As Bhutan’s economy grows, so does its waste problem


Despite its tiny population, Bhutan’s economic growth has led to increasing urbanisation and problems associated with biodegradable waste, which threatens the beauty of one of the most pristine environments in the world.

Bhutan’s rapid economic development over the last few decades has been striking. According to World Bank data the GDP of the country grew from USD 135 million in 1980 to USD 2.2 billion in 2016, or sixteen times. Based on its indicators, Bhutan has been recommended for graduation from Least Developed Country status by the UN.

While this is good news for the country, it is also accompanied by some negative indicators.

The National Environment Commission’s (NEC) report “Bhutan State of Environment, 2016” has pointed out that, with rapid socio-economic development, increasing population and urbanisation, the country is seeing an increase in the amount of solid waste generated. More problematically the composition of that waste is shifting from biodegradable to non-biodegradable waste.

Nedup Tshering, a retired civil servant and environmentalist who started a civil society organisation based in Thimphu, Clean Bhutan, said compared to other countries, waste in Bhutan is not a huge problem. However, it is growing rapidly, and within since 2014, when Tshering started his initiative, the waste produced by individual household has doubled from 250 grams a day per person to almost half a kilogramme per person now.

Disposable diapers are becoming a growing concern across the country as more people have started to use them and they do not degrade well even in landfills, stated the NEC report. Another issue of concern is that municipal solid waste also contains hazardous and electronic waste.


Bhutan’s Economy to Moderately Grow in 2019 and 2020 on Strong Hydropower and Tourism Outlooks — ADB

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THIMPHU, BHUTAN (16 April 2019) — Economic growth in Bhutan is forecast to strengthen moderately, buoyed by the industry and services sectors, according to a new Asian Development Bank (ADB) report.

The Asian Development Outlook (ADO) 2019, ADB’s flagship annual economic publication, forecasts the economy to grow at 5.7% this year and 6.0% in 2020. This is following the slipping of growth for a second year running to 5.5% in fiscal year (FY) 2018 on slower hydropower construction and temporary decline in electric power production.

“The expected commissioning of the Mangdechhu hydropower plant, strengthening of private spending, and increased government spending following the formation of a new government to implement the Twelfth Five-Year Plan will greatly contribute to growth,” said ADB Country Director for Bhutan Ms. Kanokpan Lao-Araya. “Inflationary pressure is anticipated following the recent announcement of expected pay rise of the public servants in Bhutan. A downside risk to growth forecasts would be any further delay in commissioning or lower-than-expected production capacity of the Mangdechhu hydropower plant.”

Inflation is expected to rise moderately from 3.6% in FY2018 to 3.8% in FY2019 before edging up to 4.0% in FY2020 as initial benefits from India’s goods and service tax (GST) taper and Indian inflation trends higher. Lower international oil price forecasts will help keep inflation at bay, but the planned revisions to civil service salaries and minimum wage might push up inflation, once implemented.

Current account deficit will continue to narrow further to a forecast of 16.9% of gross domestic product in FY2019, mainly on declining imports with the slowing of hydropower construction and a 6-month hiatus in capital expenditure as the country transitioned to a new administration. It is expected to shrink further in FY2020, as higher imports because of the picking up of government investment is offset by high export revenue from the full-year operation of the Mangdechhu hydropower plant.

Strengthening domestic resources toward better funding of development remains a challenge. With the expected graduation of Bhutan from the United Nations’ least developed country status in 2023, access to concessional official development assistance will increasingly be limited. Reforms have been undertaken to strengthen the mobilization of revenues to fund development. These include the creation of a stabilization fund to ensure even distribution of expenditure, a GST regime which is planned to be adopted in 2020, and reforms on provision of fiscal incentives. Fiscal incentives have been costly for the government with forgone revenue amounting to 17% of tax collected in 2017 only. Reduction of fiscal incentives, particularly tax reforms could be explored to raise government revenues, discourage the entry of footloose opportunists, while not deterring investors who see solid business opportunities in the country. Further, Bhutan needs to simplify the provision and administration of incentives without compromising the level of investment. As a complement to revenue reforms, public financial management needs further strengthening to ensure the proper collection and administration of revenue.

ADB has been supporting Bhutan since 1982, with strong emphasis on renewable energy production, transport connectivity, and key urban infrastructure projects. ADB has committed loans totaling $534.06 million, grants worth $269.22 million, and technical assistance amounting to $53.75 million for Bhutan. In 2018, it approved four projects, including two grant projects focusing on human resource development, particularly on skills and health development. Overall assistance aims to help generate revenue, support inclusive growth, and promote environmental sustainability.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. In 2018, it made commitments of new loans and grants amounting to $21.6 billion. Established in 1966, it is owned by 68 members—49 from the region.


An update on Bhutan’s economy

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Its annual average economic growth of 7.6 percent between 2007 and 2017 far exceeds the average global growth rate of 3.2 percent.

This high growth has contributed to reducing poverty: Extreme poverty was mostly eradicated and dwindled from 8 percent in 2007 to 1.5 percent in 2017, based on the international poverty line of $1.90 a day (at purchasing power parity).

Access to basic services such as health, education and asset ownership has also improved significantly.

The country has a total of 32 hospitals and 208 basic health units, with each district hospital including almost always three doctors.

The current national literacy rate is 71 percent and the youth literacy rate is 93 percent.

The recent statistics on lending, inflation, exchange rates and international reserves (Sources: RMA, NSB) confirm that Bhutan maintained robust growth and macroeconomic stability in the first half of 2018.

Gross foreign reserves have been increasing since 2012 when the country experienced an Indian rupee shortage.

Reserves exceeded $1.1 billion, equivalent to 11 months of imports of goods and services, which makes the country more resilient to potential shocks.

The nominal exchange rate has been depreciating since early 2018 (with ngultrum reaching Nu. 73 against the US dollar in early November).

However, since the Bhutanese ngultrum is fully pegged to the Indian rupee, the depreciation is mainly due to the depreciation of the Indian rupee.

And since India accounts for more than 80 percent of the country’s international trade, the price developments of these countries are parallel.

Therefore, the real effective exchange rate has been stable. External debt remained high but had not increased significantly. The 2018 World Bank-IMF Joint Debt Sustainability Analysis concluded that the risk of debt distress was moderate.

On the downside, the Bhutanese economy faces a few risks such as further delays in hydropower construction, scarce donor financing, policy uncertainty, and adverse weather events.

To manage these risks, accelerating the reform momentum after the 2018 elections is key to consolidating and furthering Bhutan’s development.

This is the main message of the recently launched Bhutan Development Update November 2018

The first tasks of the new government are to revise the FY2018/19 budget (an interim budget is currently in place) and endorse the 12th Five-Year Plan (FYP).

Our baseline scenario – in other words, without the materialization of the downside risks – is that the economy would grow 6 percent a year over the medium term, almost the same as the annual average growth rate in the past five years.

The ongoing hydropower projects and the services sector, especially tourism, are likely to support growth.

With the completion of one of the major hydropower projects in late 2018, exports are expected to increase in the next fiscal year, while imports are expected to ease decline due to lower capital goods imports for hydropower projects, as well as overall lower public investment, thus contributing to narrowing the current account deficit.

In addition, external debt as a share of to GDP is also expected to decline, due to elevated repayments and faster GDP growth.

However, as the hydropower projects contribute little to job creation, the direct impact of growth on poverty reduction is expected to be modest.

Due to low-productivity growth in agricultural activities (which still accounts for nearly 60 percent of employment) and the limited private sector development, the transition out of farming into more productive jobs will likely happen at a slow pace.


German hotel firm plans expansion into UAE, Oman, Saudi Arabia

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German hotel company, Deutsche Hospitality, has announced its plans to introduce new hotels in the UAE, Oman and Saudi Arabia within the next year.

The expansion is part of worldwide expansion plans, aiming to grow its global portfolio from 150 to 250 properties by 2024.

Deutsche Hospitality is currently present in the Middle East with two Steigenberger and five IntercityHotel hotels.

Part of its UAE growth plans includes the introduction of a new hotel brand to the region, as the group gets set to launch the first Jaz in the City hotel in Deira, Dubai in 2022.

Serving as a home away from home for music-aficionados of all genres, Jaz in the City places music in the spotlight through DJ sets and live acts, all-day play lists and Jaz Radio Stream.

Jaz in the City Dubai will be located within the Deira Enrichment Project under development by Ithra Dubai, a fully owned subsidiary of Investment Corporation of Dubai (ICD).

It will comprise 253 guest rooms and encompass a range of F&B offerings, meeting rooms and a dedicated well-being area.

Deutsche Hospitality has also announced a complete relaunch of its luxury brand, Steigenberger Hotels & Resorts.

Globally, the hospitality group’s annual growth target is to double the number of hotels to 250 by 2024. The group is aiming to add 100 new properties to its portfolio within the next five years, specifically in the Middle East and Europe.

Deutsche Hospitality’s portfolio currently consists of 150 properties across its Steigenberger Hotels & Resorts, MAXX by Steigenberger, Jaz in the City, IntercityHotel and Zleep Hotels brands.


Abu Dhabi hotels set to post highest April occupancy on record

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Abu Dhabi hoteliers are set to record their highest ever April occupancy rate, according to new data released by analysts STR.

STR’s preliminary April data for the UAE capital indicates high demand and occupancy levels above 80 percent.

Based on daily data from April, Abu Dhabi reported a 4.6 percent rise in supply compared to the same month last year and a 5.3 percent increase in demand.

The figures also revealed that occupancy rose by 0.7 percent to 80.4 percent last month compared to April 2018.

They also showed that average daily rates (ADR) in Abu Dhabi increased by 2.8 percent to AED440.01 and revenue per available room (RevPAR) rose by 3.4 percent to AED353.98.

STR said in a statement: “The absolute occupancy level was the highest for any April in STR’s Abu Dhabi database… performance levels were pushed by events such as Culture Summit Abu Dhabi and the Retail Abu Dhabi Spring Sales.”

Last week, figures published by the Department of Culture and Tourism – Abu Dhabi (DCT Abu Dhabi) said total hotel revenues in UAE capital increased by more than 16 percent in the first quarter of 2019, supported by a number of high-profile events.

It revealed that events such as the AFC Asian Cup, IDEX exhibition, Special Olympics World Games, and the Retail Abu Dhabi (RAD) shopping festival boosted total revenues, which increased by 16.1 percent.

DCT Abu Dhabi said revenues were driven by a boost in average room revenue (ARR), which increased by almost 15 percent coupled with an occupancy rate of 79 percent.

Hotels also saw room revenue increased by 24.5 percent, while F&B revenues increased by 10.4 percent, it added.


UAE’s Etihad Airways says to add flights to Moscow

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Etihad Airways has announced a new second daily flight between Abu Dhabi and Moscow’s Domodedovo Airport, which will operate seasonally between October 27 and May 10, 2020.

The additional flight, operated by an Airbus A320, will allow passengers to choose between a daytime and evening departure from both Abu Dhabi and Moscow.

The move comes as Russia is the second largest source market for inbound tourism to the UAE with 820,000 Russian tourists visiting the country in 2018.

The trade exchange between the UAE and Russia reached $3 billion last year.

Robin Kamark, Etihad Aviation Group chief commercial officer, said: “Since launching our first scheduled flights to Moscow in 2008, the route has proved very popular, enjoying strong point-to-point business and leisure demand.

“The addition of the second flight underscores the importance we place on the Russian market, by providing our customers greater flexibility, convenience and easy transit through Abu Dhabi to key points across Asia and Australia.”


Transguard wins security deals for UK embassies in Dubai, Abu Dhabi

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Transguard Group, a UAE-based business services provider, has signed an agreement with the British Embassy to provide security services to both of its locations in Abu Dhabi and Dubai.

Transguard said it has developed a bespoke security package for the British Embassy for the three-year contract.

“Being selected as the security provider for the British Embassies in the UAE is a testament to our security capabilities and the integrated and innovative solutions we offer our clients,” said Greg Ward, managing director, Transguard Group.

“Our team of security professionals are trained to the highest international standards to ensure the utmost security and privacy, which is precisely why embassies and other high-security locations trust Transguard.”

The contract will see the deployment of more than 20 security staff for each site, each of whom passed a rigorous interview process and successfully completed an internationally-certified training course, he added.

“We chose Transguard Group for our security requirements because they live up to their excellent reputation through extensive training programmes for their staff and a suite of integrated security offerings, all of which were customised to our specific needs,” said a spokesperson from the British Embassy.

In addition to providing daily security services, an events security team from Transguard will also be deployed for large events at both Embassies, including the Christmas Ball and the Queen’s Birthday, which was celebrated in mid-April.


Emaar Hospitality launches new mobile app to cover entire portfolio

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Emaar Hospitality Group, the hospitality and leisure business of Emaar Properties, has launched a fully-integrated mobile app that covers its entire portfolio.

With the single app, users will have access to an extensive range of services including booking of hotels, restaurants, spas, golf and entertainment attractions using their mobile devices.

The new app replaces all the earlier apps that were launched for the individual hotel brands and leisure attractions under Emaar Hospitality Group.

The new Emaar Hospitality Mobile App is available for download both on App Store and Google Play.

Chris Newman, chief operating officer of Emaar Hospitality Group, said: “The launch of the new Emaar Hospitality Mobile App highlights our digital transformation focus to enhance the convenience of our guests… Guests from anywhere in the world can make informed decisions and plan every detail of the lifestyle choices they cherish across our hotels and leisure attractions.”

He said from search to booking, online engagement and everything in between, the aim is to engage customers, enable them to customise their travel plans, and revolutionise the way reservations are made.

He added that Emaar Hospitality Group will continue to invest in digital solutions and implement innovative strategies to increase bookings, streamline hotel operations, integrate added-value services, to deliver personalised experiences for its guests.


Dubai unemployment rate remains steady at 0.5% in 2018

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Dubai’s unemployment rate reached 0.5 percent last year, while the economic participation rate as a percentage of total working-age population reached 83.2 percent, according to official figures.

The Labour Force Survey 2018 published by Dubai Statistics Centre also showed the unemployment rate among Emiratis increased from 2.9 percent in 2016 to 4 percent in 2018.

Among expats, the rate remained below 0.5 percent in Dubai with males (0.2 percent) and females (1 percent), with Arif Al Mehairi, executive director of Dubai Statistics Centre attributing the low rates to the UAE’s policies, which grant residency visas to employees, investors, students and persons of equivalent status with the condition that persons of working-age will not be allowed to stay in the UAE without a job.

Al Mehairi said: “The results of the Labour Force Survey 2018 illustrate the flexibility and strength of Dubai’s economy as it continues to record the lowest rates of unemployment in the world and one of the highest rates in economic participation.”

The survey use a representative sample of 3,000 households in Dubai including 1,500 Emirati households and 1,500 non-Emirati households.

The survey results showed that half of the Emiratis of working-age are involved actively in economic activities. Emirati males had a higher economic participation rate of 62.6 percent while the corresponding figure for Emirati females was 36.5 percent.

According to the survey, 2,242,363 people were employed last year out of which 81.3 percent were males while 18.7 percent were females.

The number of Emiratis employed and residing in Dubai went up by the end of 2018 to 82,630 compared to 75,856 by the end of 2016, which marks an increase of 6,774 employed Emiratis over the past three years, and an increase of employed Emiratis by 8.9 percent in 2018 compared to 2016.

Al Mehairi indicated that the total unemployed persons residing in Dubai was 10,468 in 2018, up 2,893 from 2016 to 2018.


Dubai free zone to return $354m to firms in wage protection push

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Jebel Ali Free Zone will become the first in the UAE to return cash and bank guarantees to businesses

A Dubai free zone will become the first in the UAE to return cash and bank guarantees to businesses in a push to protect wages of its employees.

Jebel Ali Free Zone (Jafza) on Saturday announced the move through its new Workforce Protection Programme initiative that is set to roll out in September.

The move will provide added benefits to employees and infuse AED1.3 billion ($354 million) back into Dubai’s economy that companies can invest in their operations and strengthen their businesses, state news agency WAM reported.

Previously, companies registered at the free zone had to give a cash or bank guarantee as a way of providing insurance to their employees in the event of non-payment of wages.

Sultan Ahmed bin Sulayem, chairman of the Ports, Customs and Free Zone Corporation and the Jebel Ali Free Zone Authority, said: “Our people are our greatest assets, and we are committed to providing them with a fair work environment that ensures they receive all the rights, privileges, and protections that should be afforded to them as core contributors to the nation’s economy.

“Through the Workforce Protection Programme, we are striving to raise standards for the UAE’s private sector by providing businesses with a model they can emulate successfully and help fulfil the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum as outlined in his 50 Year Charter.”

Under the new Workforce Protection Programme, companies will avail of approved insurance coverage that will help protect the workers in case of wage default. The insurance will extend to all Jafza-sponsored employees and apply by default to any new workers from the time they receive their work visas to the time the visa is cancelled.