The Momo Index

There is an honest way to measure a currency, and it does not need a single chart. You walk up to a momo stall, buy a plate, and ask what it cost when you were young.

The Economist has run a version of this since 1986. Its Big Mac Index prices the world’s currencies in hamburgers, on the logic that a good made the same way everywhere is a fairer yardstick than an official exchange rate. Bhutan has no McDonald’s. But it has momo — and momo does the job better, because here the dumpling is not a novelty. It is the everyday plate: the lunch a student, a clerk and a minister all eat.

So price the ngultrum in momo.

An index, not a statistical series: the 2003 momo price and entry salary are reconstructed from memory and the available pay references, not from a published pay scale of that year.

The plate has risen sixfold in roughly a quarter-century. On its own that is just inflation, and inflation is ordinary. The sharper number is the bottom row. Two decades ago a fresh graduate’s first month’s salary bought somewhere around 425 plates of momo. Today the same first paycheck — about Nu 33,500 gross for an entry-grade officer — buys closer to 280. Measured in dollars, that starting wage has risen. Measured in momo, it has fallen by about a third — and that holds whether you count gross pay or take-home, because at the entry grade the two sit only about a tenth apart.

Be honest about the size of the drop. Street food outruns the general price level — momo has run at roughly twice Bhutan’s overall inflation — so the true erosion sits in a band: about a third measured in plates of momo, nearer a fifth against the whole cost of living. The momo cut is the vivid version; the ~20% is the careful one. Both point the same way.

And the direction is the puzzle. By almost every visible measure, the Bhutanese who entered the workforce this century grew up in a richer country than their parents: electrified, connected, healthier, longer-lived, better-schooled. Yet the one number a person actually feels — what a first paycheck buys of the ordinary plate in front of them — went backwards. A whole generation inherited a wealthier nation and a thinner wallet at the same time.

That divergence is not a statistical illusion. It is the lived case for the flight to Australia. A young Bhutanese weighing whether to stay is not comparing GDP charts; they are comparing plates. A week of work abroad buys what months of work at home cannot — and the momo stall is where that arithmetic gets done, every lunchtime. The catalogue tracks the result in cold figures: a wage gap that pulls graduates abroad, a diaspora approaching one in ten, a second-largest Bhutanese city that sits in Australia. And the sharpest pull is not the size of the foreign wage — higher prices abroad eat much of it back — but its currency. A young Bhutanese leaves less to earn a bigger number than to save in money that holds its value, while every ngultrum set aside at home quietly melts. That is the rupee thread the whole economy is caught in, felt one paycheck at a time.

There is also a deeper reason the plate keeps shrinking, and it is not really local. The ngultrum is pegged one-to-one to the Indian rupee, and the rupee has spent the century losing value against the dollar. A currency that imports its monetary policy imports its erosion too. The exchange-rate cascade that economists draw in falling lines — the accidental currency bet Bhutan is structurally locked into — is, at the counter, simply this: the same coin, fewer momo.

The Big Mac Index was always half a joke and half a serious point: that the truest test of money is what it buys of something real. Bhutan’s version needs no translation. You do not have to read a balance of payments to know that the plate your first salary once covered some four hundred times now covers under three hundred. It is the one yardstick no one can argue with — because everyone has held it, warm, in their hands.