Continuity and change


The Bhutanese have been cautious not to give hasty promises; but it can hardly be debated that they have been smart in using hydro resources both as strategic leverage and as a source of income, something that Nepal has been perpetually unable to do despite possessing 42,000 MW that is potentially feasible to be harnessed.

While participating in regional conferences 12 years ago, I used to tease my Bhutanese friends that their country was still under an absolute ruler while we had a functioning parliament, a full-fledged democratic constitution with a titular monarchy and elected local bodies. Today, they have got everything while we have lost all the above. They even managed to revise the Indo-Bhutan Treaty of 1949 and sign a new one in 2007 which no longer mandates India to look after their foreign and defence policies. Furthermore, their per capita GDP has tripled in the last decade, making them the second richest country in South Asia after the Maldives. The World Bank has graduated them from a low-income to a low middle-income country. Bhutan’s economy is projected to grow 7.2 percent this year which is the highest rate in South Asia.

A lot of this buoyancy and optimism stems from far-sighted planning and steadfast implementation of several hydropower projects that give the country substantial revenue. The bulk of the electricity produced at Chukha (336 MW), Kurichu (60 MW) and Tala (1,020 MW) is exported to India. Bhutan has also begun work on a set of new hydropower projects totalling over 11,000 MW to be commissioned gradually over the next 10 years. The projects include the massive 4,060 MW Sunkosh project, the largest in South Asia.

Along with India’s rapid industrialisation and modernisation, demand for electricity in Bihar, Jharkhand, Orissa, West Bengal and the seven north-eastern states has jumped. Bihar’s Chief Minister Nitish Kumar made his first foreign visit to Bhutan after being re-elected in May 2011 and requested more electricity. Earlier, Bangladesh Prime Minister Sheikh Hasina visited Bhutan in 2010 and sought cooperation in the power sector.

The Bhutanese have been cautious not to give hasty promises; but it can hardly be debated that they have been smart in using hydro resources both as strategic leverage and as a source of income, something that Nepal has been perpetually unable to do despite possessing 42,000 MW that is potentially feasible to be harnessed. Today, we are power deficient to such as extent that there could be about 18 hours of rolling blackouts this winter.

There are hydro experts who debate that Nepal is a much more complex polity with a population 50 times greater and rivers that are international borders. They argue that irrigation and flood control are as important to Nepal as electricity. But it is also true that we have now become an importer of power from India. Largely due to political instability, labour unrest, corruption, myopic vision of policymakers and lack of consensus on how to forge an understanding with India, Nepal’s hydro resources are still under-developed, forcing people to live in darkness while a much smaller neighbour like Bhutan marches ahead.

Since the refugee exodus in 1991, there has been constant and accelerating change in the political, economic and social conditions in the sub-region and indeed inside Bhutanese society. Thimpu’s another success story is its laudable efforts to protect its environment. It has given a lot of emphasis to forest conservation and issues of Drugpa identity, such as the national dress, national values, rootedness and Gross National Happiness. It is here that it is confronted with numerous geo-strategic and internal challenges. Bhutan is reticent about the ethnic composition of its population, but some researchers have estimated that a whopping 40 percent comprise Nepali-speaking people. Like others in the neighbourhood, it also faces a transformational security environment that demands the future shape of Bhutan’s strategic choices.

To what extent can Bhutan continue to pursue its compulsory national dress and national language policy? Similarly, how long can it stick to its classical international relations principle of not having diplomatic relations with any of the five permanent members of the UN Security Council? Today, it has diplomatic relations with only 46 countries. In fact, just three countries — India, Bangladesh and Kuwait — have residential embassies in Thimpu. The result of this self-isolation was its defeat in the UN Security Council elections earlier this month. But wealth and relative political stability could become an ideal springboard for rapid advances in interactions with the international community along with engagements with major powers. Bhutan’s relations with India are marked by total trust, hence increased cooperation with major powers is not likely to impinge Indo-Bhutan relations that is solid and time-tested.

The lingering issue of Bhutanese refugees has hindered the progress of Nepal-Bhutan relations for over two decades. There are influential voices within Nepal against forging better political, cultural and economic relations as this may dilute the core issue of refugee repatriation and make Thimpu content with the current state of affairs. They hold a firm view that Bhutan must show serious commitment to what it has agreed upon earlier and implement decisions reached in respect of the refugees and show a positive gesture towards Nepal by reactivating the stalled bilateral process, and only then will there be normalisation of relations. On the other hand, there is also increasing realisation that mutually beneficial avenues in the tourism, sports, trade and investment sectors need not be kept hostage till the remaining refugees are either repatriated or resettled. For instance, there has never been a bilateral official visit at the head of state level between the two neighbours, a brutal fact that needs to be redressed.

So far, about 70,000 refugees have been resettled, with 60,000 of them going to the US. A fresh, compelling geo-strategic bent on this issue is that the second largest cluster of Bhutanese citizens are now living in the US. They are spread across the 50 states, working in Wal-Marts, active in the social media, sending remittance back to the refugee camps and offering unstinting support to a final settlement to the problem. Unfortunately, there has seldom been an attempt at Track I or Track II diplomacy to see Nepal-Bhutan relations in their totality. But the time has come to analyse the future of our bilateral relations beyond the current murky environment to find solutions to the challenges facing us.

Pandey holds a PhD from Tribhuvan University on Multi-Ethnicity of Bhutan and Nepal-Bhutan Relations and is the director of the Centre for South Asian Studies

Courtesy : The Kathmandu Post


  1. Does Nepal about 3.5 times the size of Bhutan and 50 times more people need to have any relation at all with Bhutan to be able to harness and use its own internal natural resources?

    If Nepalis come together with unity of purpose, I believe they can do much more good for their own national causes than Bhutan has done with more disadvantages on its side. Unity of purpose among the Nepalese rather than power mongering is the present need in Nepal.

  2. The actual behind Bhutan’s higher per capita income lies behind its depopulation policy. Bhutan officially reported 1.2 million population until 1988. Until that time Bhutan was one of the most underdeveloped countries of the world – even in South Asia. That figure mysteriously went down to 600,00 after 1990. And the rise of its per capita income began to reported in the media. Just plain arithmatic explains this – reduce the population to its half, GDP remaining constant; the result is the high rise in the per capita income.

  3. Nepal has a huge opportunity. First, it lies between India and China, which are the two fastest growing economies. But Nepal needs to have a concrete strategy to reap benefits from the economic opportunities that the two countries can bring about here. The second one is that Nepal has a huge tourism opportunity particularly there is a great prospect of attracting Chinese and Indian tourists. Nepal can also attract foreign direct investment to boost its economic activities but for that there is a need of sustainable peace and stability. As far as challenges are concerned, I think there is a need of a vision as a nation where you want to go and I think political leaders should work together to have a common long-term vision that ensures prosperity for the country.
    Nepal Electricity Authority (NEA) is responsible for hydropower development. Transmission, distribution and generation are its three primary factions. These functions are overlapping. Functional nature of this type would be in trouble in delivering effective performance. Mixed functional responsibility could deviate from accountability. Slow pace of hydropower generation among other thing is the outcome of this strategy. Priorities could be shifted from one to another function as to the responsibility and accountability. It hampers achieving the desired level of outcome. Therefore, it is necessary to commission separate entity to handle these functions separately. This will increase the sense of responsibility, accountability and sustainability.

  4. Dr. Pandey:

    Your portrayal of democratic Nepal reminds me of Plato’s allegory of ship used in his Republic. “Imagine then a ship or a fleet in which there is a captain who is taller and stronger than any of the crew, but who is a little deaf and has a similar infirmity in sight, and whose knowledge of navigation is not much better. The sailors are quarreling with one another about the steering—every one is of the opinion that he has a right to steer, though he has never learned the art of navigation and can not tell who taught him or where he learned …” According to Plato, democratic self government does not work because ordinary people of the state have not learnt the art of state running. I am not a political pundit to determine if the people of Nepal were ready to run the ship, but your article does imply that perhaps they were not. Now the question is how long will the ship remain afloat? It looks like the prime time has reached for the sailors to realize that they should stop feeding their individual ego, but work together to save the ship.

    I will remain optimistic and also encourage you not to be too haste in saying “Today, they [the Bhutanese] have got everything while we have lost all…” Nepal has not lost all and Bhutan does not have everything. Nepal still has the greatest virtue still gleaming proudly in the Himalayan sun – she has her sovereignty. She is waiting for her children to wake up – like every mother, she is always forgiving, always giving! But her children will have to wake up!

    On the other hand, if you check the recent news of Bhutan, you cannot help but wonder if there are too many sailors being born to steer the ship. How many political parties does Bhutan need? I think that the mushrooming of political parties is an indication of decline in trust and faith amongst citizens and also it inculcates an ugly sense of looming political stalemate where the general mass will be at the stake. Bhutan should instead use her newfound achievement to further educate and better prepare her citizens to face the future Bhutan. After every river will have been chained in dams, what will Bhutan sell? Yet Bhutan chooses to be content in dwelling in the bliss of Gross National Happiness…

    The only solution to the challenges you address about bilateral relations of these two countries, in my opinion, is to concentrate on keeping your own ships floating and from time to time, give a friendly shout of Ahoy!



  5. I have to say that the indiscriminate nature of Bhutan-bashing engaged in by Nepali press has actually created a very unsavory opinion of Bhutan in the eyes of nepalese. It’s one thing to condemn the refugee issue but unfortunately nepali press has always used a refugee-issue tainted glass to look at Bhutan without actually having been to Bhutan and knowing things first hand. Fortunately, none of the nepali papers find their way into Bhutan and Bhutanese in general do not have as hostile views of nepalis. I think it becomes easier to resolve problems within an overall environment of good relationship, rather than nit-picking a single issue at every opportunity even when it can backfire. Let’s hope this happens sooner, and nepal overcomes the impasse that it has been in for some years now.

  6. I feel the truth behind success of Bhutan and Bhutanese up to certain extend is due to their strongly founded education system by late Father William Joseph Mackey S.J. He with the support from the the then King carefully monitored the education system which is the backbone of democracy and modern world. where as in Nepal after 2007 movement, school and colleges were mushroomed with no monitor by the concerned authority which lacks proper vision. The way present day nepali political leaders act is direct impact. They lack developmental knowledge.

  7. Fr. Mackey founded the education of Bhutan but destroyed its social fabric by playing the ethnic card between the northerners and the southerners. The seeds of the 1990 movement was sown long ago in Mckey’s lecturers in schools and colleges.

    Nepal did not have Fr. Mackey – so its educations system could not laid strong. It had Prachanda who destroyed both its education and the ethnic harmony.