International relations

New PM, new challenges

The News

Druk Nyamrup Tshogpa (DNT), or Bhutan United Party, has emerged the winner in the final round of parliamentary elections in Bhutan, votes for which were cast on October 18.
These parliamentary elections were the third since Bhutan transitioned to a constitutional monarchy 10 years ago.

About Bhutan's election

Bhutan has a two-round election system, much like France.
In the first round held in September, all four registered political parties contested, and the incumbent People’s Democratic Party (PDP) led by Tshering Tobgay finished third.
The final round this month saw a contest between the Druk Phuensum Tshogpa (DPT), or Bhutan Peace and Prosperity Party, and the DNT.
The DNT first contested in 2013 and finished third in the first round. This time, it has won 30 seats in the National Assembly, the 47-seat elected lower House of Bhutan’s Parliament. The DPT has won 17 seats.
Bhutan’s three elections so far have produced three different winners. The DPT won in 2008, and PDP in 2013.

Bhutan and India

Bhutan is growing fast (8% in 2017), but also has high youth unemployment and external debt.
In 2017, its debt was 108.6% of its GDP; as per World Bank figures from that year, 80% of the country’s external public debt (equal to 77% of GDP) stems from loans for hydropower projects, mostly financed by India.
India is the largest buyer of Bhutanese hydropower, a sector that makes up 14% of the GDP and 27% of the government’s revenue. The new government wants to diversify the economy and reduce its reliance on hydroelectricity.
Bhutan also depends on subsidised gas and kerosene from India. The new government has suggested the introduction of biogas and electric cars.
India provides budgetary support to Bhutan’s development and backs it against Chinese expansionism. This was displayed during the two-and-a-half-month Doklam standoff last year.
It seems that the new government wants to reduce Bhutan's dependence on India.
In the Bhutanese scheme, the PM concerns himself with the day-to-day functioning of the country, while the monarchy has the decisive say in matters of national security and foreign policy.
It is in New Delhi’s interest to have the incoming PM aligned with his predecessor and the monarchy.

Bhutan and China

So far, Beijing does not have an embassy in Thimphu, but is keen on opening one.
This, however, has not stopped senior Chinese officials from visiting the country and engaging with the Bhutanese leadership.
China wants to finalise a land-swap deal it had been negotiating with Bhutan for several years.
Part of the Bhutanese land China wants also include Doklam, a strategically important plateau that overlooks the Siliguri corridor, connecting India’s Northeast with the rest of the country. This remains a serious concern for India.

Conclusion

Many in Bhutan feel that the country’s traditional goodwill towards India should now be linked to enhanced Indian generosity in providing it with development support.
For India, the challenge is to align with the rising expectations of an impatient people who are seemingly no longer satisfied by the philosophy of “Gross National Happiness” as concrete economic challenges of a credit crunch, high loan interest rates, unemployment and high inflation loom.