After over two years of COVID-19-induced lockdown, Bhutan will open its doors for tourists on September 23 with a new expensive policy for international tourists and Indians as well. Bhutan Foreign Minister Tandi Dorji says the lessons of COVID-19 include better ties with neighbours, including China.
India’s interests on the Doklam tri-junction will not be harmed or “compromised” by the agreement between Bhutan and China for a three-step “road map” to resolve their outstanding border disputes, Bhutan’s Foreign Minister Tandi Dorji said in an interview to The Hindu.
In the first interview since he signed the road map MoU in October 2021, and ahead of Bhutan’s decision to reopen its borders for tourists in September 2022, Mr. Dorji said that in both cases, it is necessary to learn the “lessons” of the pandemic. He said that neighbours must find the way to “resolve issues” between them, and that Bhutan and China were hopeful of resolving their disputes soon, and would later take up the tricky issue of the Doklam tri-junction area that involves India’s interests as well.
Bhutan has announced that after two-and-a-half years, the country would finally reopen its borders to tourists on September 23.
Dr. Dorji, a paediatrician by profession, said this was possible since all eligible Bhutanese had been administered COVID-19 vaccines, while children’s vaccination would soon be completed.
Bhutan, which saw about 60,000 COVID-19 cases and 21 deaths during the pandemic, has had one of the strictest lockdowns in the world since March 2020. Defending Bhutan’s latest decision, to triple its entry fee for other international tourists from $65 to $200 a day, as well as to implement for the first time, a daily sustainable development Fee of ₹1,200 for Indian tourists, Mr. Dorji said the government’s “high-value, low-volume” policy is for tourists who are sensitive to the environment and willing to pay more to visit Bhutan.
Mr. Dorji said that the pandemic had also shown how “connected” the world is, and the necessity of resolving the outstanding border disputes in the interests of “all three countries” — Bhutan, India and China.
The speed of talks last year took New Delhi by surprise, especially as they came after the 2017 Doklam stand-off between the Indian Army and the People’s Liberation Army (PLA). Mr. Dorji said he had not formally discussed with New Delhi the “Expert Group meeting” in Kunming in April 2021, that finalised the roadmap, but that the Indian government was “aware” of the progress.
From the interview:
‘Bhutan-China talks won’t focus on Doklam’
Bhutan has had the strictest lockdown amongst countries around the world: closed borders, 21 day quarantines. Why did it take so long to lift the lockdown as you plan to do now? How much has Bhutan been affected in these last few years?
Bhutan is a very small country, we have a little over 7,00,000 people. When the pandemic first began in March of 2020, we were guided by His Majesty the King, and whose command was that we should prevent even one death from occuring. The loss of one life would be a very sad thing. And that was what the government intended to do. So right from the beginning, our response has been to save each and every life, and the decision was taken to close the border. Even as we speak today, the pandemic is still not over. It is raging in many countries, although the severity has reduced, but the numbers of infections keep occurring in phases. What we really wanted was to have all the entire population vaccinated as early as possible so that once their lives are secure, then we could go forward. So we kept everything aside, including the economy, and we focused entirely on the health response and saving Bhutanese lives. The country is now entirely vaccinated, and very soon, children below five years who are willing, will be vaccinated with the recent receipt of the [33,600 doses of Moderna MRNA] vaccines from the US.
We have always followed an evidence based decision making process, studying how severe the virus was, what is the impact on the mortality, how effective are the vaccines, etc. And so based on all this, now that we have secured a very high level of vaccination, we know that the Omicron variant is not so severe. The people who have been infected have all recovered, we’ve had in all about 21 deaths in these two years. And so now we felt that we are prepared to open up the borders. Under the visionary leadership of His Majesty the King we have achieved this and I’m quite proud to say that I think we have shown an example on how we can manage COVID effectively as compared to many countries around the world. Currently we have a requirement of 24 hours quarantine while your test results come and formally we’ll be opening up the doors for tourism on September 23.
India had earlier promised Bhutan two rounds of Covishield/ Astra Zeneca vaccines, but after the Delta variant hit, was not able to provide the second round. How much diplomacy was required to to ensure that you had enough vaccines?
Firstly, I would like to thank the Government of India for the valuable support offered to us, not only in terms of vaccines, but in terms of the support for medicines, essential equipments, ventilators, Xray machines. Of course, we were also acutely aware of the urgency in India last year [during the Delta outbreak] and how much the vaccines were required there. So we started reaching out to other countries, and again, we must thank to the Minister of External Affairs in India, who on behalf of Bhutan also spoke to partners across the globe, asking them to help Bhutan with a second tranche. We reached out to approximately 30 countries, mostly in the developed world. Denmark offered us close to 250,000 doses. We’ve received several from many European countries that actually met our requirements for the second dose. But at the same time, we also received 500,000 doses of vaccine of Moderna from the US, along with the Pfizer doses from the COVAX facility. Given the scientific evidence at that time, there was no doubt that the mRNA vaccines, the Pfizer and the Moderna were the best vaccines. So we decided to use those vaccines as our second dose. We further gave the doses of AstraZeneca that we received to Nepal and to Thailand. Even for booster doses we have used only Pfizer and Moderna. The booster doses were procured largely by the Royal Government of Bhutan. And now for the children’s vaccine, again, we are going to use Pfizer and going forward I think we are going to stick with the messenger RNA vaccine. But as you said, at that time it was really difficult because the whole world was looking for vaccines, many from Asia and from developing countries. The goodwill that Bhutan has achieved and the very close bilateral relations that have been built over many decades, during their Majesty’s time and also subsequent governments, I think this showed results. We proved during the first vaccination strategy that we were very effective in giving vaccines throughout the country to the whole eligible population within one week. This also built up some sort of trust, so when partners want to give their vaccines, they know that we are going to use it effectively without any wastage. So it was difficult, but I think we managed to achieve and we’d like to thank all the partner countries for their valuable support.
Did Bhutan feel let down by the government of India when the second dose of vaccines didn’t come through?
No, no, not at all. Actually, we were already flagged about the possibility of [India] not being able to give the second dose. Although in Bhutan we required the vaccines, the outbreak was very much under control. We had effective lockdowns in place. The whole of 2021, we kept our schools closed. In comparison, the requirements in India were much, much higher than ours, and we truly understood. And, as I said, the government again, through the Ministry of External Affairs, including Dr. Jaishankar, himself, went out of the way during their bilateral meetings in Europe and US to request them to help Bhutan. Eventually, we were delayed only by about two weeks, from the date that we were supposed to give our second dose.
Bhutan received vaccines from many P-5 countries from the United States from China as well, which Bhutan doesn’t have formal relations with. Did this require a shift in foreign policy ?
Although we do not have diplomatic relationship with any of the Permanent five (P-5 countries of the UN Security Council) countries, it has not stopped us from engaging with them. And there are many successful partnerships and cooperation in many areas, mostly in the areas of education and scholarships, and capacity building. With the US, we are working on trafficking in Persons, on controlling drugs. With the Chinese, we have very good relations in terms of capacity building workshops etc. China gave us 50,000 doses. Since there were many Bhutanese, who were living in Nepal, and in Thailand, who had received the Chinese vaccine earlier, it was very useful for them to receive their second dose of the same vaccine. We always kept the choice open to the people that if you wanted to use AstraZeneca as your second dose, we had AstraZeneca, if you wanted sinovac, we had sinovac. And if you wanted mRNA, which the Prime Minister said is the preferred one, you got that. I think more than 80% took the mRNA vaccines.
Now, as you open up Bhutan for tourism once again in September, you have new rules for how tourists have to pay. Indian tourists for the first time will also be paying a special fee -give us a sense of what drove the new policy?
I would like to break this up into two components. One is for the Indians and the other one is for the international tourists that have always had a separate fee based structure. For the international tourists we have what is known as the minimum daily package rate (MDPR) which was $250 during the high season months and $200 for low season months. And this package included your hotel, your guide, your vehicle your food. $65 was charged as sustainable development fee (SDF), which the government put into development work and also in helping the Tourism Council of Bhutan to improve facilities. This was in place since 1991. So for the tourists who came to Bhutan, their experience was limited to the package provided by tour operators. Over time, this prevented diversification, prevented flexibility, prevented growth of the sectors like the hotels and other aspects. And tourism was also very restricted to only cultural tourism and trekking.
I think the last two years of COVID has taught us to rethink and reset what are the key things that Bhutan needs to do. We’ve always been a carbon negative country. Bhutan is well known for preserving our environment. However, if you see the vehicles on the road, it’s all fossil fuel based. The number of electric cars are very low, public transportation was very weak. And so during this COVID time, the two years, it taught us that we must rethink and relook at the way that we are moving forward. So we decided that instead of going for mass tourism, which was our focus prior to the COVID, that we must rethink and focus very much on our long standing policy of “high value, low volume” tourism. Tourism must be beneficial to the tourists who come to Bhutan, but it also must be beneficial to Bhutan. And therefore if we have to improve the infrastructure and services, if we have to improve the skills provided by our tour operators and our guides and our hoteliers, then we need to invest in them. We decided that we will remove the minimum daily package rate and increase the Sustainable Development fee from $65 to $200.
When it comes to Indians, we implemented the Tourism levy Act in 2020, which mentioned that for the first time, we will include 1200 rupees per day for tourists from India. The reason was at that time, in 2020 Indian tourists could come into Bhutan without any tour guides, using their own vehicles. And as a result, it led to a lot of problems and misunderstandings, because the tourists from India unknowingly would not follow the traditional cultural practices of Bhutan. Some of them were caught [defiling] religious sites while some of them were also cheated by Bhutanese guides and tour operators. There were a lot of road traffic accidents because they didn’t understand our traffic rules. And so we felt that it was very important that all of them come with a guide and that some things are regulated. Bhutan would like to welcome Indians, but our public were not happy seeing some of their practices. Reports of Indian tourists climbing our Stupas really led to an uproar in Bhutan, and that fueled the need for change. With the new fee in place, Indians will have a much more enjoyable experience. They will not get cheated. They will they will have all the facilities that foreign tourists enjoy in Bhutan, but at a much reduced cost: they will stay at a minimum three star hotel, have a guide, and go in a tourist approved vehicle. We are also aware that Indian tourists are more price sensitive, and therefore we will charge only Rs 1200 instead of the dollar rate. At some time in the future as we grow, and we will revise the rates .
High value, low volume tourism does sound somewhat elitist, as if Bhutan only wants wealthy, high-end tourists from around the world. How do you explain that?
We are definitely not trying to be elitist, but you must understand that Bhutan is also a very vulnerable country. We are worried about climate change, people have been complaining about the trash that is thrown by the trekkers. If we need to keep it clean, we need to request for more investment and therefore we need people who are aware and also sensitive about these things to come to Bhutan. So what are we asking our tourists is to pay so that Bhutan can put that money into improving tourist services, into mitigation and adaptation of climate change, controlling waste, investing in renewable energy and better public transport. High value doesn’t mean the rich, but people who were acutely aware about climate change, people who are aware about congestion and waste, and the need to invest in human capital, to improve education.
Did the Indian government object to Bhutan’s decision to change its tourism policy for Indians?
No, no, this was already discussed in 2020. And we tried to make it as convenient as possible for our Indian friends. Previous Bhutanese governments had also discussed this possibility, and we’ve improved the process by making it all online. People don’t have to wait, they can apply online and they can get their permit immediately, we are not going to restrict at all they just, it is much more convenient and efficient for them. You will travel in a tour operated vehicle, and therefore much safer. We’ve always consulted the Indian government, before we made any change of policy that affects India. We’ve always said that we should not give surprises to friends, as we enjoy very close relations.
Along with these openings, we’ve seen during the COVID pandemic, a new opening, with Bhutan-China border talks. Are you hopeful that Bhutan and China can resolve their boundary issues?
Yes, we are very hopeful, I’m very confident that we will definitely be able to resolve our border issues. It has been now nearly four decades that we’ve had discussions. As you know, we have signed a three step process that will hopefully enable us to resolve the outstanding border issues. During the COVID period, we had our expert group meeting, we are waiting for the next expert group meeting (EGM) to take place, following which we will have the border talks. There have been some delays because of the situation in China, first the Olympics, then followed by the latest COVID outbreak. But we are hopeful that that the government in China and the government in Bhutan will be able to find a suitable date for the next expert group meeting. After that, we will see how the border talks go.
Given the history, given the sensitivities, is this something that you in Thimphu and the government in Delhi have also discussed?
Not formally, but I think [Indian government] is aware about the situation. After all, the main issue revolves around the trilateral junction in Doklam. So I think it’s important that the Indian Government also, on their part, are aware about what the situation is there. As far as the bilateral talks between China and Bhutan goes, I think this is entirely a matter between our two countries. As long as it doesn’t touch the trilateral junction, that is. In many cases where there are three or more countries involved, they usually leave those decisions to a later date. So I think that there is a possibility for us to discuss all the other outstanding issues without discussing on the main trijunction area for now.
And that outcome wouldn’t impact India in the tri-junction area?
No, not at all. I think it’s important that when we make these decisions, that the interest of all the countries involved, including China, India and Bhutan, is kept, and the interests of the three countries are not compromised. That’s why it has taken us many years to reach where we have reached. And I feel that going forward, India’s interest will definitely not be compromised. It will be in the interest of all three countries, and all three countries will benefit if we resolve these issues. As all good neighbors, I think we should try to resolve any outstanding issues. There’s nothing that cannot be done through discussions and dialogue and compromise on all our parts. After COVID, I think now we need to be much more sensitive about each other. We are all actually connected, and we need to be friends, especially among our neighbors, and therefore I’m very hopeful that we will be able to resolve it.
Given the Covid pandemic and lockdown, Bhutan’s economy contracted 10% in 2020, GDP came down to 3.7%, inflation has been rising, and there’s a possible foreign exchange crisis. Can Bhutan afford to be choosy when it comes to its tourists?
As I said, we must learn the lessons from COVID. We cannot do business as usual. I think many countries around the world are learning that that to be dependent entirely on one sector is not good, especially tourism, with a global pandemic. And countries which were dependent on tourism suffered a lot. Fortunately, in Bhutan, hydropower is the number one contributor to the economy, while tourism is, in terms of employment and livelihoods, certainly one of the largest sectors. One of the reasons for the policy change is we need to reform the Tourism business- a large part of the money tourists pay actually goes back to the agents abroad. Our own tour operators get a very small share of the pie, and they are going to be the maximum beneficiary of of this new tourism policy. Bhutanese Hotels too will be able to charge according to the facilities they provide, as we have removed the caps. In the short term, there might be some reduced numbers. But in the long term, I have no doubt that it will be a success.
I ask because around the world and the neighbourhood in particular- Sri Lanka, India, Pakistan, Nepal, we’re seeing economic distress, and protests. Do you worry about something like that happening in Bhutan as well?
Yes, we are concerned, we are worried. But I must, again, break this up into two components, because our Constitution mandates that all recurrent expenditure in the country must be met from resources within the country. In terms of capital expenditure, we can use grants and loans, etc. We have been able to pass the budget this year, so it may not be as difficult for us. But looking at our region and the problems, we have discussed in the government, whether we should put some restrictions on imports, foreign vehicles, foreign drinks, etc, etc. We’ve looked at our own data, we’ve looked at our status as of now and we feel that for the next one year, it should not be very difficult. We are a very small economy, we can bounce back very quickly to take care of the few hundred thousand people who are economically active. Now that we are going to be opening from September, many of our factories, many of our industries will be reopening. Construction, which is very much dependent on Indian labourers, suffered because we couldn’t get enough but the restrictions are being lifted, and our hydropower projects are being restarted. We’ve started three smaller hydropower projects that are going to be built by Bhutan entirely. We have learned the lessons from the two years, we are learning the lessons from the experiences of our neighboring countries, and we are avoiding those mistakes. And the good thing in Bhutan is that we have a very good leadership, starting from His Majesty the King, who is guiding, and will not allow politicians like ourselves to make decisions based on short term electoral interests, and we will look at the interest of the nation for a longer term. We will not do anything to compromise the long term sustainability of the economy in Bhutan.
Bhutan is now working on preferential trade agreements with both Bangladesh and Nepal. Will Bhutan give regional arrangements like the Bhutan-Bangladesh-India-Nepal Motor Vehicles Agreement (BBIN-MVA) a rethink?
We are definitely not against the principles of BBIN, but I think the practical implementation of the MVA needs to be agreed upon. We already have signed a trade agreement with Bangladesh and we will be in discussions with Nepal and Thailand very soon. When it comes to communications and transport with other countries, it is very important, and Bhutan will definitely like to be part of this. But what we are concerned about is the sustainability of our roads. I think we will have more influx of vehicles and transportation from other countries because we are a net importing country. In India too you are seeing massive landslides taking place, and here our infrastructure is not good enough to support a high number of vehicles, especially big vehicles. The impact on the environment because of all the emissions is also a worry. I would say we are looking at all these concerns, but we have not completely closed the door on BBIN-MVA.
Bhutan-China ties won’t harm India’s interests: Bhutan Foreign Minister
After over two years of COVID-19-induced lockdown, Bhutan will open its doors for tourists on September 23 with a new expensive policy for international tourists and Indians as well. Bhutan Foreign Minister Tandi Dorji says the lessons of COVID-19 include better ties with neighbours, including China.
India’s interests on the Doklam tri-junction will not be harmed or “compromised” by the agreement between Bhutan and China for a three-step “road map” to resolve their outstanding border disputes, Bhutan’s Foreign Minister Tandi Dorji said in an interview to The Hindu.
In the first interview since he signed the road map MoU in October 2021, and ahead of Bhutan’s decision to reopen its borders for tourists in September 2022, Mr. Dorji said that in both cases, it is necessary to learn the “lessons” of the pandemic. He said that neighbours must find the way to “resolve issues” between them, and that Bhutan and China were hopeful of resolving their disputes soon, and would later take up the tricky issue of the Doklam tri-junction area that involves India’s interests as well.
Bhutan has announced that after two-and-a-half years, the country would finally reopen its borders to tourists on September 23.
Dr. Dorji, a paediatrician by profession, said this was possible since all eligible Bhutanese had been administered COVID-19 vaccines, while children’s vaccination would soon be completed.
Bhutan, which saw about 60,000 COVID-19 cases and 21 deaths during the pandemic, has had one of the strictest lockdowns in the world since March 2020. Defending Bhutan’s latest decision, to triple its entry fee for other international tourists from $65 to $200 a day, as well as to implement for the first time, a daily sustainable development Fee of ₹1,200 for Indian tourists, Mr. Dorji said the government’s “high-value, low-volume” policy is for tourists who are sensitive to the environment and willing to pay more to visit Bhutan.
Mr. Dorji said that the pandemic had also shown how “connected” the world is, and the necessity of resolving the outstanding border disputes in the interests of “all three countries” — Bhutan, India and China.
The speed of talks last year took New Delhi by surprise, especially as they came after the 2017 Doklam stand-off between the Indian Army and the People’s Liberation Army (PLA). Mr. Dorji said he had not formally discussed with New Delhi the “Expert Group meeting” in Kunming in April 2021, that finalised the roadmap, but that the Indian government was “aware” of the progress.
From the interview:
‘Bhutan-China talks won’t focus on Doklam’
Bhutan has had the strictest lockdown amongst countries around the world: closed borders, 21 day quarantines. Why did it take so long to lift the lockdown as you plan to do now? How much has Bhutan been affected in these last few years?
Bhutan is a very small country, we have a little over 7,00,000 people. When the pandemic first began in March of 2020, we were guided by His Majesty the King, and whose command was that we should prevent even one death from occuring. The loss of one life would be a very sad thing. And that was what the government intended to do. So right from the beginning, our response has been to save each and every life, and the decision was taken to close the border. Even as we speak today, the pandemic is still not over. It is raging in many countries, although the severity has reduced, but the numbers of infections keep occurring in phases. What we really wanted was to have all the entire population vaccinated as early as possible so that once their lives are secure, then we could go forward. So we kept everything aside, including the economy, and we focused entirely on the health response and saving Bhutanese lives. The country is now entirely vaccinated, and very soon, children below five years who are willing, will be vaccinated with the recent receipt of the [33,600 doses of Moderna MRNA] vaccines from the US.
We have always followed an evidence based decision making process, studying how severe the virus was, what is the impact on the mortality, how effective are the vaccines, etc. And so based on all this, now that we have secured a very high level of vaccination, we know that the Omicron variant is not so severe. The people who have been infected have all recovered, we’ve had in all about 21 deaths in these two years. And so now we felt that we are prepared to open up the borders. Under the visionary leadership of His Majesty the King we have achieved this and I’m quite proud to say that I think we have shown an example on how we can manage COVID effectively as compared to many countries around the world. Currently we have a requirement of 24 hours quarantine while your test results come and formally we’ll be opening up the doors for tourism on September 23.
India had earlier promised Bhutan two rounds of Covishield/ Astra Zeneca vaccines, but after the Delta variant hit, was not able to provide the second round. How much diplomacy was required to to ensure that you had enough vaccines?
Firstly, I would like to thank the Government of India for the valuable support offered to us, not only in terms of vaccines, but in terms of the support for medicines, essential equipments, ventilators, Xray machines. Of course, we were also acutely aware of the urgency in India last year [during the Delta outbreak] and how much the vaccines were required there. So we started reaching out to other countries, and again, we must thank to the Minister of External Affairs in India, who on behalf of Bhutan also spoke to partners across the globe, asking them to help Bhutan with a second tranche. We reached out to approximately 30 countries, mostly in the developed world. Denmark offered us close to 250,000 doses. We’ve received several from many European countries that actually met our requirements for the second dose. But at the same time, we also received 500,000 doses of vaccine of Moderna from the US, along with the Pfizer doses from the COVAX facility. Given the scientific evidence at that time, there was no doubt that the mRNA vaccines, the Pfizer and the Moderna were the best vaccines. So we decided to use those vaccines as our second dose. We further gave the doses of AstraZeneca that we received to Nepal and to Thailand. Even for booster doses we have used only Pfizer and Moderna. The booster doses were procured largely by the Royal Government of Bhutan. And now for the children’s vaccine, again, we are going to use Pfizer and going forward I think we are going to stick with the messenger RNA vaccine. But as you said, at that time it was really difficult because the whole world was looking for vaccines, many from Asia and from developing countries. The goodwill that Bhutan has achieved and the very close bilateral relations that have been built over many decades, during their Majesty’s time and also subsequent governments, I think this showed results. We proved during the first vaccination strategy that we were very effective in giving vaccines throughout the country to the whole eligible population within one week. This also built up some sort of trust, so when partners want to give their vaccines, they know that we are going to use it effectively without any wastage. So it was difficult, but I think we managed to achieve and we’d like to thank all the partner countries for their valuable support.
Did Bhutan feel let down by the government of India when the second dose of vaccines didn’t come through?
No, no, not at all. Actually, we were already flagged about the possibility of [India] not being able to give the second dose. Although in Bhutan we required the vaccines, the outbreak was very much under control. We had effective lockdowns in place. The whole of 2021, we kept our schools closed. In comparison, the requirements in India were much, much higher than ours, and we truly understood. And, as I said, the government again, through the Ministry of External Affairs, including Dr. Jaishankar, himself, went out of the way during their bilateral meetings in Europe and US to request them to help Bhutan. Eventually, we were delayed only by about two weeks, from the date that we were supposed to give our second dose.
Bhutan received vaccines from many P-5 countries from the United States from China as well, which Bhutan doesn’t have formal relations with. Did this require a shift in foreign policy ?
Although we do not have diplomatic relationship with any of the Permanent five (P-5 countries of the UN Security Council) countries, it has not stopped us from engaging with them. And there are many successful partnerships and cooperation in many areas, mostly in the areas of education and scholarships, and capacity building. With the US, we are working on trafficking in Persons, on controlling drugs. With the Chinese, we have very good relations in terms of capacity building workshops etc. China gave us 50,000 doses. Since there were many Bhutanese, who were living in Nepal, and in Thailand, who had received the Chinese vaccine earlier, it was very useful for them to receive their second dose of the same vaccine. We always kept the choice open to the people that if you wanted to use AstraZeneca as your second dose, we had AstraZeneca, if you wanted sinovac, we had sinovac. And if you wanted mRNA, which the Prime Minister said is the preferred one, you got that. I think more than 80% took the mRNA vaccines.
Now, as you open up Bhutan for tourism once again in September, you have new rules for how tourists have to pay. Indian tourists for the first time will also be paying a special fee -give us a sense of what drove the new policy?
I would like to break this up into two components. One is for the Indians and the other one is for the international tourists that have always had a separate fee based structure. For the international tourists we have what is known as the minimum daily package rate (MDPR) which was $250 during the high season months and $200 for low season months. And this package included your hotel, your guide, your vehicle your food. $65 was charged as sustainable development fee (SDF), which the government put into development work and also in helping the Tourism Council of Bhutan to improve facilities. This was in place since 1991. So for the tourists who came to Bhutan, their experience was limited to the package provided by tour operators. Over time, this prevented diversification, prevented flexibility, prevented growth of the sectors like the hotels and other aspects. And tourism was also very restricted to only cultural tourism and trekking.
I think the last two years of COVID has taught us to rethink and reset what are the key things that Bhutan needs to do. We’ve always been a carbon negative country. Bhutan is well known for preserving our environment. However, if you see the vehicles on the road, it’s all fossil fuel based. The number of electric cars are very low, public transportation was very weak. And so during this COVID time, the two years, it taught us that we must rethink and relook at the way that we are moving forward. So we decided that instead of going for mass tourism, which was our focus prior to the COVID, that we must rethink and focus very much on our long standing policy of “high value, low volume” tourism. Tourism must be beneficial to the tourists who come to Bhutan, but it also must be beneficial to Bhutan. And therefore if we have to improve the infrastructure and services, if we have to improve the skills provided by our tour operators and our guides and our hoteliers, then we need to invest in them. We decided that we will remove the minimum daily package rate and increase the Sustainable Development fee from $65 to $200.
When it comes to Indians, we implemented the Tourism levy Act in 2020, which mentioned that for the first time, we will include 1200 rupees per day for tourists from India. The reason was at that time, in 2020 Indian tourists could come into Bhutan without any tour guides, using their own vehicles. And as a result, it led to a lot of problems and misunderstandings, because the tourists from India unknowingly would not follow the traditional cultural practices of Bhutan. Some of them were caught [defiling] religious sites while some of them were also cheated by Bhutanese guides and tour operators. There were a lot of road traffic accidents because they didn’t understand our traffic rules. And so we felt that it was very important that all of them come with a guide and that some things are regulated. Bhutan would like to welcome Indians, but our public were not happy seeing some of their practices. Reports of Indian tourists climbing our Stupas really led to an uproar in Bhutan, and that fueled the need for change. With the new fee in place, Indians will have a much more enjoyable experience. They will not get cheated. They will they will have all the facilities that foreign tourists enjoy in Bhutan, but at a much reduced cost: they will stay at a minimum three star hotel, have a guide, and go in a tourist approved vehicle. We are also aware that Indian tourists are more price sensitive, and therefore we will charge only Rs 1200 instead of the dollar rate. At some time in the future as we grow, and we will revise the rates .
High value, low volume tourism does sound somewhat elitist, as if Bhutan only wants wealthy, high-end tourists from around the world. How do you explain that?
We are definitely not trying to be elitist, but you must understand that Bhutan is also a very vulnerable country. We are worried about climate change, people have been complaining about the trash that is thrown by the trekkers. If we need to keep it clean, we need to request for more investment and therefore we need people who are aware and also sensitive about these things to come to Bhutan. So what are we asking our tourists is to pay so that Bhutan can put that money into improving tourist services, into mitigation and adaptation of climate change, controlling waste, investing in renewable energy and better public transport. High value doesn’t mean the rich, but people who were acutely aware about climate change, people who are aware about congestion and waste, and the need to invest in human capital, to improve education.
Did the Indian government object to Bhutan’s decision to change its tourism policy for Indians?
No, no, this was already discussed in 2020. And we tried to make it as convenient as possible for our Indian friends. Previous Bhutanese governments had also discussed this possibility, and we’ve improved the process by making it all online. People don’t have to wait, they can apply online and they can get their permit immediately, we are not going to restrict at all they just, it is much more convenient and efficient for them. You will travel in a tour operated vehicle, and therefore much safer. We’ve always consulted the Indian government, before we made any change of policy that affects India. We’ve always said that we should not give surprises to friends, as we enjoy very close relations.
Along with these openings, we’ve seen during the COVID pandemic, a new opening, with Bhutan-China border talks. Are you hopeful that Bhutan and China can resolve their boundary issues?
Yes, we are very hopeful, I’m very confident that we will definitely be able to resolve our border issues. It has been now nearly four decades that we’ve had discussions. As you know, we have signed a three step process that will hopefully enable us to resolve the outstanding border issues. During the COVID period, we had our expert group meeting, we are waiting for the next expert group meeting (EGM) to take place, following which we will have the border talks. There have been some delays because of the situation in China, first the Olympics, then followed by the latest COVID outbreak. But we are hopeful that that the government in China and the government in Bhutan will be able to find a suitable date for the next expert group meeting. After that, we will see how the border talks go.
Given the history, given the sensitivities, is this something that you in Thimphu and the government in Delhi have also discussed?
Not formally, but I think [Indian government] is aware about the situation. After all, the main issue revolves around the trilateral junction in Doklam. So I think it’s important that the Indian Government also, on their part, are aware about what the situation is there. As far as the bilateral talks between China and Bhutan goes, I think this is entirely a matter between our two countries. As long as it doesn’t touch the trilateral junction, that is. In many cases where there are three or more countries involved, they usually leave those decisions to a later date. So I think that there is a possibility for us to discuss all the other outstanding issues without discussing on the main trijunction area for now.
And that outcome wouldn’t impact India in the tri-junction area?
No, not at all. I think it’s important that when we make these decisions, that the interest of all the countries involved, including China, India and Bhutan, is kept, and the interests of the three countries are not compromised. That’s why it has taken us many years to reach where we have reached. And I feel that going forward, India’s interest will definitely not be compromised. It will be in the interest of all three countries, and all three countries will benefit if we resolve these issues. As all good neighbors, I think we should try to resolve any outstanding issues. There’s nothing that cannot be done through discussions and dialogue and compromise on all our parts. After COVID, I think now we need to be much more sensitive about each other. We are all actually connected, and we need to be friends, especially among our neighbors, and therefore I’m very hopeful that we will be able to resolve it.
Given the Covid pandemic and lockdown, Bhutan’s economy contracted 10% in 2020, GDP came down to 3.7%, inflation has been rising, and there’s a possible foreign exchange crisis. Can Bhutan afford to be choosy when it comes to its tourists?
As I said, we must learn the lessons from COVID. We cannot do business as usual. I think many countries around the world are learning that that to be dependent entirely on one sector is not good, especially tourism, with a global pandemic. And countries which were dependent on tourism suffered a lot. Fortunately, in Bhutan, hydropower is the number one contributor to the economy, while tourism is, in terms of employment and livelihoods, certainly one of the largest sectors. One of the reasons for the policy change is we need to reform the Tourism business- a large part of the money tourists pay actually goes back to the agents abroad. Our own tour operators get a very small share of the pie, and they are going to be the maximum beneficiary of of this new tourism policy. Bhutanese Hotels too will be able to charge according to the facilities they provide, as we have removed the caps. In the short term, there might be some reduced numbers. But in the long term, I have no doubt that it will be a success.
I ask because around the world and the neighbourhood in particular- Sri Lanka, India, Pakistan, Nepal, we’re seeing economic distress, and protests. Do you worry about something like that happening in Bhutan as well?
Yes, we are concerned, we are worried. But I must, again, break this up into two components, because our Constitution mandates that all recurrent expenditure in the country must be met from resources within the country. In terms of capital expenditure, we can use grants and loans, etc. We have been able to pass the budget this year, so it may not be as difficult for us. But looking at our region and the problems, we have discussed in the government, whether we should put some restrictions on imports, foreign vehicles, foreign drinks, etc, etc. We’ve looked at our own data, we’ve looked at our status as of now and we feel that for the next one year, it should not be very difficult. We are a very small economy, we can bounce back very quickly to take care of the few hundred thousand people who are economically active. Now that we are going to be opening from September, many of our factories, many of our industries will be reopening. Construction, which is very much dependent on Indian labourers, suffered because we couldn’t get enough but the restrictions are being lifted, and our hydropower projects are being restarted. We’ve started three smaller hydropower projects that are going to be built by Bhutan entirely. We have learned the lessons from the two years, we are learning the lessons from the experiences of our neighboring countries, and we are avoiding those mistakes. And the good thing in Bhutan is that we have a very good leadership, starting from His Majesty the King, who is guiding, and will not allow politicians like ourselves to make decisions based on short term electoral interests, and we will look at the interest of the nation for a longer term. We will not do anything to compromise the long term sustainability of the economy in Bhutan.
Bhutan is now working on preferential trade agreements with both Bangladesh and Nepal. Will Bhutan give regional arrangements like the Bhutan-Bangladesh-India-Nepal Motor Vehicles Agreement (BBIN-MVA) a rethink?
We are definitely not against the principles of BBIN, but I think the practical implementation of the MVA needs to be agreed upon. We already have signed a trade agreement with Bangladesh and we will be in discussions with Nepal and Thailand very soon. When it comes to communications and transport with other countries, it is very important, and Bhutan will definitely like to be part of this. But what we are concerned about is the sustainability of our roads. I think we will have more influx of vehicles and transportation from other countries because we are a net importing country. In India too you are seeing massive landslides taking place, and here our infrastructure is not good enough to support a high number of vehicles, especially big vehicles. The impact on the environment because of all the emissions is also a worry. I would say we are looking at all these concerns, but we have not completely closed the door on BBIN-MVA.
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