𝐑𝐞𝐠𝐮𝐥𝐚𝐭𝐨𝐫𝐲 𝐑𝐞𝐟𝐨𝐫𝐦 𝐌𝐨𝐯𝐞𝐬 𝐅𝐨𝐫𝐰𝐚𝐫𝐝, 𝐁𝐮𝐭 𝐏𝐫𝐢𝐯𝐚𝐭𝐞 𝐒𝐞𝐜𝐭𝐨𝐫 𝐖𝐚𝐫𝐧𝐬 𝐎𝐟 𝐏𝐞𝐫𝐬𝐢𝐬𝐭𝐞𝐧𝐭 𝐆𝐚𝐩𝐬

…𝒑𝒓𝒊𝒗𝒂𝒕𝒆 𝒔𝒆𝒄𝒕𝒐𝒓 𝒖𝒓𝒈𝒆𝒔 𝒅𝒆𝒆𝒑𝒆𝒓 𝒓𝒆𝒗𝒊𝒆𝒘 𝒂𝒏𝒅 𝒕𝒊𝒎𝒆𝒍𝒚 𝒂𝒄𝒕𝒊𝒐𝒏 𝒂𝒔 𝒑𝒉𝒂𝒔𝒆 𝒕𝒘𝒐 𝒆𝒙𝒂𝒎𝒊𝒏𝒆𝒔 955 𝒓𝒆𝒈𝒖𝒍𝒂𝒕𝒐𝒓𝒚 𝒊𝒏𝒔𝒕𝒓𝒖𝒎𝒆𝒏𝒕𝒔

By Tashi Tshewang and Yeshi Dolma

The national effort to streamline regulations and improve the ease of doing business marked another important step this week as the Ministry of Industry, Commerce and Employment and the Cabinet Secretariat convened a high-level Business Regulatory Stakeholder Meeting in Thimphu. The meeting brought together senior government officials, close to 70 private sector representatives, and leaders of major industry associations. It served both as a progress update and a reminder that while reforms have advanced further than at any point in recent years, fundamental gaps remain.

Chaired by Lyonpo Namgyal Dorji, Minister for Industry, Commerce and Employment, the discussions delivered a clear message that the government is committed to reducing regulatory burdens that have long constrained economic activity. The meeting also underlined that partnership with the private sector is central to achieving this goal. Private sector leaders expressed cautious optimism. They acknowledged that the pace and breadth of the current reforms are the strongest seen so far, while also pointing to several areas that continue to inhibit enterprise growth.

The President of the national Chamber of Commerce and Industry, Tandin Wangchuk, captured both the appreciation and urgency that shaped the tone of the discussions. He said the private sector placed high expectations on the stakeholder platform because all parties had already recognised the need for regulatory clarity as a basis for economic strength. He also noted that the Minister had acknowledged the depth of the challenges involved in reforming long-standing regulatory practices, which he welcomed as a strong signal of government backing.

The President recalled that the reform process was initiated through a Cabinet directive issued in January 2024. The Chamber began work immediately, conducting sector wide reviews with support from experts and government officials. This initial phase identified 210 issues requiring intervention. While more than half have since been resolved, he said the remaining unresolved matters continue to affect businesses in meaningful ways. He added that collaboration with the Department, especially through the guidance of Dasho Tashi, had been instrumental and expressed hope that the same level of cooperation would guide the next stage of the reform.

He cited His Majesty’s guidance during the GMC interaction, where concerns were raised about the excessive layers of regulations that had made basic processes uncomfortable for citizens and businesses. He said this national concern helped create space for the current reform efforts and expressed confidence that with sustained collaboration, His Majesty’s vision and the government’s broader economic objectives could align.

Explaining the technical work completed so far, the Chamber President described how the 210 issues were reviewed through a series of tripartite meetings involving the Chamber, the Office of the Cabinet Affairs and Strategic Coordination and the Ministry. These consultations resolved 118 issues, leaving 56 pending. After further discussions, the Chamber validated many of the remaining issues and identified technical pathways to resolve 54 of them, while nine required additional follow up by the Office. Two issues and another 26 technical matters still require decisions.

He asked the Minister to help expedite action on these outstanding matters, stating that timely resolution would significantly improve the business environment. He urged all agencies to focus on unresolved issues rather than reopening matters that have already been settled. With Phase II approaching, where 955 regulatory instruments will be reviewed, he said the workload ahead is substantial and will require full participation from relevant agencies. Attendance at past meetings had been inconsistent and he emphasised that this must improve if the reform process is to succeed.

He also reminded participants that the private sector had previously been left out of earlier national planning processes, particularly during the Department of Planning, Budget and Performance exercise. That experience had undermined confidence. However, he said that during the audience with His Majesty on November 3, business associations were acknowledged, which renewed the sector’s motivation. He stressed that genuine inclusion strengthens the private sector’s ability to contribute to national goals.

Responding to the concerns, Lyonpo Namgyal Dorji presented a detailed account of what the government has achieved so far. During consultations, businesses initially raised 235 issues which, after validation, were narrowed to 210 actionable items. These included manpower constraints, tax matters, procurement rules, service delivery challenges, access to finance, market access, infrastructure and quality standards. He said 116 issues have been fully resolved, 59 remain under review and 38 have been submitted to the Cabinet, with some already under consideration.
He described the progress as evidence that the review and implementation process is ongoing and serious, shaped by continuous engagement with the private sector. He acknowledged the urgency expressed by businesses and assured participants that the government is acting accordingly.

In March this year, after assessing the status of the reforms, the Cabinet decided the review needed to go deeper. The Minister explained that the 210 issues pointed to systemic origins that often stemmed from unclear policies, overlapping Acts, ambiguous procedures or internal mechanisms created to avoid administrative liabilities. To address these structural concerns, the Cabinet instructed all ministries and agencies to compile a full list of regulations affecting business activity.

This work resulted in an inventory of 955 regulatory instruments, including Acts, rules and regulations, guidelines, standard operating procedures, executive orders, internal mechanisms and overlapping provisions. For the first time, officials now have a complete map of the rules governing economic activity. The Minister said Phase II will focus on streamlining, harmonising and rationalising this regulatory landscape.

He emphasised that the reform is not an effort toward deregulation. Regulations, he said, are essential to protect consumers, maintain fair competition, safeguard the environment and build investor confidence. The problem lies not in the number of regulations but in their inconsistency, duplication and lack of clarity. He added that multiple layers of regulation had accumulated over time as offices sought to avoid risk or audit concerns. If responsibilities are properly exercised, he said excessive layers should not be necessary.

With Phase II now beginning, he requested the private sector to provide specific and written feedback on each of the 955 instruments. He said that vague complaints will not allow officials to track progress accurately and asked agencies to justify each regulation they seek to retain. If a rule cannot be justified, he said, it should be reconsidered.

He noted that raising the private sector’s contribution to the national economy from the current 40 to 45 percent to above 60 percent in the next decade will require two critical interventions: improved access to finance and comprehensive regulatory reform. While the former requires fiscal space and alignment in the financial sector, he said regulatory reform lies squarely within the government’s control. He assured the meeting that the engagement platform will remain open and that private sector input is encouraged.

Additional perspectives were shared by representatives working at the ground level of the economy. A founding member of the Daga Cooperative said that strengthening agriculture could transform rural livelihoods. He said that although government attention to the sector has been strong, progress on the ground has been slower than communities expected. He argued that agribusiness and agro processing could generate significant employment if cooperatives receive targeted support and training. Mobilising and training hundreds of cooperatives, he said, would help bring fallow land back into use and reduce rural to urban migration.

He highlighted the value lost when raw goods are exported without processing. Two years ago, he said the country exported 1,200 metric tons of cardamom. If processed domestically, he said its value could have reached several billion ngultrum. He added that similar opportunities exist across many primary agricultural products and urged that these be addressed alongside the regulatory reforms.

Entrepreneur Ratna Bdr Tamang raised concerns about access to finance. He said banks remain the main source of credit but their conservative lending practices, which require collateral equal to the full value of loans, restrict opportunities for new and emerging businesses. He also highlighted challenges in the Procurement Rules and Regulations 2025. Under the current system, he said local suppliers receive only a 10 percent mobilisation advance for goods supply and even this requires a 100 percent unconditional bank guarantee. Meanwhile, when agencies procure from foreign companies or original equipment manufacturers, they can offer up to 100 percent payment against a guarantee. He asked why similar terms cannot be extended to domestic firms, arguing that equal treatment would support local enterprise growth.

As the meeting closed, the tone was broadly positive. Participants acknowledged that the reform effort has moved faster in the past eighteen months than at any previous period and that the process has become more inclusive and transparent. At the same time, private sector representatives were clear that although progress is real, significant gaps remain. The first phase has laid an important foundation, but the next phase will test whether momentum can be sustained and whether long-standing systemic issues can be addressed decisively.

For now, both sides remain aligned on the key objective: creating a regulatory environment that is predictable, clear and supportive of growth. As the country continues its economic transformation efforts, the success of Phase II will determine whether the current reform becomes a turning point or another effort that falls short of its promise.