Bhutan’s opening move, its Gelephu gambit

The mega project is a huge gamble for Bhutan but can be a gamechanger for the region, with help from India

March 15, 2024 12:08 am | Updated 02:16 am IST

‘For Bhutan, the Gelephu project is necessitated by its economic challenges’ Photo: Special Arrangement

‘For Bhutan, the Gelephu project is necessitated by its economic challenges’ Photo: Special Arrangement

In an age where connectivity projects, mega-highways and smart cities are in currency worldwide, Bhutan’s plans for a regional economic hub at Gelephu, a town bordering Assam in India, are high on Bhutan Prime Minister Tshering Tobgay’s agenda in Delhi this week in talks with the government in Delhi and India Inc. in Mumbai. The plan, launched by Bhutan’s King Jigme Khesar Namgyel Wangchuck in December 2023, is to build a “Gelephu Mindfulness City” (GMC) with a unique Bhutanese architectural blueprint across 1,000 square kilometres, as a special administrative zone with separate, investor-friendly laws.

As a carbon-neutral city, Gelephu would include only non-polluting industries (mainly IT, education, hotel and hospital sectors), and would be promoted as an investment destination and health and wellness hub in the middle of the region. In that sense the city is more like newer global peers — planned cities such as Saudi Arabia’s Neom and Indonesia’s Nusantara than financial hubs with glass-cased skyscrapers such as Dubai, Hong Kong and Singapore. It would also lie at the crossroads of India’s “Act East” plans for connectivity to Myanmar, and on to Association of Southeast Asian Nations and the Indo-Pacific region as well as the new India-Japan connectivity plans between India’s north-eastern States through Bangladesh to the Bay of Bengal and Indian Ocean. At the 7th Indian Ocean Conference 2024 in Perth in February, External Affairs Minister highlighted the “need for lateral land-based connectivity across the Indian Ocean region,... essential to supplement and complement the maritime flows” through “initiatives like the IMEC [India-Middle East-Europe Economic Corridor] to India’s West and the Trilateral Highway to India’s East”.

Despite the lofty ambitions, the Gelephu gambit will require a major leap of faith from India. To begin with, the geography of Gelephu, a rare broad plain in an otherwise mountainous country, poses challenges. With warmer temperatures than in the mountains, Gelephu gets high amounts of rainfall during a monsoon season that lasts several months, leading to considerable flooding each year. The surrounding forests and wildlife populations place Gelephu right in the middle of elephant corridors. Insurgencies in Assam and the northeastern States and just across the Indian border in Myanmar have been an area of great concern in the past, leading to a major military operation (Operation All Clear) by Bhutan’s former (Fourth) king in 2003, working with the Indian Army to drive out militant groups sheltering in the area. As Gelephu is landlocked, it is dependent on other countries, primarily India, to provide the infrastructure for trade and transport out of the special administrative region.

A necessity for Bhutan

For Bhutan, the Gelephu project is necessitated by its economic challenges. Apart from hydropower, tourism is Bhutan’s mainstay, but the kingdom has always discouraged mass tourism, preferring instead a “high value, low volume” motto to ensure sustainability. However, if Bhutan wants to increase these revenues, it must scale up its capacity to take in more tourists and visitors and land bigger planes, which need a much larger airport than the present one in the narrow Paro valley.

The first part of the Gelephu project involves scaling up the Gelephu airport and tarmac to international standards, which will need financing and expertise from India. The growing “outmigration” of Bhutanese youth in search of jobs abroad is another challenge, and the government hopes a mega project such as Gelephu will stem that. Finally, there is Bhutan’s most pressing geopolitical concern: pressure from its northern neighbour China to conclude a boundary resolution deal and to establish diplomatic ties. Far away to the south, Gelephu offers Bhutan a way to open itself up in a controlled manner to the rest of the world, while also continuing negotiations with Beijing for a stable border.

For India too, the worry of Bhutan — its only direct neighbour not currently in Beijing’s orbit — broadening its ties with China should keep it focussed on the Gelephu project. India and Bhutan have thus far built an idyllic relationship, based on a strong understanding between every Bhutan’s king and Indian Prime Minister over the past 75 years. Bhutan’s requests have seldom ever been rejected, and India is the leading source of investments in Bhutan, comprising 50% of its total foreign direct investment. New Delhi would also be wary of “missing an opportunity” of the kind seen in Sri Lanka’s Hambantota a decade ago, which sent the close neighbour to China, caused unsustainable debt and is a project that risks becoming a “white elephant”. When it comes to investment in infrastructure, Gelephu’s needs will dovetail with New Delhi’s own plans for the region: railway lines right up to the border with Bhutan; better roads to feed into the trilateral highway to Myanmar and South East Asia; cooperation with Japan to coordinate roads and bridges construction in Bangladesh in order to access Chattogram and Mongla ports; and upgrading border posts with all three land neighbours to allow efficient trade. In addition to climate-friendly solar and wind power generation projects, India’s plans for a South Asian power grid that would draw electricity from Nepal and Bhutan, with supply to Bangladesh and Sri Lanka would lend itself to more consistent power supplies needed for Gelephu.

Gelephu faces immense challenges, but New Delhi’s other grand plans for connectivity confront challenges too. The International North-South Transport Corridor (through Iran-Russia via Chabahar to Central Asia) faces western sanctions), and the IMEC (through the United Arab Emirates-Saudia Arabia-Greece), and I2U2 initiative (Israel-India-UAE-U.S.) are challenged by Israel’s bombardment of Gaza and Houthi attacks in the Red Sea. Meanwhile, nearly a decade of deteriorating ties with Pakistan have seen the Narendra Modi government virtually cut off any plans for land connectivity over India’s western border.

It can recast ties

Obviously, the conditions for a mega-smart city with no immediate returns from the investment envisioned for the GMC, are not optimal at present. However, as the global setting grows more polarised and countries increasingly opt for “tribal” foreign policies that draw more from traditional allies in their respective neighbourhoods, India too must find its tribe in South Asia: a region that shares language, faith, culture, geography and climate. The goodwill generated by India’s generous support to Sri Lanka during its economic crisis and steadfast relationship with Bangladesh can be multiplied by similar forays in other directions, such as helping Nepal defray the costs of its new airports by allowing overflight rights, continuing the projects committed to the Maldives despite recent setbacks in ties, and even considering a new chapter with Pakistan, amidst all its other political and economic turmoil. To that end, the Gelephu project offers a chance for the region to conjure an imagination beyond the problematic present — one that is a huge gamble for Bhutan, but also a potential gamechanger for the region, with help from India.

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