Economic Contingency Plan - Royal Government of Bhutan (2020) Build Bhutan Project
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Economic
Contingency Plan
Series - I
Redesigning Development: Attaining Greater Heights
Build Bhutan Project Tourism Resilience Food Self Sufficiency
Royal Government of Bhutan
(2020)
C PMO Bhutan
Economic Contingency Plan
(2020)
Series - I
Redesigning Development: Attaining Greater Heights
CONTENTS Foreword.................................................................................................................................................................................................................................................................................iii Chapter:1BuildBhutanProject(BBP).......................................................................................................................................................................................2 1.1 Background................................................................................................................................................................................................................................................................2 1.2 Objective.......................................................................................................................................................................................................................................................................4 1.3 Keyresults..................................................................................................................................................................................................................................................................4 1.4 Strategy...........................................................................................................................................................................................................................................................................5 1.5 Programmes.............................................................................................................................................................................................................................................................6 Chapter2:TourismResilience............................................................................................................................................................................................................15 2.1 Background............................................................................................................................................................................................................................................................15 2.2 Objective...................................................................................................................................................................................................................................................................15 2.3 Strategies....................................................................................................................................................................................................................................................................15 2.4 KeyResults.............................................................................................................................................................................................................................................................16 2.5 Programmes..........................................................................................................................................................................................................................................................17 2.6 Programswithmediumtolongtermimpacts:...............................................................................................................................................19 Chapter3:FoodSelf-sufficiencyandNutritionSecurity..........................................................................................................................23 3.1 Background...........................................................................................................................................................................................................................................................23 3.2 Objective..................................................................................................................................................................................................................................................................23 3.3 KeyResults...........................................................................................................................................................................................................................................................24 3.4 Strategy......................................................................................................................................................................................................................................................................25 3.5 Programmes........................................................................................................................................................................................................................................................26 4 SummaryofKeyECPIndicators............................................................................................................................................................................................36 5 ECPBudgetsummary................................................................................................................................................................................................................................37 6 Implementation,MonitoringandReportingFramework.....................................................................................................................38 7 Conclusion...................................................................................................................................................................................................................................................................39 Annexure 1 Grant allocation to LGs based on Multi-criteria analysis ..................................................................................40 Annexure 2 Role of Central Agencies to implement Agriculture and marketing component .......... 41 Annexure3 Dzongkhag-wiseproductiontargetandbudget...............................................................................................................42 Annexure 4 ECP implementation guideline circulated to the LGs ............................................................................................. 43 Annexure5 MonitoringandReporting(M&R)..............................................................................................................................................................45 LIST OF TABLES Table1.1 Shortageofforeignworkers...........................................................................................................................................................................................2 Table1.2 Potentialworkforcesupply.............................................................................................................................................................................................3 Table1.3 CategoryofworkersforEngagementandSkilling...................................................................................................................7 Table1.4 FoundationalCoursetrainingandduration........................................................................................................................................7 Table 1.5 Monthly Wage Package (Employer + wage top-up) by occupation ...............................................................9 Table1.6 StepsforEngagementandSkilling...............................................................................................................................................................13 Table1.7 Programprofileandbudget.........................................................................................................................................................................................14 Table1.8 ImplementationTimeline.................................................................................................................................................................................................14 Table2.1 Programprofileandbudget........................................................................................................................................................................................20 Table 3.1 Multi criteria and assignment of weights for grant allocation totheLocalGovernments........................................................................................................................................................................................33 Table3.2 FarmroadPrioritizationCriteriaforGSB.............................................................................................................................................34 Table4.1 ProgramProfileandBudget.........................................................................................................................................................................................35 ii ECONOMIC CONTINGENCY PLAN | 2020
Foreword
between now and post COVID-19. The
My experiences as a doctor in triage tells
disease has already entered the medical
me to make the most favourable decision
dictionary.
in the shortest possible time and endure
in the spirit of team work. Even if there is a distinction, our intention
is to draw the line closer. That way, we
We see through such medical emergencies
will already be dwelling in the “post
with empathy, guided by professionalism
COVID-19 era” with the prospect of rising
and driven by hope. Most situations in
to the so-called new normal.
delicate times are beyond control but we
give our best. Bringing the line closer will not just
give us the chance to fight the disease
Fortunately, for Bhutan, His Majesty The
efficiently, but also avert an intense
King has not only secured his citizens
economic downfall. It is also within these
from the pandemic through initiatives
frames that we can draw measures to
non-compromising but safeguarded the
pace our growth trajectory.
lives and livelihoods of every Bhutanese,
a reflection of his boundless compassion. In doing so, priority remains to ensure
the safety of our population from the
A King spearheading this modern battle
disease first. Only then can we consider
against the pandemic, where the entire
initiating projects befitting standards of
nation unites against it, is beyond
new normal.
description. What we accomplished is
miraculous. The interventions brought about by the
ECP are along the principles of building
The sacrifices of the King, complemented
a resilient nation, ensuring economic
by its people’s hard work, especially those
security and enhancing self-sufficiency,
on the frontline, have secured the nation
the foundations of a new normal.
from threats of a local transmission of
the disease. This gave us the space and I have constantly reminded all officials
the fuel to move forward. involved that the interventions we
introduce through ECP should evolve
In doing so, complementing many of
into something more permanent, the sort
the noble initiatives and the measures
that defines Bhutanese character. It is in
introduced over the months, it is my
pursuit of a systemic transformation with
pleasure to introduce the Economic
a long-term national vision.
Contingency Plan (ECP) Series I.
For one, a key component of ECP is the
My aspiration is for the country to not just
“Build Bhutan” project, devised to not just
see through the challenging times but rise
address, but professionalise existing gap
above the norm and complacence early,
in workforce in the construction sector. A
knowing there is no clear delineation
ECONOMIC CONTINGENCY PLAN | 2020 iii
closer look offers a clearer perspective national interests. The new normal we
of the national vision to build the safety talk about would be non-existent if we
and security of our nation with our own do not change the way we work. And so
hands, as it used to be once upon a time. we must exercise prudence and work in
How do we engage our youth in the coherence.
construction sector? The problem is a The challenges this pandemic has
conventional one with retold topics of posed has also given us opportunities.
low wage, and lack of required skills and Countries and people who are able to
long-term job security. By building on adjust to this new normal faster, have
these components, we view with newer the opportunity of defining the post
lens and targeted intervention. And so, COVID-19 era better.
what we initiate today need to sustain As we release the document, I bring to
hereafter. you His Majesty’s message from the
Tourism has come to a standstill but that televised address on March 22. As a
does not dissuade us from rebuilding the small country with small population,
sector and ensure engagement of those we have always worked together and
directly affected. A salient feature of overcome challenges of all sorts, big
ECP, of many, looks at long term policy and small.
issues to not just redeem but redefine I offer sincere prayers and place my hope
tourism. We look at diversifying our on the ECP to benefit the country and its
products beyond cultural tourism, while people at all times. As the government,
also ensuring continuity of high-end we will ensure that timely projects like
destination. these are initiated in series to suit the
The sealing of borders also narrows need of the COVID-19 era.
import of food but widens opportunity With His Majesty at the helm, and the
to produce our own. Therefore, we government taking charge, together we
are revisiting our age-old practice of can achieve this.
conventional subsistence farming with
modern tools and innovative ideas. The
agriculture ECP seeks to encourage
farming and livestock production that
sees year-round production and is not
just market driven.
Dr Lotay Tshering
As different institutes get down to rolling
these programs, I urge everyone to rise Prime Minister
above the standard and be guided by Royal Government of Bhutan
iv ECONOMIC CONTINGENCY PLAN | 2020
1
CHAPTER
Introduction
The global health crises caused by the COVID-19 pandemic has a resulted in an
unprecedented global economic crisis. Three factors make the current crisis unprecedented.
First, no country has managed to remain unscathed. Second, in addition to plummeting
demand, supply chains have been severely disrupted. Additionally, all developments
point to the possibility of a protracted episode. Thus, we must orchestrate our responses
accordingly.
While Bhutan has demonstrated exceptional competence in averting a public health crisis,
the economy has taken a severe toll due to the unavoidable preventive and containment
measures. The tourism and allied sectors in particular have been disproportionately
impacted as evidenced by a sharp decline in revenue of more than 40% for the Fiscal Year
ending 2020; demand is likely to remain frozen for the foreseeable future. The construction
sector with it’s heavy reliance on foreign labour is experiencing a shortage of workers.
Such supply-side disruptions are particularly pronounced for the sector given it’s high
share of GDP and linkages to other sectors. A similar problem is evident in the agriculture
sector as Bhutan remains critically dependent on India for imports, notwithstanding the
unique opportunity presented by the current pandemic for domestic producers.
The Economic Contingency Plan (ECP) seeks to address the above issues and mitigate
the impacts of COVID-19 by executing immediate coping measure while simultaneously
initiating reforms and systemic changes that may trigger positive outcomes in the above
sectors in the medium to long term.
The ECP report is presented in three chapters. Chapter one presents the Build Bhutan
Project and discusses how to bridge the workforce gap created by the pandemic. Chapter
two discusses the tourism sector and measures to enhance its resilience while engaging
the laid-off to strengthen the sector’s prospects. The final chapter dwells on increasing
agricultural and livestock production to ensure food self-sufficiency.
ECONOMIC CONTINGENCY PLAN | 2020 1
Chapter : 1
Build Bhutan Project
(BBP)
1.1 Background sector. As per the Labour Administration
The COVID-19 global pandemic has System with MoLHR, the total demand for
impacted various sectors of the country’s foreign workers in the construction sector
economy, including the construction sector. across the country was estimated at 35,567
The restriction on entry of foreign workers as of June 2020. Out of this, the demand
immediately after the outbreak of COVID-19 for skilled workers is 18,838 and unskilled
has created a large workforce gap in the is 16,729. As a result of the restriction,
Table 1.1 Shortage of foreign workers
Workers
Workers with available in the
Occupation permit country Worker Shortage
Skilled
Masonry 13,225 7,818 5,407
Carpenter 2,709 1,524 1,185
Steel fabricator 581 409 172
Plumbing 764 529 235
Electrician 157 118 39
Building painting 29 19 10
Operator 191 150 41
Rod binder 1,182 866 316
Total 18,838 11,433 7,405
Unskilled
Unskilled with permit 16,729 9,639 7,090
Total 16,729 9,639 7,090
Grand-total 35,567 21,072 14,495
Note: Plumber and electricians fall under closed category. Therefore, as per the policy, no foreign workers are
allowed under closed category. The foreign workers considered in the table above under the closed category
pertain to IMTART, Project DANTAK & for hydropower projects.
2 ECONOMIC CONTINGENCY PLAN | 2020
Table 1.2 Potential workforce supply
Category Number of people Remarks
Registered unemployed 8756
Laid off 3174
As of June 2020
Un-paid leave 7824
Overseas returnees 2167
Total 21921
the supply for both skilled and unskilled showed a demand of about 7,533 skilled
workers are short by 7,405 and 7,090 workers, as shown in figure 1.
respectively, making the total shortage of
This needs to be assessed in light of labour
foreign workers 14,495.
requirements for the ongoing 12thFive Year
The demand for skilled workers was also Plan projects and additional projects, including
assessed through a survey conducted by the those front loaded from the 12th plan and
Ministry of Labour and Human Resources implementation of the ECP. It is evident that these
in March 2020 where 2,379 employers and require a significant number of workers, further
contractors were interviewed. The survey exerting pressure on the workforce shortage.
Figure 1. Demand of skilled labour (Foreign worker Survey, March 2020)
Source: MoLHR Survey - 2020
ECONOMIC CONTINGENCY PLAN | 2020 3
On the other hand, the economic disruptions Government take the lead in initiating reform,
from the pandemic have also displaced given the significant volume of publicly funded
a significant proportion of the domestic construction in addition to its regulatory role.
workforce. Notwithstanding the alternative
Thus, the project will institute a range of
employment preferences of the displaced, it
strategies to meet the labour demand,
is worth pursuing the possibility of redeploying
especially that of skilled workers. The project
these people to the construction sector. A
will be implemented by the Ministry of Labour
conservative estimate places the total at 21921.
and Human Resources (MoLHR) in coordination
They include, those registered as un-employed
with relevant agencies (MoWHS), Construction
with the Ministry of Labour and Human
Development Corporation Limited (CDCL),
Resources, laid off employees, employees on
National Housing Development Corporation
un-paid leave and overseas returnees.
Limited (NHDCL), Construction Development
On the surface, the numbers alone indicates Board (CDB), Construction Association of
the potential to match the significant demand Bhutan (CAB) LGs and the private sector.
through redeployment, although this will
1.2 Objective
entail significant effort. Therefore, to match
While addressing the immediate workforce
the demand for workers in the construction
gap in the construction sector, the
sector with the supply of workers, the Build
project is intended to address wider and
Bhutan Project (BBP) is being initiated. The
longer-term objectives in the construction
current situation provides a unique platform
industry that include:
to address some of the most critical issues
• Mobilizing, creating and managing
related to sector. First, it provides a significant
a pool of skilled and unskilled
opportunity to enhance the sector’s share of
workforce to meet the requirements
employment as the usual sources of labour
of the sector,
supply- from across the border- have been
• Professionalizing the sector’s
restricted. More importantly, it presents
workforce
an avenue for undertaking further reforms
• Promoting the sector as an attractive
related to professionalization, specialization
avenue for employment
and standardization. It is imperative that the
1.3 Key results
Skill 6,702 people in 7
people in the occupational trades in
Establish 18
construction sector constructionKey Indicators (KPI)
Baseline Build Bhutan Project (BBP) Target
0 6,702
0
0 18
1.4 Strategy for Bhutanese, the strategic focus of the BBP
To enable transformational change in the will be geared towards building an enabling
construction sector and to enhance its environment, including policy support, initiating
attractiveness as a source of employment reforms and providing incentives and benefits.
Skill / Reskill 6,702 worker
Engage/ Employ Professionalization
14,495 worker
• Form 18 specialised firm/
groups
• Promote Mechanization
• Create Employment Agency
Social Security Scheme
• Introduce and institute
portable Provident Fund
• Provide wage top-up
BBP
Job Wage PF
top-up
• Import foreign worker through
+ +
specialised firm
15% 10% • Outsource maintenance work to
specialised firms
• Award work to specialised firm
ECONOMIC CONTINGENCY PLAN | 2020 51.5 Programmes sector. Building on the experience of
The BBP will pursue the following 5 broad the first phase and interest of the takers,
programs with immediate and medium to the BBP will strive to work towards
long term impacts to achieve its objectives meeting the entire workforce shortage. In
• 1.5.1) Engagement of laid-off, addition to facilitating the interaction and
unemployed and overseas returnees engagement of workers with employers, the
in the construction industry BBP will also meet the surging demand for
• 1.5.2) Creation of a skilled workforce workers through labour saving measures
by skilling and re-skilling like mass production of the construction
• 1.5.3) Provision of social security component, mechanization, pre-fabrica-
and incentives: a) Wage top-up; b) tion and formation of specialised groups.
Personal Protective Equipment and
For engagement, the project will register
workers uniform; and c) Provident
and categorize interested job seekers into
Fund
two groups: skilled and non-skilled. This
• 1.5.4) Professionalization of the
is also essential to provide commensurate
construction industry: a) Formation
incentives to those who are skilled,
of specialised firms; b) Mechanization
motivate skilling among the unskilled,
of construction industry; and
encourage constant up-gradation of skills
c) Creation of an employment agency
and promote organized human resource
• 1.5.5) Policy support: a) Enforcement
development in the construction sector.
of existing policies and b) Policy
reform Table 1.3 captures the two categories of
workers. Category ‘A’ workers are those
1.5.3 Engagement of laid-off, with skills ready to be engaged with the
unemployed and overseas return- employers while category ‘B’ workers
ees in the construction sector are unskilled and would require skilling
The BBP will strive to attract and engage prior to engagement. In other words,
those unemployed, laid off and overseas BBP will match the category ‘A’ workers
returnees in the construction sector by directly with the registered employers and
introducing and instituting a wage top up in contractors for immediate engagement in
addition to their wages. The BBP will also the construction sector.
institute a retirement security and benefit
Out of the pool of registered workforce,
scheme, including provision of provident
there is a risk that some of them, primarily
fund, participation in Government
unskilled ones, would prefer to engage
construction projects to start with, which
in the construction sector temporarily
will later be scaled up in the private sector
only and may revert to their respective
based on the success of the program.
sector/ occupation once economic activity
The BBP will target to meet the workforce revives. Nonetheless, the BBP, through the
shortage of 14,495 in the construction incentives discussed above, will encourage
6 ECONOMIC CONTINGENCY PLAN | 2020Table 1.3 Category of workers for Engagement and Skilling
Categories Skills Qualification Remarks
Skilled workforce - NC2, NC3, Diploma or UG in
Category A Ready for engagement
construction trades
Potential to engage in skilling, and
Category B
laid off after COVID-19) engagement
Table 1.4 Foundational Course training and duration
Sl. No. Course Level Duration in Months Remarks
NC2 1.5 Bar bending, scaffolding,
1 Masonry
NC3 0.5 tile laying
NC2 2.0
2 Construction Carpentry
NC3 0.5
NC2 1.0
3 Plumbing
NC3 0.5
Domestic Wiring NC2 0.5 House wiring, industrial
4
Industrial Electrician NC3 1.0 wiring, security wiring
NC2 1.5
5 Welding
NC3 1.0
NC2 1
6
Operation NC3 0.5
7 Building Painting NC2 0.5
the workers skilled in construction trade workers will be skilled at the NC2 level
to adopt a longer-term perspective and out of which an estimated 855 will further
pursue a career in the construction sector. pursue an NC3 level certification. The
skilling target is based on the maximum
1.5.4 Creation of a skilled carrying capacity of TTIs. The skilling
workforce will be done through compressed
unstructured training programs with 20%
The BBP will also provide skilling,
of it conducted at the Technical Training
re-skilling and up-skilling opportunities
Institutes (TTI) as foundational courses
to those registered for engagement in
and the remainder 80% conducted at
construction works. A total of 6,702
ECONOMIC CONTINGENCY PLAN | 2020 7the designated companies in the form of Upon completion of trainings under
on-the-job training or attachment. different occupations, the project will
provide one time free equipment and
While the skilling programme will require
tools. The government will also work with
the Technical Training Institutes to
the suppliers to ensure availability of such
operate at full capacity to meet the labour
tools and equipment in the market for
requirements of the construction sector,
purchase.
realistically, the BBP may not meet the
entire demand for labour. Therefore, labour
Assessment of workforce
saving strategies like mass production,
A National Assessment will be conducted
standardization of building components,
through Recognition of Prior Learning
pre-fabrication etc. will be pursued.
(RPL) upon completion of the skilling
During the skilling program, BBP will program. The assessment will be flexible
provide a monthly stipend of Nu. 6,000 and conducted as and when the trainees
per person, in addition to food and acquire all required competencies of
accommodation facilities provided by the their chosen specialization. However,
TTIs. the assessment needs to be done within
one year of completion of each training.
Immediately upon enrolling in the skilling
The TTIs shall coordinate and provide
course, the TTIs will offer foundational
information on the number of trainees
courses, which will include theory
to be assessed, their qualification level
and basic hands-on practical training.
and formative assessment report to the
Once the formal training is complete,
Department of Occupational Standard
the BBP will attach the trainees with
(DOS) for RPL assessment at the NC2 and
the skilled workers of the designated
NC3 level.
companies, viz. state-owned companies,
private companies and other interested The certification of local artisans such as
companies for a project duration of stone mason (Dozop) who do not have any
more than one year. The companies will former qualification will also be explored.
supervise and provide handheld training.
The partnering companies will provide 1.5.5 Provision of social security
basic accommodation for the trainees and incentives
during the attachment period.
a. Wage top-up
The concerned TTI will closely monitor In order to enhance the attractiveness of the
the trainees while on attachment with sector, it is critical to institute an attractive
partnering companies. To ensure quality wage and benefit scheme. The prevailing
and relevance of trainings, the TTIs will wages in the construction sector merits a
review and update the effectiveness of revision if we are serious about transforming
their modules and curriculum periodically. the sector. Otherwise, the BBP may simply be
seen as a temporary respite for those facing
8 ECONOMIC CONTINGENCY PLAN | 2020a difficult financial situation. It is equally which would ultimately enhance the image of
important to be cognizant of the undesired the sector; and the financial implications to the
implications that such revision may have government is modest.
on the economy especially in distorting the
The wage top-up shall be paid to the
relative wage rate of the sector. Specifically,
employee upon fulfillment of the following:
a relatively high wage rate in the sector may
• Upon signing of contract agreement
divert labour from other sectors and create
with the employer and issuance of
shortages in critical and labour intensive
appointment letter, and
sector like agriculture.
• Signing of an undertaking letter by
The BBP’s incentives scheme have been the employee.
devised to mitigate such potential externalities.
The employers shall have options to
Accordingly, a monthly wage top-up of
engage the employee on contract or
15%, will be offered above and beyond the
sub-contract basis, or daily wage/monthly
wage paid by the employer, depending on
salary basis.
the workers’ level of skills. However, if the
engagement duration is less than a month, Additionally, the employers shall ensure
the wage top-up will be provided on a Pro that employees are provided with
Rata basis. Some of the merits of this option accommodation facilities at the work site
include: the attractiveness of the overall as per the minimum prescribed standard.
worker pay package(almost comparable with
b. Personal Protective Equipment and
RGOB and CDCL remuneration packages);
Worker uniform
recognition and compensation based on skills
In addition to the wage top-up, the BBP will
(motivation for re-skilling and up-gradation);
provide basic Personal Protection Equipment
motivation to work in the construction sector
Table 1.5 Monthly Wage Package (Employer + wage top-up) by occupation
Minimum Market PF contribution Possible
Monthly Wage Wage
to be paid by Wage Top- Employee BBP 10% package
Skills Level Category employer (A) up 15% (B) 5% (C) (D) (A+B-C)
Engineer Nu. 20,000 Nu. 3000 1000 2000 Nu. 22,000
Diploma Nu. 18,000 Nu. 2700 900 1800 Nu. 19,800
Category A
NC3 Nu. 16,500 Nu. 2475 825 1650 Nu. 18,150
NC2 Nu. 15,000 Nu. 2250 750 1500 Nu. 16,500
Nu. 12,000
Unskilled Category B Nu. 1800 600 1200 Nu. 13,200
Note: The minimum monthly wage to be paid by the employers for various skill types is a conservative estimate,
lower than the prevailing market wage rates. Therefore, employers shall ensure that the wages paid are not
lower than this estimate.
ECONOMIC CONTINGENCY PLAN | 2020 9(PPEs) to the workers engaged under this without completing the one-year term
project to ease the employer’s financial will be eligible to withdraw only their
burden and to improve the working conditions share of the PF contribution while
and environment in the construction sector, the BBP contribution of 10% will be
although the Regulation on Occupational ploughed back to the project.
Health, Safety and Welfare 2012 and the
Regulation on OHS for Construction Industry 1.5.6 Professionalisation of the
2012 mandates employers to provide them. construction industry
The BBP will also provide work dress to start
a. Formation of specialised firms
with as an added incentive.
The BBP will initially target the formation
c. Provident Fund (PF) of 18 specialised firms and groups, with
The introduction of a social security and three groups each in the 6 occupational
benefit scheme that offers long-term benefits categories (electrical (house wiring),
to the employee as well as to the construction plumbing, construction carpentry, steel
sector is overdue. The BBP is working with fabrication, masonry and building painting).
the National Pension and Provident Fund In this regard, the BBP will facilitate and
(NPPF) to institute a PF system for the provide the following support:
employees engaged under the BBP. The • Registration and obtaining business
BBP will contribute 10% of the employee’s licenses and providing tools and
basic salary to the PF and will require the equipment like personal protective
employee to contribute 5% to make the total equipment;
PF contribution of 15%. This arrangement will • Provide short term tailor-made
be operational for the first year of the project construction management and
only. From the second year, the contribution entrepreneurship trainings;
will involve a tripartite arrangement, whereby • Opportunities to avail concessional
the BBP, employee and employer contribute working capital loans with interest
5% each. rates as low as 5%;
• Policy support by reviewing the
Since the PF is intended to provide
current foreign worker policy and
long-term retirement benefits,
awarding contracts on maintenance
all employees will be encouraged
works directly to the groups. The BBP
to contribute and save till they
will also work to incorporate prefab
superannuate. However, there is a
windows and doors in the Bhutan
flexibility to withdraw the contribution
Schedule of Rates to promote such
as and when required. If an employee
works which can be done by the
wishes to withdraw the entire PF, the
groups.
employee will require at least one year’s
worth of engagement and contribution. In essence, the BBP will strive to support
An employee wishing to withdraw the formation of specialised groups and
10 ECONOMIC CONTINGENCY PLAN | 2020assist them until they become established c. Creation of Employment Agency
and competitive in the construction
In pursuit of the BBP’s long term
industry.
objectives, the MoLHR in collaboration
b. Mechanisation of construction industry with MoWHS will work on the creation
of an Employment Agency in the
A priority that needs to be urgently
construction sector. The objective of the
addressed in the construction industry is
agency is to provide a sustainable supply
mechanization to enhance efficiency and
and management of skilled construction
quality. Indeed, there is significant scope
workforce to ultimately make the
for technological penetration given the
construction industry a key sector in
breadth and intensity of innovation in
generating employment opportunities.
the sector as evidenced by the adoption
of telemetry, mobile apps, autonomous Additionally, the agency is expected to
heavy equipment, drones, robots and 3D cater to the worker’s social security and
printed buildings. benefits like provident fund, gratuity,
and insurance, paid leave, bonuses,
To stay abreast of such technological
etc. In this regard, referring to relevant
developments, the BBP will promote the
legislations, policies, regulations,
following medium to long term measures,
RCSC’s agencification framework, the
among others, in collaboration with other
MoLHR will commission a thorough
key stakeholders.
assessment and establish a relevant
• Incentivise adoption of
agency which could be in the form of
mechanisation and professionalisa-
a government agency, an autonomous
tion in the Government Procurement
agency, a SoE or a private entity.
Rules and Regulation, where deemed
relevant.
1.5.7 Policy support
• Encourage sector-wide mechanisation
In order to successfully implement the
by providing subsidies, incentives and
BBP and bring transformational change
working capital.
to the construction sector, it is essential
• Support establishment of building
to embrace reforms and enforce the
component manufacturers to
implementation of existing policies such
manufacture prefabricated or
as the National Construction Industry
readymade building components
Policy. Some of the areas recommended
particularly for wood works like
for reform and enforcement are:
windows and door frames.
• Explore opportunities to provide
Policy Reforms:
concessional working capital loans
i. Instituting portability of PF
at as low as 5% interest rate.
schemes among the employers to
enable Labour mobility.
ECONOMIC CONTINGENCY PLAN | 2020 11ii. To encourage investment in prefab iii. The Procurement Rules and
firms, the use of prefabricated Regulations (PPR) and Standard
windows and doors should be Bidding Document (SBD) 2019
mandatory for all public construction prescribe sub-contracting of
works. The MoWHS shall incorporate specialised trades to the registered
the prefab windows and doors in the specialised firms with some
Bhutan Schedule of Rates (BSR) to conditions. However, this is yet to be
enable procuring agencies to account enforced. The procuring agencies
it in their Bill of Quantities (BoQ). shall adhere to the provisions to
iii. The MoLHR to review and streamline ensure that specialised firms are
the Foreign Workers Policy to ensure promoted.
an appropriate balance between
foreign and local workforce.
iv. All government agencies to outsource
maintenance and repair works to the
specialised firms.
v. Allowing the import of foreign workers
through specialised firms only.
Policy Enforcement:
i. The MoLHR will enforce the Foreign
Workers Policy and the entry of
foreign workers falling under the
‘Closed Category’1 should be
strictly monitored.
ii. The LGs and the procuring
agencies shall strictly adhere to the
provisions of the Bhutan Building
Regulations 2018 that requires
plumbing and electrical works to
be done by the certified plumbers
and electricians respectively and
non-compliance should result
in non-issuance of occupancy
certificate by the LGs.
1 Closed category refers to plumbing and electrical trade. Import of foreign workers, as per the existing policy, for these trades is not permissible.
12 ECONOMIC CONTINGENCY PLAN | 2020Table 1.6 Steps for Engagement and Skilling
ECONOMIC CONTINGENCY PLAN | 2020 13Table 1.7
Sl. Target Unit cost Budget (in
No. Activity number in Nu. Million Nu.) Remarks
Wage top-up + PF
1 7,000 4,075 423 For 12 months duration
2 5,847 6,000 52.6 Average of 1.5 months
3 855 6,000 5.13 Average of 1 month
Food & accommodation
4 5,847 3,000 26.3 Average of 1.5 months
Food & accommodation
5 855 3,000 2.57 Average of 1 month
NCS @ 0.120m, CBC
Development &printing of
6 6 1,145,000 9.68 @ 0.650m & printing @
Curriculum
300*750
7 Training materials 6,702 10,000 67
Basic hand tools & PPE
8 6,702 30,000 201.1
Basic PPE during
9 7,000 10,000 70.0
engagement
10 18 31,000 13.4
additional instructors
11 6,702 8,000 53.6
Monitoring &Evaluation of M&E budget for DTE and
12 30.00
skilling program TTIs
Specialised groups
13 21.02 18 groups
formation
Induction course for
14 18 200,000 3.60 18 groups
specialised groups
15 Long term feasibility study 1.00
16 60.00 contingency& M&E budget
for PIUs
Grand Total 1,040
Table 1.8 Implementation Timeline
Sl.
No. Activity Timeline
1 April 2020
2 Commencement of registration process May 2020
3 Launch of skilling and assessment July2020
4 Launch of engagement July 2020
5 Monitoring and Reporting July 20202
CHAPTER
Chapter 2 : tourism resilienCe
Tourism Resilience
2.1 Background provides an uninterrupted context to
While the COVID-19 pandemic has address longer term policy issues while
created varying degrees of challenges also enhancing its infrastructure and
for all sectors, the tourism sector has diversifying its product base by engaging
come to a complete standstill as a the displaced in the medium term.
result of the border closure and travel
2.2 Objective
restrictions. Bhutan saw more than 2400
Against this backdrop, the tourism sector
cancellations of VISA during the onset
contingency plan aims to:
of COVID-19 in March and the closure
• Immediately engage those who have
of many hotels and allied businesses
been displaced to provide a source
catering to the sector. Indeed, the
of livelihood;
tourism sector in Bhutan started bearing
• Professionalise employees in the
the impact of COVID-19 as early as
tourism sector, identify new tourism
November 2019 with the cancellation of
products and provide a face-lift
travel plans.
for tourism infrastructure through
enhancement and beautification as
The two notable impacts in the sector
part of an engagement program for
are the loss of livelihood for Bhutanese
displaced employees;
dependent on the sector and revenue
• Strengthen tourism governance;
foregone for the country in terms of
• Overall, work towards maintaining
convertible currency. The revenue from
and promoting Bhutan’s image as an
the tourism sector sharply declined
exclusive high end and sustainable
by 41% in 2019/2020 compared to
tourism destination.
2018/2019 (Budget Report 2020).
2.3 Strategies
The sector is critical to Bhutan’s
• Award Tourism ECP works to tourism
economy due to its diverse linkages with
related associations, Dzongkhags
other sectors. While the impacts of the
and other relevant organizations to
pandemic have been devastating, it also
ECONOMIC CONTINGENCY PLAN | 2020 15engage the displaced; • Partnering with Build Bhutan Project
• Collaborate with training institutions to provide longer term engagement
to provide advanced training and and employment opportunities for
skilling programs; people displaced from the Tourism
• Implement “cash for work” modality Sector as short-term engagement
(Cash paid right upon the completion programmes under Tourism ECP
of work); may not be financially sustainable.
2.4 Key Results
points opened
and operational
Service Providers
Tourism Reslience:
Key Results
Payments
TCB RRCO
HOTEL
16 ECONOMIC CONTINGENCY PLAN | 2020Chapter 2 : tourism resilienCe
Key Indicators (KPI)
Baseline Tourism Resilience Target
0 >1,000
0 2
2.5 Programmes is expected to generate employment for
To realize the above objectives, the around 343 persons. The infrastructure
following four broad programs intended to and product development sites have
provide immediate engagement have been been identified based on the frequency of
designed under the tourism ECP. travel to these places both by tourists and
• Infrastructure and product nationals.
development
• Surveys and studies 2.5.2 Surveys and studies:
• Training and re-skilling
a. Tourism Resource Inventory (TRI)
• Waste management.
TRI is a comprehensive data base
The programs have been planned in two
encompassing tourist attractions,
phases spanning over nine months. Phase I
products, services and infrastructure
ran from April to June 2020, while phase II
that are available at various locations.
covers the period from July to December
The resource inventory can serve
2020 targeting more than 1000 displaced
as a valuable tool and reference for
employees.
both tour operators and tourists alike.
The first and only resource inventory
2.5.1 Infrastructure and product
survey was conducted back in 2005.
development
The current resource inventory survey
This component includes re-development,
aims to build on the previous survey
beautification and up-gradation of tourist
and provide access to an updated
destinations and monuments. Additionally
comprehensive tourism resources
it includes development of new trails,
information system, including historical
quality roadside amenities, campsites
details and significance of each tourism
and beautification works. This component
resource.
with a fund allocation of Nu 44.86 million
ECONOMIC CONTINGENCY PLAN | 2020 17The resource inventory survey will Once the initiative is complete, users,
be conducted across 20 Dzongkhags potentially tourists can have easy access
and 205 Gewogs by enumerators to information, including cultural, religious
through administered questionnaires and heritage attractions; nature-based
using tablets to record information of attractions; recreations and special events
potential tourism resources. A total of by visiting Google Maps or Google earth.
73 enumerators, mostly laid off tourism
employees will be recruited and trained 2.5.3 Training and re-skilling:
for this survey and engaged for seventy Capacity building of the industry personnel
days. An indicative fund of Nu. 16.68 will be undertaken in collaboration with
million has been proposed to complete the relevant stakeholders. This will allow
the survey. different target groups to enhance their
skills, product diversity and profession-
b. Update Google Street View Imagery
alism of the tourism sector. The capacity
Google Street View (GSV) is a technology
building areas have been identified based
featured in Google Maps and Google
on emerging trends in the tourism industry.
Earth that provides interactive street
This will ultimately contribute towards
level imagery. It has now expanded to
strengthening the tourism workforce
include cities and rural areas worldwide.
resulting in a more satisfying experience
Google Street View displays sceneries
for future visitors. Some of the trainings
of stitched images. GSV in Bhutan was
identified under this program are:
last launched in 2014 by the Ministry of
a. Handicrafts and souvenir
Information and Communication (MoIC)
production for handicraft persons;
in collaboration with Google. Since then,
b. Hotel assessment;
no updates were made despite significant
c. Wellness and Spa (Sowa Rigpa);
changes in the urban landscape.
d. Up-gradation of guide course;
Therefore, the proposed GSV initiative
e. Advanced food production.
aims to update the entire street view of
the country capturing the latest images The above training programmes will be
that will be useful for the general public conducted in the established tourism and
and tourists. hospitality training institutes and hotels
to support the private sector. Additional
The GSV initiative, including required
trainings may be included based on
fieldwork, will engage around 10 laid off
emerging needs.
guides and professional photographers for
three months starting from April to June
2.5.6 Waste management.
2020. The team will be trained and field work
As a high-end tourist destination, maintaining
will be piloted in two identified Dzongkhags
the country’s aesthetics is imperative. Waste
prior to scaling it at a national level.
management is increasingly becoming
18 ECONOMIC CONTINGENCY PLAN | 2020Chapter 2 : tourism resilienCe
a prominent issue requiring immediate and guide the payment of SDF by regional
attention. Therefore, this activity will focus on tourists; delineate the roles and respon-
managing waste along the most frequented sibilities of stakeholders in terms of the
trekking routes and tourist hotspots through SDFs and enhance professionalism; and
cleaning, advocacy and awareness programs service delivery for regional tourists.
on waste. The laid off employees from the
tourism industry will be engaged to implement 2.6.2 New Entry Points
this activity with a fund allocation of Nu. 5.006 To prepare for the re-opening of the sector
million. and facilitate a more proportional spread
of tourists across the country, especially in
2.6 Programs with medium to
the southern foothills of Sarpang, Gelephu
long term impacts:
and Samdrup Jongkhar with favourable
While short term programs are being
weather conditions in winter, two new
implemented to immediately engage the
entry points with integrated Check post
laid off, the following programs relating to
facilities will be set-up at Gelephu and
governance and operations with expected
Samdrup Jongkhar. Around 35% of the
medium to long term impacts are also
international tourists who visited Bhutan
recommended to prepare the sector for
in 2018 cited Bhutan’s favourable weather
re-opening once the pandemic abates.
condition as the primary reason for their
1. Readiness to implement Sustainable
visit (Bhutan Tourism Monitor, 2018).
Development Fee (SDF);
2. New Entry Points;
2.6.3 Assessment of Non-TCB
3. Assessment of budget hotels;
certified Hotels
4. System Integration.
Currently, it is mandatory for Minimum
Daily Package Rate (MDPR) tourists to stay
2.6.1 Readiness to implement
at least in 3-Star hotels certified by the TCB.
Sustainable Development Fee
However, similar regulations do not exist
(SDF)
for non MDPR tourists. With the surge in
As part of the preparedness and
non MDPR tourists in the country, demand
readiness to reopen the tourism sector,
for uncertified hotels has increased
the implementation modality for the
leading to their proliferation, which now
Sustainable Development Fee for regional
has crossed over 500. While licensing of
tourists is being finalised. Towards this,
non-star hotels and apartments are within
an interim Standard Operating Protocol
the purview of Ministry of Economic
(SOP) for SDF has been drafted and will
Affairs (MoEA), there is no standard
be implemented until the full Guideline
regulation, guideline or a lead agency
for Management of Regional Tourism is
to monitor the standards or quality of
rolled-out as part of the National Tourism
services offered by such accommodation
Policy. The SOP is intended to facilitate
ECONOMIC CONTINGENCY PLAN | 2020 19providers. Further, the implementation lack of integration among these systems
of the Sustainable Development Fee and information sharing perhaps creates
necessitates regional tourists to stay in loopholes that enable undercutting and
certified hotels. Therefore, the TCB as tax evasion.
part of its SDF preparedness strategy will
The intent of the proposed integration is to
conduct a nationwide survey of these
ease business processes like transferring
uncertified hotels for possible certification
of tour payments and refunds. TCB will
and preparation of way-forward. The
implement this system together with the
survey will be conducted by trained tour
banks in a phased manner.
guides, hotel staff and tour operations
staff. Under this system, the payment aggregator
of the respective banks will be integrated
2.6.4 System Integration into Tashel through use of the required
Pursuance to the government’s initiative of Application Programming Interface (API).
improving service delivery and information Upon integration, the current practice of
sharing, TCB has developed various making manual updates for credit advice
online systems to cater to the relevant received from the banks will be automated
stakeholders. Currently, there are over and the service delivery Turn Around Time
five tourism systems, including Tashel visa (TAT) will be significantly decreased.
online and costing system. However, the
Table 2.1
Phase I
Budget Outlay Employment
SL No Activities (m) Generated
1 Hotel Assessor’s training and assessment 2.50 24
2 Bumdrak trek 0.21 19
3 Druk Path trek 0.39 24
4 Jhomolhari- Yaktsa trek 0.66 20
5 5
6 Dagala 1000 Lakes trek 0.43 16
7 Rehabilitation of day hike within Thimphu 0.35 20
8 Training on Sowa Rigpa 0.39 20
9 Re-skilling for handicrafts craftsman 16.00 60
10 Google Street view imagery refresh project 10.00 10
11 Footstep of Terteon Pema Lingpa 2.25 5
20 ECONOMIC CONTINGENCY PLAN | 2020Chapter 2 : tourism resilienCe
12 10.51 46
Highway
13 RSA – Chendebji, Trongsa 2.85 20
14 Taktsang site development 12.80 70
15 Cleaning program in Thimphu 100
16 Tran Bhutan Trail- Trongsa 20.62 315
Construction of safety railing leading to Menchu at Dobji
17 2.80 15
Dzong, Paro
18 1.84 25
19 RSA – Mebartsho, Bumthang 1.84 12
20 Jomolhari-laya-Gasa 0.68 21
21 Facelifting of Punakha High School roadside park 10.00 10
22 RSA – Rimchu, Punakha 2.80 25
23 RSA – Dodena, Thimphu 2.80 25
Total 102.7 907
Phase II
1 Development of footpath at Tamchog Lakhang in Paro 7.00 20
2 Installtion of safety railing at Chari monastry in Thimphu 0.15 10
3 Enhancement of Bumdra trek route in Paro 2.00 25
4 Construction of restroom facility at Dodena in Thimphu 2.80 25
Development of Dagala Trek route from Thimphu
5 4.80 27
6 13.00 30
Market in Thimphu
7 Enhancement of 60km biking trail around Thimphu city 3.50 30
8 Enhancement of Phajodhing trail 5.70 30
9 10.00 50
Thimphu
10 Upgradation of cultural guides on trekking course 3.96 90
Advance Food production on Continental, Thai and
11 5.00 50
Chinese Cuisine
12 Advance level Food and Beverage Service Training 3.95 100
Training course on wellness, meditation, spa and sowa
13 1.03 70
rigpa
14 Tourism Resource Inventory Survey 16.68 73
15 Digitization of trek route - Snowman trek 1.57 14
16 48.13
Total 129.27 644
Grand Total 232.00 1551
ECONOMIC CONTINGENCY PLAN | 2020 2122 ECONOMIC CONTINGENCY PLAN | 2020
3
CHAPTER
and Nutrition
3.1 Background The agriculture sector contingency plan
The agriculture sector employs 51 percent of therefore seeks to boost agriculture
the population (Labour Force Survey, 2019) and livestock production by providing
but contributes a disproportionately lower a range of support measures across
16 percent of the country’s GDP (National the value-chain that include technical
Accounts Statistics, 2019). While Bhutan’s assistance and additional support for
economy has evolved from its agrarian marketing, value addition and providing
beginnings productivity in the sector year-round connectivity and road access.
is still extremely low, reflecting limited
3.2 Objective
commercialisation, mechanisation and
The key objective of the agriculture ECP
scarcity of land among other constraints.
is to:
Despite successive five-year plans pursuing
• Boost agriculture and livestock
self-reliance, Bhutan remains overly
production for food self-sufficiency,
dependent on India for agriculture and
nutritional security and income
livestock imports. This is bound to grow
generation;
as a result of increasing population and
• Bring back potential fallow lands
economic growth. However, the current
under crop production;
pandemic and border restrictions has
• Provide alternate employment and
limited access to the Indian source market.
income generation opportunities for
However, this also provides an opportunity displaced people;
to pursue the elusive goal of food self-suf- • Improve and enhance market access
ficiency by increasing production and and marketing of agricultural and
ultimately achieving import substitution, livestock products
at least in a few agriculture commodities
and livestock products to start with.
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