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17th Session of the National Council Concludes

Posted on :24 June 2016

The Hon’ble Minister for Economic Affairs, Lyonpo Lekey Dorji attended the debate session following the Question Time held with him on 8th June 2016, in the National Council, today.

Invoking Chapter 8, Section 137 of the National Council Act for the first time in this session, this is the second debate session following the question time in the National Council. As per this section, a member with the permission of the Chairperson may call a debate in the National Council, if he/she is not satisfied with the answers provided in the question time by the Minister.

Following the question time with the Minister of Economic Affairs on the role of State Mining Corporation (SME) given its immense potential to act as a social and economic wealth equalizer and the government to provide a list of strategic minerals that are considered so important for our country, Hon’ble Tashi Wangyel called for further debate on the issue.

The Hon’ble Minister candidly said that there are no special privileges for SMC and that laws cannot differentiate between government owned corporations and private companies. The Minister referring to his personal belief in neo-liberal free market mechanisms reported that private sector must be allowed to participate and the government must focus on enhancing laws, regulations, protecting the minority share holders as Government entities are generally inefficient in running business. He also acknowledged the existence of corruption in the sector and the need to address it. Citing some examples from China, where SOEs have not been successful and referring to social and communist countries like China and Soviet Union reverting to privatization after realizing their past mistakes, the Minister said that providing exclusive rights to SMC over strategic minerals might not be in line with democratic governance.

However, Hon’ble Tashi Wangyel argued that Article 1.12 of the Constitution vests rights and ownership of Minerals in the state and it is to be regulated by law. He mentioned that unlike a typical SOE, the SMC is a corporate entity established by the present government and is managed under the DHI, which was established to look after the Nation’s wealth for the benefit of the people. The DHI companies are designed to benefit from being a state owned enterprise as well as being governed on corporate and business principles to ensure efficiency and profitability. He further argued that while private sector is considered to be more efficient, efficiency can only exists if there is competition and level playing field for all.

However, in the case of the mining sector, the efficiency gain from competition is limited as only few players can participate due to high investments. Moreover, the gains from private sector are offset by losses due to corruption. Citing a study report by International Monetary Fund, a key proponent of free market principles, he mentioned that overselling neo-liberalism since the 1980s has been the cause for rising inequality across the globe. Further, he pointed out that privatization of natural resources in Russia as the cause for the emergence of an oligarchy in the country and therefore such ideology does not bode well with Bhutan’s vision to strive towards a just and harmonious society.

The Minister responded by referring to the Article 9.10 of the Constitution, which requires states to encourage private sector development through promoting fair market competition and prevention of commercial monopolies. He said that while direct contribution from mining sector is about 2.8 % of GDP, the indirect contribution and benefits are far more. He said the ministry is also looking into amending the Mines and Minerals management rules, which would take care of issues related to regulations.

Had it not been for the time constraints, the debate would have seen more members expressing their views. However, the debate ended with the House passing a resolution calling upon the Royal Government to urgently table the Mines and Minerals Management Act 1995 for amendment to enhance transparency, curb corruption, and prevent tax evasion and other business malpractices in the mining sector. The house also called upon the Government to grant SMC a special and an exclusive right over all primary mining activities, while encouraging private sector to invest only in areas for value addition.

Following the debate, the National Council concluded its 17th Session by offering Zhabten to Their Majesties the Druk Gyalpo, Gyaltsuen and the 4th Druk Gyalpo. In his concluding remarks, the Hon’ble Thrizin said that while the formal session adjourns today, the work of the Committees will start from tomorrow. Thrizin also announced the draft agenda for the forthcoming session of the National Council and assigned the different committees with the relevant assignments. The National Council will deliberate on two Bills, one Agreement, seven policy issues, two reports, and also continue working on the two on-going works related to national security. The distribution of work to various committees is as follows:

Legislative Committee

a.Customs Bill

b.BBIN (Agreement)

Foreign Relations Committee

a.Civil Aviation Bill

Natural Resources & Environment Committee

a. Agriculture Polices

b. Gewog Rationalization

Economic Affairs Committee

a. Review of 11th Plan MTR

b. Tax Audit of Tour Operators

Social & Cultural Affairs Committee

a. Cultural Issues

Good Governance Committee

a. Policy Formation

b. ACC’s Financial Security

c. Gewog Development Grant

Special Committee

a. Education Policy

The Hon’ble Prime Minister, Hon’ble Speaker and Hon’ble Minister for Economic Affairs also attended the closing ceremony of National Council.

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