Prime Minister Tshering Tobgay, at the Friday Meet the PM session yesterday, described Druk Nyamrup Tshogpa’s (DNT) concerns over the country’s debt situation as an act mainly geared towards gaining political mileage.
The DNT, in a press release on Thursday, stated that the current government has put Bhutan in “a danger zone” with 113 percent debt as the percentage of Gross Domestic Product. This, the party said, makes “Bhutan the worst country in the SAARC region in terms of debt management”.
The party went on to state that Bhutan is almost becoming South Asia’s Greece, a country that collapsed because of debt.
“This is especially disheartening as the current government blamed the past government on poor debt management and campaigned on the promise of improving debt in 2013. But the reality is we are now much worse than we were four years ago,” DNT stated.
Retaliating to DNT’s statement, the Prime Minister said he appreciates the fact that DNT is following the country’s economic situation and has raised the issue. But he is not happy with the way the party blamed the government.
DNT has sensationalised the country’s debt situation by stating the country’s economy is on the brink of collapse and by comparing it to Greek economy, said the Prime Minister. Lyonchhen said the DNT made the statement mainly to gain political mileage by instilling fear in the minds of people with the elections fast approaching.
The Prime Minister explained that on face value, the country should be alarmed but more than 80 percent of the total debt is hydropower debt. This borrowing, he said, is self-liquidating. The tariff on the electricity is determined by the cost of the project.
However, the Prime Minister said since it’s a debt, it should be carefully monitored. As of now, the loans availed for Chhukha and Kuri-chu hydropwer projects have been liquidated and for Tala, the pay-off is almost complete.
The remaining 20 percent of non-hydro debt include loans to Bhutan Power Corporation, Bhutan Development Bank Limited and Bhutan Hydro Power Services Limited. This, Prime Minister Tshering Tobgay explained will be paid by the entities themselves.
Considering all these, the government has to pay about Nu 28 billion of the non-hydro power debt from its revenue. As of 31st March this year, the non-hydro debt stood at Nu 34.5 billion.
On the DNT’s statement on the current government blaming the past government on poor debt management in 2013, the Prime Minister justified that in those days, the country’s non-hydro debt was higher and that the previous government had borrowed billions just to finance the rupee crisis in the country.
