Strategy for gross national happiness (sgnh) Annexures to the Main Document

For almost all NTFPs, there is very little economic and ecological information. In terms of economics, basic information on yield per given area, total production and amount traded are not available. Such lack of information deprives formulation of effective production and marketing strategies.

Lack of technology for proper harvesting, processing and packaging hampers development of NTFPs. Such lack of technology and know-how has also resulted in no new and innovative products being developed. Left unattended, such shortcomings will impinge on the success of NTFP commercialization.

Current policies and laws consider NTFPs under the overall framework of forests. This has led to less attention and consideration being provided to NTFPs. As such, this has resulted in inadequate management of NTFPs and stymied growth within the NTFP sector. An example of how the lack of adequate policies hampers effective management is the inability of the government to determine how much fees should be charged for the collection of different NTFPs.

The DoF and the RNRRCs have the capacity to conduct resource assessment for a few selected NTFPs. There are also clear linkages – wherein RNRRCs provide the scientific information and the DoF translates those into management principles and provides relevant guidelines. But this is happening only for cordyceps at the moment. This existing linkage should be strengthened and capacity to carry out research and exchange information improved.

Examples of a few successful entrepreneurs suggest that commercialization of NTFPs can indeed contribute to both the rural as well as the national economy. Firms such as Bio-Bhutan and Nado Poi Zokhang are examples. What is relevant to note is the fact that with better policies and supportive government institutions, there is ample room for more such firms to develop given the immense range of NTFP products.

Entrepreneurship development programmes within the MEA have proved instrumental in promoting opportunities for start ups. There is commitment from the government and support for entrepreneurs and development of potential firms in Bhutan.

A separate Division for NTFPs could be created within the DoF with the mandate to look into development of NTFPs in collaboration with existing – NITM/ITMS, RNRRCs, IHDP, NMC, MEA, Private Sector – and upcoming agencies.

A thorough assessment of NTFPs in terms of product types, availability, production levels and use should be conducted. Areas of production should be mapped. Economic parameters, such as households involved in collection, amount traded, and income generated should be collected. Ethno-botanical surveys should be given priority to list important NTFPs in terms of their diverse uses.

Capacity for ecological research should be built to enable proper identification of potential NTFPs and derive sound data to ensure calculation of sustainable harvest rates and related threats. Human resources in terms of strength as well as ability must be strengthened. Adequate financing for such research must be made available.

Most studies dealing with success of NTFP commercialization highlight lack of market awareness as a major constraint. In the initial years (2008 – 2013), the Royal Government should pursue market identification for potential NTFPs.

After product identification and development of appropriate protocols, a thorough value-chain analysis for each product should be undertaken. Within the value-chain, profit margins and levels of success must be computed at each stage. This will enable identification of how benefits are spread across the value-chain. Where necessary, this will enable the government to intervene in an informed manner. For instance, in cases where it is found that one actor along the chain is appropriating a disproportionate size of the benefits, the government will possess necessary information and appropriate regulatory tools to ensure equity.

Locations of primary producers must be linked with proper transportation facilities. In cases where products identified are perishable, proper storage facilities should be built in the nearest urban center where facilities of storage are available. Reducing the gap between producer, processor, trader and the final consumer should be given priority – more so where goods are perishable (e.g. matsutake mushrooms). This entails identification of nearest export port from the point of production.

Value addition must be encouraged at every stage in the value chain. Wherever possible, value addition should be promoted at the producer’s level so that most returns flow to them. Product development must be accorded high priority. Wherever possible, research should be undertaken to develop innovative products (e.g. nutraceutical herbal supplements, herbal soaps, etc).

Education of primary producers in terms of sustainable harvest rates, group formation and legal issues should be accorded priority. Information on international sanitary and phyto-sanitary standards and requirement should also be provided. Existing extension capacity should be upgraded to cater to this.

The current support rendered to entrepreneurs by the MEA should be upscaled. Besides training, it should provide services such as assistance with faster provision. Education and information on markets should be provided. Information on international sanitary and phyto-sanitary standards should also be provided where export conditions demand so.

Access to technology is considered under the framework of having knowledge of options, necessary skills and ability to source equipment and financing. Harvesting and post harvesting technologies for the most promising NTFPs should be explored and standards developed. This can be led by the DoF with technical and collaborative support from the post harvesting unit of the MoA. This information should be made available to producers and entrepreneurs through information portals.

A clear understanding of the roles of different stakeholders – government, entrepreneurs, primary producers and other interest groups – will be vital in ensuring proper communication and delivery of services. An exercise should be carried out to define what the roles of different stakeholders in NTFP development should be. Additionally, an assessment of how they should change over time will be beneficial in defining future strategies in an adaptive manner.

Human resources in areas such as ethnobotany, resource ecology, bio-chemistry, marketing and economics should be developed on a priority basis.

The founding fathers of Bhutan have always been great patrons of our arts and crafts. Right from Zhabdrung’s time, our leaders and rulers have preserved and promoted these arts and crafts. As a result, a strong artisan foundation was laid in the country. To this day, in rural communities where about 70% of Bhutanese population live, artisan activities permeate into all areas of life – woven baskets as storage facilities, wooden bowls for dining usage, etc. Further, the usage of our national dress and other traditional utility products by all Bhutanese citizens has sustained this sector up to now.

In the past, various initiatives were taken by the government and donors to promote handicrafts in Bhutan. Although such initiatives have had a positive impact on the development of arts and crafts in Bhutan, sustainability has always been an issue due to the lack of ownership. There are a number of organizations which are involved with the handicrafts sector such as the National Institute of Zorig Chusum (NIZC), the National Women’s Association of Bhutan (NWAB), certain NGOs, and the Handicrafts Emporium, among others. These organizations work in isolation and are at times more competitors than collaborators. Having a multitude of agencies also leads to duplication of work and waste of resources. There is a need to identify one single agency to play the lead role to organize, coordinate and develop this sector.

Although trade in handicrafts constitutes one of the important sources of income for the rural communities, there is a paucity of accurate data on the number of artisans, products and product range as well as the places of production, use and availability of raw materials, skills level, etc. While numerous studies have been conducted through various projects under many organizations, several of these studies have not seen the light of day nor have they been implemented. Organizations dealing with the subject matter, in this case the Handicrafts Emporium, should have had access to those studies.

Artisan products are expressions of Bhutanese tradition and culture. Currently, most artisan products are designed for traditional usage. However, in order to go beyond this current realm and to tap market potential, it is important to translate traditional designs and products into usage that is complementary to contemporary markets.

Quality is an important aspect, especially when producing for new markets beyond its current confines. The present quality of workmanship is not appropriate for such expansion. Much training will be needed to bring the quality of products to the appropriate level for institutional up-scale trading.

In order to make a product competitive, one of the important aspects of the product is the element of costing. Generally the handicrafts products are priced very high vis-à-vis the quality of the product. There is no system for pricing/costing and this is yet another area that needs to be addressed.

Existing production systems are mostly informal and the means of production are primary and domestic based. Although these machines are suitable for its current needs, it is not totally appropriate for a larger scale of production. For example, the sewing machines used here are mainly domestic sewing machines, which are not appropriate to sew new types of products where different types of fabrics are combined in one product.

There is great marketing potential for artisan goods and services. For example, besides the tourist markets, artisan products can also penetrate into the largely untapped institutional hospitality markets. Producers can supply in-room amenities where designs and materials are uniquely Bhutanese. This will further enhance the experience of tourists, where local cultural materials are used instead of imported products.

The Handicrafts Emporium in Thimphu is currently mainly a retailer and does not play a major role in the development of this sector. While it is a retailer, it cannot conduct its business as would a fully private enterprise as it is a government owned corporation which entails its own inherent problems. (To cite an example, it has been subsidizing the NWAB since 1995 @ Nu. 50,000 per month). Its role needs to be changed from a retailer to a developer and investor in arts and crafts, engaging in capacity building, developing SMEs in arts and crafts, business incubation and providing start-up funds and organizing unified marketing strategy. To this end, it should be upgraded and restructured to enable it to perform these functions of development and investment.

As a first step, the Handicrafts Emporium should compile all the studies conducted thus far on the handicrafts sector from various organizations. Thereafter, it can conduct a nationwide survey to update and fill in the gaps, if any, especially with regards to the number of artisans, their concentration, the product/product range, use and availability of raw materials, technology, production capacity, etc.

Artisans in all sectors suffer from lack of access to high quality raw materials at reasonable prices. The materials and problems for each sector differ, but it is critically important to address these problems. In many cases, inferior and even gaudy raw materials are totally ruining refined traditional skills.

The formation of artisans’ groups (cooperative societies) based on the survey would be the next logical step. The formation of such societies will enhance economies of scale be they in terms of purchasing raw materials, access to markets, supply or collective bargaining strength. It will also be much easier and cost effective to provide any required institutional intervention such as for skills development trainings and workshops.

Based on the survey on the skills of the artisans, various trainings will then have to be initiated in the areas of product diversification, product adaptation, creative weaving, designing etc. Specifically pertaining to tourism, the souvenir industry can also be developed. Souvenirs, though based on traditional art forms, are often miniaturized to suit the needs of long distance, especially airborne, travellers. Sometimes a similar purpose is served by substituting lightweight materials for heavier traditional ones. Production methods may remain largely unchanged while the products themselves are subjected to extensive modification.

One of the commonly cited problems is the inability of our handicraft producers to meet bulk orders due to its time consuming nature. The introduction of simple machines such as spinning wheels, broad looms, dyeing machines, wood lathe machines, tool kit for cane and bamboo will greatly alleviate this problem. Some of the options worth exploring here include the provision of tool kits at subsidized rates to the artisans, the institution of a Raw Material Bank for various raw materials to save cost.

There are a lot of handicrafts of Indian and Nepalese origin being sold as Bhutanese ones. On the one hand, such practices tantamount to willful misrepresentation (in other words cheating) of tourists, who are the main buyers which in turn does nothing for the reputation of Bhutan and on the other hand, they have a negative impact for our own handicrafts development prospects. Branding and certification is required for all products produced in Bhutan and hence it would seem logical that a National Institute for this purpose be established. The same institute could do the certification for handicraft products as well. If however, the establishment of such an institution is not feasible, the restructured Handicrafts Emporium should be given the mandate to certify and brand all handicrafts as “Made in Bhutan”. Thereafter, brochures educating all consumers/tourists of the existence and significance of the brand would be imperative.

Artisans in all sectors suffer from a lack of direct access to markets, ad hoc and sporadic distribution systems, and dependence on middlemen. Transportation problems also prevent artisans in remote areas from communicating directly with their buyers. Marketing is a new field for artisan products and hence it requires aggressive plan. Various methods such as advertisement, exhibitions, fashion shows, certification of products, development of product brochures and catalogues will have to be initiated to enhance the marketability of the artisan products from Bhutan.

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  Take advantage of the events in 2008 by launching new products commemorating the special occasion.
  
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  Develop brochures and catalogues on the artisan products with a brief on the product, the artisan and the place.
  
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  Utilize various forms of the media such as internet, news papers for marketing
  
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  Take advantage of prominent places such as airports, museums, etc.
  
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  Introduce SEAL of EXCELLENCE to encourage creativity of the artisans
  
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  Establish international linkages with associations and NGOs for market penetration.
  
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  Organize trade fairs/exhibitions such as declaring a particular day/week as the day/week of the Artisans.
  

Information and Communications Technology (ICT) is recognized as a key leveraging factor in national development, from wealth creation to improving the quality of life for all sections of the society. Numerous factors influence the extent and speed of social and economic development – not least political stability, physical infrastructure, basic literacy and health care. There is no suggestion that ICT can eliminate the need for these or offer a panacea for all development problems. But experiences around the world reveal ample evidence that intelligent deployment of ICT can have a dramatic impact on achieving social and economic development goals. The real benefits lie not in the provision of technology per se, but rather in its application to create powerful social and economic networks by dramatically improving communication and the exchange of information.

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  An export focus can produce significant economic benefits, such as growth and foreign investment, but these gains do not automatically translate into progress on broader development goals.
  

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  Building domestic ICT production capacity may address local needs and help strengthen domestic economic linkages, but it can significantly restrict countries’ ability to adopt new technologies and to gain competitive advantage in the global economy.
  

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  It is imperative to use ICT to improve the competitive position of a developing country in the global economy, but this may fail to meet some development goals if it diverts attention from fostering local markets and businesses.
  

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  An explicit focus on using ICT in pursuit of development goals allows countries to achieve a wide diffusion of benefits from ICT and contributes to both broad-based economic growth and specific development goals.
  

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  A number of interrelated factors should be addressed to maximize the benefits of ICT for development. These include building human capacity, creating incentives for enterprise, developing appropriate content and increasing competition, especially among telecommunications and Internet-related businesses.
  

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  Finally, the success of national ICT strategies is dependent upon the coordination and alignment of efforts undertaken by all actors involved, at global, local and national levels.
  

The role of ICT, both as an enabler and as an industry in itself, is identified in the 2004 Bhutan ICT Policy and Strategies (BIPS). Because of the rapid development of the technology, it is difficult to make any realistic detailed long-term plans for this sector. The long term objective is to establish a robust ICT infrastructure, develop a flourishing ICT industry and deploy ICT and media to leverage good governance, as elaborated below:

While Bhutan Telecom Ltd (BTL) as the incumbent telecommunication operator has an extensive network, the strategy recognizes the value of other players in the market, both current and in the near future. It is pragmatic to involve BTL as well as new entrants to expand and improve ICT network coverage of the country. The plan recommends laying of Optical Power Ground Wire (OPGW) over the main power transmission lines. The plan also looks at how the existing ICT services charges, particularly internet services, can be made more competitive. This entails exploring alternative gateways through India and other countries in the region. Overall, the ICT infrastructure development is based on a study of the existing network, identification of gaps and building a coherent network.

1. 
   Filling in the gaps in the existing network to ensure a fully redundant network providing broadband connectivity.
   
2. 
   Upgrading of the national network to support triple play services (voice, data and video).
   
3. 
   Enhancing the international gateway and providing access to submarine cable landing stations in neighboring countries.
   
4. 
   Improving and establishing more community access centers.
   
5. 
   Instituting policies towards a healthy ICT and media market based on competition and sustained development
   

The strategy is to improve the backbone network (both national and international) and national ICT distribution system within the following timeframes:

1. 
   Immediate (2007-2008)
   
2. 
   Short-Term (2008-2013)
   
3. 
   Medium-Term (2013-2018)
   
4. 
   Long-Term (2018-2028)
   

The immediate term covers the projects which are ongoing and prioritized for implementation during 2007-2008:

1. 
   Wangdue-Punakha aerial fiber link
   

c. East-West/North-South OPGW network

d. Broadband internet service
Short-Term (2008-2013)

The next stage of network expansion will concentrate on laying fiber to the Dzongkhag headquarters not covered under the above plan. This will improve the network, enhance its reliability and also meet the demands for bandwidth in the growth centers and economic hubs and other Dzongkhag headquarters. BPC transmission network will be utilized, where feasible. The short-term plan will include the following:

BPC will implement high voltage transmission line to evacuate power from Basochhu to Tsirang-Sarpang-Gelephu and also to form the national power grid. This will remove the bandwidth bottleneck on the Tsirang-Gelephu microwave radio link and will also increase the reliability of the backbone network. Laying of OPGW can be simultaneously done by BPC while building the power transmission lines.

2. 
   Mongar-Tangmachhu-Lhuentse OPGW/ADSS
   

This will increase the reliability of the ICT backbone and also meet the objectives of a more robust network in these areas.

This link will increase the bandwidth capacity for the Phuentsholing-Samtse link which currently is 34Mbps. Further, it will meet the requirements of Samtse and Gomtu industrial zones.

This will augment the existing BTL microwave radio, meet the demand for Paro and Haa, and also increase the reliability of the ICT backbone network.

This will replace the existing DRMASS between Thimphu and Gasa.

The proposed optical fiber on these routes will result in a nationwide IP-backbone network. This will also augment the BTL SDH radio links. However, the installations have to be carried out on aerial optical fiber cable as there are no plans in the short-term to build power transmission lines on these routes.

The last mile access (network to the homes and offices) could be expanded using fiber and/or wireless technologies. The present distribution systems consist of underground and aerial copper cables and some wireless. In order to enhance network reliability and efficiency, it will be necessary to take fiber to the nearest locality and further distribution done using copper cables or wireless technologies.

9. 
   Expansion and up-gradation of mobile services
   

Broadband services capable of triple play services (voice, data and video) will be made available to all growth centers, economic hubs and Dzongkhag headquarters.

It is proposed that integrated utility ducts be built along all primary and secondary national highways for carrying power transmission lines, water, sewage, gas, fiber optic cables, etc.

Fiber optic cables shall be laid along the following highways to augment the national ICT backbone infrastructure:

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  Samtse-Phuentsholing-Lhamoizingkha-Gelephu-Nganlam-Samdrupjongkhar
  

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  Ura-Gomphu-Panbang
  

Feasibility will largely depend on the completion of proposed primary and secondary national highways.

ICT services can be provided as it is very close to Basochhu Generation Unit, which is approximately 2 km from BPCL 66KV tower LB-77 and Rurichhu 220/66/11 sub-station.

ICT services can be provided to the project sites subject to completion of the Ura-Gomphu-Panbang highway. Chamkharchhu-I is about 2.5 km from Langdurbi village, Zhemgang. Chamkharchhu-II is about 14 km from Dakpai-Buli road and 1 km from Shingkhar village, Zhemgang.

The project site is about 25 meters from the Trongsa-Zhemgang highway and about 5 km from BPC 6.6 kV pole Q20H32. Mangdechhu can be easily covered by the planned OPGW project.

The site is about 1 km from Lammi and Lhamoizingkha villages. It is about 5 km from Monitar, on the Kejarey-Kalikhola road. The communications to the project site will be available on completion of the Samtse-Samdrupjongkhar highway.

The proposed site is about 1 km from the BPC 11kV transmission pole and Chanachen village under Geling geog.

The site will be covered by the proposed Kanglung-Trashigang-Trashiyangtse OPGW project.

By 2020, BPC envisions full rural electrification. The possibility of using the existing BPC feeder lines to provide ICT services using ADSS fiber needs to be explored. The project can be undertaken in phases. This will provide the platform for delivering all kinds of ICT services to the homes.

By this time, Bhutan should be in a position to own a satellite of its own, which will cater to the ICT backbone infrastructure needs of the ICT and ICT-enabled services industries as well as for remote sensing facility for geological, ecological, land use-planning, weather and other services. Additional bandwidth can be sold to the neighboring countries for similar uses.

At present, there is virtually no local electronic content available. The major use of internet is e-mail service. Users download contents offered by the Internet mainly from USA and Europe. This has a direct impact on the services tariff provided by the ISPs. Without enough local traffic, there is neither a case for competition in the domestic market, nor can Bhutan bargain with the regional telecom operators. This underscores the need for developing local content. Therefore, content related projects and programmes such as online banking, e-governance applications, e-education, e-health, video conferencing, IPTV, gaming, etc. must be promoted.

Other projects that will boost local content development include the Dzongkha localization and National Digital Library of Bhutan projects being undertaken by the DIT.
Human Resource Development

The overall objective of the ICT human capital strategy will be to build a critical mass of IT personnel required to support the growth of this sector. This will include IT university graduates, engineering and B.Sc graduates and IT diploma, as well as high school leavers with requisite ICT skills.

The immediate and short-term HRD strategy should be to meet the human resource requirements for the various ICT service industries identified for the 10^th FYP. The following industries have the potential to be established using the current human resource base:

1. 
   Call centers
   
2. 
   Medical transcription
   
3. 
   Software development
   
4. 
   Data processing & capturing
   
5. 
   Data networking services
   
6. 
   Web design/development
   
7. 
   Animation/graphic designing
   

The number and capacity of potential private business ventures desiring to establish the identified industries cannot be fully foreseen. However, each recruit may require additional training to take up the positions in the business units. Currently, the Ministry of Labour and Human Resources (MoLHR) provides support for these trainings and this could be continued during the 10^th FYP. But eventually, as the industry becomes more mature, all the trainings should be borne by the private investors and by the employees themselves.

ICT professionals need to continually update their skills and knowledge. There are various relevant packages being offered by reputed institutes in India. However, the costs of providing such trainings are high. An alternative cost-saving strategy would be to invite resource persons and provide trainings locally at RIM and private institutes which have the requisite logistics.

Professional branding may be especially important to market Bhutan as a quality BPO destination. The cost of professional branding courses is high and therefore, the strategy would be to conduct the courses in Bhutan by hiring resource persons from outside. In addition to generic training, certification courses will be required to provide professional branding.

1. 
   The government could negotiate with renowned Universities such as MIT and Harvard or their equivalence and secure scholarship for few top Class XII Science graduates every year.
   
2. 
   In addition, the government should continue to send 10-15 students to Indian Universities for undergraduate and post-graduate courses. This should also cater to the professional development of the current ICT staff in the government and the private sectors.
   
3. 
   Management of ICT Business Courses – This scheme will provide recipients with subsidy/scholarships towards the cost of short management courses to enhance skills and competencies of private sector managers. This should be aimed towards providing managerial skills as well as opportunities to network with prospective business partners.
   

The private ICT training institutes in Bhutan do not have the capacity to provide good quality ICT education. Most of them provide basic courses for the high school students and organize tailor-made courses for government agencies and corporations. It is proposed that the government introduce a system of accrediting ICT training providers. The aim is to better regulate the ICT training provider industry, specifically to provide incentives to well resourced and well performing training providers and to gradually upgrade or to close down training providers which are not providing quality training.

In the long term, Bhutan needs to ensure that there is a programme of education and training in the existing institutes to cater to the demand of the ICT industry. This will require constant upgrading of existing courses in line with the growth of the ICT and ICT-enabled industry.

Over the past decade, the introduction of competition in the ICT sector, particularly in mobile cellular and broadband markets, has been one of the key factors in increasing tele-densities. The level of competition that is authorized by countries (based on the number of competitive players) as well as the kinds of services open to competition is critical to sustaining this ICT sector development strategy. Competition in international services, in particular, the international gateway, and leased lines, is vital to ensuring low-cost Internet access.

Opening up access to the local loop for competing operators is also gaining ground as a means to fostering competition. Local loop unbundling is increasingly recognized as being important not only for competition in traditional telephone services but also to prevent incumbent’s monopoly from spilling over into the domain of broadband Internet. Therefore, the goal of unbundling has often been to make network components available to new market entrants with greater commitment, expertise and incentives to improve services.