost of local goods. The higher cost can be attributed to lack of competition among the local produce, and that, in turn to the small yield from farms. I may be wrong- I have heard of people having to throw away vegetables (potatoes) because they couldn’t sell it all off. But in general, I feel I am right in this. Obviously, this is conjecture, and the concerned agency needs to look at why local produce is not main source of food for us.

Incidentally, who is the concerned agency? The agriculture ministry, for now, but it’s about time we had an agency which looked solely at how to boost local economy through agriculture. Not just boost agriculture, or cottage industries, but economy through agriculture. This body can be small, and work with various other organisations, but work solely to ensure that our farmers grow more, grow for business, find ways to turn more and more farm produce into marketable goods, ensure that the products are of a certain quality, and also to help them market their goods.

The agriculture ministry probably works at helping farmers produce more. But something is definitely going wrong somewhere in between when this work doesn’t translate into results. What happened, for instance, to the three crop policy that was introduced a few years ago?

We need to look at the real problems of our farmers. Do they have the right seeds, the right breed of animals, the right knowledge to grow these crops and rear the animals? Do they have enough land, enough fertilizers, enough water to irrigate their lands? Do they have roads to help them transport their goods to the outlets? Are there enough cooperatives that help them sell their produce? Or are our farmers just lazy? We aren’t really a lot of people to feed, smaller and more difficult lands have been able to feed larger population than ours.

The rupee crisis may open the eyes of our farmers to the opportunity to market their locally grown produce, and eventually replace all imported farm produce- it may hide a silver lining.  But it may not work out that way, unless active steps are taken. We can wait and watch, or we can make it happen.

Meanwhile, you can do your bit to enhance this ‘silver lining’ by consciously choosing local products- local milk, butter, cheese, salt, vegetables, locally produced snacks (a lot of locally produced potato chips, fried nuts, fried snacks, and even fried tengma is available in town, and they are probably more healthier than MSG filled imported snacks), packaged drinks, and furniture.



Filed under Bhutan, Entrepreneurship, government, new ventures, Uncategorized

3 responses to “Is there a silver lining to the rupee crunch?

  1. Thoughtful and optimistic opinion. Having gone through this blog, I got reminded of our national development policy prior to GNH era; there were 7 goals, and amongst them one was National Self Reliance. This rupee shortage should be seen as an opportunity to achieve national self reliance. Yes it is possible for us to be food self sufficient. Our staple diet is rice, and we have enough rice fields to produce rice for all Bhutanese, but situations in the grassroots aren’t favourable to the farmers because like you said our local products cost more when compared to Indian rice. But can’t the govt put some form of tax (is it excise duty?) to import indian rice? ( when they have the audacity to ask for interest for the rupees that we borrow) Taxing on indian products that can be produced inside Bhutan is one way to START BUILDING OUR OWN ECONOMY. when people realize that growing rice is profitable, hundreds of acres of fallow paddy fields will be green and golden once again, this will curb the rural to urban migration whose menace is palpable in the urban areas ( housing shortage, drug abuse, violent youths, etc). Infact, the change in human geography of bhutan will be the greatest road block on our way to achieve GNH.

  2. Di

    I wouldn’t call it ‘audacity’ to charge interest on loans- that’s just business, right? But of course, you are right about the tax…I suppose that will be an import tax. But also real help to farmers- I somehow think the agriculture ministry’s plans haven’t really been working on the ground.

  3. Baap

    Good thinking and you have all my support; but i was disappointed with last evening panel discussion on rupee crisis. Two lyonpos did not utter a word about the need to boost local economy, especially agriculture and food processing. It is high time we invest in agriculture like many developed countries do. They make their food production base strong before anything else and once self sufficiency in basic needs are attained they planned for secondary and tertiary sectors development. In Bhutan we are approaching development from opposite direction. I hope this rupee crisis encourages our planners think right and do right thing. Otherwise, they should be replaced with other able bodies.


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