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The Inequality Gap


Narrowing the gap of income inequality between the rich and poor mass in most south Asian countries remains a challenge to the governments in the region. Bhutan, being a country that has been accepting a cautious development, is not yet close to narrow the gap, if not widened.

Bhutan Living Standard Survey (BLSS) 2012 reveals the figures that poverty in Bhutan is nearly halved over the past five years. A World Bank economist, Srinivasan Thirumalai lauded the report as consistent with the growth rate of Bhutan estimated at 5% in 2010. Bhutan is also rapidly closing the poverty gap with least poor countries like Sri Lanka and Maldives, according to the World Bank estimates of 2010.

But figures are not always to rely on. The methods of taking such social surveys using appropriate tools and tracking the income levels of the poorer section living afar are some key misgivings in the findings of BLSS. The poverty analysis report 2012 has drawn a progressive graph that over the past two decades, the poverty reduction rate is 12% with mean consumption increased by 5%. But a graph published in kuensel of May 1 gives a picture of 12% as the poverty rate of 2012 while for 2007 it was 23.2%.

One can assume sufficient flaws in the data collection methods, while looking at the figure of 12% poverty reduction just in 5 years. If we take the rate for two decades of Bhutan’s path to development, there is room to argue that rural areas have not at all contributed to this amazing poverty reduction. The two decades were the years when most lands in southern Bhutan turned fallow, the development of agriculture and other infrastructures as roads, schools, bridges had been stalled for the security reasons. ULFA and BODO militants camping in the secluded enclaves of southern belt did resisted and threatened movement of government goods and personals. During this time, all development works were urban-centered, that too with much skepticism and dilemma. In those years, most weekly markets that exchanged goods and cash between Bhutanese growers and Indian merchants, closed and no buying selling took place.

Why a thriving district like Samtse has many poor people? The reason is obvious neglect for the people as the government waited for nearly five years after 1990 to see if more people could be evicted by signing the voluntary migration forms. The fear that ‘militants’ might interfere and obstruct the development works remained as the pretense for all years until 2000. Some of the rural people did came up voluntarily to emigrate after they could not produce anything on their land, had no chance to settle elsewhere, no school for the children, no government protection against all fears against wild animals or robbers and no place to sell their harvest. More people in the district abandoned their land, could not tend to the orchards and lay at the mercy of wild animals and monsoon rains to return to farm.

The fate is same for Samdrupjongkhar district which is the most affected district by ULFA and BODO militants. Moreover, the large tracts of wetland left by the evictees became the breeding ground for wild boars, barking deers, hogs while the surrounding forest supported wild elephants as haven.

Villages like Samrang, Bakuli, Dalim, Dumpha and Bhangtar became thinner with the human population. Nganglam, just north of Pathsala was most safe haven for the Assam militants. Daifam and Shingkharlauri started gearing up for the physical development and exchange trade with Assam very recently, may be two or three years now.

The income inequality is seen most prominently in Chukha which harbors the two mega hydro projects and localized industries. The poverty rate in Chukha is 8.8% which means there are comparatively poorer people. Phuentsholing is long standing business hub for Bhutan, while industries, colleges, and technical institutes are aplenty in Chukha. Chukha hydropower, Pasakha Industrial area and the Tala hydropower are big economic machines that can churn out rupees and dollars. But what is wrong?

This suggests that revenue generated from the businesses and industries in Chukha is siphoned to the pockets of richer and already wealthier people while the economic opportunities for the poorer to increase their income are limited. Big business houses in Phuentsholing are still owned by Indian merchants who pay certain royalty or operating tax to the government that seems not to trickle down.

The poverty analysis report found out that the gap between haves and have-nots have not changed even after five years. According to it, the richest 20%consume roughly seven times more than the poorest 20%. It means the richest Bhutanese are seven times richer than the poorest.

Let us look at the health care. It is state funded and is literally free for all Bhutanese. However, some rich people are able to spend some hundred thousand to deliver babies in Bangkok, while some are not able to go to hospital in Thimphu, if they are referred for getting treatment that take a month or two.

The cost of living in urban areas is increasing exponentially. So the people with lower range of salaries and daily wage laborers are living in penury, consuming the lowest quality food items, sheltering in the shacks and small tin-roofed house. In Phuentsholing, two average rooms cost Nu 5000 while in Jaigaon, similar rooms can be rented at Rs3200. Therefore, many Bhutanese who fall in lower income range get rented apartments in Jaigaon.

Another figure on poverty speaks: the new poverty line for Bhutan is fixed at 1704.80 Bhutanese currencies per person per month. Going by this minimum consumption level, many rural people and the highlanders of Laya,Lunana, or Merak Sakteng are far below this line. Even the land owners in the fertile valleys and southern foothills are not able to consume to this level, just in a month. The crop they produce in their land is not valued in the market in proportion to the labor input they make.

Let us take an example in rural parts of Gelephu town. The travel to market for fifteen to half hour ride cost Nu 50, while the shop for essential commodities for a week in Gelephu cost Nu 500. Therefore a villager in Nayabasti or Taklai is likely to spend 2200 in a month for the family of 6. This obviously doesnot include the consumption of home-grown milk, eggs, the rice or lentil. What can be the cost of living for a household of five living in Gwang or upper Maokhola.

The same applies to Dorokha and Denchukha villages although they fetch more cash from cardamom or the mandarins.

The numbers presented in the poverty analysis report or the living standard survey report  are not the absolute measures to reflect on the living qualities of average Bhutanese. It sounds pretty fairly drawn if we look at the salaries of civil servants, government heads or some private employees of mega projects operating in the country. It is also good from the standpoint of the deceptive tendering practices to benefit the high-handed ministers and department heads of ongoing projects. Some ministers are busy amassing the wealth by getting two-fold income of government salary and rent collected from government offices that are set up in their multistoried buildings in Thimphu.

 This will not close the gap of income inequality or reduce poverty at that speed of 12% in five years. No, never.  The school students falling sick of nutritional deficiency in Orong, Martshala, Luentshe last year is not an indication of reduced poverty.  Children who walk to school more than two hours daily and studying half-starving are not epitomes of reduced poverty.