IRS |Institute of Regional Studies


Contemporary Regional Developments in Bhutan

14th March - 3rd April
  • Bhutan spending more than a third of government revenues on servicing debts:
    The expected rise in US interest rates will increase financial pressures on developing countries already struggling with a 60% jump in their debt repayments since 2014, a leading charity has warned. The Jubilee Debt Campaign said a study of 126 developing nations showed that they were devoting more than 10% of their revenues on average to paying the interest on money borrowed – the highest level since before the G7 agreement to write off the debts of the world’s poorest nations at Gleneagles, Scotland, in 2005. Five of the countries on the charity’s list – Angola, Lebanon, Ghana, Chad and Bhutan – were spending more than a third of government revenues on servicing debts. Developing country debt moved down the international agenda following the Gleneagles agreement in which the G7 industrial countries agreed to spend £30bn writing off the debts owed to the International Monetary Fund and the World Bank by the 18 poor countries. But developing country debt is now once again being closely monitored by the IMF, which says 30 of the 67 poor countries it assesses are in debt distress or at risk of being so. Lending to developing countries almost doubled between 2008 and 2014 as low interest rates in the west led to a search for higher-yielding investments. A boom in commodity prices meant many poor countries borrowed in anticipation of tax receipts that have not materialised. But the Jubilee Debt Campaign said the boom–bust in commodity prices was only one factor behind rising debt, pointing out that some countries were paying back money owed by former dictators, while others had been struggling with high debts for many years but had not been eligible for help. The campaign said developing countries were also vulnerable to a rise in global interest rates as central banks withdrew the support they have been providing since 2008.
    (Guardian 18 March 2018)
  • Foreign secretary of India,Vijay Gokhale meets Bhutan top brass, discuss bilateral issues: Besides holding deliberations with his Bhutanese counterpart Dasho Sonam Tshong, Gokhale also called on Prime Minister Tshering Tobgay and King Jigme Khesar Namgyel Wangchuck during the visit which began on Sunday, the External Affairs Ministry said. This is Gokhale’s second visit to the country this year. In February, Gokhale had visited Thimphu with National Security Advisor Ajit Doval and Indian Army chief General Bipin Rawat to hold extensive talks with the Bhutanese leaders on strategic issues, including the situation in Doklam A statement, issued by the Ministry of External Affairs on Monday, said: “The talks were held in a cordial atmosphere in keeping with the unique and exemplary bonds of friendship and cooperation that exist between the two countries. “The visit was in keeping with the tradition of regular high-level exchanges between the two countries, and provided an opportunity to the two sides to discuss matters concerning our bilateral partnership, including the commemorative activities planned in 2018 to mark the golden jubilee of the establishment of formal diplomatic relations between the two countries,” it said. Indian and Chinese troops were locked in a two-and-half-month-long standoff in Doklam, from June 16 last year after the Indian side had stopped the construction of a road by the Chinese Army in a disputed Doklam tri-junction. Bhutan and China have a dispute over Doklam. The face-off ended on August 28. China and Bhutan are engaged in talks over the resolution of the dispute in the area. India has maintained that since it is a tri-junction involving the three countries, it also has a say in the issue, especially in the backdrop of a 2012 agreement between special representatives of the two countries, that have till now held 20 rounds of talks.
    (Indian Express, 3 April, 2018)
7th March - 13th March
  • Doklam issue: Bhutan, China to hold fresh round of boundary talks: The 25th round of boundary talks between Bhutan and China, of great interest to India and deferred on account of last year’s Doklam standoff, are due to take place later this year, possibly in the second half, two persons familiar with the development said. The Chinese side at the talks will be led by vice foreign minister Kong Xuanyou and the Bhutanese delegation by foreign minister Lyonpo Damcho Dorji, the two said on condition of anonymity. Recent rounds of the Sino-Bhutanese talks have focused on four points in the western sector between China and Bhutan --including Doklam — and Pasamlung in the central-north sector. The disputed areas in the western section other than Doklam are Charithang, Dramana and Sinchulun. Doklam is the subject of territorial dispute between China and Bhutan, which have no diplomatic ties. Bhutan last year objected to Chinese troops constructing a road in Doklam, prompting Indian troops stationed in the Himalayan nation to intervene. Concerns are rife that China could alter the status quo on Doklam. During the standoff last year, India said China’s move was against an understanding the two sides reached in 2012 that any change in the status quo would need the consent of the third country, which in this case was Bhutan. The report of a joint technical field survey in the disputed areas is already complete and it was ‘endorsed’ by both China and Bhutan in the last round of talks. “The survey goes by the claims mostly of land usage, population settlement and administrative control. But due to the geographic reasons, what happens in the talks is of importance to India,” said one of the two people cited in the first instance.
28th February - 06th March
  • Cross border electricity trade issues under review with India
    GoI’s guidelines on cross border electricity trade has affected Dagachhu and Khonlongchhu projects. The government of India has formed a committee to review issues arising from its guidelines cross border electricity trade, economic affairs minister Lekey Dorji said .He said that the Indian power secretary, Ajay Kumar Bhalla has assured that power transaction between the two countries will never be an issue. This was confirmed following the recent visit of the power secretary in the country. He said that the two governments are working to resolve issues that would impact hydropower development in the country. The concession agreement for Kholongchhu project is still on hold because of the issues with guidelines on cross border electricity trade, which the Indian government issued on December 5, 2016.
    (Kuensel; 5.3.2018)