Bhutan government imposes a moratorium on the import of all vehicles to save its dwindling foreign reserve. But utility vehicles, heavy earthmoving machines, and agriculture machinery are kept out of the moratorium. Bhutan is facing a Sri Lanka-like economic crisis.
• Bhutan bans vehicle imports for six months to strengthen its foreign reserves
• It is facing an economic crisis because of the Ukraine war, pandemic, and vehicle import
• It is mandated by its constitution to maintain foreign reserves
What Is The Crisis Situation In Bhutan?
The foreign reserves of Bhutan dwindled from $1.46 billion in April 2021 to $970 million at the end of December 2021. The data has been released by the Royal Monetary Authority of Bhutan. Also, the country is following a zero-COVID policy that has barred foreign tourists for the past two years. But the soaring oil and grain prices due to the Ukraine war aggravated the economic crisis in the country.
How Is Vehicle Import Responsible For The Crisis?
According to the daily Kuensel newspaper, vehicle import is the biggest factor in the economic crisis. The newspaper further said that the country imported more than 8000 vehicles till June and that depleted its foreign reserve to a critical level. But now the ministry of finance has put a moratorium on utility vehicles costing more than 1.5 million ngultrums ($20,000) through a notification. But the vehicles used for the promotion of tourism are exempted.
What Does Bhutan Constitution Say About Foreign Reserves?
The constitution makes it mandatory to maintain reserves for at least 12 months of imports. The moratorium comes into force from Friday and will remain effective for six months. The government will review and amend the moratorium after the said period and make a decision depending on the position of the foreign reserve.