Since Bhutan opposition People's Democratic Party (PDP) led by Tsering Tobgay won last week's National Assembly elections, speculation has grown over the influence that India's decision threats to withdraw certain subsidies had on the vote. Many analysts say India's withdrawal of subsidies on cooking gas, kerosene oil, excise duty refund and hydro-electric projects could have lost the vote for the formerly ruling Druk Phuensum Tshogpa (DPT).
While various post-election analysis have been offered by various quarters, three probable explanations for the election results stand out: The first rests on domestic factors in Bhutan, the second can be traced to India’s domestic constraints and the third factor is external - China.
Explanation One: Bhutan’s domestic politics
It is no exaggeration to state that in the past five years, democratic space in Bhutan has indeed opened up, with Druk Phuensum Tshogpa (DPT), taking important decisions on certain economic and political issues.
However, be it a land scam case involving high ranking DPT officials, "political" benefits accrued by premier Jigme Thinley’s extended family members - or the case of a "rupee crunch" - the party had increasingly been receiving domestic criticism from various quarters.
Significantly, the King has been silent on all theses issues, observing the growing domestic developments with symbolic detachment. Given the growing prominence of the DPT in Bhutan’s body politic and the lack of potential political alternatives, it could well be possible that the Indian government has garnered the approval of the King himself before taking the subsidy decision.
This partially explains the decision's timing. New Delhi’s disappointment with the DPT government has been made explicit in one of the official note sent which stated that it had "repeatedly conveying our concerns regarding the lack of transparency and openness on part of the Royal Government of Bhutan (RGOB)".
The note further added that New Delhi should "demonstrate our seriousness through some concrete expression of displeasure" and that Government of India, "continues to be presented with a fair accomplice by the Bhutanese who seem to have acquired a habit of doing things keeping us in the dark and taking decisions unilaterally even on issues having a bearing on our common security. They seem to take the Indian government for granted, regardless of what they do".
The diplomatic significance of this note is that the political message has been clearly transmitted - a message which serves the interest of not only New Delhi but also the King of Bhutan. In fact, according to this explanation the timing of this decision appears to be well-timed.
Explanation Two: India’s Domestic Constraints
The second explanation rests on India’s economic policies, with New Delhi perturbed over concessions given to Bhutan on hydro-projects. India has also advised Bhutanese authorities to have more effective “financial management”.
The subsidy cuts have been further followed by a cut in Chukha export power tariff, which, according to financial estimates could cost Bhutan a total of one billion Bhutanese ngultrum annually ($10.6 million). While New Delhi’s decision would make some Bhutanese rethink their economic dependence on India, it has nonetheless been criticized for its spillover into the political domain, particularly as Bhutan gears up for a second round of elections.
Explanation Three - The China Factor
Given its political implications, it is widely believed that rather taking the decision was consequence of something more grand - a reaction to DPT’s leaning towards China.
Bhutan’s ties with China been on show in the media since Thinley’s meeting with former Chinese premier Wen Jiabao on the sidelines of a UN Conference on Sustainable Development at Rio de Janeiro in 2012. Also in July 2012, Thinley’s relations with China were in the news when a bus tender was given to Global Traders and Gangjung (GT), a supplier of Chinese vehicles.
The issue was debated in Bhutan’s domestic media and Thinley’s familial ties with the company’s owner were exposed. It is interesting to note that China and Bhutan have not had official talks since January 2010, when both countries had last met for formal border talks.
While no substantial official movement has been seen on this front, recently, an article on PLA camps established inside Bhutanese territory has come to light. The report claimed that China has been operating three military camps inside Bhutan since May 24 which have been hosting the Chinese flag.
According to the report, "until 2010, the area of Bhutan was 46,500 square kilometer, [but] Chinese intrusion resulted in seizure of 8,229 sq km from the northern belt of Bhutan, surprisingly downsizing the country's area to 38,390 sq. km."
While such stories have been circulating the media for quite some time, it can be concluded that China has been quite tenacious on the border issue. Have Bhutan-China border negotiations already reached some political compromise, or is it that Bhutan is now surrendering slowly to Chinese claiming tactics on its North-Western border with China?
Given this trend, sooner or later it could well be possible that the Chinese flag is also seen on the Doklam plateau, which overlooks the Siliguri corridor? The fact that the Ministry of External Affairs has proposed that in the future hydroelectric projects be operated jointly points a lack of bilateral trust[4]. This further suggest the Indian government's decision was taken to showcase its economic clout on Bhutan.
What is of important is to find the emerging pattern in India-Bhutan relations. Clearly, India-Bhutan relations are showing two dominant trends which need to be taken seriously by the Indian policy makers.
First, New Delhi needs to inform its engagement with Bhutan from perceptions emerging from the ground. The number of stakeholders is increasing in Bhutan, and it is important to prop up foreign policy with consultations across sectors, particularly the emerging business community.
Second, New Delhi also needs to be wary that given its economic weight as Bhutan's largest development partner, it will inevitably be included in good governance debates. A prudent strategy is thus needed which demands a shift in focus - from New Delhi to the Bhutan's bordering areas.
Bilateral exchange at various levels with bordering areas of West-Bengal, Assam and Arunachal Pradesh should thus be expedited and monitored with cautious care. While cross border trade (informal) and border marts are often held, they need to be normalized, to promote a shared understanding amongst the people of India and Bhutan.
Cooperation on climate change also needs to be recast in the India-Bhutan framework as this is a growing concern of Indian states sharing the international border with Bhutan . Given that there are various reports flooding both the digital and print media on India-Bhutan relations, most pointing to a dismissive picture, it is perhaps time for New Delhi to prepare itself for a new phase in India-Bhutan relations. With PDP's victory India should perhaps slate out a comprehensive policy path.
