𝐎𝐏𝐈𝐍𝐈𝐎𝐍- 𝐇𝐚𝐬 𝐁𝐡𝐮𝐭𝐚𝐧’𝐬 𝐄𝐜𝐨𝐧𝐨𝐦𝐢𝐜 𝐒𝐭𝐢𝐦𝐮𝐥𝐮𝐬 𝐏𝐥𝐚𝐧 𝐌𝐢𝐬𝐬𝐞𝐝 𝐈𝐭𝐬 𝐌𝐚𝐫𝐤?

The Economic Stimulus Plan (ESP) was launched with high hopes of revitalizing Bhutan’s economy following the devastating impact of the COVID-19 pandemic. The ESP was designed to jumpstart key sectors such as agriculture, tourism, youth employment, and small-scale industries. However, more than a year into its implementation, a critical question lingers: has the Bhutanese economy truly rebounded to its pre-pandemic levels, or are we witnessing a disconnect between policy aspirations and ground realities?

While government officials tout the ESP as a success in terms of fund allocation and sectoral investments, the lived experiences of businesses and the general public suggest a different narrative. Many businesses continue to struggle, unemployment remains a pressing issue, and purchasing power among consumers remains weak. If economic stimulation was the goal, why does the recovery seem so fragile? Are we missing the intended targets, or is there a fundamental flaw in the execution of the ESP?

Economic stimulus plans, by design, are intended to inject liquidity, spur demand, and restore economic confidence. However, for many Bhutanese, economic recovery remains elusive. Small and medium-sized enterprises, which form the backbone of Bhutan’s economy, continue to grapple with cash flow constraints, reduced consumer spending, and lingering operational difficulties. A significant portion of the ESP funds was allocated to sectors like agriculture and the creative industry, but there is little visible impact on consumer demand. The issue does not necessarily lie in the disbursement of funds but rather in their absorption and multiplier effects. If the intended beneficiaries- businesses and individuals- are not experiencing a noticeable change in their economic fortunes, then the stimulus plan may not be functioning as effectively as intended.

One of the key indicators of economic recovery is purchasing power. If people have money to spend, businesses thrive, production increases, and the economy grows. However, consumer confidence remains low. Many individuals are still recovering from the financial setbacks of the pandemic, and inflation has further eroded their spending capacity. Despite substantial funds being funneled into different economic sectors, these investments have not necessarily translated into increased income for the general public. The mismatch between financial allocations and economic outcomes raises concerns about the efficiency of the ESP. Are the funds reaching those who need them the most? Are they being channeled into productive avenues that can generate sustainable employment and income?

Another critical issue is the structural weaknesses in the country’s economy that the ESP alone cannot address. The country remains highly dependent on imports, which means that increased liquidity often flows out rather than circulating within the domestic economy. Additionally, bureaucratic hurdles and inefficiencies in implementation slow down the impact of stimulus measures. For instance, while concessional loans have been made available through the Bhutan Development Bank, access to these funds is often constrained by procedural bottlenecks. Many small and medium-sized enterprises, particularly those in rural areas, struggle with securing financing due to complicated application processes. Without addressing these fundamental issues, simply injecting funds into the economy will not necessarily lead to the desired economic rebound.

While the overall sentiment remains one of skepticism, there are some sectors that have shown signs of recovery. Tourism, which was one of the hardest-hit industries, is gradually regaining momentum. The high-impact community development projects funded under the ESP have also led to some improvements in infrastructure and rural employment. However, these gains remain uneven and insufficient to declare a full economic rebound. The real measure of success for the ESP should not be just fund utilization but tangible improvements in economic indicators such as employment rates, business growth, and income levels. If most businesses are still struggling and consumers have limited spending power, then the plan’s effectiveness remains questionable.

Given the current economic reality, Bhutan must reassess its approach to economic recovery. Instead of focusing primarily on fund disbursement, the government should prioritize enhancing access to credit, strengthening domestic production, targeting employment generation, and boosting consumer confidence. Streamlining loan application processes and offering more flexible financial instruments for small and medium-sized enterprises and entrepreneurs can ensure that stimulus measures directly lead to job creation, particularly for youth and vulnerable populations. Reducing import dependency by fostering domestic manufacturing and value-added industries can ensure that increased liquidity benefits the local economy rather than flowing out of the country. Implementing policies that put more money in the hands of individuals, whether through tax reliefs, direct support programs, or wage enhancements, can further support the overall economic recovery.

The Economic Stimulus Plan was undoubtedly a necessary intervention to mitigate the economic fallout from the pandemic. However, if the nation’s economy has yet to bounce back to pre-COVID levels, it signals that the approach needs recalibration. A stimulus plan that does not translate into tangible benefits for businesses and individuals risk becoming a short-term financial exercise rather than a true economic revival strategy. While the ESP may have laid the groundwork for recovery, its effectiveness hinges on whether it can translate financial injections into real economic resilience. Until businesses regain stability and the public regains financial confidence, Bhutan’s economic recovery will remain an aspiration rather than a reality. The time to reassess and refine the stimulus strategy is now.

Pema Wangchuk, Thimphu