Bhutan offers to host South Asian SAARC fund at Sri Lanka summit

Sri Lankan Prime Minister Ranil Wickremasinghe (2nd R) arrives to visit the site of a bomb attack at St. Anthony's Shrine in Kochchikade in Colombo on April 21, 2019. - A string of blasts ripped through high-end hotels and churches holding Easter services in Sri Lanka on April 21, killing at least 156 people, including 35 foreigners. (Photo by ISHARA S. KODIKARA / AFP) (Photo credit should read ISHARA S. KODIKARA/AFP/Getty Images)

August 3, 2008 (LBO) – The landlocked kingdom of Bhutan offered tax concessions to host a planned South Asia Association of Regional Co-operation (SAARC) development fund, at a meeting of the seven nation grouping’s leaders in Colombo. The SAARC development fund is to have a 300 million dollar initial capital which will be used to fund development projects in the region, officials said.

Bhutan’s prime minister Lyonchhen Jigmy Y Thinley said at the inauguration of a summit meeting Saturday that his country was willing to give “operational, tax and legal flexibility,” for a permanent secretariat for the fund to be hosted in Bhutan.

“My delegation attaches high importance to this institution as a means of engendering meaningful co-operation in many important areas and we are confident that the Fund will evolve into a viable and effective SAARC mechanism,” he said.

The 300 million dollar fund is tiny compared to the vast capital needs of the region.

In many countries of South Asia most of the government revenue is spent on vote-buying populist subsidies, and maintaining large public sectors.

When even this is not enough, governments dip into central bank financing (money printing) to give subsidies, causing high