The Pulse

Economic Revival is on the Minds of Bhutanese Voters

Recent Features

The Pulse | Politics | South Asia

Economic Revival is on the Minds of Bhutanese Voters

The final round of Bhutan’s fourth general election on January 9 will be a contest between the PDP and the BTP.

Economic Revival is on the Minds of Bhutanese Voters

Bhutan’s parliament building as seen from Trashi Chhoe Dzong, Thimphu, Bhutan.

Credit: Deposit Photos

On January 9, Bhutan will vote in the final round of its fourth parliamentary election. The contest is between the People’s Democratic Party (PDP) and the Bhutan Tendrel Party (BTP), which emerged with the largest percent of the votes in the primary round of voting on November 30. Five parties had contested in the primary round, and the PDP and BTP secured 42.5 and 19.6 percent of the votes, respectively.

The ruling Druk Nyamrup Tshogpa (DNT) secured only 13.1 percent of the votes. Standing fourth among the contesting parties, it failed to qualify for the final round.

In power, the DNT presided over a challenging time for the nation. Its term coincided with the COVID-19 pandemic. The party managed the pandemic through strict and unpopular measures at the cost of business, severely limiting tourism. The external debt service ratio increased from 5.8 percent in 2019-20 to 15.1 percent in 2022-23. Increased fuel prices exacerbated the country’s economic troubles.

As a result, economic issues top the agenda in the upcoming election. Two days before the election primary, Kuensel’s editorial noted that “all parties highlighted reviving [the economy], making it the most talked about during the campaign period, including providing content for social media.” Despite the country being known for its Gross Happiness Index, the newspaper noted that many Bhutanese believe the “rest of the priorities are taken care of if the economy is on the right track.”

Bhutan’s economy has recovered, growing at nearly 4.5 percent a year, after shrinking by 10 percent in 2020. It is expected to grow at a similar rate in the coming year.

However, inflation has exceeded growth rates. Youth unemployment was 29 percent in 2022. “The economy took a battering during the COVID-19, and we have not been able to resuscitate it since,” former Prime Minister and President of the PDP Tshering Tobgay said. Consequently, youth emigration, particularly to Australia, has increased significantly post-pandemic. The youth population and experienced people from the civil service and private sector are emigrating as opportunities dry up in the Himalayan kingdom.

As reflected in the primary debate among presidents of the five participating parties, PDP’s leader focused on attracting foreign direct investment and expanding the country’s tourism sector. DPT president proposed further development of hydropower projects.

PDP has proposed a 15 billion Nu (or $180 million) economic stimulus plan to be implemented within a couple of months of forming the government to increase liquidity in the banking sector at a reduced cost. Meanwhile, the BTP has proposed a 50 billion Nu ($600 million) stimulus in the 13th plan budget. Other household economic issues such as land tax, housing, and service infrastructure development are also of concern to the voters.

However, both parties have vowed to support the Gelepu Special Administrative Region (SAR) announced by Bhutan’s King Jigme Wangchuck in his National Day address on December 17. The proposed 1,000 sq km international city bordering the northeast Indian state of Assam, which intends to be the vibrant economic between South Asia and Southeast Asia, will enjoy executive autonomy and legal independence and help provide high-paying jobs to youth and a conducive environment for Bhutanese migrants abroad to return. The king  said he would “personally be involved” in the project to ensure its success.

BTP President Pema Chewang said that anyone who came to power should extend their full support to realize the king’s vision. His PDP counterpart also supported the project, saying that the project aims to provide jobs and skills to Bhutan’s youths in Bhutan.

The king’s announcement which came amid the election campaign shows the monarchy’s enduring influence in Bhutan. It shows that regardless of who forms the next government, the project will be carried forward. The king hinted as much in his speech, remarking that such projects have failed in other countries because of a lack of internal consensus, deliberate obstructions, and conflict of ideas among vested interests, implying that he wants the projects to be above such fray. Therefore, the parties have relatively narrower policy differences than in other democracies and engage in little negative campaigning. However, it also marks the limitation under which the elected government has to function.

Foreign policy has taken a backseat during the elections, though it is not entirely ignored. All of the parties support increasing cooperation with India in the hydropower sector and facilitating trade ties. The Wire notes that only the Druk Phuensum Tshogpa (DPT) manifesto specifically referenced India in terms of foreign policy. The manifesto states that the party will prioritize strengthening connections with the people and government of India and maintaining friendly relations with neighboring nations.

Bhutan’s fourth general elections comes amid major developments on the foreign policy front vis-à-vis its two giant neighbors.

Although it does not have diplomatic relations with China, it is engaged in talks to settle its disputed border with that country. In October, the two countries held the 25th round of boundary talks and signed a Cooperation Agreement on the “Responsibilities and Functions of the Joint Technical Team on the Delimitation and Demarcation of the Bhutan-China Boundary” and have agreed to push forward with implementing all the steps of the Three-Step Roadmap.

India is closely watching the Sino-Bhutanese talks process, as it is concerned over Chinese territorial demands in the Doklam Plateau, area that abuts India’s border near Chicken Neck, connecting India’s Northeastern states to the rest of India. In 2017, the Indian and Chinese armies were locked in a standoff near Doklam.

However, India will not sweat over the elections in Bhutan as India-Bhutan relations remain a pillar of stability. Furthermore, PDP, widely seen as friendly to India, is in pole position in the upcoming elections.

Bhutan is at a critical juncture. Whichever party wins on January 9 has its task cut out. On one hand, it needs to resuscitate the economy. On the other, it will have to engage with China to resolve the border issues.

India will have an acute interest and is a key cog in both. Thimpu needs Indian support to revive its economy and to ensure that the Gelepu project gets off the ground. It will also need India to be on its side in solving the border dispute with China. For better or worse, the next prime minister will also have to work in the shadow of the monarch.