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Sourajit Aiyer - The Straits Times Singapore - Bhutan beckons investors - Singapore, Apr 2014

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Sourajit Aiyer - The Straits Times Singapore - Bhutan beckons investors - Singapore, Apr 2014

  1. 1. Search Published on Apr 18, 2014 Purchase this article for republication (http://newslink.a siaone.com/ips/N ewsPostEnquiryR equest.action) Buy SPH photos (http://www.photo bank.com.sg/) Log in (/ldap/redire ct.html? reroute=/the -big- story/asia- report/bhuta n/story/bhut an-beckons- investors- 20140418) Subscribe (http://www.stsubs cribe.com.sg/) NEXT STORY: South Asia needs S$3.5 trillion infrastructure investment: World Bank (http://www.straitstimes.com/node/2233170) (http://www.straitstimes.com/node/2233170) (http://www.straitstimes.com/sites/straitstimes.com/files/20140418/ST_20140418_STBHUTAN_2443 38e.jpg) Bhutanese children at a window. Most young people are literate and computer-savvy and there is a hunger for the latest products, including casual fashion and electronic goods that could be sold online. Bhutan is undergoing an important political and economic transition. -- PHOTO: AGENCE FRANCE-PRESSE By Sourajit Aiyer For The Straits Times WITH a population of about 750,000, Bhutan rarely evokes the interest of international investors. However, opportunities exist for those willing to look at specific sectors and focus on potential profitability rather than just immediate growth. Bhutan is undergoing an important political and economic transition. And the aspirations of its population are also changing. Its monarchy gave way to a parliamentary democracy in 2008. The economy has been growing rapidly; gross domestic product expanded by 7 per cent, 12 per cent, 9 per cent and 5 per cent in the past four fiscal years. Incomes are also growing. Extensive construction activity can be seen along the Babesa Highway south of the capital Thimpu. According to the Statistics Bureau, investment by financial institutions in the building and construction sector soared from 5.8 billion ngultrum (S$118 million) in 2008 to 14.5 billion ngultrum in 2012. BACKGROUND STORY I found during two taxi rides that the young part-time drivers were graduates who also had office jobs. There seemed to be a sense of despair at the lack of full-time jobs. TO READ THE FULL STORY... 403 Forbidden Bhutan beckons investors The country is more than its happiness index. Opportunities abound in this small frontier market. • • • • • • BHUTAN Bhutan beckons investors (/the- big-story/asia-report/bhutan/story/bhutan- beckons-investors-20140418) South Asia needs S$3.5 trillion infrastructure investment: World Bank (/node/2233170) Cell phones catapult ‘Shangri-La’ Bhutan into modern age (/the-big- story/asia-report/bhutan/story/cell-phones- catapult-%E2%80%98shangri-la%E2% 80%99-bhutan-modern-age-20140324) Bhutan, world's last TV holdout, now a tech vanguard: PM (/the-big- story/asia-report/bhutan/story/bhutan- worlds-last-tv-holdout-now-tech-vanguard- pm-20140222) Bhutan celebrates 34th birthday of 'Dragon King' (/the-big-story/asia- report/bhutan/story/bhutan-celebrates-34th -birthday-dragon-king-20140221) Bhutan to become green car showcase in deal with Nissan (/the- big-story/asia-report/bhutan/story/bhutan- become-green-car-showcase-deal-nissan- 20140221) MORE STORIES (/ASIAREPORT/BHUTAN) (http:// www.s traitsti mes.c om/st/ print/2 29039 9) (javas cript:v oid (0);) 0 0 0 Politics & Diplomacy Economy & Business Health & Environment Trends & Transitions Op-Ed Lifestyle People South-east Asia East Asia South Asia Oceania Multimedia Blogs About Us Page 1 of 2Bhutan beckons investors 05/09/14http://www.straitstimes.com/the-big-story/asia-report/bhutan/story/bhutan-beckons-inve...
  2. 2. By SOURAJIT AIYER FOR THE STRAITS TIMES W ITH a population of about 750,000, Bhutan rarely evokes the inter- est of internation- al investors. However, opportuni- ties exist for those willing to look at specific sectors and focus on po- tential profitability rather than just immediate growth. Bhutan is undergoing an impor- tant political and economic transi- tion. And the aspirations of its population are also changing. Its monarchy gave way to a parlia- mentary democracy in 2008. The economy has been growing rapidly; gross domestic product expanded by 7 per cent, 12 per cent, 9 per cent and 5 per cent in the past four fiscal years. Incomes are also growing. Extensive con- struction activity can be seen along the Babesa Highway south of the capital Thimpu. According to the Statistics Bu- reau, investment by financial insti- tutions in the building and con- struction sector soared from 5.8 billion ngultrum (S$118 million) in 2008 to 14.5 billion ngultrum in 2012. Bhutanese professionals tell me home owners are trying out new interior designs. But while the building boom is backed by de- mand, not all have the necessary capability to buy. Education enrolment has risen, but job creation lags. I found dur- ing two taxi rides that the young part-time drivers were graduates who also had office jobs. There seemed to be a sense of despair at the lack of full-time jobs. Most of the low-income workers appear to be from India, judging from the Hindi music they listen to on their radios. Most youths prefer the “punk” look. Girls are also fashion con- scious. An expatriate working with an international group notes that young Bhutanese are big fans of the Korean programmes that re- flect middle-class lifestyles. Those with good incomes are willing to spend. News reports suggest that cars are now larger and in greater numbers. New cof- fee shops and restaurants are sprouting up, and average prices seem higher than in Thailand or In- dia. But since Bhutan still has very few such outlets, proprietors may be taking advantage of the lack of competition. These changes are throwing up sector-specific micro opportuni- ties, such as: í Electric cars: Environmental reasons apart, Thimphu is small and should suit intra-city driving. People owning electric cars would rarely be far from a battery charg- ing point. Bhutanese professionals re- mark that youngsters increasingly preferred to drive rather than walk. Cabbies say cars imported from India cost about 20 per cent to 25 per cent more than in India. But electric cars would have to be priced competitively, or they will be out of reach for most people. í Processed and packaged foods: Such foods are becoming increas- ingly popular, going by the stocks in department stores. Hygiene is one reason. Another is longevity. Daily cooking is not practical with a working population increasingly comprising both men and women. í Mobile value-added services (VAS): Bhutan has moved from having no mobile phones to claim- ing more than 70 per cent mobile penetration in less than seven years. Annual subscriber growth is in excess of 100 per cent. This suggests potential for mobile VAS providers to tie up with local net- works for mobile gaming, tones, infotainment, live streaming, m-commerce, and so on. í Solar renewable energy: The sunlight in Bhutan is intense due to its high altitude and low pollu- tion levels. Being mountainous, the country also has land tracts not suitable for real estate or agri- culture. These are located in the east of the city across the river, in the west near a television tower, and in the south around the Bud- dha view-point. These places would be suitable for the construc- tion of solar photovoltaic panels on mountain inclines. í Finance: The propensity to save has never really caught on. Ratio of savings (excluding time deposits) to gross domestic prod- uct has hovered between 9 per cent and 13 per cent over the past five years. This could constrain the ability of banks to lend. Local professionals, however, say the appetite for initial public offerings on the stock market is huge. The recent listing involving Dungsam Polymers, a manufactur- er of polythene bags, was over-subscribed by about three times. With people’s wallets estimat- ed to grow, potential future list- ings might warrant the attention of boutique banks. Online trading has picked up and offers scope for technology providers to partner with local brokers. í E-commerce: Bhutan has good Internet connectivity and most young people are literate and com- puter-savvy. There is a hunger for the latest products, including cas- ual fashion, electronic goods and entertainment that could be sold online. The market for formal clothes, however, is limited since most people wear traditional at- tire at work. í Pre-fabricated furniture: The building boom is fuelling demand for furniture, meaning timber. But this is something Bhutan might want to avoid to maintain its eco- logical balance. í Hang-out zones: Changing lifestyles mean socialising in fash- ionable coffee shops and restau- rants in the city centre. The 1990s music played in most of these plac- es seems to attract many young people. But there are not many such outlets. If the number of high-income earners grows, there could be opportunities for more such businesses across the city. í Vocational and professional courses: The construction of the Knowledge Park and IT Park shows the government is taking higher education seriously. This emphasis on higher education sug- gests a chance for entrepreneurs to provide professional and voca- tional courses in information tech- nology, hotel management, graph- ics and industrial skills, thus build- ing expertise and making students job-ready and employable. í Online newspapers: Local newspapers are small and have limited global content. This pro- vides opportunities for online newspapers, with both news and infotainment content, gaining rev- enue from either advertising or subscriptions. í Travel: Those not travelling as part of a group package would ap- preciate a good online booking ser- vice. My own experience suggests the online booking process is not streamlined for individual budget travelling. But luxury hotels offer- ing a variety of indoor services may find only limited demand. Since most foreign visitors pay a per-day fee, which limits the number of days they can remain in the country, most prefer to stay in budget hotels and spend their time outdoors. Is it justified to look at these op- portunities, given that Bhutan is such a small market? Absolute profits may be low, but the pic- ture is different if the focus is in terms of return on equity. Larger markets offer higher growth po- tential. But companies entering such environments also face great- er competition and will not be able to break even for some time. Meanwhile, Bhutan’s govern- ment will have to think about opening up the economy to for- eign investors further in order to provide increased economic oppor- tunities for its jobless youth. Bhutan may be a small “fron- tier” market, but it is not without opportunities. stopinion@sph.com.sg The author works with a leading capital markets company in India. By PIERRE DE VOS T HE week has not begun well for Oscar Pisto- rius. Under relentless cross-examination from prosecutor Gerrie Nel, the Paralympian athlete, standing trial for shooting and kill- ing his girlfriend Reeva Steenkamp, came across as an eva- sive witness. Pistorius first told the court he had “accidentally discharged” his firearm, then he said he acted out of fear because he thought his life was in danger, and then he said he did not mean to pull the trigger. Only the second of these claims provides a plausible legal defence. Because there was no actual threat to Pistorius’ life, he cannot rely on the principle of self-de- fence. However, in South African law, the principle of putative self-defence may apply where the accused genuinely believed his or her life was threatened. Where accused people are found to have genuinely believed their life was in danger and to have accordingly believed they were using reasonable means to avert an attack on themselves or their property, they may escape conviction for murder on the grounds that they lacked requisite intention. Pistorius, therefore, has to con- vince the court that his vulnerabili- ty, as a disabled person living in South Africa, genuinely led him to believe his life was in danger from an intruder hiding behind a closed toilet door. The court must fur- ther be convinced that his re- sponse – pumping four bullets through the door – was reasona- ble in the circumstances. For a person living outside South Africa, this may seem a tough ask. It may not seem re- motely reasonable to shoot four “zombie-stopper” bullets into a door without having been directly threatened by an attacker and without knowing who was hiding behind it. However, at the heart of the de- fence is an assumption that the high crime rate in South Africa, coupled with Pistorius’ vulnerable state as a disabled person, ren- dered his actions reasonable. It is true that the rate of violent crime in South Africa is high. Al- though the murder rate has de- creased substantially from 68.1 murders per 100,000 people in 1995/1996 to 30.3 per 100,000 in 2011/2012, this number remains extremely high. But statistics from different police stations also indicate that violent crime is far more rife in black townships than in the middle-class areas where most white people live. Pistorius lived in one of the many gated communities that have sprung up in response to the perceived threat of violent crime against middle-class people. Often built in an identical faux-Tuscan style, houses in such communities are usually also kit- ted out with an elaborate alarm system, as was Pistorius’. Such communities are typically surrounded by a high wall with an electric fence on top; the entrance to the community is always strict- ly controlled. It was exactly because Pisto- rius lived in a gated community that he could sleep with the win- dows of his bedroom open. That he lived in such a place, therefore, presents a major difficulty for the defence. Most middle-class South Africans not living in such commu- nities perform elaborate rituals at night to lock doors and security gates, and to activate alarm sys- tems linked to the offices of pri- vate security companies on 24-hour call in the event of the alarm being tripped. The obsession with violent crime displayed by some mid- dle-class white people in South Af- rica, usually in fearful discussions at dinner parties and on radio talk shows, has become something of a cliche. It is made fun of by come- dians and those wishing to display their enthusiastic support for the so-called “new South Africa”. This fear became prominent around the time when South Afri- ca made the transition from white minority rule to democracy. When white South Africans ex- press an acute fear of violent crime, it can often sound like fear of crime has become a more ac- ceptable way for white people to express their fear of black people and of a government led by black people. Pistorius needs to convince the court that his alleged fear of an in- truder was not irrational and his response to this alleged fear was reasonable. That is why he has al- leged that he has, on several occa- sions, been the victim of crime. stopinion@sph.com.sg The writer is Claude Leon Foundation chairman in constitutional governance at University of Cape Town. This article first appeared in The Conversation (http://theconversation.com), a website that carries analysis by academics and researchers in Australia and Britain. By ROBERT MUGGAH and ILONA SZABO DE CARVALHO W ITH just two months to go un- til the start of the World Cup, a sense of panic is gripping Rio. Cariocas, as the city’s residents are known, are less concerned about whether stadiums will be built on time than with the direction of the state police department’s once-lauded pacification pro- gramme. The pacification police units – or UPPs – were intended to retake control of neighbour- hoods previously controlled by heavily armed drug barons, with the goal of eventually re-inte- grating these communities back into the city. Many people now fear that the pacification police units are unravelling and that violence in some of Rio’s 600 slums – known as fave- las – is getting out of control. The state’s gov- ernor recently called for mas- sive reinforce- ments from the Brazilian Army, with more than 2,500 soldiers deployed to the Mare slum earli- er this month. Local newspa- pers are predict- ing the demise of the state’s flagship public se- curity programme before the world’s biggest sporting event gets under way. Violence and petty crime have clearly increased in some areas of the city over the past months. Nineteen police officers have been assassinated since the start of the year, more than in all of last year. But the militarisa- tion of policing is likely going to make a bad situation worse. As heavily armed soldiers and shock troops begin pouring into the city’s largest favelas, Rio’s authorities risk reversing the progress made by the country’s most effective community polic- ing experiment in a generation. Instead, there is now tough talk of killing traffickers and lib- erating the city’s poor from the clutches of sinister drug gangs. Some media outlets are uninten- tionally stigmatising the favelas as havens of crime and drugs, re- inforcing the government’s hard line. Critically important discus- sions on ways to expand public services – health, education and sanitation – are being overtaken by the rhetoric of fear. Yet, for all its imperfections, Rio’s pacification programme has generated impressive re- sults. Since its launch in late 2008, the initiative has set up 37 permanent police posts target- ing 257 communities and reach- ing approximately 1.5 million people. It has contributed to a dramatic 65 per cent reduction of lethal violence in “pacified ar- eas” between 2008 and 2012. In newly pacified neighbourhoods, homicide rates are 9.2 per 100,000, compared with 18.8 per 100,000 in the rest of the city. These are startling num- bers for a country that experienc- es, on average, 50,000 murders per year. There are also less open carry- ing of firearms and a growing lev- el of confidence among commu- nity residents to criticise violent policing operations and demand better quality public services. There have also been some setbacks. Theft and robbery have increased in some areas, though this may be partly be- cause crimes are more widely re- ported than before. There are al- so legitimate concerns that the gentrification in some pacified areas has forced locals to leave the neighbourhoods they have lived in for decades. Now, more than ever, there is a need to improve and consoli- date public security efforts in Rio. Although it is tempting, the state and city governments must not resort to the repressive tac- tics of the past. They should re- call that before the pacification programme began, Rio’s military police killed one out of every 23 people they ar- rested between 1985 and 2008. Today, there are more than 9,000 police officers newly trained in hu- man rights and community out- reach. While a small number have been impli- cated in the ex- cessive use of force, they are not as ruthless as in the past. But with elite troops now in- volved in train- ing police pacification units, there is a risk of reverting to the harsh practices that have not been used since Brazil’s days un- der a dictatorship. Rather than dispensing with pacification, Rio de Janeiro needs to double down on it. Pub- lic safety in Rio or anywhere can- not be achieved by focusing on policing alone. There is also an urgent need to reap the social and economic dividends generat- ed by the pacification project. To do so will require letting peo- ple hold title to their property and improving access to basic services for low-income resi- dents. It will also mean identify- ing meaningful employment op- portunities for poor young men – who are most likely to be the perpetrators and victims of vio- lent crime. In a crisis, there is a tempta- tion to resort to “us” versus “them” narratives. Yet precisely the opposite is needed: a dia- logue with the community lead- ers who live Rio’s war on a daily basis. This conversation needs to be joined not only by the po- lice, but also by politicians, en- trepreneurs, academics and ac- tivists. Pacification will fail if it is not accompanied by serious in- vestment and a commitment to integrating hillside favelas with the glitzy beachfront neighbour- hoods where the better-off re- side. And for genuine peace to emerge in time for the World Cup, much less the Olympics, Cariocas, of all classes, need to ask themselves what kind of soci- ety they want to build. Will secu- rity be a public good shared by all, or the preserve of a select few? Robert Muggah is the research director at the SecDev Foundation and at the Igarape Institute, where Ilona Szabo de Carvalho is executive director. NEW YORK TIMES Bhutan beckons investors Bhutanese children at a window. Most young people are literate and computer-savvy and there is a hunger for the latest products, including casual fashion and electronic goods that could be sold online. Bhutan is undergoing an important political and economic transition. PHOTO: AGENCE FRANCE-PRESSE The country is more than its happiness index. Opportunities abound in this small frontier market. Pacification will fail if it is not accompanied by serious investment and a commitment to integrating hillside favelas with the glitzy beachfront neighbour- hoods. Public security efforts in Rio need a rethink I found during two taxi rides that the young part-time drivers were graduates who also had office jobs. There seemed to be a sense of despair at the lack of full-time jobs. The fear that grips white South Africa F R I D A Y , A P R I L 1 8 , 2 0 1 4 OOPPIINNIIOONN A33

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