New Delhi: Less than a week after Bhutan Prime Minister Tshering Tobgay’s visit to India and ahead of the Lok Sabha elections starting next month, Prime Minister Narendra Modi will be going on two-day visit to the Himalayan kingdom this week. This will be Modi’s third visit to Bhutan since he became Prime Minister. He had earlier visited that country in 2014 and 2019.
The Prime Minister will pay a state visit to Bhutan from 21 to 22 March, Ministry of External Affairs said in a statement on Tuesday. "The visit is in keeping with the tradition of regular high-level exchanges between India and Bhutan and the Government’s emphasis on its Neighbourhood First Policy. During the visit, Prime Minister will receive audience with His Majesty Jigme Khesar Namgyel Wangchuck, the King of Bhutan and His Majesty Jigme Singye Wangchuck, the Fourth King of Bhutan. Prime Minister will also hold talks with the Prime Minister of Bhutan H.E. Mr. Tshering Tobgay," the Ministry said.
India and Bhutan, the MEA added, share a unique and enduring partnership which is rooted in mutual trust, understanding and goodwill. "Our shared spiritual heritage and warm people to people ties add depth and vibrancy to our exceptional relations. The visit will provide an opportunity for both sides to exchange views on bilateral and regional matters of interest and deliberate on ways to expand and intensify our exemplary partnership for the benefit of our peoples," the statement read.
On March 14, Tobgay held a meeting with Modi in New Delhi during the course of which the former extended an invitation to the latter to visit Bhutan. This was Tobgay’s first official visit abroad after being elected as Prime Minister of his country for the second time in January this year.
Following the meeting, the two sides issued a joint statement in which Modi stated that India remains committed to partner with Bhutan in its quest to become a high-income nation in consonance with the vision of Bhutan King Jigme Khesar Namgyel Wangchuck and the priorities of the people and the Royal Government of Bhutan.
“Prime Minister Modi reiterated India’s commitment to step up support for Bhutan’s 13th FYP (Five-Year Plan) including to consider request for the Economic Stimulus Program,” the statement read. “India’s development assistance will be geared towards the development of infrastructure, building connectivity in its broadest form which includes road, rail, air and digital connectivity, and in sectors like agriculture, healthcare, education, skilling and cultural preservation.”
In the Interim Budget 2024-25, the Ministry of External Affairs has been allocated Rs 22,154 crore for fiscal year 2024-25. The largest share of aid portfolio under New Delhi’s Neighbourhood First policy has been granted to Bhutan with an allocation of Rs 2,068 crore against Rs 2,400 crore in 2023-24.
To bring his country out of the economic morass that it is finding itself in, Tobgay had announced an ambitious Rs 15-billion economic stimulus plan with support from India. Making this announcement at a meet-the-press session in Thimphu on February 29, Tobgay said that a specialised task force has been established to craft a comprehensive strategy and supervise the implementation of the plan.
Ahead of the National Assembly elections in the Himalayan kingdom, Tobgay’s People’s Democratic Party (PDP), in its manifesto titled ‘Contract with Bhutan’, promised to pull Bhutan out from the economic doldrums. “Our nation’s economy is teetering on the brink of collapse,” Tobgay stated in a message to the people in the manifesto. “With an average growth rate of just 1.7 per cent in the past five years, our economy is at its worst in our recent history. The private sector, our main driver of growth, has become stagnant, with many businesses either closed or operating at reduced capacity. Youth unemployment has hit a record high of 28.6 per cent.”
He stated that Bhutan’s public debt is at its highest, particularly non-hydro debt at a whopping Nu 108 billion (Rs 108 billion). Foreign currency reserves have depleted to a level that threatens to breach the constitutional requirement. Fiscal deficits have widened while the national revenue stream has dwindled.
“A total of 80,614 Bhutanese people live in poverty in 2022,” Tobgay stated. “That is, almost one in eight Bhutanese is struggling to meet their basic needs for food and other basic necessities. Development in our rural areas has nearly come to a standstill. To make matters worse, in recent years, an unprecedented number of Bhutanese, including professionals and skilled individuals, have been leaving the country in search of better economic opportunities abroad.”
He stated that this has put immense pressure on public service delivery, affecting the country’s hospitals, schools, and public institutions. These unprecedented economic challenges and mass exodus of Bhutanese, he stated, are happening at a time when Bhutan is experiencing a steep decline in fertility rate, which currently stands at 1.8 per cent, below the replacement rate of 2.1.
“If we are unable to reverse these trends, the very viability of our nation will be in jeopardy,” Tobgay had cautioned the people. “If we do not course correct immediately, the very survival and sovereignty of our beloved nation will be at stake.” To rebuild and revitalise the economy and transform Bhutan into a developed nation, the PDP pledged to achieve some key economic goals.
As for India’s commitment to support Bhutan’s 13th Five-Year Plan, it is worth mentioning that New Delhi has been extending economic assistance to the Himalayan kingdom’s socio-economic development since the early 1960s when it launched its Five-Year Plans. India continues to be the principal development partner of Bhutan.
For the 12th Five-Year Plan, India’s contribution of Rs 4,500 crore constitutes 73 percent of Bhutan’s total external grant component. The key areas of focus of the government of India’s assistance include agriculture and irrigation development, information and communication technology (ICT), health, industrial development, road transport, energy, civil aviation, urban development, human resource development, capacity building, scholarship, education and culture.
“Prime Minister Modi appreciated His Majesty’s vision of the Gelephu Mindfulness City, which will lead to economic prosperity and development in Bhutan and in the region in a sustainable manner, and further strengthen economic and investment linkages between India and Bhutan,” the joint statement issued following the Modi-Tobgay meeting further read.
The Gelephu Special Administrative Region (SAR), called the Gelephu Mindfulness City, announced by the Bhutan King on the occasion of the Himalayan kingdom’s National Day in December last year is expected to be a game-changer for the region facilitating productive flow of capital and knowledge. The Monarch of Bhutan made the announcement soon after making an official visit to India in November last year. As part of the trip, King Wangchuk made his first ever official visits to the states of Assam and Maharashtra.
Gelephu Mindfulness City will be developed in Sarpang district of Bhutan bordering Chirang district in India’s northeastern state of Assam. Gelephu is one of three entry points to Bhutan from India, the others being Samdrup Jongkhar to its east and Phuntsholing to its west. During his National Day speech, Wangchuk said that South Asia is experiencing an unprecedented economic transformation.