Tightrope Act

All eyes are on Bhutan as it strives to form stronger ties with China and In­dia.

Southasia - - REGION BHUTAN - By Dr. Omar Fa­rooq The writer works as a re­searcher for ma­ter­nal and child health pro­jects.

Bhutan is a land­locked coun­try lo­cated at the east­ern end of the Hi­malayas. Its north­ern bor­der is con­nected to China while its south­ern, east­ern and western bor­ders link it to In­dia. To Bhutan’s west lies the In­dian state of Sikkim that sep­a­rates it from Nepal. To the fur­ther south the In­dian states of As­sam and West Ben­gal lie between Bhutan and Bangladesh. Un­til the early 17th cen­tury Bhutan ex­isted as a set of mi­nor fief­doms war­ring with each other. The fiefs were united by the mil­i­tary leader, Shab­drung Ngawang Nam­gyal, who de­vel­oped a dis­tinct Bhutanese iden­tity among the peo­ple of the area. Nam­gyal ar­rived in Bhutan af­ter flee­ing re­li­gious per­se­cu­tion in Ti­bet.

There is a limited net­work of roads in Bhutan be­cause of its moun­tain­ous land­scape while the coun­try does not have rail­ways. This, com­bined with the lack of ac­cess to a coast, lim­its Bhutan’s trad­ing op­por­tu­ni­ties. In 2008, Bhutan and In­dia signed a free trade ac­cord which al­lowed Bhutanese im­ports and ex­ports to tran­sit In­dia with­out tar­iffs. Also, the value of Bhutan's cur­rency is tied to the In­dian ru­pee which is ac­cepted in Bhutan as the le­gal ten­der. The econ­omy of Bhutan is one of the small­est in the world, but it has grown rapidly in re­cent years - by 8 per­cent in 2005 and 14 per­cent in 2006. In 2007, Bhutan had the sec­ond fastest grow­ing econ­omy in the world, with an an­nual economic growth rate of 22.4 per­cent.

Bhutan main­tains strong economic, strate­gic and mil­i­tary re­la­tions with In­dia. A long­stand­ing agree­ment al­lows In­dian and Bhutanese cit­i­zens to travel to each other's coun­try with­out the need for a pass­port or visa. Bhutanese cit­i­zens may also work in In­dia with­out any le­gal re­stric­tions. Bhutan is mak­ing ef­forts to es­tab­lish and strengthen its ties with the in­ter­na­tional com­mu­nity. As a part of this mis­sion, Bhutan has in­vited a num­ber of for­eign dig­ni­taries to visit the coun­try while the prime min­is­ter of Bhutan has also made sev­eral trips abroad.

So far, this tiny Hi­malayan king­dom has suc­ceeded in gain­ing the at­ten­tion of the world. A re­cent ex­am­ple is the visit by In­dian Prime Min­is­ter Naren­dra Modi who chose Bhutan for his first in­ter­na­tional visit af­ter tak­ing charge of of­fice. Al­though In­dia and Bhutan al­ready have close ties and have co­op­er­ated on nu­mer­ous pro­jects, such as elec­tric­ity gen­er­a­tion and hy­dropower sup­ply, the In­dian prime min­is­ter’s visit was aimed at fur­ther boost­ing mu­tual ties. The two pre­miers re­it­er­ated their com­mit­ment to achieve the 10,000 MW tar­get in hy­dropower co­op­er­a­tion. Prime Min­is­ter Modi also laid the foun­da­tion stone of a 600MW hy­dro­elec­tric project in Bhutan, a joint ven­ture of In­dia and Bhutan. Modi an­nounced nu­mer­ous mea­sures and con­ces­sions for Bhutan and pitched the idea of an an­nual hill sports fes­ti­val among In­dia’s north­east­ern states, Bhutan and Nepal.

The Bhutanese prime min­is­ter left for Ja­pan soon af­ter the In­dian prime min­is­ter’s visit. In Ja­pan, he dis­cussed with the Ja­panese prime min­is­ter co­op­er­a­tion in the fields of agri­cul­ture, farm mech­a­niza­tion and in­fra­struc­ture devel­op­ment. In July 2014, the UK For­eign Min­is­ter, Hugo Swire also vis­ited Bhutan. There have been dis­cus­sions of co­op­er­a­tion between Bri­tish com­pa­nies to as­sist Bhutan in economic devel­op­ment.

Bhutan’s strong re­la­tions with In­dia have not stopped the coun­try from striv­ing to form diplo­matic ties with China. Both na­tions are ready to carry out a proper de­mar­ca­tion of their bound­aries and forge for­mal diplo­matic re­la­tions based on the Five Prin­ci­ples of Peace­ful Co­ex­is­tence. Also, Bhutan has sent pos­i­tive vibes to China by stat­ing that the coun­try strongly be­lieves in a One-China pol­icy.

As a nod of ap­proval to Bhutan’s ef­forts to make a place for it­self in the world, of­fi­cials from the World Bank vis­ited the King­dom re­cently. Some is­sues dis­cussed dur­ing the visit were debt re­assess­ment, ex­pan­sion of devel­op­ment pol­icy credit ( DPC) and ex­plo­ration of new fi­nanc­ing win­dows.

As Bhutan strives to gain global recog­ni­tion and form stronger ties with its neigh­bor­ing coun­tries, it will be in­ter­est­ing to see how it per­forms the tightrope act and bal­ances its re­la­tions with its rather tricky neigh­bor – China – and with Ja­pan.

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