The Economic Affairs Committee of the National Council have reviewed that it is not necessary to allow foreign land ownership to meet Bhutan’s Foreign Direct Investment (FDI) Policy objectives. One of the Committee members remarked that unlike manufacturing and industrial sectors where FDI companies seek to own land, attracting FDI in the service sector is not determined by the land ownership aspect.
“In case of Bhutan, foreign land ownership was not a requisite for service sector investment so far. For example, the Aman and Uma hotels are on leased land and the IT Park is also built on leased land,” said Lhuentse MP, Rinzin Rinzin.
The Committee reviewed that allowing foreign land ownership will lead to consequences like foreign economic domination, impact on environment, impact on rent and home ownership and loss of control over territory.
“Foreign ownership of land could complicate the sovereign control as FDI businesses are often based on legally binding bilateral, regional or international investment agreements. If the FDI agreements are not scrutinised professionally, there is every possibility that the state could lose legal cases with foreign business when it comes to control over the land,” said Jigme Wangchuk, Samdrupjongkhar MP.
Moreover, with only 7 percent arable land area and about 65 percent of the population depending on agriculture, the Committee said that allowing foreign land ownership will pose a threat to food security and also have an adverse impact on the alleviation of poverty in country.
In order to attract foreign investors, the Committee recommended the government to invest in infrastructure, education and training and other factors that contribute to an enabling environment for the private sector growth rather than rushing to provide foreign land ownership rights.
