With elections nearing, Bhutan doesn’t want India to slow down its assistance

Cash, rather than China, tops the agenda of Bhutan Prime Minister Jigmi Y. Thinley, who arrived here on a three-day visit. With elections due in Bhutan towards the middle of this year, Thimphu is keen that its development plans and hydel projects being constructed by India are not affected by the Finance Ministry’s move to reduce fiscal deficit, said government sources.

Mr. Thinley was a surprise winner in Bhutan’s maiden parliamentary polls and his group is keen to repeat the performance in the next elections as well. Showcasing ongoing road, hydel and other development projects and ensuring they are not affected are said to be one of the keys to his party repeating the showing when elections are held in June this year.

Mr. Thinley’s focus on economic ties with India is not surprising. During its years of good economic growth, India contributed generously to Bhutan’s Tenth Plan as well as maintained the flow of funds for three ongoing mega hydel projects — the 1,200-mw Punatsangchhu-I, the 1,020-mw Punatsangchhu and the 720-mw Mangdechhu.

This smooth flow of funds now appears to be in danger of being curtailed after Union Finance Minister P. Chidambaram indicated his intention to take a closer look at the allocation for Bhutan as part of his overall drive to compress allocation of budgetary resources to most Ministries including the Ministry for External Affairs which channels India’s external assistance.

Mr. Thinley is also keen to know the status of seven other major hydel projects that have a generation potential of over 7,000 MW. The clearance schedule of all these projects has been pushed back by four to six months amid apprehensions that some of them involving central public sector enterprises may get further delayed.

As for China, sources close to Thimphu said the top leadership, including King Jigme Khesar Namgyal Wangchuk, are kept acquainted about the situation on his country’s borders by India’s Research & Analysis Wing. So far, Beijing’s activities have not been an area of concern though middle ranking Chinese officials have visited Bhutan to test the waters on the prospect of establishing diplomatic ties.

Bhutanese sources also refer to the general aversion to the Chinese among middle level officials as one reason why the opening up towards China will not take place soon. During 10 years between the mid 60s to the mid 70s, when many of the officials were in their formative years, they were witness to the pitiful state of Tibetan refugees as they sought shelter in their villages along the route to India.

These memories still live with them and frequent reports of Tibetan monks immolating themselves has led them so far to politely stall China’s probes for a diplomatic presence in Bhutan. The dispute with China over what some Bhutanese regard as traditional grazing pastures for their cattle around the Sikkim-Bhutan-China tri-junction also dissuades them from getting too close to China.

Basically at the back of Mr. Thinley’s mind is the nervousness every politician suffers from before an election. Between now and June, when the elections are likely to be held, they don’t want a slowdown in Indian assistance for Bhutan’s budget or the hydel projects to become a factor, said official sources here.

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