However, the question is: has privatisation in Bhutan brought about any noticeable change in economic growth and equity? Does privatisation always bring in market competition, productive efficiency and equity?

The influence of paradigm shift in economic policy has not spared Bhutan. Bhutan began it's privatisation policy in 1987 and it has accelerated since 1992. The basic objective of the government strategy on privatisation has been to ensure efficient management and operations of enterprises andthereby promoting economic growth, limiting the role of the government so that it can concentrate on activities where there is not adequate private sector alternative, fostering indigenous entrepreneurial and management expertise and providing increased opportunities for saving and investment within the Bhutanese economy.

The privatisation programme in Bhutan is implemented through three institutions namely, the ministry of trade and industry (MTI), ministry of finance and Bhutan Chamber of Commerce whose executive members are mainly the leading entrepreneurs and industrialists. To support privatisation the institutional and legal environment was created with the passing of "The Companies Act, the Kingdom of Bhutan, 1989". Many enterprises including the public corporations are registered under the Act. MTI through it's policy on demonopolisation takes certain steps to ensure that privatisation does not lead to concentration of ownership and high inequalities in income distribution. Since 1987, the focus hasbeen on divesting government shares in joint corporations. In mining and manufacturing sector plants have been fully privatised together with gypsum, slate and coal mines. But a lot of analysts in Bhutan are in a dilemma. They find it difficult to believe that privatisation has proven to be a superior economic structure. Bhutan's privatisation does not support this proposition. While in some areas we could say that privatisation has definitely helped in a lot more the it is a disappointing one.

Though tourism industry has largely been benefitted from privatisation process. There are areas like privatisation of the bus services run as a monopoly of the Bhutan government transport services today we find different operators on routes. But the increase in the number of private operators has not led to any competitive situation and hence has not benefitted the commuters. Today except one or two routes all other enjoy route monopoly. To do away with arbitrary monopoly prices of the route operators governmentfixes the prices. Making a mockery of the whole process of privatisation. In other sectors too the result of privatisation may not be all that encouraging. The industrial concentration ratio has not declined the total factor productivity does not show any rise. The quality of life of the people has not improved. Social loss discounts the private gain from the privatisation process.

The question is what went wrong with privatisation in Bhutan? The policymaker in Bhutan has failed to understand the limit to privatisation. They fail to understand that Bhutan can neither be fully privatised economy nor can it be fully state-owned economy. For a country like Bhutan market competition still remains questionable even with full scale privatisation particularly due to smallness in domestic market size. The topography of Bhutan is mountainous and landlocked. This means that transportation costs are very high and make the Bhutanese goods uncompetitive in the international market.

In our pursuit to managing thenational economy we should be careful in assessing whether private sector is more efficient than the public sector. Theoretically, there is not much difference regarding their performance. More than the ownership (public or private) one has to look into the market situation. In a competitive market setting, both the sectors could operate equally efficiently.

Based on the economic size of the country, privatisation focused on small and cottage industries look more promising in Bhutan for creating competitive market structure. This is true as the capital requirement is not huge and the management is comparatively easy. Therefore, entry becomes easy for the entrants. Another thing is that the government should appraise the post privatisation impact of any industry before privatising it. In particular, the focus should be on what kind of market structure will be created after privatisation.