Translation

Note: Following the recent fake Bhutanese refugee scandal involving high-profile politicians and bureaucrats in Nepal as well as refugee leaders, the Nepali media, Setopati, published a long form on the refugee issue. The piece in Nepali begins with Chandra Dhungana's story -- a refugee whose identity is maligned in the midst of the recent scandals. It then discusses Nepal-Bhutan relations from a historical standpoint. It suggests Nepalis began migrating to Bhutan as early as the 8th century. Additionally, it dwells some time on Nepal-Bhutan relations during the times of Mallas in Nepal and Zhabdrung in Bhutan. Finally, the article highlights the current status of refugees who are still in the camps in Jhapa. 

This morning a friend shared a link to the article. I tried translating it. But to translate it manually is too much of an effort. So I used AI to translate the text. However, I realised that AI's version can be misleading sometimes. So, I compared the Nepali and the English version produced by AI and, whenever necessary, I manually translated the text to reduce the distortion of meaning from the original. Whenever the text was matching in meaning, I retained it. This has caused a significant variation and the quality of the prose. But the meaning is more or less retained. 

I can say not much information is lost in translation, though the stylishness of the Nepali writing is certainly lost. I, however, do not agree with all of what is written. Historicity is questionable at times. Plus, the sources the article mentions, besides being too few, are mostly not very reliable. Of course, except for the one Nepali source - नेपाल भुटान ऐतिहासिक सम्बन्ध र जोङ्–सार–पा एवं ल्हो–छाम्–पा समुदाय- which I have not read and am not in a position to comment on. The article raises some pertinent issues as well as mentions some incident in history that are worth researching. 

Bhutan: 400-Year History

Sudip Shrestha

 

Introduction

 

"My name is Chandra Dhungana. And I am not a fake Bhutanese refugee."

As he introduced himself, it felt natural to mention his name and surname, but in the current context, we thought it was natural for him to attach “a genuine Bhutanese refugee” tag to his name.  

Following the reports about defrauding Nepali citizens of millions with the promise to send them to the US as Bhutanese refugees, genuine refugees like Chandra find themselves in a midst of an identity crisis.

Chandra resides in the Beldangi refugee camp in Jhapa, Nepal, in hut number D2/159.

Apart from his six-year-old son, Chandra has no other family members. Most members of his family, including his mother, have already migrated to the United States years ago. Neither Chandra nor his son's name is currently listed as a refugee.

In 2006, 2008, and 2012, the United Nations High Commissioner for Refugees (UNHCR) verified the Bhutanese refugees. In all these events Chandra was not present in the camps; he was in India for work. His minor son, Surya Dhungana, was also not included in the list after his father's departure.

 

In 2019, a joint team of UNHCR and the Refugee Coordination Unit (RCU) returned to the camps to take photos and conduct interviews with refugees who had missed registrations earlier.

Chandra didn’t miss that opportunity.

He went along with his son, got their names recorded, had their photos taken, and gave an interview.

As the list was compiled, Chandra's satisfaction knew no bounds. But now, he feels disappointed that the list is now caught in a controversy.

 

After the fraud of Nepali citizens having been registered as Bhutanese refugees has been made public,  everyone included in the list is being looked at suspiciously.

"We are like the genuine note kept inside the wad of fake notes," says Chandra. "Once the wad is counterfeit, who cares to recognise the genuine! Our genuine story will overshadow the wealth of the fake ones!"

...

This series about Bhutanese refugees began starts with Chandra Dhungana because of the ongoing controversy.

We have been working on this series for more than three years. We were researching how Nepali people entered Bhutan, when it started, and how they became refugees, expelled from their country.

Bhutan built an international image as “happy and peaceful", but we wanted to shed light on the tears and pain of the Nepali people behind that image. We wanted to tell the story of the ethnic cleansing that took place against the Bhutanese Nepalis.

Our series begins in that era when Bhutan did not exist as a country.

What we now know as Bhutan was called "Lho Mon" by the Tibetans. Lho Mon is a Tibetan term for “southern land”. The Nepalis called it Bhot-anta.

In the mid-17th century, a person entered the land we now call Bhutan or Lho Mon, and he turned this land into a country. He united small kingdoms and communities, and connected small territories and sects. He established a rule based on religion and introduced the new identity of "Druk Yul," meaning "land of the Thunder Dragon."

That person was the first Dharma King of Bhutan, Ngawang Namgyal.

Ngawang Namgyal history is almost legendary. Before coming to Bhutan, he was a monk at the Ralung Monastery in Tibet. He considered himself the reincarnation of the religious guru Pema Karpo of the Drukpa lineage and claimed his right as the successor of the Ralung Monastery. However, the rulers of the Chang region of Tibet did not support him. His conflict with these rulers ultimately made it impossible for him to stay at the Ralung Monastery.

 

How strange the coincidence in history! Four hundred years later, the country founded by Ngawang Namgyal – a refugee himself –should evict Bhutanese of Nepali origin, just the way Ngawang Namgyal was evicted.

Over a hundred thousand Bhutanese of Nepali origin had to become refugees from a country founded by a refugee!

In this series, we will take you back to that time when Nepalese first entered Bhutan.

Fourteen hundred years ago, in the seventh century, there was an emperor in Tibet, Srong-tsang-Gampo. He had married Bhrikuti, the daughter of the Licchavi king Udayadev of Nepal. According to Tibetan oral tradition, Princess Bhrikuti brought with her the statues of Akshobhya, Maitreya, and Tara as dowry. Some artisans from Kathmandu had accompanied Bhrikuti to Tibet. Later, Srong-tsang-Gampo became involved in the propagation of Buddhism. He went to Bhutan and built Buddhist monasteries. These Buddhist monasteries are believed to have been built by the Nepalese artisans who had gone to Tibet with Bhrikuti. There is a belief that some of these Nepalese artisans stayed in Bhutan.

Then comes the entry of the tantric religious guru Padmasambhava. In the eighth century, Guru Padmasambhava visited various regions of Bhutan and imparted tantric teachings. Even today, the Buddhist community in Bhutan reveres him as 'Guru Rinpoche'. It is believed that this religious guru once came to Farping in Kathmandu for penance, and then went to Bhutan via Tibet. At that time, some Nepalese followers are also believed to have followed him to Bhutan and settled there.

We do not know who these Nepalis were that had accompanied Srong-tsang-Gampo and Padmasambhava. No historical records are available on these events.

The entry of Nepalis into Bhutan which is verified by historical records began some four hundred years ago.

At that time, Dharma Raja Ngawang Namgyal, who was trying to consolidate Bhutan into a new structure and establish a systematic state, had established diplomatic relations with the Malla Kingdom of Gorkha and Kathmandu. He was influenced by the governance system set up by King Ram Shah in Gorkha, and the Buddhist monasteries of the Kathmandu Valley had a great influence on him. There is a history of him coming to Swayambhu in Kathmandu before he went to Bhutan as a refugee, where he stayed for some time and received Buddhist education.

Gorkha and Bhutan were also bridged by religious relations. Whenever Gorkha kings fought among themselves, or when they could not produce an heir to the throne, they would summon the Bhutanese Lama to conduct tantric rituals. It is said three princes were born to King Ram Shah only after such a ceremony was conducted. Among them, Damber Shah later became the king of Gorkha. It is also believed that Prithvi Narayan Shah was born to Narabhupal after he had summoned Bhutanese lamas to conduct a tantric ceremony.

Because of these bilateral relations, Bhutan’s Dharma King Namgyal paid two visits to Gorkha and the Kathmandu Valley during his reign. During both visits, he took with him a large number of people of all four varnas (Brahmins, Kshatriyas, Vaishyas, and Shudras) to Bhutan. King Lakshmi Narasimha Malla of Kathmandu and King Siddhi Narasimha Malla of Patan also sent Newar artists, including sculptors and painters, along with Namgyal to Bhutan.

Based on historical records, this is the first phase of Nepalese entering Bhutan.

Does history acknowledge those Nepalese? Are their names recorded in history?

In this series of stories, we will introduce you to those individuals who, four hundred years ago, entered Bhutan by crossing over the bridge of the relationship cultivated by King Ram Shah of Gorkha and the Dharma Raja Ngawang Namgyal of Bhutan. Today, some of the refugees might even be their descendants from Gorkha!

From a historical standpoint, the diplomatic relationship established between the then Gorkha state and Bhutan was even firmer over time. This resulted in a protracted migration from Nepal to Bhutan. The Bhutanese palace had allowed those Nepalese to cultivate the dense jungle of the southern region. They farmed there. They did business. They also defended the southern border as human walls.

What was the settlement of the Nepalese in Bhutan like at that time? How did the state manage them? We will elaborate on this for you.

The political ties between Nepal and Bhutan were deeply rooted to the extent that Nepal provided its support when the first king of the Wangchuck dynasty, Ugyen Wangchuck, ascended to power. Ugyen Wangchuck had asserted his dominance over other provincial rulers in Bhutan, proclaiming himself as king. This marked the inception of a monarchy rooted in dynastic tradition in Bhutan.

History has it that Chandra Shamsher Rana convinced the British to accept Ugyen Wangchuck as the monarch of Bhutan. Chandra Shamsher and Ugyen were mit[1]. Due to this camaraderie, he facilitated a meeting between Ugyen and Lord Minto of the British Government. In this series, we have encapsulated a plethora of such historical instances of bilateral relations between the two nations.

Among the Bhutanese Nepali were such persons who had earned the trust of Bhutanese rulers and been entrusted with the rights to administer the southern belt. Garjaman Gurung was one of them. His status among Bhutanese Nepalis was equivalent to that of a 'king'. One day, he went to the Bhutanese court and requested to be made the 'Prime Minister', or a tin sarkar.[2] This startled the Bhutanese court, and they conspired to assassinate him. We will narrate to you the story of his rise and fall.

In the 1950s, when India became independent from the British Empire, and Nepal overthrew the Rana regime to establish a democracy, a democratic movement also sparked in Bhutan. Girija Prasad Koirala himself went there to organize the Bhutanese Nepalis who were participating in the Bhutanese movement. How did this movement in Bhutan start? How did it end? What strategies did the then Bhutanese King Jigme Dorje Wangchuck adopt to suppress the movement? We will describe all of this in detail.

At the same time, we will also tell you the story of the first martyr of Bhutan, Mahasur Kshatri, who lost his life in the said democratic movement.

After the first democratic movement, King Jigme Dorje Wangchuck granted two important political rights to the Nepalese in Bhutan — first, he granted them citizenship and second, he ensured their participation in the National Assembly. In this regard, Jigme Dorje's reign was a happy time for the Nepalese in Bhutan.

That happy time was interrupted by his own son, Jigme Singye Wangchuck.

During the reign of Jigme Singye Wangchuck, many such laws were abolished or amended, which his father had introduced with the intention of integrating the Nepalese in Bhutan into the national mainstream. He implemented discriminatory laws against Nepali speakers. Their rights to citizenship were revoked. Their rights to land were lost. Their rights to language and culture were taken away. And, finally, they were forced to live as refugees after leaving Bhutan.

What were the discriminatory laws that forced the Nepalese in Bhutan to become refugees? How were they turned from citizens into non-citizens? And how were they forced to leave their country and become refugees? We will discuss these issues in detail in this story series.

 We have written this series reflecting four hundred years of Bhutanese history in a narrative non-fiction style. The events mentioned herein have been drawn from historical records, tipots, and books. Some incidents have been recounted by historians researching the subject, and Bhutanese refugees. We have used narration occasionally to present these historical events more simply. We are aware that narration should neither obscure nor curtain history. Hence, we have only adopted the narrative style in places where it aids in the lively and engaging depiction of non-fiction. You will be easily able to distinguish which part is narrative and which is non-fiction as you read through this series.

We have divided the story series into various chapters. Starting tomorrow, we will be publishing two or more chapters every Friday. Each instalment will be about ten thousand words long. The entire series will amount to approximately 80,000 words.

In the process of writing a series about Bhutan, we met leaders of Bhutanese refugees, Teknath Rijal, Dr. Bhampa Rai and others several times. We had hours-long conversations with them. Dr. Rai has now passed away. Teknath Rijal, however, is under police custody, implicated in a case of false refugees.

We visited the Beldangi camp twice and interacted with the Bhutanese refugees living there. They shared with us the injustices they had to endure in Bhutan and the pain of being displaced from there. They shared the hardships they have faced living as refugees in Nepal. We have recorded their stories, which were told over conversations lasting more than fifteen hours. These experiences and stories will be included in our series.

Similarly, we spoke with the families of Nepali Bhutanese who have spent their lives in various prisons in Bhutan. They still go to Bhutan with great sadness to meet their family members. Sometimes they get to meet them, and sometimes they just return. We will share their stories with you.

We have also heard about the experiences of Bhutanese Nepalese who have settled in the United States under the third-country resettlement program. Their journey from Bhutan to Nepal and finally to America will also be part of our series.

Historian Ramesh Dhungel, who has delved into the history of Bhutan and the dimensions of Nepal-Bhutan relations, has greatly helped us. We had more than a four-hour discussion in three different with Dhungel, who conducts historical research on the Tibetan language, Tibetan civilisation, and Buddhist culture and tradition. His book 'Nepal Bhutan Historical Relations and Jon-Sar-Pa and Lho-Cham-Pa Community' (नेपाल भुटान ऐतिहासिक सम्बन्ध र जोङ्–सार–पा एवं ल्हो–छाम्–पा समुदाय)[3] greatly assisted us in preparing this series. Many of the events we have mentioned here are based on this book.

We also used 'Unbecoming Citizens' by Michael Hutt, a scholar of Nepal and the Himalayan region, and 'Bhutan: A Movement in Exile' by DNS Dhakal and Christopher Strawn as source materials.

Michael Hutt's book was helpful for us to understand the settlement and arrangement of Nepalis in Bhutan from the historical events of Bhutan. Similarly, the book by Dhakal and Strawn assisted in understanding the first phase of the democratic movement and subsequent events. Dhakal himself is a Bhutanese refugee. He has long advocated for the rights of refugees.

While we were exploring, unearthing, the four hundred years of Bhutan's history, the fake refugee case became public. Some high-level political leaders and administrators were involved. A case against 30 of them has been filed in Kathmandu District Court on Wednesday.

This new development added a new chapter to our story series - the chapter of Chandra Dhungana.

We got in touch with Chandra through Dil Bahadur Mahat, also known as Dil Bhutani, who lives in the Beldangi Refugee Camp.

We first met Mahat three years ago and had a lengthy conversation. After the fake refugee issue came to light, we spoke with him again.

Even though this investigation revealed the group making fake refugees, he expressed deep regret over the situation where genuine refugees are losing their identities in the same process.

'Whoever is fake, only their money got wasted. But those who are genuine refugees, their identity itself is sinking, that's the pain,' he said, 'those who missed out on registering on the refugee list for various reasons will face a greater problem!'

'Those genuine refugees who missed out were gradually registering themselves and obtaining identity cards. Now the hope is dying.'

He also pointed out another problem that all Bhutanese refugees might have to face.

'Bhutan accused the people living in the refugee camps of not being Bhutanese citizens. We have always protested against it. This issue will give strength to the accusation of the Bhutanese government,' he said.

He is also afraid that this will weaken the repatriation movement of Bhutanese refugees.

Since 1990, Bhutan has expelled over 120,000 Nepali-speaking people from the country. They lived as refugees in various camps in Jhapa and Morang. Of these, 113,000 have gone to the United States, Australia, and some European countries under a third-country resettlement program. Now, more than 6000 refugees are left here. Some of these refugees are engaged in a movement for repatriation. They want to return to Bhutan, not go to America or Europe. Dil Mahat is one of them. He says this issue has greatly damaged the movement of refugees who are discussing the option of repatriation.

In the meantime, he is happy that the issue of Bhutanese refugees has once again received discussion. He says that this could bring to light again the issue of the remaining genuine refugees.

"The Nepalese government and the international community should reassess the living conditions of Bhutanese refugees living in camps in a new way, ensuring their right to live as they wish," he said, "If the solution to this issue is not sought, the gangs involved in corruption in the name of refugees will continue to flourish."

In the final minutes of a nearly hour-long telephone conversation, Dil Mahat brought up the case of Chandra Dhungana and said, "He is a genuine refugee suffering in the crowd of imposters."

Chandra Dhungana had fled Bhutan and came to Nepal as a refugee thirty years ago, in 1992, from the Lalenai village located in Chirang, Bhutan.

He was 16 at the time.

His father had passed away in Bhutan. He came to Nepal with his elderly mother, two brothers aged 12 and 5, and two sisters aged 10 and 7.

The incident of fleeing from Bhutan still haunts him.

"There was a raging conflict in the village," Chandra collected his dim memories and elaborated his story, "At that time, Bhutan had forced the Nepalese to give up the Daura-Suruwal and Dhaka Topi and wear the gho. We were not allowed to study the Nepali language. Some schoolteachers were even prosecuted for teaching in the Nepali language."

"We Nepali speakers were mostly Hindus," he continued, "We heard rumours that we would not be allowed to celebrate festivals like Dashain and Tihar. We heard that we could not even conduct our weddings and rituals according to our customs. More terrifying than that, Bhutanese military forces started to have evil intentions towards our daughters. It became difficult for us to protect our dignity and lives."

This fear led Nepali-speaking families to abandon their villages and start moving, one after another, like threads in a broken loom, Chandra said, "We felt it was better to stay alive by fleeing Bhutan, rather than dying there."

Chandra's family lived in a hut belonging to their relatives on the bank of the Mai River after they entered Nepal. After about four months, they moved to the Beldangi camp.

So why couldn't Chandra, who came to Beldangi camp thirty years ago, make a 'Refugee Card'?

"Because I wasn’t fortunate. Being the eldest son in the family, naturally, the responsibility towards my younger siblings fell on me,” he said, "I used to go out of the camp for work. I mostly went to India. In the meantime, the 'Refugee Card' was issued three times. Everyone in the family got it, but I kept missing it."

When the first and second refugee certifications were taking place, he was working as a security guard in Gujarat, India. While in India, he was diagnosed with jaundice. Even after knowing that the verification was being done in the camp, he could not return due to his illness.

When he returned later, the certification process was over. He lived in Nepal for a few years. He married a girl from outside the camp and started living outside the camp. But his family life was not stable. They separated.

In the meantime, his brother, who had gone to work in a coal mine in India, went missing. After not hearing from him for a long time, Chandra went to India to search for his brother. He explored the mines he knew about. He worked there for a while. This time, he had brought his son Surya along, who was just three years old at the time.

 

The third phase of verification took place at this time. The mother, who was excluded earlier, registered her name and went to America. Chandra’s name, along with the three-year-old son who was with him, did not appear on the refugee list this time either.

"At least if I had left my son with my mother, his name would have been on the list!" Chandra grumbled tiredly, "If luck was on our side, maybe he would have been in America with his grandmother, uncles, and aunts!"

"Sometimes I feel like my share of the unfortunate lot has been partly shared with him as well," he said.

If excluding his younger brother, who disappeared in India, only Chandra and his son remain in the camp from the family. His younger brother who went to America under the resettlement program is in Pennsylvania. His younger sister's home is also there. Their mother lives with both, in turn.

"You have another sister, don’t you?"

"She got married here," a slight happiness sparked in Chandra’s voice, "She is in Itahari. She is the only one I can call my own in Nepal now. Sometimes she comes here with my niece and nephew, sometimes I visit them."

"Even though my heart is a baggage of million pains, seeing her happy makes me happy. What else does it take to be happy anyway!" he said.

While all the members of the family reached America and Australia, the only glimpse of real happiness in Chandra’s life, who is living a 'haphazard life' here with his son, came when his and his son's names appeared on the refugee list for the clearance count.

The names did appear, but they still could not get the refugee card this time.

 

After a recent revelation that counterfeit refugees were slipped into the list, Chandra is again disheartened. He feels his fate has cheated him again.

Chandra is currently earning a meagre living for himself and his son by doing odd jobs. They have also managed to raise a few goats. Occasionally, relatives living abroad lend a helping hand.

"I've spent half of my life like this, but I fear all this chaos will ruin my son's life," mourned Chandra, "Without the refugee card, one doesn't get the recognition of being a refugee. We can't open a bank account. Even if I want to take up a decent job or start a business, it's not possible without the card."

His son, Surya, is about to take his final exams for grade 11. He studies at Damak Himalayan Secondary School. So far, he hasn't needed to show a refugee card at school. Chandra is worried about whether Surya will have the opportunity to attend university in the future.

In a conversation spanning an hour and a half, Chandra vented his heart out, sharing his countless sorrows from his experience. In the end, he appealed to us, "Please make sure everyone hears the story of genuine refugees like us. We are lost in the noise of fake refugees. I hope it opens the eyes of those who doubt our identity!"

Usually, in the confusion between genuine and fake refugees, it's often the genuine ones who suffer more. The fakes have themselves to blame; they create some chaos and then disappear.

Even here, once action is taken against the guilty, the fake refugees are likely to fade away. Then, only the genuine ones remain. But by then, there might already have been a crisis in their identity. When someone introduces themselves as 'I am a Bhutanese refugee,' the tendency to laugh and create a stigma by questioning 'Genuine or fake?' may emerge.

 

With the aim of ethnic cleansing, the Bhutanese government, which committed genocide on its own Nepali-speaking citizens, pushed them across the border, and denied that they were Bhutanese citizens despite them having lived there for generations, could also tomorrow refer to this case to reiterate its claim.

In such a situation, the story of Lhotsampa Bhutanese refugees, who have been forced to live as refugees for more than thirty years due to the outbreak of communal violence, will be overlooked.

The international community, particularly Western countries, are amused by at the 'Gross National Happiness Index' that the Bhutanese government publicizes every year. They barely remember the incidents of human rights violations in Bhutan at the beginning of the 1990s. The stories of Nepali-speaking refugees expelled from Bhutan receive less attention in the international press. The narratives of human rights violations and refugees are being overshadowed by the tourist descriptions of innocent Bhutan.

Even today, Bhutan's misleading narrative to the international community about the political prisoners they keep in various jails in inhuman conditions does not make international news. Instead, Bhutan's economic growth rate, progress in the realm of freedom of expression, the tales of their king and queen, and the so-called 'Gross National Happiness Index' are promoted in an advertisement style.

This may erase the incidents of human rights violations and ethnic cleansing in Bhutan, preventing the creation of the same narrative that the Bhutanese government is trying to create.

In this situation, the story of over a hundred thousand Lhotsampa Bhutanese refugees expelled from their own land is fading away.

The purpose of our story series is to not let the suffering of Bhutanese refugees and the history of the Nepali-speaking Bhutanese community be forgotten.

So that no Bhutanese refugee has to say when introducing themselves —

'My name is Chandra Dhungana. And I am not a fake Bhutanese refugee.'

In the first part of our story series tomorrow, we will discuss that historical era, which is directly linked to Bhutanese refugees.

Chandra Dhungana, Dil Mahat, and refuges like them, who, after being expelled from their country, are taking refuge in different countries, had  their fates seal nearly four hundred years ago at the Gorkha Durbar, when Ram Shah was the king of Gorkha.

At that time, the queen of Gorkha saw a dream that connected her to the Bhutanese Dharma King Ngawang Namgyal.

What was that dream?

How did the relationship between Bhutan and Gorkha crop up?

And how did the story of Nepalis entering Bhutan begin?

...

 

 

---

[1] In Nepali culture, there is a practice of anointing friendship into something purer, long-lasting, and sacral. Two individuals become mit/mitini when after their relationship is anointed in a ceremony. For ease of understanding, let’s think of this as a form of brotherhood blessed by deities through a ceremony.  

[2] The title was used by Rana Prime Ministers of Nepal. While a King is panch (5) sarkar, the Rana PM was a tin (three) Sarkar.

[3] The book is apparently written in Nepali. 

Between irrelevance and irresponsibility

 The Forbes news piece brought to light for the first time DHI’s covert investment of millions of dollars of public money in the volatile crypto empire which went bust last year. The strange thing about this investment is that the DHI tried to keep all of it clandestine and remain interestingly comfortable after having gambled away millions.  

What is particularly frustrating is, besides wanton disregard for the well-known risks inherent to the volatile crypto market, the company allowed the flow of the scarce dollars when it was sorely needed back in the currency-deficit country grappling with covid19 woes. 

The DHI and its mandate

The Druk Holding and Investments (dhi)  is a government-owned holding company formed in 2007 via a royal charter "to hold and manage the existing and future investments of the Royal Government of Bhutan for the long-term benefit of the people of Bhutan". It holds shares in manufacturing, energy, natural resources, finance, communication, aviation, trading, and real estate companies. These companies are of three types: DHI-held (100% share), DHI-controlled (>51% share), and DHI-linked (<51% share).

As a holding company for the state, DHI has several important mandates (see here) of which three below are of relevance to this discussion.

• Maximize return on investments by optimal utilization of resources.
• Lead, complement and spearhead the growth of a dynamic private sector.
• Make investments outside Bhutan

Since its inception, the company has taken over several large public ventures that account for a large percentage of the gross domestic product (GDP), and it regulates them through an autonomous governance structure comprising the Chairperson appointed by His Majesty the King, a board of directors, and a Chief Executive Officer appointed by the board of directors. Having this control over eclectic economic sectors in the country, DHI is also a major employer of talent and recruits qualified and highly skilled Bhutanese technocrats and professionals. The salaries, bonuses, and other benefits the company offers are more attractive than those in the civil or private sectors in Bhutan. This is reflected in the disproportionately higher ratio of foreign-educated, technically qualified Bhutanese talent pool being employed in the DHI companies compared to its lacklustre counterparts, the civil service and the private sector.

Recognising the talent pool in the company, the DHI has been entrusted to spearhead several important national undertakings. For example, DHI finalised the National Digital Identity platform in February 2023 and it was launched by the crown prince, who became the first Bhutanese digital citizen. The NDI is sort of a digital wallet where a citizen would have access to their civil identity and a host of personal data in a digital account accessible to individuals. This move would be the initial step towards the much-talked-about digital transformation in the country.

DHI’s pandemic-time performance

DHI's 2021 annual report shows the company had a remarkable 16% growth rebound in the financial year 2021 compared to a 12% revenue decline in the financial year 2020. The company remitted Nu. 13,032.86 million as dividends, taxes, and royalties to the Royal Government of Bhutan in the financial year 2021. Holding power, telecommunication, finance, and trading companies, DHI saw less COVID-related disruption to their revenue flows compared to the private sector’s complete nosedive.

In the same report, DHI also reported a significant investment abroad in 2021. The investment in cryptocurrency related to the recent Forbes report could be one such investment by the DHI but no mention of it is available in the report. If crypto investments were made in 2021, it is curious why the omission was made. Surely, it would have shown DHI's creativity as well as proved the company is abreast of the rest in the digital zeitgeist. They chose not to disclose it, but Forbes let the cat out of the bag. 

The Forbes news report

The DHI was reportedly a customer of now-bankrupt crypto lenders BlockFi and Celsius. The company had kept this side of the investment secret from the Bhutanese people, whose wealth the company supposedly safeguards, even after the crypto world went bust last year. According to the Forbes article, DHI had borrowed from BlockFi some 30-odd million coins (pegged 1:1 USD) and the lender had alleged that the company "failed and refused" to make a full loan repayment, leaving an unpaid balance of USD 820,000.

The article quotes the DHI Chief Executive Officer as saying “We do not have any comments as the matter with BlockFi has been settled. We are not able to comment due to confidentiality.” This statement is inadequate in explaining the reports because it gives no picture at all of what "settled" means. How was the loan repaid? Who paid for it?

The amount is eye-watering for a country whose forex is quickly emptying, forcing the government to place a moratorium on the import of vehicles and non-essential cloth and food items. Equally, even more, troubling is the term "confidentiality". It shows how the company can make dealings in the unholy backstreet of the crypto world where young, testosterone-charged kids with superhuman IQs emerge and vanish like gnats in tropical heat in summer. 

However, if the investments were made in 2022, the annual reports aren't out yet. But that does not mean the company will mention this investment in the reports. The CEO's refusal to comment "due to confidentiality" hints the reports will omit this investment. This leads to further confusion; on the one hand, the company does make mention of investments it makes in more conventional ventures. So, why should one investment be kept confidential while others are not? Perhaps this is DHI’s way to curtail criticism of risky investments. And curiously, it appears DHI is not legally obliged to make public its investment, much less the poor investment that becomes a liability and might embarrass Bhutan internationally.

Such freedom to make investments with no checks can engender financial wantonness and corruption.  State-owned companies (SOEs) are quite popular for business ineffectiveness, corruption, and crowding out of potential private sectors. Thus, for DHI to make covert investments in volatile ventures means the company could drag the country to financial disasters way larger and more damning than the crypto fiasco reported in the Forbes article.

The crypto fiasco is especially telling if we look at it against two of DHI’s mandates:

1. Maximize return on investments by optimal utilization of resources.
2. Lead, complement and spearhead the growth of a dynamic private sector.

The investment in crypto didn’t seem to maximize RoI. It wasn’t by any standard an “optimal utilisation of resources” because when the investments were made the country was economically at its knees and didn’t appear it would get up anytime soon. Financial poverty was already pulling people down the poverty line in remote parts of Bhutan, as indeed in the urban centres where inflation was soaring. So, millions of dollars were dumped in dubious ventures when the country sorely needed it at home. And, the priority certainly should have been domestic need because DHI's wealth, at least on paper, is people’s wealth and they should have had the access to it through local investment and boost-ups to ease some of the COVID-19 pain. In other words, this investment isn't justified even if we looked at it through the intention rather than the outcome, something Milton Friedman would have scoffed at.

It is also important that we objectively looked at how well DHI is fulfilling its mandate to "spearhead the growth of a dynamic private sector”.  The DHI companies are expected to avoid competition with the private sector by focusing on ventures with longer gestation periods and strategic investments while divesting shares in companies which can be operated more effectively by the private sector. But this was not to be. According to the World Bank, between 2009 and 2015, DHI's assets grew from Nu 51 billion to Nu 154 billion, a threefold growth. Meanwhile, DHI was actively deterring private investments in small-scale mining, woodcraft, and construction, sectors with higher profitability, through its own investment creating unfair price competition. 

 The flip side isn't exciting either. SOEs, either DHI-held or otherwise, have not made significant profits in their business. And the DHI executives justify the less-than-flattering performance of the companies saying: Public sector companies suffer as a result of competition from the private sector.  According to the Natural Resouces and Environment Committee of the National Council, in June 2021, the profit and employment trends in SoEs were decreasing while the subsidies to the SOEs were increasing. In November 2022, National Assembly's Economic and Finance Committee reported similarly poor performance of SoEs. The profit for the Nu. 1.5 billion injected in SoEs in 2020 was well below the principal amount injected. This clearly shows SoEs can be a liability to the state, besides inhibiting private sector growth. Almost five years after the World Bank's recommendations were out suggesting that the SoEs, including DHI, must not compete with the private sector when the sector can deliver more effectively, the ground realities haven't changed much. The same report by the Economic and Finance Committee of the National Assembly says certain SoE is importing dairy products from India and crowding out poultry production by Bhutanese farmers. 

Besides being economically disadvantageous for the country, DHI and SoEs taking up ventures that the private sector can profitably operate contravenes the Public Finance Act (2007) which requires SoEs to undertake commercial activities that the private sector may not be able to cater to due to critical resource constraints.  

So considering the recent clandestine crypto investment that has busted, the poor economic performance of the DHI and other SoEs, which at best are associated with jobless growth, and crowding out of and unhealthy competition with the private sector, the time has come to objectively and frankly assess the relevance of DHI and SOEs in their current sizes and shapes. 

The natural corollary to the above realities, I believe, would be this question: should the DHI not be more properly regulated, made more transparent, and restrained from causing economic stampede? What risks does alternative power with unrestrained modus operandi in business pose to good governance in the country? 

 

 

Austerity when election nears

 Dasho Z thinks the DNT MP Karma Donnen Wangdi’s decision to step down as minister is only natural. He hasn’t got a ministry to cling to. What is unnatural is that the government allowed the MP to hold the cabinet portfolio though the ministry reshuffling erased his ministry almost 6 months ago. The DNT came to power by overselling austerity. Being a bit wiser would have helped the party in the next election.

What took so long to decide who should step down? Maybe they pushed the date to step down so that the austerity the government followed would remain fresh in public sentiment when the elections are held next year. Public sentiment is important for the party.

Dr Lotay and Co. know recasting their public image is a vital prerequisite for the next polls in which they have decided to contest, though the prime minister had asked people to give him one chance. He had assured he would deliver and not re-contest. Power strips people of their principles. We can’t blame the prime minister for choosing to re-contest. He certainly can in a democracy. 

The two red scarves and lung mar boost the party's image considerably. But that will not be enough. The economy is down. The country is riding a roughshod. There are views that the Govt. is responsible for all that’s happening in the country because of its weak economic decision-making. This isn’t true, but the hoi polloi doesn’t get to the finer nuances.

 It looks like DNT hopes Dasho SK will salvage its image. I am afraid I am pessimistic about it. Dasho SK doesn’t enjoy much popularity among people. His 2018 book earned him a handful of opponents. Those of us who allowed him to enjoy the benefit of the doubt feel he isn't the institution that his fans like to believe he is after reading the book. PM yesterday said the party is yet to decide who will lead it in the next election. If it’s for Dasho Z to decide, Dr L should lead the party. He is far more popular than Dasho SK. Dasho SK isn't made up of prime ministerial stuff. There is no quibble here.       

Though the stepping down was delayed, DNT actually got some brownie points here. The past precedence is rather bad. In 2018, Dasho TT sent Lyonpo Sherpa on paid leave after Sherpa’s name was muddied in some scandals. He was on paid leave till their tenure ended. He should have been relieved of his duties and removed from the payroll. He wasn't, after all, faultless. 

Anyway, Dr Lotay Tshering and Co. have decided to contest. They got the right. I only hope some power centres are not flexing their economic muscle to influence the elections, especially after the PM’s statement on the border issues. Some quarters have labelled him as pro-China, a label that isn’t exactly a good one when elections are near. Let’s go back to 2013 to know why.

 

 

 

 

The Singapore model and Bhutan

            a tale with a happy ending 

A malaria-infested, arid, poor island suspended on the Malaca Strait was politically weak and economically down in the early 1960s. When a recently elected political party called for a national referendum on 1 September 1962, seventy percent of the island's population voted in favour of merging the island with another country. The merger, they hoped, would salvage their economy, vivify it, and help people live a decent life.

But the poor, beleaguered island met with other challenges. The federal government of the new country they had joined announced taxes to raise $147 million to address the budget deficits. The island had to arrange 38.8% of the amount, though its population made up only 17% of the country.

The difference between the representatives of the island and the bigger country only widened. The island again became an independent nation on August 9 1965.

Fast forward, from a poor, malaria-infested island with a GDP per capita of less than $500 in the 1960s, Singapore is today one of the world’s richest countries, with a GDP per capita of over $72,000.

 

  

 

Singapore's GDP per capita and growth percentages between 1960 & 2020

The Singapore model

 Today countries in the developing world want to adopt the Singapore model. Or at least get experts from Singapore to help them restructure their policies and practices so that they could achieve decent economic success.

But what exactly led this poor country to become what it is today? It did not chance upon windfalls like oil reserves or diamond mines. Much has been written about Singapore’s success. Prime Minister Lee Kuan Yew, the legendary leader behind the success, has himself written passionately about his country and the rough path to greatness. For now, let's just go for a brought estimate of the model and consider the following three factors:

 

#1. The strategic location of the island that guarantees the control of 40% of trading passes.

 

#2. The friendly policies adopted by the government towards foreign investments.

 

#3. An efficient government.

Let’s look at point #3. Singapore could form a stable government and institutions with a strong rule of law, low corruption, and pro-business policies that attracted MNCs and  foreign investors to the country. Only when the government system is honest and business-friendly can points #2 and #1 have any value. There are other countries in Singapore’s neighbourhood (Malaysia, for example) not as successful as Singapore but equally endowed in terms of geographical location. Ships sail at the ports held by Singapore because they have good business there – and not necessarily vice versa. Also, business-friendly policies alone do not ensure as resounding an economic success as Singapore’s.

Singapore’s success brings up a question about government forms. Is democracy a prerequisite for development? Not necessarily so. With strong central control, zero tolerance for dissent, and a harsh crackdown on corruption, Singapore didn’t allow laxity and democratic amorphousness to flourish. We could say Singapore was Semi-autocratic. Studies also tend to support it is often the benevolent dictators that lead their countries to success. China's Deng Xiaoping, Chile's General Pinochet (unfortunately not benevolent) and, may we say, Bangladesh's Sheikh Hasina are some examples of iron-fisted rulers who led their countries to some economic success.

Developing countries might look at this reassuringly because they may fulfil some of the criteria. Bhutan, for example: It has an efficient and stable government system and institutional mechanisms to curb corruption. Location is a bit of a problem, but the vast Indian market and the possibility of opening to Chinese markets compensate for the disadvantage of the location a good bit. Hydropower development, for example, is possible because of the energy-hungry Indian market.

Indeed, Bhutan remains inspired by Singapore’s resounding success and looks up to it. It has tried to incorporate Singapore’s style, its methods of public service delivery, and a host of other things.

The ongoing reforms are a testament to Bhutan’s earnest pursual of the Singaporean model in Bhutan. Sweeping reforms are carried out in the public, corporate, and education sectors to restructure and recast them for efficiency.

The reforms are a no-nonsense business. The civil service which occasionally comes under sharp public tongue for being corruptive, lax, unethical, inefficient, highhanded, detached from reality, self-serving, self-preserving, regressive, retrograde, status quoist, risk-averse, compartmentalised, money-driven, stratified, inaccessible, unsympathetic, highly unnecessarily bureaucratised, and even politicized was in for a shocker when several dozen top bureaucrats including directors and secretaries were “managed out” (read fired) because, on being tested, they lacked the minimum competence and vision that their positions required.

What did this achieve? Of course, underperformers were asked to vacate for the competent ones. Some good performers might have been wrongly laid off. But when you wash rice, some grains will exit the bowl with the chaff and water. That is inevitable even in so simple a task as cooking, let alone in nation-building. More importantly, the good ones are more focused on their job if they have not already left, that is. Many left after the reforms. Whether it was because of reform is debatable. But leave, they did. Dasho Zala’s mediocre friend became a politician. Another friend is in Australia. A professor with the distinction of having taught the Ivies and top schools around the world who also happens to intimately know Bhutan’s public service and governance by the virtue of being a scholar of public administration and governance told Dasho Zala he can only explain the Australia rush as "moral panic". Maybe LKY would approve of the reforms.

We couldn’t afford to be wrong. Singaporeans were consulted, hired, listened to. They advised the assessment of the bureaucrats. Their involvement lent authority and a touch of the ‘knowing’ to the whole process. There was little resistance. Those that were laid off packed their bags and gracefully accepted the disgrace. It was at a time when the covid-19 pandemic and strict protocols had stalled economic life and prospects of alternative employment outside public service were nearly zero. Yet people rose above personal goals and left. That is the kind of commitment we have this time.

The reform continues. Recently, two important colleges of the Royal University of Bhutan—the Gaeddu College of Business Studies and the College of Science and Technology—received new leaders. These leaders are young Singaporeans from the business world. One of the presidents with roles in both the engineering college and the business school is a 35-year-old start-up entrepreneur who, as per his LinkedIn profile, received his Bachelor of Accounting and Finance from the University of London in 2013. Some Bhutanese on social media, mostly going incognito, questioned their unmistakable youth. But this time it’s the Singaporeans leading the way. Why, surely some of Lee Kuan Yew’s greatness might have rubbed off on these young people!

We really want them to touch what we are doing. Sort of anoint our reform with their hands blessed by the virtue of being Mr LKY's citizens. Two of the members of the pay commission formed last year were Singaporeans. The pay commission is a constitutional body “headed by a chairperson, which shall be autonomous and shall be constituted, from time to time, on the recommendation of the Prime Minister”. The commission “shall recommend to the Government revisions in the structure of the salary, allowances, benefits, and other emoluments of the Royal Civil Service, the judiciary, the members of Parliament and Local Governments, the holders and the members of constitutional offices and all other public servants with due regard to the economy of the Kingdom and other provisions of this Constitution.” Because the commission is a constitutional body, netizens, again under the burka of anonymity, questioned the constitutionality of having foreigners as members. That was bollocks of course. Constitution doesn’t say who can and cannot be the members. When it doesn’t say anything like that, we might do well roping in a few Singaporeans.

This time Bhutan is doing it differently. Adopting the Singaporean model with Singaporeans to sort out and vivify our system.

Some in Bhutan say this model isn’t necessarily Singaporean.

Do they have reason to say this? Maybe, but they haven't advanced the reasons yet. As people are leaving the civil service, the corporate world, and academia and joining what the Bhutanese editor Tezing Lamsang called the “Australia rush”, some people are saying Bhutan tried to fix what wasn't broken and, in the process, broke it. Might this rush cripple workforce supply in Bhutan? What about when experts are leaving from public health, medicine, education, science and technology, and domain experts in various specialised public sectors?

Will this impact Bhutan’s dream of being an economic success?

 I am not sure. But I am certain when a lot of skilled people move out of the country, it will deprive Bhutan of one thing that was critical to Singapore’s success – skilled people.

Lee Kuan Yew knew one more thing than the three points we discussed above. Attracting foreign business and investment, he knew, was possible only if Singapore had the type of people these foreign companies would want to employ. If an American company could not depend on Singaporean employees and had to bring its own pool of employees from the States or India, it would mean quite a silly economic decision on the company’s part. So, LKY knew, people must have proper education and they must possess the technical knowledge that employers look for. And most importantly, they must work in the country.

“A society to be successful must maintain a balance between nurturing excellence and encouraging the average to improve.”

― LKY, The Wit, and Wisdom of Lee Kuan Yew

In Bhutan, our education system is weak. Dasho Zala knows that. Especially, we are unfathomably lacking in STEM. Now the Singaporeans have the task to achieve. They would have to create a competent workforce through enhanced, revolutionised education in the university colleges they lead. Now they already lead three key colleges (College of Science and Technology and Gaeddu College of Business, and the Gyalpozhing College of Information Technology led by a Singaporean lady) that are invariably connected to Bhutan’s economic vision for the 21st century: Information and Technology, digital transformation, FinTech, etc.

The Bhutanese are a viscerally proud, self-respecting, honour-driven stock of the Himalayas. When such persons suppress the qualities and give way to changes, accepting pchilipa kids as their bosses and good disruptors to the old system, Dasho Zala knows it is for the greater good, for economic success, for the good of people who are coming and are yet to come. 

Any failure to deliver will be harshly judged by history.

 

 

 

 

stick with carrot and stick?

The  Bhutanese Prime Minister recently said India makes a third in  Bhutan-China unresolved border. Was he speaking politically? Because, geographically, India has little to say regarding the border issue. It's Bhutan's land. Or if Bhutan accepts the package deal, China's. 

 

So, what was the context of his statement? Or was it appeasement which has been Bhutan’s foreign policy since Tshering Tobgay became Prime Minister in 2013? He campaigned on the premise of a strained relationship with India. The DPT government had done the straining by trying to normalise Bhutan’s relationship with China.

Though India denies it, who can say for certain the perfectly timed withdrawal of LPG subsidies did not catapult Tshering Tobgay and PDP to power? Most of us have conveniently forgotten that ancient age of 2013.

But New Delhi’s memory is not so short-termed. The mostly upper-caste, Brahmin-dominated India’s bureaucracy, as indeed the polity, has a good pedigree as far as memory is concerned. They carried their Vedas and Upanishads in a grand memory continuum for thousands of years until the words were committed to letters. New Delhi knows where to hit to get the donkey going.

So, isn’t it a political masterstroke to rope in India in an issue that India got no business getting into, especially since elections are around in Bhutan? And now that Druk Nyamrup Tshogpa wants to re-contest, how will the statement impact its prospects as India doesn't especially pleased with the accommodation he extended?

 

What is unfortunate is that the Indian media spoiled it all. While the statement did really demonstrate the extent to which Bhutan can accommodate Indian interests, often at the cost of its own goals, that Bhutan had spurned India is a dominant narrative. I don’t think it worked as well as it was intended to. So is New Delhi oiling its stick again? Will it withdraw some subsidy or refuse to buy the electricity developed in partnership between India and Bhutan? Something is up New Delhi's covert sleeves if it feels Dr Lotay Tshering has suddenly turned pro-China. The PM was neither pro-India nor pro-China; he was expressing Bhutan's right to exercise its choices. But India can't think beyond the binary of pro-India or pro-China. What is there in the offing anyway?

I am not sure. But roping in India, even symbolically, hasn’t worked well. How will China respond? China’s pressure is growing. Xi is impatient when it comes to the border. The earlier Chinese leaders weren’t as assertive as Xi it seems – at least not as assertive as Xi when it comes to the boundaries in the Himalayas. Xi is moving Tibetans closer to the borders, even inside the lands of other countries, as a way to revert the emptying of the border lands which was presumed to be a security threat to China’s territorial integrity at the boundaries.

Xi’s villages have propped up in Baeyul Khenpajong and other areas inside the disputed border with Bhutan. But until 2015 or about, these border villages weren’t there. The more we delay in settling the borders, the more incursion China will make. It seems China doesn’t wait.

And roping India in at Doklam will invariably lead to delays in border settlement. China will continue to make more incursions in the central north. It may even make its claim more assertive at Sakteng. Sakteng was meant to be a benign pressure point. We can’t say if it is still benign. Recently, it gave Chinese names to a couple of places in Arunachal Pradesh, a region China has consistently claimed South Tibet and hence a Chinese land illegally occupied by India. And this is not insignificant. Oh, they have some villages set up there as well. India’s capacity to defend against China is increasingly tested. Dr Jaishankar’s words on China being a bigger economy to the effect of saying what can I and the 56 inches chest do? weigh a lot vis-à-vis its place in the race with China for the sphere of influence. There we got a few points to think about.

The former international boundary secretary, the formidable late Dasho Pema Wangchuk, were the good soul alive, would confirm for us that every time we delayed talking about borders, China got more aggressive and built villages, roads—and all the paraphernalia it is using also at the South China sea– on the border with Bhutan and inside it.  

 

We are caught between carrot and stick and the fire. The joint statement released following His Majesty’s visit to India also doesn’t address the elephant in the room. Or the elephant in the nation. Indian army’s presence in Bhutan would be a security threat to China as much as China’s presence in Doklam would be to India. Can we wake and prod the elephant? I don’t think anytime soon.