The change in leadership looks likely to affect border negotiations with China. Thimpu is likely to further strengthen ties with India.

Voters in Bhutan backed the opposition People’s Democratic Party, led by former Prime Minister Tshering Tobgay, in the final round of parliamentary elections Tuesday, local media reported.

The party won a majority of seats in the lower house in the fourth general election held by the small Himalayan country since its 2008 transition to a constitutional monarchy.

The ruling Druk Nyamrup Tshogpa Party had been eliminated in a preliminary round of voting in late November, leaving the final round as a contest between the People’s Democratic Party and the new Bhutan Tendrel Party and guaranteeing a change of government.

During the campaign, Tobgay criticized previous Prime Minister Lotay Tshering for the economy’s poor recovery from the coronavirus pandemic. He set out a 15 billion ngultrum ($180 million) stimulus plan to attract foreign investment and expand the tourism sector.

Bhutan’s government uses the unique concept of “gross national happiness” to promote well-being beyond economic wealth. But the country suffered a heavy economic blow from COVID-19 due to its heavy dependence on tourism.

The government has moved to cut jobs in the public sector, the country’s largest employer. The youth unemployment rate doubled over five years to 28.6% in 2022, and many young people have left for Australia.

The next administration will face the challenge of turning around the ailing economy. Gross domestic product shrank 3.3% in 2021, the International Monetary Fund reports. Though the economy rebounded to a 5.3% expansion in 2023, growth is forecast to slow to 3% this year.

On the foreign policy front, Bhutan is likely to further strengthen ties with India. The smaller nation is nonaligned, having no formal relations with any of the United Nations Security Council’s five permanent members. Its diplomacy with major countries is conducted with neighbor India as an intermediary.

In a December speech for Bhutan’s National Day, King Jigme Khesar Namgyel Wangchuck announced plans to establish a special administrative region in the country’s south, bordering the northeastern Indian state of Assam. The massive 1,000-square-kilometer Gelephu project seeks to create an international economic city.

The announcement came shortly after a visit by the king to India, where he told Prime Minister Narendra Modi that the purpose of the project is to build an economic corridor linking South Asia and Southeast Asia through India’s northeastern states.

The king sought cooperation on infrastructure development, including an international airport, and investment by Indian companies. India might take more of a hand in Bhutan’s foreign policy in exchange for economic support.

The change in leadership looks likely to affect border negotiations with China. Chinese and Indian troops engaged in a standoff in 2017 over the Doklam Plateau, which is claimed by Bhutan and China and borders India as well. Beijing has since established a permanent military presence there and pressured Bhutan to accept a territorial swap proposal that would cede Doklam to China.

Bhutan had been expected to compromise with China under the previous administration, given its conciliatory attitude toward Beijing, but the change in government makes that unlikely for now.

India has serious concerns about the border issue with China and should make stronger relations with Bhutan a diplomatic priority, said Pankaj Jha, a professor of international affairs at India’s O.P. Jindal Global University. (Courtesy: NIKKEI ASIA)
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