Article from national newspaper Kuensel on the crisis
You have Nu 100 in your pocket, but Nu 80 belongs to friends, from whom you borrowed money and need to pay back.That is the state of the Bhutanese economy, according to latest figures maintained by the central bank. http://www.kuenselonline.com/2011/?p=28774
More from Kuensel
In 2007, Bhutan’s Rupee borrowings were INR 4B, and in 2008 the government of India extended a standby credit facility, from which Bhutan could borrow Rupee of up to INR 3B, at a lower rate of interest than that of the State Bank of India.In 2010, Rupee borrowings increased to INR 8B, and to INR 11B in 2011, with domestic consumption growing faster than exports to India.The government has been meeting with the Indian government, requesting them to increase the limit of borrowings by an additional INR 3B for the government of India standby facility, and SBI borrowings to INR 10B, in April this year.
The country is now rationing rupee and new loans for construction and vehicles are suspended. An informal rupee black-market mushrooms along the India-Bhutan border where rupee, actually pegged to the Bhutanese ngultrum, is sold at a rate as high as 30%. Meanwhile, Bhutan borrows rupee from the State Bank of India at a 10% interest to meet the shortage. The pursuit of Gross National Happiness is expected to address issues including over indulgence in materialism or to put it in simple terms, money.
GDP does not reflect happiness goal, a press release on the conference
This emerging international consensus was manifested in July last year when 68 countries joined Bhutan to co-sponsor a UN resolution on “Happiness: Towards a holistic approach to development,” which was adopted by consensus by the 193-member United Nations. The resolution stated that “happiness is a fundamental human goal and universal aspiration; that GDP by its nature does not reflect that goal; that unsustainable patterns of production and consumption impede sustainable development; and that a more inclusive, equitable and balanced approach is needed to promote sustainability, eradicate poverty, and enhance wellbeing”.
Bhutan Opposition Leader tweeted a blog where he predicted the crisis
My first rupee shortage blog post, written more than three years ago bit.ly/xh0JSK