The highly and the lowly paid
September 19, 2011As the last of the living Buddhist societies in the world, Bhutan has unabashedly basked in the attention showered by the outside world. The country’s development philosophy of Gross National Happiness is being extensively marketed at international forums, and is being subscribed to by many remarkable thinkers around the globe.
At the core, as a philosophy, GNH carries the two immutable tenets of social equity and justice. And yet, the silent rumbles of inequality – particularly the yawning chasm in the income of the people at various levels – are begging to be quietened.
The talks are about the corporate sharks and the lowly private beggars, between who falls a long distance of Nu 145,000.
Today, the corporate heads in the country are paid high salaries. The list is led by the chairperson of Druk Holdwing and Investments (DHI). Most corporate CEOs earn more than the ministers. And even the working staff members in these corporations are paid much higher than their colleagues in other sectors.
And then there are those who live on a monthly income as low as Nu 2,000, which is Nu 1,000 below the national wage rate.
For a typical household, annual average cash income in 2010 was calculated at Nu 121,455 where non-monetized goods and services could fulfill a large part of household needs.
The 2010 GNH survey, however, found that average annual household cash income, excluding non-monetized goods and services that households produce, ranges from Nu 50,000 in Lhuentse to Nu 300,000 in Thimphu.
Against the backdrop of such levels of cash earning, the president of Centre for Bhutan Studies, Dasho Karma Ura, said a steep rise in the level of salaries in higher echelons of the government, particularly in the public corporations, will set a tendency for income inequality between the salaried people and the rest.
He said a good society, or a democracy, subscribes to shared norms necessary for removal of the problems that economic disparities produce. One of those shared norms is income equality, a value by which the past leaders lived, with modest pays and perks, while they oversaw the egalitarian spread of fruits of development.
It got slightly dented in the last three years because of the free market notion of rewarding oneself or rewarding people with high skills in profit-making organizations.
“However, revenue generation is not a good enough criterion because the functions and goals of organizations are different,” said Dasho Karma Ura. “Each agency has its own responsibility, not commensurate with revenue generation. There is no yardstick to measure what a lama, a teacher, or a doctor does in terms of money.”
Therefore, people should keep their entitlements sensibly down, said Dasho Karma Ura. He said pressing for one’s salary rise can come at the expense of
budget that can be used to establish public infrastructures and services. Already, about 39 percent of the government revenue is spent on pays and benefits of civil servants.
The finance secretary, Lam Dorji, said there are a lot of people in corporations drawing salaries more than the ministers. But they are functioning under different situations, bodies, and boards, he said. “I assume that they have taken into account the overall national interest and implications.”
He said Bhutan is a small economy where whatever happens in one sector has repercussions on the other. And when the other sector is not able to afford a raise, it creates disgruntlement among its employees.
The finance ministry had expressed its concern to DHI on the rise in corporate salaries. At present, Bhutan’s financial situation is not comfortable with about 40 percent of the total budget spent on pays and perks of government employees and an equal amount on their utilities.
Justifying high salary scales of corporate heads under DHI, its executive director, Damber Singh Kharka, said that CEOs are contract employees for a term of three years. Their contract can be renewed by their boards provided that they score more than 85 percent in their corporate level performance.
“They have no job guarantee. They have to deliver, and they need to be compensated well,” he said, adding that the CEOs also need to be paid well like their competitors in the market. People of such capability and experience need to be retained with good compensation, or just allow them to leave, said the executive director.
If the present crop of CEOs leaves, the companies they are heading will suffer, said Damber Singh Kharka. The profits will decline, the companies will be overtaken by their competitors, and the government will lose revenues. There were instances in the past when high performers in corporations left for greener pastures, which does not set a good trend.
The salary of the DHI chairman was fixed by the then interim prime minister and it has not changed since then, said the executive director. “His salary was already fixed in the appointment order. He was one of the first recruits of DHI.”
The CEO of Bhutan Telecom Ltd, Nidup Dorji, said that salaries of CEOs are based on what is expected of them in terms of revenue generation and opportunities they create in the companies.
“Compared to those in other countries, CEOs in Bhutan get peanuts,” he said. “Disparity might be there, but one should not forget to look at the worth [of the CEOs].”
Dasho Karma Ura, however, said Bhutan has to live within its own economic context, instead of following pernicious examples from abroad. There are nations where corporate employees took run away incomes and bonuses, even made their corporations broke, he said. “Scandalously, their governments rescued some of these companies.”
There are also nations that consider equity and equality as strong principles, and corporate leaders and high officials are not free to determine their own salaries.
He said, at the end, there are two routes to relatively greater equality: the first is to allow huge pay discrepancies, but tax high to redistribute income. The second is to achieve narrower pay differences in the first place.
He added, “There are clear evidences that the second option is better on many counts.”
By Sonam Pelden
16 Responses to “The highly and the lowly paid”
Leave a Reply
About Town
Nation
BO Forum Discussions
- Bhutan Observer discussion Forum • CABLE TV TO BE BANNED
- Bhutan Observer discussion Forum • BANNING DISH TV
- Bhutan Observer discussion Forum • Job of RO in Tsirang
- Bhutan Observer discussion Forum • Job of RO in Tsirang
- Bhutan Observer discussion Forum • Re: can we buy car now?
- Bhutan Observer discussion Forum • Re: Why so many misfortunes befall to Bhutanese?
- Bhutan Observer discussion Forum • Tobacco Control Act, should it be amended?
wow……………………where do they keep this much of money……we can’t even save in 3-5 years also.
DHI justifies the increase as an international norms and also as per the market. However, they should be mindful of the fact that Bhutan is a small country and cannot afford to compare its status to that of multi-billion dollars multinational corporation. I am also skeptical of what role does DHI have on profit making while various agency under its umbrella does all the business activities. Government should seriously look into the matter before government exchequer is broke like dasho karma ura mentioned
Wow!
I did not know that these people are withdrawing this huge amount. On top of this, I guess they also get some other benefits like mobile voucher.
I support Dasho Karma’s view that the difference should be reduced.
Bhutan tourism industry officially began in 1974 with its first 287 tourists that year. Being a landlocked country with limited natural resources tourism was introduced in Bhutan with an aim to generate the much needed foreign exchange revenue and for the over all development of the country through the revenue generation.
Wow! they are so lucky chaps that the amount they earns in a month is an amount that some of us can not earn through-out our life-span. The difference is as huge as the author has already expressed.
Who made these vast differences is we human beings ourselves due to want of identicalities in anything we do and possess.
Being, I the follower of Buddha Dharma, I always start my daily prayers with THE FOUR IMMEASURABLES:
May all beings have happiness and the causes of happiness.
May all beings be free from suffering and the causes of suffering.
May all beings rejoice in the well-being of others.
May all beings live in peace, free from greed and hatred.
So Lets all Pray that my prayers are answered to benefit all sentient beings.
They have good “KARMA”. The law of karma says that if you have done good in previous life, you will experience good and if you have done evil, you will experience evil in this present life. So it is their previous KARMA that they are enjoying at present.
So in order to enjoy like them in your next life, please do good to others and all at present life without too much greed and hatred.
Some are over-fed and some still in poverty. How can we avoid this differences of some can afford a golden shoes and where some strives for daily meals.
Generally speaking, the world leaders must come together to level this huge differences as they only can do if they want to, as it is a human made difference by their greeds.
May all hungers be fed with sufficient foods.
There is no value addition whatsoever by having DHI on top of all these companies and drawing such hefty salary is complete misnomer and day light robbery.
When I pray I always pray that there be no indifferences within this globe & space and may all sentients beings be equal in the eyes of Almighty God and be they be happy and well.
I pray that my prayers be worked to benefit all sentient beings without any tiny indifferences.
The salaries CEO’s in Bhutan are get are justified. The priceless brain and sleepless nights they put in to generate revenue for the country and its people is a bigger contribution. And nu. 150000 is a peanut salary for a CEO.
CEOS should be given certain percent of the profit they make .
Chairman, Lynpo Om Pradhan’s salary is not even USD3500.00 – Come on – he left UN with USD10,000.00 net monthly salary to serve his country, King and People.
ddddd……what the hell are u talking….ur statement “CEOS should be given certain percent of the profit they make ” is ridiculous and of course stupid!….u think, this companies belong to ceos? If the company is conceptualized, built and operated by one individual or group, then, they deserve to get hefty amount. But in Bhutan, all these state owned companies are just handed over by state when it starts generating revenue…..for example, all power sector companies make huge profit and they were just handed over by authorities after the construction…. they are just milking from milking cow handed over by someone.,,…CEOs elsewhere goes through sleepless night as they have to be innovative, up-to date with market situation to survive in the cut throat competition…..here, CEOs are out of country for more than a month on study tour and yet the companies are making profit, simply coz most of the companies are monopoly in nature…..
Having said this, i don’t mean they don’t deserve more- they deserve slightly more than civil servant but not so huge like today….The basis for deserving more is, working hours in corporations are move compared to civil servants-this justifies the statement ” equal pay for equal work”….Besides, most of these companies are service oriented and they will have to attend duties in odd hours.
so, people in these state owned companies should be paid slightly higher than civil servants but certainly not so hefty like today. And pls don’t compare with CEO elsewhere-there is a sea of difference between those CEOs and our CEOs here!
my thought
Again those who are highly paid are entitled to free govt. quarters. And those lowly paid have to look for private costly quarters that of the rents which are higher than their earning.
We could not stop raising of house rents and prices of goods and also could not do anything to atleast bring to equality. Some enjoy and some suffer. Can we really achieve GNH like this. Simply telling “Take care of one minds” isn’t enough and appropriate.
If you really seek happiness, go under the tree, sit there and meditrate for life-long without looking for comfortable home, tasty food and sweety drink. Do not think of sinny wealths and worldly pleasures.
You can achieve true happiness like this if you can. Otherwise don’t simply say tame your mind. It is easier said then done. But know where shoe pinches.
Those who get more are LUCKY ONES. Those who get less are UNLUCKY ONES. This is the difference between lucky and unlucky ones.
Untill and unless the human greeds exists, we can not do anything of equity and justice for all. We can talk but cannot act in reality. Even the GODs could not do this and left upto the individuals luck and Karma.