th 14 Round Table Meeting Enhancing Happiness and Sustainable Development through Partnerships
Report on the Proceedings of the 14th Round Table Meeting
Prepared by the Joint Task Force (JTF) for the 14th RTM Royal Government of Bhutan and United Nations System in Bhutan
CONTENT
I. INTRODUCTION...... 1 II. SUMMARY OF THE 14TH RTM PROCEEDINGS ...... 3 Day One: Inaugural Session ...... 3 Inaugural Address by the Prime Minister of Bhutan ...... 3 Introductory Remarks by the UN Co-Chair ...... 4 Days Two and Three: Thematic Sessions ...... 5 Introductory Remarks by the RGoB Co-Chair ...... 5 Thematic Sessions ...... 6 Side Events ...... 6 Concluding Session ...... 7 III. THEMATIC DISCUSSIONS ...... 8 SESSION 1: GROSS NATIONAL HAPPINESS – REIMAGINING DEVELOPMENT FOR HAPPINESS AND WELLBEING ...... 8 SESSION 2: NATIONAL DEVELOPMENT PRIORITIES...... 18 12th Five Year Plan and SDG Integration ...... 18 SESSION 3: CLIMATE AND DISASTER RESILIENT DEVELOPMENT ...... 25 SESSION 5: STATE OF THE ECONOMY AND DEVELOPMENT FINANCING ...... 33 (1) Bhutan’s Macroeconomic Performance and Outlook ...... 33 (2) Economic Diversification ...... 37 SESSION 6: LAST MILE CHALLENGES AND OPPORTUNITIES...... 43 Development Challenges, Opportunities, and Continued Partnership ...... 43 IV. DEVELOPMENT PARTNER STATEMENTS...... 47 SESSIONS 4 AND 7: PARTNERSHIPS ...... 47 Summary of Commitments and Recommendations ...... 47 V. CONCLUSION ...... 60 ANNEXURES ...... 62 ANNEX 1: PROGRAMME FOR THE 14TH RTM ...... 62 ANNEX 2: INAUGURAL ADDRESS BY THE HONOURABLE PRIME MINISTER OF BHUTAN ...... 66 ANNEX 3: INTRODUCTORY REMARKS BY THE RGOB CO-CHAIR FOR THE 14TH RTM...... 72 ANNEX 4: STATEMENTS SUBMITTED BY DEVELOPMENT PARTNERS ...... 76 Annex 4.1: Statement by Asian Development Bank (ADB) ...... 76 Annex 4.2: Statement by Australia ...... 78 Annex 4.3: Statement by Austria ...... 81 Annex 4.4: Statement by Bangladesh ...... 83 Annex 4.5: Statement by Bhutan Foundation ...... 86 Annex 4.6: Statement by Bhutan Trust Fund for Environmental Conservation ...... 88 Annex 4.7: Statement by the European Union ...... 89 Annex 4.8: Statement by Finland ...... 91 Annex 4.9: Statement by Green Technology Center ...... 93 Annex 4.10: Statement by HELVETAS ...... 94 Annex 4.11: Statement by ICIMOD ...... 95 Annex 4.12: Statement by India ...... 97 Annex 4.13: Statement by Indonesia ...... 99 Annex 4.14: Statement by International Finance Corporation (IFC) ...... 101 Annex 4.15: Statement by International Monetary Fund (IMF) ...... 103 Annex 4.16: Statement by International Union for Conservation of Nature ...... 105
Annex 4.17: Statement by Ireland ...... 107 Annex 4.18: Statement by Israel ...... 109 Annex 4.19: Statement by Japan ...... 111 Annex 4.20: Statement by Korea Development Cooperation Agency (KOICA) ...... 113 Annex 4.21: Statement by Kuwait ...... 115 Annex 4.22: Statement by Norway (NORAD) ...... 116 Annex 4.23: Statement by SAARC DEVELOPMENT FUND ...... 118 Annex 4.24: Statement by Save the Children International ...... 119 Annex 4.25: Statement by Singapore ...... 121 Annex 4.26: Statement by Slovenia ...... 123 Annex 4.27: Statement by SNV, Netherlands Development Organisation ...... 124 Annex 4.28: Statement by Thailand ...... 125 Annex 4.29: Joint UN Statement ...... 128 Annex 4.30: Statement by the World Health Organisation ...... 135 Annex 4.31: Statement by the World Bank ...... 138 ANNEX 5: CLOSING STATEMENT BY THE UN RESIDENT COORDINATOR ...... 141 ANNEX 6: CLOSING STATEMENT BY THE SECRETARY, GNH COMMISSION, RGOB ...... 143
I. Introduction
The Royal Government of Bhutan (RGoB) held the 14th Round Table Meeting (RTM) from 12th to 14th March 2019, coinciding with the beginning of the 12th Five Year Plan (FYP) and at an important point in Bhutan’s development journey.
With the country set to graduate from the United Nations (UN) Least Developed Country (LDC) category by 2023, the 12th FYP period (2019-2023) is considered critical to ensuring that development gains to date are consolidated, that last mile challenges are overcome, and that progress towards achieving the 2030 Agenda for Sustainable Development and its 17 Sustainable Development Goals (SDGs) is sustained.
The 14th RTM was therefore geared towards apprising Bhutan’s development partners on its socio-economic achievements and challenges; and on the way forward in the form of the 12th FYP, including efforts to strengthen and broaden partnerships for its effective implementation.
The Honourable Prime Minister of Bhutan, H.E. Lyonchhen (Dr.) Lotay Tshering, inaugurated the event, which was jointly organised by the RGoB and the United Nations (UN) System in Bhutan. The RTM was co-chaired by H.E. Lyonpo Dr. Tandi Dorji, Minister for Foreign Affairs, and H.E. Mr. Achim Steiner, UNDP Administrator and UN Under-Secretary General.
Close to 200 participants attended the meeting, including representatives of Bhutan’s international and resident development partners, Government ministries, constitutional bodies, Parliament, political parties, autonomous agencies, Local Government, Civil Society Organisations (CSOs), and private sector associations. Of this, 37 delegates represented 23 resident development partner agencies, and 69 delegates represented 22 bilateral and 19 multilateral development partners based in the region and internationally.
Background, Theme and Objectives
RTMs were initiated in the early 1980s and are usually held twice over the course of a five- year plan period. The main purpose of these meetings has been to serve as an important forum for policy dialogue and aid coordination, as well as to provide an opportunity for the RGoB and development partners to discuss common interests and to strengthen cooperation.
The theme of the 14th RTM was “enhancing happiness and sustainable development through partnerships”. The basis for this theme comes from Bhutan’s development approach, which is guided by Gross National Happiness (GNH), and also from the SDGs, which continue to be integrated into the national development framework.
It also stems from Bhutan’s appreciation of the development cooperation and support that has facilitated its socio-economic progress, and the wish to strengthen foundations for multiple levels of partnership towards sustained achievement of GNH and the SDGs.
Therefore, the 14th RTM was held with the following objectives:
i. To sensitise development partners on the 12th FYP: the last plan as an LDC to address the last mile challenges and consolidate development gains.
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ii. To take stock of Bhutan’s developmental progress, challenges and future priorities, including smooth graduation. iii. To acknowledge and appreciate the contribution of development partners, while also assessing remaining financing gaps, and strengthening foundations for continued and future partnerships in Bhutan’s socio-economic development; iv. To leverage the opportunity presented by the 2030 Agenda and the SDGs to set out a joint vision of Bhutan’s socio-economic development through effective partnerships; and
v. To explore possible financing windows and opportunities for Bhutan in its efforts on the path of Sustainable Development and in line with the Addis Ababa Action Agenda.
Key documents prepared for the RTM—to provide the technical backdrop for dialogue with development partners—include a concept note and a background paper detailing Bhutan’s socio-economic progress and challenges. These and other reading resources can be accessed at the 14th RTM website: https://rtm.gnhc.gov.bt. The programme for the RTM is provided in Annex1.
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II. Summary of the 14th RTM Proceedings
Day One: Inaugural Session The Inaugural Session for the 14th RTM was held on the evening of 12th March 2019, at Hotel Taj Tashi in Thimphu, Bhutan. The meeting was formally opened by the Honourable Prime Minister of Bhutan, H.E. Lyonchhen (Dr.) Lotay Tshering, following a performance of Bjipi Pawo by the Royal Academy of the Performing Arts (RAPA), and the offering of Marchang by the Thimphu Dzongdag.
Inaugural Address by the Prime Minister of Bhutan Lyonchhen welcomed all delegates and expressed special appreciation for the presence of the UNDP Administrator and UN Under-Secretary General, Mr. Achim Steiner, who is the second UNDP Administrator to visit Bhutan in 46 years.
Paying tribute to GNH and the wise leadership of Bhutan’s monarchs—due to which the country has been pursuing development in a holistic, inclusive, sustainable and responsible manner—Lyonchhen also expressed appreciation for the generous support and goodwill of development partners. Without these critical factors, Bhutan would not have achieved the significant gains in key human development indicators, alongside the robust economic growth that it enjoys today.
As a result, the 12th FYP would be the last Plan that Bhutan would implement as a Least Developed Country (LDC), with its effective graduation from LDC status set for December 2023. However, Lyonchhen expressed concern that unless the 12th Plan is approached strategically and is well-implemented, Bhutan may end up “behaving like a rich country, when we are actually very poor.”
Despite many successes, Bhutan still had much to do, to reach the unreached and to ensure that no one is left behind. LDC graduation would be meaningless unless the most basic needs of all Bhutanese are met, including equitable access to quality drinking water, livelihood opportunities, quality healthcare and education, to name a few. Discrepancies in policy and practice have to be addressed, as illustrated by the need to provide quality healthcare (including free basic healthcare) when only three percent of the national budget is allocated to the sector.
Bhutan’s economic vulnerability—stemming in part from its high dependence on climate- sensitive sectors, especially hydropower, for domestic revenue generation—remained a concern. The agriculture sector, although employing the largest proportion of the Bhutanese labour force, continues to be characterised by low productivity levels.
Lyonchhen observed that while the increases in Bhutan’s Gini index indicates a widening gap between the rich and the poor, the most worrying factor is that this trend coincides with the last ten years of democracy in Bhutan. This, Lyonchhen said, warrants that elected Governments reflect carefully on what needs to be done differently.
Several fiscal reforms are therefore being explored. Efforts to improve the ‘ease of doing business’ and to encourage private sector growth include the possibility of adopting an additional criterion i.e. one on “fairness in doing business”. Further, to facilitate the growth of a robust private sector, a private sector development committee was recently established.
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Meanwhile, as the country remains highly vulnerable to the impacts of climate change, Lyonchhen said that Bhutan, for its part, continues to pursue sustainable socio-economic development, rather than simply opting for rapid economic growth. To facilitate such choices, the GNH policy-screening tool—which is an environment-sensitive screening tool applied to policies and programmes in the country—is taken very seriously, even though it may sometimes impede economic benefits.
Thus, the Honourable Prime Minister highlighted some of the key social, economic, environmental, and governance concerns and strategies for the 12th FYP—thereby laying the ground for the deliberations of the 14th RTM. The full text of the inaugural address is provided in Annex 2.
Introductory Remarks by the UN Co-Chair H.E. Mr. Achim Steiner, UNDP Administrator and UN Under-Secretary General, and Co-chair for the 14th RTM, said that this meeting is being held at a critical time—in the sense of choices to be made with Bhutan’s upcoming graduation from LDC status and the opportunities presented by the 12th FYP. While acknowledging Bhutan’s wish to meet remaining basic developmental needs, its aspiration to take the GNH vision further into the development of its economy and society was also emphasised.
From having emerged as a counter-proposition to Gross National Income (GNI) as the dominant but simplistic measure of development, GNH itself has matured in terms of its application. This was apparent from its democratic processes, and generally from the choices that Bhutan has made. As had also been noted during the release of the National Human Development Report: 10 Years of Democracy in Bhutan earlier in the day by the RGoB and the UN, the emergence of GNH happened simultaneously with its democratic transition, and this had not been coincidental.
His Excellency referred to Bhutan as a pioneer, having pushed the boundaries of thinking with GNH—from understanding development as more than simply economic progression, to being a kind of aspirational metaphor or a vision, to now being a reference point in developmental thinking, and increasingly so in development planning. In the context of climate change as well, Bhutan stood as an example, as a net sequester of carbon, while the world at large was running out of time to address this global challenge.
Bhutan’s development pathway provided an extraordinary contrast in a world where the growth of capital and wealth does not necessarily create happiness; where sometimes countries amongst the fastest growing economies have some of the most intense internal turmoil; and where sometimes the extraordinary accumulation of wealth happens alongside extraordinary destitution and poverty.
Mr. Steiner thus paid tribute to Bhutan’s development approach, highlighting its importance in the global development discourse. As had been described by the former UN Secretary General, Agenda 2030 is “a declaration of inter-dependence”. As such, Agenda 2030 and the SDGs are closely aligned with GNH.
Therefore, within the broader context of development, LDC graduation is to some extent an arbitrary milestone—one that should not automatically define the nature of relationships cultivated over so many years, and that have become part of Bhutan’s development journey. Beyond graduation, Bhutan’s journey would entail its further maturing as a nation, as a community, and as a member of the international community. In this respect, and also in the 4 | P a g e
context of difficult challenges to be addressed, Mr. Steiner reiterated the UN family’s commitment and friendship.
Climate change is perhaps the most clear and present danger—a threat that if not managed collectively would be an unmanageable challenge for Bhutan. The challenge of youth unemployment is another, which as the Honourbale Prime Minister had emphasised, requires a re-think on the kind of education and skills development, and other opportunities for Bhutan’s burgeoning youth population. The creativity and ability of young entrepreneurs and the start- up generation, in Bhutan and elsewhere, encourages a deeper look into the potentials that exist within the country.
In its 2018 Voluntary National Review report to the UN—which presents Bhutan’s GNH approach in the context of the 2030 Agenda and the SDGs—the RGoB had identified the need for building economic resilience, sustaining environmental resilience, developing human capital, and ensuring gender equality. Indeed, Mr. Steiner said, Bhutan’s economic transformation lies within its social transformation, and its ability to maintain its leadership in environmental sustainability.
In closing, His Excellency expressed appreciation for the inspiration provided by the Bhutanese leadership, led by Their Majesties, the Government, leaders in civil society, academics, and others that have contributed to Bhutan’s development. The 14th RTM, he said, is an opportunity to provide further affirmation that the partnerships and friendships formed as a part of this journey would continue with equal, if not greater, vigour.
Days Two and Three: Thematic Sessions Introductory Remarks by the RGoB Co-Chair H.E. Lyonpo (Dr.) Tandi Dorji, Minister for Foreign Affairs and RGoB Co-Chair for the 14th RTM, welcomed delegates and participants to the thematic deliberations of the RTM, which were held at the National Convention Centre in Thimphu on 13th and 14th March. Lyonpo remarked on Bhutan’s good fortune to be guided by wise and compassionate monarchs, and to have the strong support of development partners—both of which continue to be critical factors in the country’s progress since the inception of planned socio-economic development almost six decades ago.
Lyonpo recalled Bhutan’s long-held national goal of reducing dependency and attaining self- reliance. He said that while the country is far from being self-reliant, its progression to graduate from LDC status in 2023 is deliberate and a matter of great satisfaction. The 12th FYP, being its last plan as an LDC country, must be well-resourced so that graduation is sustainable and not just symbolic.
Lyonpo highlighted that with about eight percent of Bhutanese—mostly in far-flung areas— still living in poverty, much remains to be done to narrow the gap between rich and poor. Among other measures, ensuring equitable access to quality health and education services is critical, which in turn demands higher resources for these sectors.
The 12th Plan would be Bhutan’s most ambitious plan to date, with an outlay of Nu. 310 billion (4.43 billion USD). Out of this about 70 percent would be financed through domestic resources, and 20 percent through external grants—bringing the overall fiscal deficit in the 12th FYP to 10 percent or Nu. 29 billion (415 million USD). The Government would therefore look into implementing tax reforms as one of the means to increase domestic revenue generation.
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Lyonpo emphasised the need to work together, and the need for international support in addressing climate change. Bhutan remains vulnerable, with two of its most important economic sectors i.e. hydropower and agriculture highly susceptible to climate change impacts. Its economic vulnerability is further heightened as a landlocked country facing challenges with connectivity. Its private sector remains weak and youth unemployment high.
At the same time, Bhutan as a small country was humbled that the global community found inspiration in its development approach. Guided by GNH, it did not take the easier path of pursing short-term economic gains as that would have led to irreversible damage to the vitality of its culture, environment and communities. By giving balanced importance to a much wider set of criteria for progress since the early years of development, Bhutan has been a quiet pioneer in questioning the very purpose of development. Bhutan had therefore been honoured to join the international community, in adopting the SDGs in 2015 as the new global development agenda.
Lyonpo underscored the importance of partnerships for sustainable development, with the effective implementation of the 12th FYP hinging on coordination, consolidation, and collaboration across all sectors and development actors in the country. Foundations for broader partnerships with the international community would also continue to be strengthened. In addition, prospects for integrated and innovative financing mechanisms would be explored, as a means to supplement financial requirements while also driving positive outcomes across GNH-led key result areas and the SDGs.
Lyonpo concluded by once again expressing deep gratitude for the role played by development partners, past and present, in Bhutan’s development journey—while also looking ahead to continued cooperation and friendship in the 12th FYP and beyond. The full text of the Co- Chair’s introductory remarks is provided in Annex 3.
Thematic Sessions Delegates and other participants were briefed on multiple aspects of Bhutan’s socio-economic development through a series of seven sessions, broadly structured around the RTM theme of “enhancing happiness and sustainable development through partnerships”. The sessions were co-chaired by various RGoB and development partner representatives, and consisted of two panel discussions, four presentations, and the delivery of statements by 31 development partners.
The thematic sessions were on: Gross National Happiness – Reimagining Development for Happiness and Wellbeing; National Development Priorities; Climate and Disaster Resilient Development; State of the Economy and Development Financing; Last Mile Challenges and Opportunities; and Partnerships. These sessions were highly interactive and witnessed a vibrant exchange of views.
A detailed summary of each of the panel discussions, presentations and ensuing discussions is presented in section III of this report, while key aspects of development partner statements are presented in section IV.
Side Events Side events were held on the grounds of the National Convention Centre. These showcased local products, initiatives and innovative ideas by various government, non-government,
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community, and civil society entities. The events were opened mid-morning on 13th March by the RTM Co-Chairs, H.E Lyonpo (Dr.) Tandi Dorji and H.E. Mr. Achim Steiner.
Participating agencies included the Department of Disaster Management (DDM), Ministry of Home and Cultural Affairs (MoHCA); Department of Industry (DoI), and Agency for the Promotion of Indigenous Crafts (APIC), Ministry of Economic Affairs (MoEA); Ministry of Agriculture and Forests (MoAF); National Environment Commission; ICIMOD; World Wildlife Fund (WWF); UN Country Office, Bhutan; Tarayana Foundation; One Gewog One Product (OGOP) Project; Menjong Sorig Pharmaceuticals Corporation Limited; Bio Bhutan; and SABAH Bhutan.
A Global Live Stream Special Dialogue on “Rethinking Development: Advancing Human Wellbeing and Protecting the Planet” was held in the evening on 13th March, at the Royal University of Bhutan (RUB) conference hall in Thimphu. It featured the UNDP Administrator and UN Under-Secretary-General, Achim Steiner, in conversation with former Secretary of the Ministry of Information and Communications (MoIC), Dasho Kinley Dorji. The event was organised by the Royal Institute for Governance and Strategic Studies (RIGSS) in Phuentsholing, in partnership with UNDP Bhutan.
Concluding Session The 14th RTM came to a successful close by late afternoon, 14th March, with concluding statements delivered by the Secretary of the GNH Commission, Mr. Thinley Namgyel, and the UN Resident Coordinator, Mr. Gerald Daly. The two speakers highlighted some of the key takeaways from the meaningful engagement and deliberations of the past three days, and expressed appreciation to the 14th RTM co-chairs, the various session co-chairs, panellists and presenters, and all delegates and participants. Full texts of the two concluding remarks are provided in Annex 5 and Annex 6.
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III. Thematic Discussions
The thematic sessions of the 14th RTM began on 13th March with a panel discussion on GNH - Reimagining Development for Happiness and Wellbeing, followed by a presentation on the 12th Five Year Plan and SDG Integration, and another panel discussion on Climate Change and Disaster Resilient Development. The fourth session, on partnerships, saw the delivery of statements by five development partners.
On 14th March, the fifth session consisted of two presentations, one on Bhutan’s Macroeconomic Performance and Outlook and the other on Economic Diversification. A presentation on Development Challenges, Opportunities, and Continued Partnership was made in the next session. The rest of the attending development partners delivered their statements during the seventh/last session of the RTM.
Copies of all power point presentations can be accessed from the RTM website: https://rtm.gnhc.gov.bt. Session 1: Gross National Happiness – Reimagining Development for Happiness and Wellbeing
Panel Discussion on GNH - Reimagining Development for Happiness and Wellbeing
Moderator: Dasho Karma Tshiteem, Chairperson, Royal Civil Service Commission
Panellists: 1) Dasho Karma Ura, President, Centre for Bhutan and GNH Studies 2) H.E. Mr. Achim Steiner, UNDP Administrator and UN Under-Secretary General 3) Dr. Sabina Alkire, Director, Oxford Poverty & Human Development Initiative 4) Aum Chime P. Wangdi, Secretary General, Tarayana Foundation, CSO
The objective of this session was to introduce Bhutan’s GNH vision, to discuss how its development processes and outcomes are shaped by it, and thereby provide the philosophical and conceptual foundations for subsequent sessions of the RTM.
Providing a brief introduction to GNH, the moderator Dasho Karma Tshiteem said that the future of a nation cannot be left to chance. As His Majesty the King has said: “The future is neither unseen nor unknown, it is what we make of it”. And that is what GNH has been for Bhutan i.e. a vision of what we want, a nation where people fulfil themselves with peace and happiness, and a philosophy with ensuing values to guide actions to achieve this vision.
Recalling the origins of the GNH concept, when His Majesty the Fourth Druk Gyalpo in the 1970s expressed that “GNH is more important than GNP”, it was at the time a radical approach. Paraphrasing the poet Robert Frost, Dasho Tshiteem remarked that Bhutan had taken “the road less travelled”, and that had “made all the difference”.
Guided by this holistic and balanced approach, Bhutan was able to avoid some of the ails of development common elsewhere i.e. great inequities, marginalisation of large sections of
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society, disappearing culture and traditions, fraying social fabric, environmental degradation, abject poverty, poor governance, rampant corruption, to name a few.
Built on four pillars1, Bhutan’s approach to GNH has been to leave the responsibility of happiness to individuals, while drawing policy and programme attention to areas requiring intervention. As such, the GNH Index was formulated to guide and facilitate Government in the creation of favourable conditions across nine areas2, to enable the pursuit of happiness.
Dasho said that the UN’s successful launch of the SDGs is a quantum leap from the Millennium Development Goals (MDGs), holding great promise for global sustainable development. With their more holistic outlook, there is clear commonality between GNH and the SDGs. Based on the conviction that the global development agenda requires a re-think and reorientation vis-à- vis the purpose of development, Bhutan has made significant effort to share the ideas of GNH beyond its borders. Therefore, Bhutan has welcomed the SDGs and is happy to champion it.
Despite tremendous gains in development—from being one of the poorest countries in the world in the 1960s to reaching LDC graduation today—Bhutan continues to face a number of valid concerns, mainly on account of its smallness and geography. These will not go away and therefore the resulting vulnerability is something that Bhutan will constantly have to grapple with. Significant challenges remain especially on the economic and employment front. In this respect, the conversations around LDC graduation and the phasing out of technical and financial support, as well as reduction in development partnerships, has become a growing concern in policy circles as well as for people in the streets and in the villages.
The first panellist, H.E. Mr. Achim Steiner, was invited to share his views on Bhutan’s contribution to the global discourse, on how GNH and the SDGs converge, and the prospects for partnerships to achieve these goals together.
Remarking on the beautiful summation offered through His Majesty the King’s quote—that the future is not unknown, it is what we make of it—His Excellency remarked on the similarity of the purpose and outlook of the UNDP with that of GNH.
Mr. Steiner said that a profound period of transformation is underway in the future of development—disruption on the one hand; extraordinary opportunities on the other; but also, a time in which the ability of communities, nations and societies to decide on the pathways to pursue was severely compromised. Communities around the world are experiencing a crisis of leadership, lack of confidence in governance and economic leadership, as well as inequality, environmental crisis, and other manifestations of the failure of development over the decades.
While some still consider the future of development to be shaped by the largest economies, what matters most today is the ideas, the values, and the leadership that unites people for a common purpose. It is no accident that purpose-led transformation has now gained importance—as exemplified by the considerations given to the values and characteristics of a company over its salaries, by prospective employees.
1 The four pillars of GNH are sustainable and equitable socio-economic development, conservation of the environment, preservation and promotion of culture and traditions, and good governance. 2 The nine domains of the GNH index are living standards, cultural diversity and resilience, community vitality, ecological diversity and resilience, good governance, time use, psychological wellbeing, health, and education. 9 | P a g e
The future of development, being re-defined now, is driven by factors beyond our control, but human ingenuity allows these so-called externalities to be controlled. The question now is about how to re-invent our economies, our societies, and the way we collaborate with one another, into concepts that allow governments to make decisions on behalf of their people.
While inequality, environmental exploitation and the lack of sustainability have all been inevitable prices of development in the 20th century, nations across the world are now converging to fight on similar challenges. The idea of singular drivers just does not hold up in this 21st century.
Mr. Steiner said that the adoption of the SDGs in 2015 had been counterintuitive in some ways. Nations came together and were able to frame an agenda for development and cooperation, at a time when geopolitical tensions around the world were re-emerging. In doing so, they were able to draw an entirely different picture of what matters in the future of development.
Bhutan, meanwhile, had already articulated a vision for development outcomes that speaks more accurately to human nature and psychology. And that has been the first point of alignment between GNH and the SDGs i.e. a recalibration of what needs to be considered in the future of development outcomes.
The GNH concept has gone through a process of maturing—from a value- and a purpose-led vision into a developmental paradigm, and further into assessment tools to gauge policy impacts across nine domains. Similarly, the processes for the SDGs are unfolding, not as a religious dogma or global truth, but as a way of having a conversation on what matters in development.
The World Economic Forum in its 2019 risk report identified environmental, economic and social risks as the top three risks. This underscores a clear need for an evolutionary process on these three fronts, with concepts maturing into a different reality. Bhutan through its GNH approach, and the UN system through the SDGs, are both seeking to re-define the purpose, values, means and choices in development.
Mr. Steiner expressed that the greatest things in human history does not arise from the wealthiest, the most powerful, or the biggest. Sometimes the most disruptive, far-reaching ideas emerge out of a community or a society that has the vision, the cohesion, and a sense of purpose that inspires. In this respect, Bhutan offers a sense of opportunity. And this RTM, therefore, was as much about what happens in development in Bhutan as it was for those in the international development community—to seek inspiration, ideas, and also leadership from the way Bhutan defines its development path.
Therefore, as reinforced by the moderator, both GNH and the SDGs has brought sharper focus on articulating what matters most in development.
Dr. Sabina Alkire was invited to share her insights on metrics that best suit an egalitarian society—an outcome that GNH aspired to—and on the value added by the multi- dimensionality of the GNH development vision, philosophy and practice.
Dr. Alkire reiterated the previous speaker’s point that both the tremendous gains and challenges of Bhutan are also, in a sense, a microcosm of what countries are looking for in the SDGs era. Bhutan is a pioneer not only of GNH but also of the Multidimensional Poverty Index (MPI), having launched its national MPI in 2010—one of the first countries to do so.
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With the value of equality requiring a particular care for those at the bottom levels of wealth, Bhutan’s MPI rate has seen a sharp reduction i.e. halving it within five years, which is a much greater reduction than required by the SDGs.
Bhutan’s metrics and their links to policy are of interest to others around the world. With more countries adopting the MPI, global interest in Bhutan’s performance in this measure—which includes three of the nine GNH domains—is growing. Some countries are also adopting the GNH index, with some adjustments to suit their contexts, such as by replacing the culture domain with personal security.
Dr. Alkire described the GNH metrics as creative. The GNH Index can be disaggregated by gender, age, area, and other variables; and it can provide a picture of the composition of poverty. The GNH index captures improvements in GDP—a necessary aspect of GNH—while also capturing a wider set of indicators. This has been useful in creating a conversation for what matters in development.
In terms of inequality, these metrics also provide a multidimensional look at the inequality of GNH, which went down slightly between 2010 and 2015. Inequality (the Gini) in 2010 stood at 0.0916, as compared to 0.876 in 2015 i.e. GNH had grown and GNH Gini had fallen slightly. The 2nd GNH Survey Report showed that progress in GNH since the first survey in 2010 was driven by progress in living standards, and in health and education. It also showed that there are other areas requiring support, such as psychological wellbeing or feeling of belongingness, driglam namzha, and contributions of time and resources to community.
Such findings illustrate avenues for linking policy to a broader and more coherent set of metrics; as well as the opportunities to work on addressing challenges and ensuring policy linkages based on the nine domains. Bhutan is an example for others, as it offers legitimacy for such metrics, which is not always the case in other countries even as the need to do so is increasingly being recognised.
In closing, Dr. Alkire quoted Bhutan’s former Prime Minister, who had said that “measures are like eyes, they help us to see things and help bring matters into focus”. She said that Bhutan is a pioneer in metrics, both in poverty and in GNH. It is creative, and is asking the right questions. Going forward in the SDG era, this is another small but disruptive experiment that offers creativity for others in the global community.
The moderator commented that eventually, in development discourse, the real contest is a contest for ideas; and the innovative work that Bhutan is doing could provide the evidence that will hopefully shift the conversation and change the trajectory of development practices.
The next panellist, Aum Chime P. Wangdi was invited to share the experiences of Tarayana Foundation—a CSO working closely with the grassroots as well as with the Government—on key challenges and issues in the actual implementation of GNH, based on first-hand accounts of people living on the margins.
Aum Chime expressed appreciation to the Government for consciously expanding the civic space wherever possible, including in this RTM. Bringing civil society on as partners is greatly appreciated by the CSO community. With multi-dimensional poverty primarily a rural occurrence in the Bhutanese context, Tarayana has been working with more than 300 villages across all 20 districts. Most of these are far-flung rural communities located in mountainous terrains.
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Through their interactions, Tarayana understood that local communities are fiercely independent and dignified. In taking development interventions to them, it is important not to ruffle their dignity, and to ensure that they are taken on board right from the planning stages. This is critical, because often what communities need and want are contrary to the assumptions made by development planners.
For development interventions to remain useful, adequate dialogues are required between policy-makers, planners and communities. Working with the grassroots has made it clear that communities do not just expect handouts, but are more appreciative of “hand-ups” i.e. to be engaged not just physically for labour purposes, but more importantly with their minds. It is important to tap into and utilise local knowledge and practices.
While local communities have a treasure trove of information, they have not yet learnt to value this and tend to discount their relevance to development dialogues. It is therefore important to build the confidence of communities, to acknowledge their roles as knowledge-holders and custodians of Bhutan’s rich biodiversity, and therefore their role as active participants in Bhutan’s sustainable socio-economic development.
The key message here is that, development interventions will only be successful if locals take ownership and steer the processes of change within their communities. Tarayana has learnt through experience that simply imposing ideas will not work. In their implementation of the Rural Economic Advancement Programme (REAP) in partnership with the Government, it was the communities who drove the change—and the outcomes were so evidently different from the modalities of top-down Government interventions.
Aum Chime cited Tarayana’s experience of “disruptive practices” such as the REAP interventions, as an indication of the need to evaluate development practices, to understand what does and does not work. Through this arrangement, resources were effectively utilised, illustrating the possibility of narrowing the gap if available resources are shared and well- distributed.
One remaining concern was whether Bhutan really is ready for LDC graduation, looking at it from the perspective of rural communities, the disabled, the economically vulnerable, and other groups on the margin. For instance, with climate change, even if Bhutan is doing everything it can, it will still suffer the impacts unless collective action is taken. And in this context, is Bhutan really ready, when a small but significant section of its population does not have access to some of the most basic infrastructures?
Aum Chime concluded by saying that appreciation and utilisation of local knowledge and resources is an obvious choice for a nation that pursues GNH; and that “all things important are not necessarily measurable, and sometimes things that are measured are not all that important.”
The moderator noted that the REAP interventions had been based on the MPI identification of communities, and underscored the need for close consultations as the implementation of GNH and the SDGs cannot be a top-down approach.
The last panellist, Dasho Karma Ura, was invited share his insights on how Bhutan fares in the assessment and implementation of GNH.
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Dasho first shared reactions to some of the points made by the previous panellists. He proposed that the world has been experiencing two more paradoxical states, in addition to the environmental, economic and social risks outlined by Mr. Steiner. One is the rationalised and systematised cruelty to animals, that has occurred in tandem with the rise and focus on human rights since 1919.
The other is that, the legacy of peace enjoyed by the world since the founding of the League of Nations has been accompanied by dramatic investments in arms and ammunitions; this external peace maintained by the rule of law is also accompanied by a rise in the loss of life through suicides, with depression and other pervasive psychological disorders indicating internal unrest.
Today, the availability of macro-data makes it possible to see the broad patterns of development processes and outcomes, which Mr. Steiner had highlighted; and in Bhutan’s case the use of micro-data as provided by the GNH index makes it possible to zoom in on the variables. While income is the fastest rising component of the GNH index, as Dr. Alkire had illustrated, not too much weight is attached to it. Equal weight is distributed among the nine domains, precisely owing to the concerns over outcomes of dominant development approaches.
Dasho observed that another danger of development was apparent from Aum Chime’s intervention i.e. the price of imposition by bureaucrats, and the bureaucratisation of the notion of what development and knowledge is.
Moving on, what to do next about GNH in the country?
First, in the spirit of kindness and expressing gratitude—which research supports as being important in generating happiness—Dasho expressed gratitude to Bhutan’s development partners. Although no research has been conducted on international relationships motivated by the happiness of countries, cordial relations between nations and how peoples identify with each other is important.
Historically Bhutan would have fallen in the category of a “blue zone place”, as known in the happiness literature, where everything is roughly perfect i.e. in the past, people generally enjoyed good quality of life with good health, meaningful social relations, and enjoyment. GNH could be understood as an attempt to retain these good parts of life in modern generations. Today—with the pervasiveness of globalisation, and hyper-realism driven by social media— most leaders are unable to separate the good from the bad.
Dasho said that successive Governments have generally embraced GNH, although at times they do not embrace but profess GNH. For the most part, there has been willingness on the part of Government, though effort is needed to move the bureaucracy. In all, the integration of GNH into governance needs to take place at a much faster level, given the fast pace of the globalisation process.
Within the bureaucracy and the State enterprises, the culture of analytic thinking needs to shift towards GNH, thereby requiring capacities in these institutions to be built. While public decision-making, especially policy-making geared towards GNH is practiced to some degree, the impact of these policies has to be assessed. Data will have to be collected for this purpose— and although GNH surveys are conducted periodically, micro-research is required for validation in the interim periods.
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Moving beyond the traditional approach to setting budgets, annual budgets require sectoral impact assessments in accordance with GNH standards, as do the pledges of Governments. Dasho also suggested the need to obligate companies and corporations beyond a certain size and scale, to report on GNH business certification. While a framework has been developed, it is yet to be implemented and requires the support of Government.
Dasho informed that Bhutan is currently working on a strategic Vision Document, which should be for the next 100 years or at least for one lifetime. It should illuminate the future path for all stakeholders including development partners, Government, CSOs, etc., and be well- coordinated and work as a “GPS” for all—with room for revision along the way.
To embed GNH in legislation, it is necessary to analyse and influence the legislative process from a GNH perspective, with the active participation of Parliament. The administration of criminal justice requires to be made more sensitive to GNH as well. Thus, the three branches of Government could converge on wellbeing and happiness.
Urban planning needs to be more dynamic, given poorer GNH outcomes in the domains of culture, community and environment in the urban areas—which in turn indicate that urban areas have not met the bar in aspiring and working towards the ideal.
Dasho concluded by saying that individuals have a deep urge to improve their skills and behaviour to achieve happiness and wellbeing outcomes; however, this requires some support, and the main channel is the mass media. A review and reduction of unnecessary and harmful content was suggested, as one way of reducing screen time to help ensure that people get adequate time to sleep.
Discussion Considering the role of bureaucrats as highlighted during the panel discussion, the UN Resident Coordinator in Bhutan, Mr. Gerald Daly enquired if there are specific metrics they would follow regarding Local Governments’ utilisation of resources in the 12th FYP, and also as they develop Bhutan’s next Vision Document—all from a GNH point of view?
Aum Chimi expressed concern over human resources and capacities at the Local Government (LG) level, which remain the same while resources have increased. A guideline for LGs as well as civil society to facilitate effective and wise utilisation of resources would be useful. Opportunities for rural communities require expansion through digital solutions, as there is already a digital divide with rural children disadvantaged in accessing information. Moving beyond micro-finance, local communities increasingly express interest in economic opportunities and accessing business portfolios—underscoring once again the need to consult with local communities. LGs stand a fair chance if such considerations are kept in mind, and it is hoped that LGs will also engage the civil society sector wisely.
The representative from the Bangladesh Embassy in Bhutan shared that Bangladesh has carried out studies on various aspects of its upcoming graduation from LDC status, which indicate erosion of preferences from donors. Has Bhutan also done any such study, and how will it address the challenges that come with graduation?
Aum Chimi said that there has not been a holistic study done by Bhutan on LDC graduation, at least not in the civic sector. However, the clear concern for Bhutan stems from its small economy which is largely dependent on hydropower and tourism, and although evidence is not
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documented, experience shows that climate change impacts like freak weather conditions severely affect local farming communities, to give one example.
The panel moderator requested the UNDP Administrator to share some perspectives on how concerns over LDC graduation could be addressed, what concrete roles development partners can continue to play, and the implications of graduation from a GNH perspective.
Mr. Steiner said that graduation is an accomplishment but also a transition, and it is necessary for countries to analyse what will change. If the RGoB has not yet done this, the UNDP could assist in such an analysis because it can be a disruptive process. Within the UN System, agencies look at graduation with mixed feelings. The notion that there is a point at which a nation enters into another level of development is not wrong, but perhaps the lens through which this point of departure is defined is far too narrow. This can trigger a series of consequences that do not consider different realities of countries.
So, the question is, can we evolve the instrument? There are two forces at play: the donor community, which is keen to see countries graduate; and, on the other hand, in these very same countries there is a more profound debate about global security, a common future, public goods, and the view that a simplistic view of LDC graduation can trigger consequences that will cost far more to the international community in due course.
For example, the work that the UNDP does with the MPI is one way of trying to change such mechanistic approaches. Bhutan’s graduation is not a reason for development partners to leave, but is a reason to engage with a changing quality of engagement. Success should be a reason to have closer bonds in partnerships. This RTM needs to articulate a rationale for this that is slightly more profound than the current discourse.
Dasho Karma Ura shared that firstly from the statistical perspective, he is not sure if the figures truly support LDC graduation because those are based on GDP. In Bhutan’s case this is highly misleading as there is huge transfer of money in terms of debt repayment. Therefore, Gross National Income (GNI) would have been a better measurement, as there is a big gap of about 15 percent between GDP and GNI. Bhutan is actually a heavily taxed country: if the revenue from hydropower is not factored in, the GDP to tax ratio is quite high and ultimately the disposable income of people is not as much as that projected by GDP per capita.
Secondly, a great deal of investment comes from India and other development partners. However, this is unstable because should their investment levels decrease, Bhutan’s GDP could become a fragile and volatile figure. It would be good if the LDC graduation criteria could include additional measures. One suggestion is to set a threshold wherein a significant proportion of the population is lifted out of unhappiness and misery—that would be a true measure of graduation in holistic terms.
Aum Damchoe Dem of BAOWE expressed that the private sector requires more international support, in creating a market that is conducive to Bhutan’s unique challenge of “extremely small volumes of excellent produce”.
Mr. Steiner expressed keenness to learn how Bhutan in the context of its history, traditions, culture and GNH will envisage the evolution of the private sector. The development world seems to have equated the private sector with the corporation rather than the small household farmer, the corner shop, the informal sector. As such, how to deal with local markets and also how they connect with the global market has to be a fundamental aspect of driving GNH. It
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is important to note that the private sector should not be about trading away societal assets such as water, but rather to provide more effective services such as water treatment.
What are the rules that drive the evolution of the private sector? Does it always have to be the large scale versus perhaps a private sector that is an integral part of an economic view? Moving forward, there is much to learn about sustainable tourism, start-ups, technological connection, to name a few. The rural economy should also feature more in development thinking—not in the sense of rural households producing more, but in the sense of tapping opportunities to connect with the digital global market and provide various kinds of services.
Mr. Sharma from ICIMOD said that Bhutan is one of the eight countries of the Hindu Kush Himalayan region. 240 million people live in this region, 1.9 billion people live in downstream areas, and whatever occurs in these mountains has immediate impact on these people making up about one fourth of the world’s population. In terms of food security, this means that almost half of humanity will be impacted. How could the UN bring this to the attention of the global community, so that there is more investment in this region?
Mr. Stiener gave credit to the scientists as well as the UN, which had set up the Inter- Governmental Panel on Climate Change (IPCC), for protecting this narrative of climate change and mountainous communities from national interests. Therefore, mountains have increasingly featured in the development discourse. The degree of warming in mountains, as in Bhutan, is happening at a far higher rate, with disruptions in hydrological flows and disasters such as glacial lake outburst floods (GLOF) taking place. All these clearly make vulnerability a key link between climate change, development and GNH.
Downstream, India is facing extraordinary risks, some of which are immediate. The problem and therefore the solution to these challenges lies not so much on the mitigation actions of those living in the mountains, but through the actions of the rest of the world that is driving these changes in the mountains. In the coming years, the focus will increasingly have to be on adaptation and disaster-risk preparedness in these communities. The imperative to invest in the mountains lies with those in the downstream and with the global community. The UN Secretary General will convene another climate summit to bring the focus back to these issues—the UNFCCC/the Paris Agreement, is the only thing we have and everyone must engage. There is too much inertia and complacency at the moment.
Concluding Remarks
In conclusion, Dr. Alkire said that with the idea of GNH capturing the imagination of many around the world, a key challenge that remains is the need to go beyond conventional notions of growth and investment, and to really move the boundaries into psychological wellbeing, culture and community.
Mr. Steiner shared that he was struck by the discussion about bureaucrats and their role in development planning and execution. In terms of identity, perhaps it is necessary to define bureaucrats as “a state of being” and not as “a state of mind”. From history and from GNH, it is clear that people retain the freedom to imagine and to choose a different pathway. Therefore, countries and communities can choose a different pathway. For example, Costa Rica simply chose to abolish its army against all advice and odds; and Switzerland chose a development model where its people would stay in the villages and connect with the world through technology, rather than urbanise. Making deliberate choices can likewise be maintained as a part of Bhutan’s GNH discourse and journey.
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Dasho Karma Ura emphasised the need for careful reflection and decision on the boundaries between the public and private domains—something that is currently shifting in Bhutan—and invited the Government’s attention to this. The discussion on digitalism, air space, tourism, etc. is compelling and seductive, but conscious attention must also be brought back to agriculture and food sovereignty—these are central to any country, and this was where the identity, strength and sovereignty of Bhutan was rooted. Therefore, more ideas are needed to ensure good soil management, organic practices, good prices for produce, etc.; otherwise the current trend of rural-urban migration, the feminisation of agriculture, etc. will get worse. Bhutan is at a tipping point in this regard, and attention must not be lost.
Aum Chimi reiterated that rural development has to be given centre stage. A lot of trust- building is required through transparent operations at all levels, before development can take place with participation of all actors as equal partners. In all decision-making, there is need for a “head and heart balance” i.e. to be practical but also kind and compassionate. It is important to have gratitude for basic natural endowments that is often taken for granted, such as clean air and fresh water.
In closing, the moderator Dasho Tshiteem said that many of the issues discussed require technical interventions such as capacity development and financial resources, and these can be addressed. At another level, the major change required is the change in mindset. What are the values that we have? What are the outcomes fashioned from these values? Bhutan’s recent past shows that GNH outcomes are possible even without GNH tools, if the values of most actors are correct. To really implement GNH and the SDGs, underlying values have to be addressed through education so that sustainable actions and outcomes are possible.
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Session 2: National Development Priorities
Presentation on the 12th Five Year Plan and SDG Integration by Mr. Thinley Namgyel, Secretary, Gross National Happiness Commission
Session Co-Chaired by H.E Lyonpo (Dr.) Tandi Dorji, Minister for Foreign Affairs, RGoB, and H.E. Mr. Achim Steiner, UNDP Administrator
The objective of this session was to apprise delegates and participants on Bhutan’s socio- economic achievements to date, remaining challenges, and way forward in the 12th FYP including SDG integration.
12th Five Year Plan and SDG Integration
As presented by the Secretary of the Gross National Happiness Commission (GNHC), Mr. Thinley Namgyel, Bhutan is a small country spanning 38,394 square kilometres, and is located between India and China. The second Population and Housing Census of Bhutan (PHCB) was conducted in 20173—recording a population of 727,145 (52.3% male and 47.8% female), a population density of 19 persons per sq.km, with 62.2 percent residing in rural areas.
Since 2008, Bhutan has been a Democratic Constitutional Monarchy, with the third democratically elected Government in office since October 2018. In keeping with its strong environmental conservation policies, Bhutan’s forest cover stands at 71 percent against the constitutional requirement of 60 percent.
Outlining Bhutan’s socio-economic progress, the Secretary drew attention to the GNH Index, which was initiated in 2007-08—although socio-economic development plans and programmes since the early decades of development had been based on the principles of GNH. The first GNH survey in 2010 recorded a GNH Index score of 0.743, and the second survey in 2015 showed a slight improvement in GNH outcomes with a GNH Index score of 0.756.
Significant reductions were made in poverty—with income poverty at 8.2 percent in 2017 as compared to 23.2 percent in 2007; and multidimensional poverty at 5.8 percent in 2017 as compared to 25.8 percent in 2007. Between 2005 and 2017, general literacy increased from 59.5 percent to 71.4 percent; life expectancy from 66.3 years to 70.2; and Human Development Index (HDI) from 0.510 to 0.612, placing Bhutan in the medium human development category.
As of 2017, Bhutan’s GDP was recorded at USD 2.34 billion (Nu. 164.628 billion), ranking 170 out of the 196 countries that report GDP; and GDP per capita was USD 3,438 (Nu. 223,815), ranking 180 out of the same list. Bhutan had been fairly successful in generally maintaining GDP real growth rate at six to seven percent, but in 2017 it was recorded at a low of 4.63 percent mainly owing to delays in with hydropower projects. Overall unemployment stood at 2.4 percent.
Given this good socio-economic progress, Bhutan was found eligible for graduation from LDC category in the 2015 and 2018 triennial review. It had fulfilled the Gross National Income (GNI) and Human Assets Index (HAI) criteria in both reviews, but is yet to meet the Economic Vulnerability Index (EVI) threshold. On this basis, Bhutan would be graduating by the end of
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the 12th FYP in 2023. As such, the next five years will be critical for ensuring smooth and sustainable transition from LDC to developing-country status.
The GNHC Secretary said that while good progress has been made at the national level, challenges remain especially at the disaggregated levels. For instance, poverty in Thimphu is as low as one percent while other Dzongkhags have poverty levels as high as 33 percent. Another key concern is the rising trend in the Gini coefficient (0.35 in 2007, 0.36 in 2012, 0.38 in 2017).
Disparities also exist when breaking down the GNH index. For instance, the 2015 survey showed that people in urban areas are happier than those in rural areas; and males are happier than females. Despite near full enrolment in education, 3.2 percent of children are not enrolled either due to remoteness or disabilities. A 2015 nutrition survey supported by UNICEF found that 21.2 percent of children under age five were stunted, nine percent were underweight, and 21 percent of children between ages two to nine were living with one or more disabilities.
Deaths from NCDs increased from 53 percent in 2011 to 69 percent in 2018; and suicide cases increased from 48 in 2004 to 116 in 2017. Gender disparities also exist, with only about 12 percent of women in the civil service holding executive positions, and 15.2 percent in the parliament. Despite low overall unemployment rate, youth unemployment is high at 13 percent, with a higher female youth unemployment rate.
Given Bhutan’s small and scattered population, its economy suffers from diseconomies of scale. Its remoteness, difficult terrain, and being landlocked pose additional challenges. As per the World Bank logistic performance indicators, Bhutan ranks 149 out of 168 countries, due to poor quality of trade and transport infrastructure. Bhutan actually is located in between two of the largest markets in the world, so it is actually not that remote. While there are challenges, there are also opportunities.
Bhutan’s export base is narrow with 33 percent of total exports comprised of electricity; and 10 products making up 80 percent of good exported, of which most are mineral-based. Export market is also concentrated with about 85 percent of exports made to India, and nine percent to Bangladesh.
Contribution of the agriculture sector decreased significantly from 43 percent of GDP in 1980, to about 16-17 percent at present. Meanwhile, large numbers of people are still employed by this sector (51.3 percent), showing that the structural transformation in the economy has not resulted in commensurate job creation. As agricultural activity is mainly subsistence-based, Bhutan continues to depend on food imports. The 2015 GNH survey had found farmers to be the unhappiest group of people in the country—owing to the drudgery of farm work and human-wildlife conflict, to name a few factors.
Despite Bhutan’s good record in environmental conservation, it is not spared from the impacts of climate change. Bhutan has 677 glaciers and 2,794 glacial lakes; in the last two centuries 21 GLOFs were recorded, of which four outbursts were reported in the last 40 years. Bhutan also falls in the high seismic zone IV and V, making it vulnerable to major earthquakes. Landslides, floods, windstorm and forest fires are other disasters that it is vulnerable to.
Against this backdrop, and in line with the Government’s priority of narrowing the gap and the SDGs principal of leaving no one behind, some of the priorities of the 12th FYP were highlighted.
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To address challenges and also to sustain progress made to date, the 12th FYP has 17 National Key Result Areas (NKRAs) i.e. key outcome areas that the Central Government agencies and Local Governments will collectively work towards over the next five years. Bhutan will also work towards implementing the SDGs through this framework, which includes Key Performance Indicators (KPIs), and thereby also contribute to outcomes in the nine domains of GNH.
For a glimpse of how the 12th FYP framework integrates the SDGs and their linkages to the GNH domains, the GNHC Secretary touched upon NKRAs 1, 2 and 11, which relates to the economy. As shown in the slide below, these are expected to contribute to SDGs 8 and 9, and relates to the GNH domains of living standard, psychological wellbeing, good governance, and time use. The SDGs have a goal of ensuring that growth is not less than seven percent for LDCs, which is also one of the KPIs under NKRA 1/macroeconomic stability. Likewise, SDG 8 emphasises full and productive employment, which is captured under NKRA 11 through its KPI of unemployment of 2.5 percent.
Similarly, other SDGs are integrated into the 12th FYP framework through the other NKRAs and their corresponding KPIs.
In addition to the central and local government programmes, eight high priority multi-sector interventions or “flagship programmes” have tentatively been identified (shown below)— which is a new feature in the 12th FYP. The main purpose of these flagships is to enhance collaboration among key stakeholders, with different agencies and LGs working together under one programme.
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The successful implementation of the 17 NKRAs and the flagship programmes would lead to achievement of the 12th FYP objective of “a just, harmonious and sustainable society through enhanced decentralisation.” A key element in all this is the “Triple C” of the 12th FYP i.e. Coordination, Consolidation and Collaboration, and SDG Goal 17 on partnerships for development. The RGoB would work together in this manner, internally—including with the CSOs—and also with its development partners.
Discussion The representative from JICA shared that through his travels around Bhutan, water shortage is indeed a critical issue for many. With different Government agencies responsible for water, such as MoAF for irrigation water, and others for supply to schools and health facilities for example, the arrangement seemed scattered. What kind of institutional arrangements would the RGoB promote? While JICA has given grants scheme for water supply, it alone is not able to take care of the entire issue. Perhaps resources are required to support capacity building, given that 50 percent of the 12th FYP resources are going to LGs, and capacities at that level are critical if partners are to work together.
The GNHC Secretary agreed that multiple agencies are responsible for water at the central and local levels. The Water Flagship Programme is led by the NEC, and the creation of a dedicated agency to address water supply issues is being looked into. As a flagship programme, the idea is to bring all the stakeholders together to work as team.
While noting Bhutan’s achievements, the representative from MoFA/Thailand was struck by two statistics: 21 percent of children aged 2-9 live with disabilities; and suicide cases had increased from 48 to 116. What kind of disabilities are children facing and what are the causes? While Bhutan is known for GNH, the number of suicide cases indicate that there are some unhappy people—what could be the cause? What can development partners do to help in this regard, and what is the RGoB doing?
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The GNHC Secretary mentioned the disability policy that the RGoB is working on, which aims to address concerns surrounding persons with disabilities. Although the numbers are small, suicide is a growing concern and a three-year multi-sectoral action plan (2015-2018) has been in place. Besides counselling services and other strategies, it also seeks to work with influential personalities like monks to engage with people in these matters.
The representative from Japan shared that Japanese technical assistance looked towards decreasing disparities between urban and rural areas, and that a comprehensive development plan for Bhutan was also being looked into. With upcoming LDC graduation, what was Bhutan’s view on Yen loan project scheme?
With regard to Yen loan, the GNHC Secretary suggested that discussion could be had with the Ministry of Finance. Generally, Bhutan takes self-liquidating loans for projects and programmes. Additional loans are taken for very important projects in line with the threshold and other requirements prescribed by the Public Debt Policy.
The representative from UNESCAP commended Bhutan as a pioneer and example for other countries to emulate. A comprehensive project is being developed for Bhutan, Bangladesh and Nepal—countries that are similarly placed in terms of high dependence on a few economic sectors, working to ensure smooth LDC transition, exploration of innovative financing, etc.— and UNESCAP looked forward to collaboration with other development partners in assisting economies in the sub-region for smooth and sustainable graduation.
The Bhutan Resident Representative of the World Bank remarked that a key challenge in the 12th FYP implementation would be managing trade-offs in the economy. While it is a challenge, Bhutan could also try and make use of its small size. What are some of the ideas and programmes that the RGoB is looking into, to manage trades-offs such as capital and infrastructure investment vs. financing constraint; environmental conservation vs. natural resources utilization especially in the private sector; and urban development vs. LG capacity building?
The GNHC Secretary informed that in the 12th FYP, existing infrastructure would be consolidated while also putting in place the required additional facilities to facilitate private sector growth and trade. Investments would continue in industrial estates and airport expansion, and alternate avenues for investment are being looked into. To help create a more conducive environment, the Foreign Direct Investment (FDI) and the Cottage, Small and Medium Industry (CSMI) policies are under review—and the policies are anticipated to be revised and endorsed by the new fiscal year i.e. July 2019.
The Bhutan Resident Representative of the ADB requested an update on the timeline for launching flagship programmes. It was suggested that the implementation of flagship programmes needs to move quickly, as large capital investments are time consuming and could have impacts on the overall economy. With Bhutan’s growth having slowed down, timing was of the essence.
The GNHC Secretary said that the details of all flagship programmes should be prepared and ready for implementation by July 2019. While there are eight programmes identified at the moment, their financing and continuity would depend on their quality and progress. Till date, three such programmes have been approved i.e. the Bhutan Organic Flagship, Water Flagship and One Gewog One Product (OGOP) Flagship. A fourth, the Digital Drukyul Flagship, has been approved in principle.
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On WWF’s question regarding strategies and plans to enhance private sector investment domestically and through FDIs, especially in the Flagship Programs, the GNHC Secretary referred to the Private Sector Development Committee that was recently established under the chairmanship of the MoEA Minister. He reiterated that FDI and CSMI Policies are under review, and emphasis is being given to PPPs. Start-ups are also a point of focus given the youth unemployment issue.
On why nutrition did not feature explicitly as a flagship activity—given that it is a multi- dimensional concern—the GNHC Secretary said that the Bhutan Organic Flagship Programme would to some extent capture nutrition concerns. WFP Asia Pacific Region also asked if there were any risk mitigation plans beyond climate change, given that any major plan faces various risks.
The representative from Australia recalled the Prime Minister’s speech the previous evening, on the need to review and make education relevant for Bhutan’s needs. What would a high- quality education system for Bhutan look like, and how would the impacts be measured particularly in relation to employment opportunities?
The GNHC Secretary outlined that the Government has recently increased provision of free basic education from the 10th to the 12th standard. It was also looking into improving nutrition in schools through a proposed stipend revision for students; and proposing the replacement of traditional exam system with formative assessments, for which teachers are being trained. The 12th FYP has specific NKRAs and KPIs for education, to track student progress in STEM and other critical subjects. Emphasis is also being given to TVET, given the potential for jobs in the technical and vocational fields.
The representative from Austria expressed appreciation for the 12th FYP priorities of macro- economic stability, economic diversity and gainful employment. Austria is small and landlocked like Bhutan, and focused on diversifying its economy through SMEs (905 of 50000 enterprises is SMEs). This approach has worked well in Austria, and could be a useful example for Bhutan to consider. It also has highly specialised niche markets, which is what Austria relies on, and not on MNCs. As with anything, SMEs require investment, and this could be a good basis for diversifying Bhutan’s economy.
To reach those that are hardest to reach, the representative from SCF encouraged the GNH Commission to think about some purposeful targeting and budgeting when detailing the 12th FYP. Child protection, education of the very youngest of children, and reaching children in conflict with the law are important, but sometimes can be difficult unless specific budgets are allocated for these concerns. The GNHC Secretary took note of this and said that discussions would be held with the Ministry of Finance, on how to assure budget for these critical issues.
Lastly, the representative from the European Union expressed appreciation for the links between the 12th FYP and SDG objectives. EU policies and agenda use the SDGs to focus its development assistance. As these linkages are in line with its current financing of the multi- financial framework, the presentation was useful. It would be important to have a strategy to improve investments in the private sector, and on how to enhance trade beyond the two neighbouring countries. It would also be helpful to know how the RGoB is planning to cope with disparities in the country.
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Conclusion Offering some concluding reflections, the session co-chair Mr. Achim Steiner said that a striking reality is whether we use Bhutan’s GNH approach or the SDGs, we are giving ourselves a framework or lens through which to judge our actions. The GNH policy screening tool and the GNH approach takes into consideration multiple dimensions including gender, which if not looked into could have unintended multi-dimensional consequences.
Whether it is the issue of food, water, or disability, every dollar invested has returns in multiple dimensions. In this sense and in terms of the discussion on trade-offs, how are they reflective of a deeper underlying sense of values that drives society? This goes back to GNH and making wise and sustainable choices. This also serves as a reminder that sometimes we make trade-offs considering the interests of one another.
On Austria’s example of SMEs, considering Bhutan’s location between one fifth of humanity in its neighbouring countries, it need not really worry about finding markets. Bhutan is in a better position than Austria in this sense. What in the end would allow Bhutan to be a player in the market is not the size of its market or its landlocked status, but the capacities that exist within its economy. Young people and SMEs can play critical roles in Bhutan’s economy, and it would be important to identify and build the required capacities to scale up and accelerate these sectors.
Lastly on flagships, decisions are difficult but Governments need to make them. As the GNHC Secretary mentioned, some of the flagships may not happen if they do not fulfil certain criteria. Decisions will have to be made on where to invest resources and energy, where the greatest return on investment can be achieved keeping in view the holistic development approach of GNH.
The RGoB session co-chair Lyonpo (Dr.) Tandi Dorji noted that given time constraints, all details of the 12th FYP could not be presented, but that all relevant information are available on the GNHC website. As well, comments raised by development partners have all been noted, and if not adequately addressed in this session could be discussed—in fact development partners are encouraged to discuss further with GNHC.
Lyonpo highlighted that the budget for capital investment in the 12th FYP has been reduced. More effort would be geared towards strengthening existing systems, for instance through tax reforms (to improve tax collection and reduce tax avoidance), improving ease of doing business, and improving public service delivery. As such, the flagship programmes such as the Digital Flagship will be important, as services would be digitised, made more transparent and efficient.
While it may be a concern that the 12th FYP has been delayed by almost six months—owing to the timing of the elections and with a new Government in office—Lyonpo said that this should only make us work harder towards implementing the Plan.
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Session 3: Climate and Disaster Resilient Development
Panel Discussion on Climate Change and Disaster Resilient Development
Moderator: Ms. Srilata Kammila, Head, Climate Change Adaptation a.i, UNDP, Bangkok Regional Hub
Panellists: 1) H.E Lyonpo Yeshey Penjor, Minister for Agriculture and Forests 2) Mr. Koji Yamada, Chief Representative, JICA Bhutan Office 3) Mr. Svante Helms, Head of Office, WFP, Bhutan 4) Ms. Paola Pampaloni, Deputy Managing Director, European External Action Service
The objective of this session was to sensitise delegates and participants on the impacts of climate change and climate-induced disasters in Bhutan; and to explore relevant and potential sources of climate finance that will enable Bhutan to address these concerns.
The session moderator, Ms. Srilata Kammila, underlined Bhutan’s vulnerability to disasters and climate change, stemming in part from its geography and mountainous terrain. At over 2200 metres, it is the fourth highest country in terms of elevation. While its forest coverage of over 71 percent provides benefits in terms of carbon sequestration, it also needs to safe-guard its biodiversity and all life forms. Of its 2600 glacier lakes, 24 have been identified as potentially dangerous.
These vulnerabilities are compounded by the various socio-economic vulnerabilities it faces: high dependence on agriculture and monsoon rains; remoteness of the communities and rural poverty; increasing urbanisation and resultant stresses on social and economic services; higher temperatures and changes in rainfall patterns resulting in wetter summer and dryer winters— to name a few examples. All these translate into daily lives and affect different sectors, including agriculture productivity and socio-economic losses. With its climate-dependent livelihoods and climate-sensitive economy, climate change is thus a reality of everyday life in Bhutan—especially for the vulnerable and marginalised.
The question therefore, is how prepared is Bhutan to tackle these risks in the climate agenda? On the positive side, Bhutan has been proactive—it has shown values in leadership by preserving the environment, and not viewing it as a cost to development, but as an integral part of sustainable development. Bhutan has articulated its priorities and goals in various strategies and programmes—in its Nationally Determined Contribution (NDC), National Adaptation Plan of Action (NAPA), and its NAPs process that it is advancing.
In this regard, some of the many efforts taken by Bhutan, with UNDP support, include the NAPA I project which focused on addressing risks from GLOFs, enhancing early warning systems, and awareness and preparedness of communities. The recently concluded NAPA II project focused on enhancing national- and local-level adaptive capacities, as well as capacities to cope with and respond to various disasters including flash floods, landslides and forest fires. These projects pioneered some cutting-edge work in landslide stabilisation, and empowered local communities and women, through participatory approaches that also involved CSOs. The ongoing NAPA III project is cross-cutting and looks at the forests and agricultural landscape— bringing together the synergies between the biodiversity, protected areas and biological
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corridors of Bhutan and the underlying ecosystem services which are critical to the resilience of local communities.
Bhutan has demonstrated leadership in recognising that climate change and risk-informed policy- and programme-making is critical—not only to safeguard development going forward, but also to prepare for a future that comes with many uncertainties.
The first panellist, Lyonpo Yeshey Penjor, was invited to share and discuss key elements of Bhutan’s environmental policy, and some of the policies and priorities related to climate change as articulated in the 12th FYP.
Drawing attention to the UNFCCC, Lyonpo highlighted Articles 4.8 and 4.9—which establishes the rationale and imperative for the global community’s support to vulnerable countries, in preparing for adaptation, and for setting examples with mitigation options.
On the ground, Bhutan has been experiencing the symptoms of climate change: GLOFs, flash floods, landslides, windstorms, prevalence of invasive species and diseases, to name a few. As a rugged, mountainous and landlocked country, and with its high dependence on the climate- sensitive sectors of agriculture and hydropower, Bhutan is challenged by the impacts of climate change.
Bhutan has tried its best to set examples as well as to put in place measures to address climate change. Bhutan’s environmental policies, and its plans and strategies in the 12th FYP are all set for low-emission and carbon-resilient development. It is important to highlight that all this comes with a cost, as it demands extra effort. Bhutan has also forgone opportunities to extract its natural resources in the interest of environmental conservation, and in the interest of being a sequester of carbon.
Bhutan is further challenged with the need to address the climate change impacts that it faces. These include the need for technological advancements, increased financial resources, and capacity-building including in the mobilisation of resources. When a small country in LDC status is making concerted effort to address climate change, it requires the support of its development partners and the global community.
To address climate change, the RGoB has committed to submitting periodical national communications on its greenhouse gas emission status, and on its vulnerability, adaptation and mitigation needs. This process also builds capacity of locals in understanding and addressing climate change impacts and issues. As outlined by the moderator, Bhutan has implemented two NAPA projects, and the third one is under implementation.
NAPA is specifically designed for capacity-building of LDCs, through the principle of learning by doing. This means that NAPA addresses specialised and localised issues. From this, it is necessary to step on to national adaptation programmes. Meanwhile, Bhutan is also making efforts on the mitigation front, through the nationally approved mitigation actions.
As a low-income developing country after LDC graduation in 2023, Bhutan would still require the support of development partners—as otherwise the efforts to date could be derailed. As mentioned, capacity building for the short-, medium-, and long-term is critical to ensure sustainability in Bhutan’s efforts. The short-term would entail capacities of bureaucrats working in the civil service including policy- and decision-makers.
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For the long term, a reorientation of the education system will be required, as the future generation must be prepared—otherwise the dependency will continue. While the College of Natural Resources has introduced classes on environment and climate change, this needs to be expanded to build capacities for research—the Royal University of Bhutan (RUB) has therefore developed a strategy for this purpose.
The second panellist, Mr. Koji Yamada, was invited to share some of JICA’s experiences in Bhutan in addressing climate change, in reducing disaster risks, and how well-placed Bhutan is in tackling these challenges.
Mr. Yamada began by recalling the great north-east Tsunami that hit Japan eight years ago, which had brought catastrophic disaster to the country. He also recalled that the SENDAI framework for action had been agreed on by the international community on 15th March, 2015. Based on these two events and the focus on resilience-building in Bhutan, one of the projects that JICA has worked on in Bhutan is the flood early warning systems.
From 2013 to 2016, JICA implemented this project to develop capacities in GLOF, rainstorm and early warning. This had three components, the first being capacity-building at the central level, which has also benefitted the UNDP-supported NAPA project. The second component was the installation of early warning system in two pilot river basins i.e. Mangde Chhu and Chamkar Chhu. The third component was strengthening emergency response at the community level in these target communities.
Following the completion of this project, some observations were made: (1) Since the last evacuation mock drill in March 2016, no additional mock drills had been conducted. It was also noted that while earthquake evacuation mock drills have been introduced in the school curriculum, drills for early warning and flood evacuation are not included. (2) Some of the sensor devices were found to be malfunctioning, the reason being a lack of budget. This requires urgent attention as otherwise, it will not be possible to collect correct data to determine flood alert levels. (3) High staff turnover is an issue, making it difficult to sustain capacity- building efforts. It was found that new staff trained in Thimphu and placed in the duty stations are unable to monitor the equipment properly.
Based on these observations, Mr. Yamada offered some recommendations for the RGoB:
(1) Some effort is required in remembering what has been learnt, and that can be done without any substantial support from development partners.
(2) Local technological capacities need to be enhanced to develop replacement devices and spare parts for malfunctioning equipment. In this regard, a new project is being launched with the College of Science and Technology to enhance the capacity of the digital fabrication. This is more general and does not target climate change or disaster risk reduction issue; but sub- elements of this project will include disaster risk reduction components.
Mr. Yamada concluded by saying that even if new systems are introduced, those systems will have to be managed and implemented with human resources. Therefore, the focus has to be on developing human resources that can create solutions for a resilient society at the local level.
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The moderator noted the coherence in JICA’s efforts to support the RGoB’s priority of building local capacities (and not just “upstream” capacities), and towards ensuring the long-term sustainability of local efforts at disaster risk management and climate change.
The third panellist, Mr. Svante Helms, was invited to share WFP’s experiences and challenges in disaster management—focusing on efforts in recent years at coordination and on moving disaster response and preparedness forward.
Mr. Helms began by saying that Asia is the most disaster-prone region in the world, with the frequency and severity of disasters increasing. Therefore, agencies like the WFP will continue to support countries in strengthening their disaster preparedness. WFP has a dual role: it acts as an ambulance of the UN, moving out within 24 hours to help countries respond to disasters; and it also helps in building longer-term capacities for disaster preparedness.
As countries move from low- to middle- income status, WFP’s role is also transitioning from that of primarily being a responder—towards one that helps to strengthen systems, enhance capacities, and provide technical assistance, so that countries are enabled to respond to disasters themselves.
As already mentioned, Bhutan faces a range of disasters—earthquakes, landslides, floods, GLOFs, wind storms, forest fires, etc. From a potential impact point of view, earthquakes are a major concern and is therefore the focus of this discussion. However, some of the things that the WFP is supporting the RGoB with for earthquake preparedness, is also relevant for other disasters.
A fault line runs across southern Bhutan, and over the last 100 years four major earthquakes have taken place along this Faultline in the Himalayan arc. The economic losses and casualties to Nepal, from the major earthquake in 2015, are estimated at USD 10 billion. Should an earthquake of that magnitude take place here, to what extent is Bhutan prepared?
An earthquake simulation exercise was held in Thimphu, and an inter-agency contingency plan is in place since 2017. A number of challenges as well as areas of progress and opportunities were identified. Challenges include: (1) disaster awareness; (2) coordination, both within the Government ministries and within the UN i.e. no clear awareness of roles and responsibilities, and unclear process of requesting international assistance; (3) data preparedness relating to disasters, with data sitting in different agencies and not consolidated; (4) logistics, in terms of lack of humanitarian staging area and contingency plans for damaged infrastructure.
Some of these challenges can be resolved fairly easily through systems building, processes, and standard operating procedures; others require more substantial investment including in infrastructure.
In terms of progress and opportunities, there is a growing awareness of disaster risks and their potential impacts in Bhutan. For example, the results of a recently-released seven-year study in Bhutan concluded that there is a risk of an 8.5 magnitude earthquake, and that Bhutan is not as prepared as initially assumed.
At the same time, there is growing recognition in the Government for the need to invest more in disaster preparedness. For example: The Disaster Management Act of 2013 and the creation of the Department of Disaster Management (DDM); Disaster Management Committees set up
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in each Dzongkhag; disaster management plans in 16 of 20 Dzongkhags as of date; and recently a proposal for a search and rescue training centre in Chhukha.
Since over a year and half ago, WFP has been working in five areas with the RGoB i.e. overall coordination and capacity-building; data preparedness; logistics; emergency telecommunication; and food security. The focus has been primarily in the first three areas.
In terms of coordination and prioritised actions, WFP has been working closely with the DDM on the development of a National Roadmap for Disaster Risk Management, which is a pragmatic framework for action with clear roles and responsibilities (includes Government ministries and all development partners in the country), a timeline, and budget. It focuses on six areas i.e. disaster awareness, strengthening governance, strengthening coordination, improved data preparedness, improved resourcing, and sector preparedness.
To ensure coordination, the UN’s disaster risk management team is being increased to include development partners and NGOs. For data preparedness, a 72-hour needs assessment process is being introduced with the DDM, and it will be integrated with the disaster management information system. Building on pre-existing information as well as actual data collection, the idea is to collect all data in one place for geo-references, to digitise data collection, and to enable the Government to collect detailed information on disaster events within 72 hours.
Another important project is to build an earthquake impact model in partnership with Durham University. It basically converts a hazard map, to a map of the seismic areas in the country, and it can be converted into a risk map i.e. the likelihood of damages and casualties in different earthquake scenarios. This would be useful in informing contingency planning, pre-positioning of stocks, and also help build national awareness. Currently, such a model is being used by the Government of Nepal.
The moderator noted how many of the lessons and prospects from the work on earthquake preparedness are applicable to other disasters—whether it has to do with data preparedness, ensuring a coordinated response, developing long-term capacities, etc. As the same communities face multiple disasters, these are not to be seen in silos but as a part of the whole.
The fourth panellist, Ms. Paola Pampaloni, was invited to share about the European Union’s role in assisting countries to address climate change—especially in the context of the Paris Agreement—and also the mechanisms and structures being put in place to channel that assistance.
Ms. Pampaloni said that climate change is a core priority for the European Union (EU), and is a part of all aspects of its work. It is the major challenge for all of humanity, and Bhutan is to be commended for its strong commitment and efforts in this global cause. Since 2009, Bhutan declared its commitment to remain carbon neutral, despite all its pressing socio-economic development needs.
A recent report from the IPCC (Special Report: Global Warming of 1.5º C) warns about the urgent need to act on climate change. To do so, rapid and unprecedented change in all aspects of society is required. This is a challenge that cannot be addressed in isolation, and requires the global community to work together. It has to be high on the policy agenda, and is a priority for the EU and its Member States. As such, the EU will continue to press for the implementation of the Paris Agreement by all parties. The EU engages with many partners in an open dialogue
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on climate change and environment. The implementation of the Paris Agreement is a fundamental part of the EU’s negotiations and agreements with new countries.
Within the EU itself, a number of important legislations have been adopted, to enable the it to deliver on the commitment to reduce greenhouse gas emission by at least 40 percent by 2030— the benchmark in the Paris Agreement. However, the EU legislation would go beyond this target. A number of measures and legislation have been adopted, especially in the field of renewable energy and energy efficiency, to reduce emission at around 40 percent by 2030. In addition, a strategy has also been developed, with a long-term vision for a prosperous, modern, competitive and climate-neutral economy by 2050.
This is an example of how the EU is trying to lead the way to climate neutrality, in line with the objective of the Paris Agreement, as well as with the objective to keep the temperature increase below two degrees. It will also continue to keep up efforts towards keeping the temperature up to 1.5 degrees.
In the international context of helping partners to combat climate change, the EU has provided 20.4 billion Euros in 2017 alone, which is one of the biggest contributions. An important initiative for climate action developed since 2008 is the Global Climate Change Alliance or the GCCA Plus—which in the current framework has gone up to 420 million Euros, and is specifically addressed to the most vulnerable countries. In particular, it works with the Small Island Development States (SIDs), and with all the LDCs.
The EU also facilitates policy dialogues to build climate change resilience, and to foster the transition towards a low-carbon economy. This programme therefore tries to contribute to the implementation of the NDCs. Several projects implemented by the GCCA programme also support the adaptation and disaster risk reduction action, through an ecosystem-based approach. Therefore, the EU is following an integrated approach by promoting resilience.
Issues like temperature rise, changing weather patterns, extreme weather, desertification, costal erosions, sea-level rise, and security risks associated with these changes are all being discussed, to prepare countries for such consequences of climate change.
Ms. Pampaloni reiterated that Bhutan is a role model, being not only carbon neutral but also carbon negative. As a country located in a very fragile, mountainous environment, it is very vulnerable to the impacts of climate change—facing increasing threats from extreme events as highlighted by earlier speakers.
In addition to the GCCA Plus—which is supporting all countries to implement the Paris Agreement and of which Bhutan is a part—the EU will also provide support through its Rural Development Change Response Programme. With 21.5 million Euro, this programme contributes to the reduction of poverty and inequality, through the promotion of sustainable rural livelihoods, and resilience to climate change impacts.
Ms. Pampaloni said that the EU is an important development partner for Bhutan, and efforts must be guided by shared commitment to the goals of the Paris Agreement. Bhutan and the EU definitely have shared values, as is evident from the presentations and discussions at this RTM. The EU for its part will continue to work with vulnerable countries, for their needs in implementing the Paris Agreement.
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With the process of framing its seven-year annual framework underway, the EU looks forward to cooperating with Bhutan bilaterally. It also does so multilaterally, as it counts on Bhutan and like-minded countries to support EU initiatives related to fighting against climate change and environmental protection in the multilateral forum.
Discussion
The representative from ITU (Telecom Union) shared global statistics to illustrate the devastating effects of disasters on people and economy, with the impacts being even more severe for those living in isolated and rural areas without access to basic information and communication facilities. ICTs are critical to delivering early warnings and for ensuring timely information. The ITU recently organised a global forum of emergency telecommunications, and a new study (Disruptive Technologies and their Use in Disaster Risk Management) was released on how disruptive technologies can be useful for effective disaster management. Developments such as Artificial Intelligence, Internet of things, big data, and innovations in areas such as robotics and drone technologies are transforming many fields including disaster risk reduction and management. ITU has assisted Bhutan in developing mobile applications for several areas including DRR, as well as an emergency communication framework, and looks forward to providing other assistance.
The Vice-Chancellor of the RUB remarked that the importance of building capacity came out as a strong point for long-term sustainability—and given the RUB’s mandate, it is scaling up its programmes in environmental science, environmental management, and sustainable development to research-based post-graduate programmes in climate studies. As a relatively young university however, it does not as yet have adequate capacity for trans-disciplinary research, which is required in climate studies and PhD supervision. Therefore, the RUB takes this opportunity to solicit support in developing this programme, and to partner with universities in development partner countries. The RUB would be happy to share a concept paper that has been developed for this programme.
Mr. Helms said that working with universities is of value, and WFP’s partnership with Durham University is also data-driven. Instead of having the hazard map, we will have the risk map with likely casualties and damages—and that is the result of modelling indicators such as housing fragility, time of the day an earthquake will strike, population density, remoteness, and poverty. Sharing Nepal’s experience with developing and using this model, Mr. Helms suggested that it may be useful to consider bringing in capacities through such partnerships for best use of resources.
The representative from ICIMOD agreed that technology is very important for DRR and that it is necessary to work at different scales. Working with communities on early warning systems is important. While the usefulness of technologies is quite clear, the social part also needs to be considered. Therefore, communities need to be empowered and engaged in dealing with many of the disasters that affect them through the use of these early warning systems. On the 1.5-degree report mentioned by the EU, ICIMOD having been a part of that report shared that a 1.5-degree rise is already very hot for mountains, and 34 percent of the Himalayan glaciers would vanish by 2100. With a two-degree rise, which is now being discussed, 50 percent of the glaciers would vanish by the same time, with high implications in terms of water availability as well as disasters.
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Concluding Remarks
On the challenges and opportunities faced by JICA in working with the RGoB, Mr. Yamada said that the lack of hydrological data makes it very difficult to design and implement sustainable and resilient infrastructure such as bridges and irrigation systems.
In the spirit of south-south cooperation, Mr. Helms shared that there is much to learn from Nepal’s experience, especially from the earthquake point of view. A humanitarian staging area was built by the Government of Nepal and the WFP just one month before the 2015 earthquake struck. Built as a place that would be able to receive the massive aid likely to come in after a disaster, and to distribute that aid, this staging area worked very well. For the first time, WFP did not have to bring in operational material, which it usually does, and that had made a lot of difference in the period following the disaster.
Ms. Pampaloni said that the challenges LDCs face in accessing climate finance are many, including building capacity and to have an administration that is able to cope with the challenges. With many disasters happening in very remote areas, this capacity needs to be built not only at the central level but with all the local administrations, which should be accompanied by an awareness-raising of the entire population. A strategy has to be developed in order for any country to cope with disasters. It is also important to have very good environmental impact assessments, and this is applicable to Bhutan given its high investments in infrastructure development. However, capacities take time to build as also experienced by European countries—but the EU is ready to help LDCs with capacity, knowledge and technology transfer.
Lyonpo Yeshey Penjor said that commitments like the NDC are conditional—in the sense that while Bhutan wishes to adapt to climate change and also set examples in mitigation options, it can happen only with international support. Through its NDC, Bhutan has committed primarily to two agendas. One is re-commitment to carbon neutrality—initially it had made this pledge at the Conference of Parties (COP) in 2009 and then in 2015.
The other is to maintain 60 percent forest cover, which is mandated by its Constitution. This is particularly important for securing the sink capacity of Bhutan’s forests. Specifically, nine priority activities have been identified for mitigation. Adaptation strategies have also been outlined, of which one is to increase capacity for resilience. This is expected to further improve food self-sufficiency, water security, nutrition, hydropower sustainability, improvements in the transport sector, etc. As such, Bhutan has set ambitious targets to address climate change, but again, this can only happen with international support.
In conclusion, the moderator provided a brief summary of key points that came through the discussions, and offered some reflections on where to go from here. Given the urgency and the need for climate action, a transformative shift that looks at a whole-of-society approach is needed. An emphasis on integrated climate and development is critical to be able to achieve the SDGs. Recalling the UNDP Administrators words—often, it is not the rich or developed countries from where innovation comes; the disruptive changes come from countries that lead with values, and purpose and vision. Ms. Srilata Kammila said that the international community looks to Bhutan for inspiration, with its ideas and actions to pursue climate-resilient development, and will continue to stand with Bhutan in pursuit of its GNH vision.
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Session 5: State of the Economy and Development Financing
Presentations on: (1) Bhutan’s Macroeconomic Performance and Outlook by Mr. Nim Dorji, Secretary, Ministry of Finance, RGoB; and (2) Economic Diversification by Ms. Yangchen Tshogyel, Deputy Governor, Royal Monetary Authority, RGoB Session Co-Chaired by H.E. Lyonpo Namgay Tshering, Minister for Finance, RGoB and Mr. Yoichiro Ishihara, Resident Representative, the World Bank Group, Bhutan
The objective of this session was to provide a macro perspective of the Bhutanese economy (through the presentation of the Finance Secretary); and to take a closer look at efforts to develop the Cottage and Small Industries (CSI) as one of the means to diversify the economy (through the presentation of the RMA Deputy Governor).
Co-chair for the session, H.E. Lyonpo Namgay Tshering, Minister for Finance, provided a re- cap of Bhutan’s impressive economic growth, which had translated into significant improvements in its human development indicators. Lyonpo remarked that the 12th FYP is an ambitious plan, and that the two presentations would shed greater light on how it will be implemented from the economic and financial perspective.
(1) Bhutan’s Macroeconomic Performance and Outlook
As presented by the Secretary of the Ministry of Finance, Mr. Nim Dorji, Bhutan’s economic growth in the last decade averaged above five percent, with spikes during the commissioning of hydropower projects. For example, following the commissioning of the 336 MW Chhukha Hydropower Project, a 27.8 percent growth rate was recorded. Similarly, a growth rate of about 18 percent was recorded following the commissioning of the Tala Hydropower Project in 2007. This shows that growth is driven primarily by hydropower and its attributes.
With a GDP of about USD 2.5 billion, Bhutan is one of the smallest economies and ranks 165 out of 192 economies as per the World Economic Outlook in 2018. In terms of GDP per capita, it stands above the regional average, and globally ranked 125th by the same listing. 33 | P a g e
In terms of the real sector, the Finance Secretary highlighted the structural transformation of the Bhutanese economy since the 5th FYP—which shifted from agriculture to industry, and into the service sector, as shown in the diagram below. Within this, hydropower continues to be the major contributor at about 30 percent of GDP in 2017.
With regard to the monetary sector, the increasing flow in net foreign assets forms the major portion of liquidity in the market. Domestic credit is about 60 percent of GDP. Private sector trading has been growing at an average of 30 percent in the 11th FYP, forming about 93 percent of the total domestic credit i.e. the entire domestic credit is almost consumed by the private sector. In terms of exposure, the housing sector has the maximum at 25-26 percent, followed by the service sector, and by trade and commerce. The Finance Secretary remarked that this would have to change as Bhutan moves forward.
Given free-trade between Bhutan and India, Bhutan’s inflation tracks India’s inflation with some time lapse. Inflation has been moderate and stable in the last five years with deviation of over just one percentage point—indicating stable macroeconomic conditions.
In terms of the external sector, overall balance of payment (BoP) on average remained positive with accumulation of reserves—mainly due to inflow of external grants and loans. Capital account mainly comprises grants and finances of 39 percent of the credit account balance. Financial account comprises mainly hydropower disbursements, FDI inflows and debt inflows.
However, Bhutan has been experiencing persistently elevated levels of current account deficit, averaging 25 percent of GDP—which is one of the highest in the region. This is caused mainly by high levels of imports, which amounts to 46 percent of GDP as compared to exports amounting to 25 percent of GDP. Trade deficit in the 11th FYP therefore amounted to 21 percent of GDP.
The Finance Secretary informed that with an overall positive BoP, reserves have grown to USD 1.1 billion in 2018. A strategy to meet BoP is a reserve-currency mix of 70-30 Indian
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Rupee and convertible currency. The reserve is able to cover about 13 months of merchandise imports and 29 months of essential imports, as required by the Constitution.
With prudent fiscal management over the past three decades, fiscal deficit had been maintained below three percent of GDP, which has been the RGoB’s target. The coverage of total expenditure by domestic revenue improved from 60 percent in the 10th FYP to 64 percent in the 11th FYP, which is one of Bhutan’s key fiscal targets.
Official Development Assistance (ODA) in the form of loans and grants has been a main source of development financing, averaging 67 percent of the capital budget. The Finance Secretary informed that the public debt stock has increased due to borrowings—mainly for hydropower projects—from 64 percent in 2008/09 to 107 percent (GDP-debt ratio) in 2018. Non-hydro debt accounts for 32 percent of the total debt stock, mainly to finance development needs including key infrastructure for the economy. Despite high debt levels, Bhutan’s debt distress is rated as moderate by the IMF-World Bank debt sustainability analysis—as investments in hydropower are self-liquidating.
As for Bhutan’s macroeconomic outlook—given strong fundamentals in terms of real and external sector, and a stable fiscal sector—real GDP growth in the medium term is projected at about six to seven percent in the 12th FYP, assuming a business-as-usual scenario. The Finance Secretary pointed to the potential for a higher growth rate of seven to eight percent, if two hydropower projects in the pipeline are commissioned on time i.e. the Mangdechhu Hydropower Project (720 MW) and the Punatsangchhu Hydropower Project II (1020 MW).
It was underscored that the current account deficit is one of the major challenges for Bhutan— which is projected to decrease from -15 percent to -seven percent over the 12th FYP, depending on export performances.
The Finance Secretary highlighted fiscal targets in the medium term. These include maintaining fiscal deficit below three percent of GDP; tax to GDP ratio at 12 percent; domestic revenue coverage to be increased up to 80 percent by the end of the 12th FYP from the current 64 percent, which is critical if Bhutan is to be financially sustainable after graduation; and non- hydro debt to be contained below 35 percent of GDP.
In terms of development financing needs for the 12th FYP, the outlay for the 12th FYP is NU. 310 billion, which is equivalent to USD 4.4 billion. As illustrated in the diagram below, about USD 418 million is the projected gap in resources. The Finance Secretary informed that in order to address this resource gap, concessional borrowings will be made from multilateral development banks (MDB) such as the ADB and World Bank, and the balance from domestic borrowing. While MDB borrowings are useful in financing capital expenditure and contributes to reserves, domestic borrowing has some impact in drawing out reserves and this is one of the challenges in development financing.
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Going forward, the debt-to-GDP ratio or debt stock is expected improve from 99 percent (hydro debt-73%, non-hydro debt-25%) to 76 percent (hydro debt 60%, non-hydro debt 16%). However, the debt stock in absolute amounts will remain substantial given expected increase in GDP.
To supplement resources, Bhutan will continue to pursue and also explore innovative financing windows. These include financing mechanisms already under implementation i.e. endowment funds (BTFEC, BHTF), Bhutan for Life, BIOFIN, and public-private partnerships. Additional avenues will be explored, such as through the Bhutan Climate Fund, Green Bonds, GNH of Business Certification, among others being studied.
As highlighted by earlier speakers, the Finance Secretary reiterated that Bhutan continues to face critical challenges as it stands on the threshold of graduation. These include low levels of economic diversification; economic vulnerabilities including impacts of climate change, and shocks from internal and sources; significant resource gaps for development financing; narrow tax base; high levels of public debt; and persistent current account deficit.
Therefore, some of the fiscal measures in the 12th FYP will to be implement innovative financing mechanisms, as mentioned; and broadening the tax base through modernisation of sales tax into a smart GST. Public financial management will be strengthened with the institution of a Financial Committee; the introduction of an e-payment system to change the landscape of transactions; and the revision of procurement rules to suit the changing needs of the country. Fiscal decentralisation will be deepened through annual block grants to Local Governments. The investment climate will be improved with the institution of an Investment Committee, and through the amendment and revisions of laws and regulations—such as the Immovable and Movable Act, Bankruptcy Act, among others.
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(2) Economic Diversification
The Deputy Governor of the Royal Monetary Authority (RMA) of Bhutan, Ms. Yangchen Tshogyel, said that in recent years the Central Bank has increasingly taken on a more developmental role. This is in terms of its financial inclusion initiative, as well as its recently launched Priority Sector Lending (PSL) initiative which targets the Cottage and Small Industries (CSI).
The rationale for promoting CSIs stems from the need to diversify Bhutan’s economy and to address the various vulnerabilities it faces, as highlighted by previous speakers. With upcoming graduation, the need to address these concerns was particularly pressing. Hydropower would continue to remain key, but in order to move towards a more inclusive, resilient and diversified economy, it would be necessary for Bhutan to tap into the potential offered by the CSI sector.
Globally, SMEs make significant contribution to the economy, with formal SME’s accounting for 40 percent of GDP and 60 percent of employment in emerging markets. In Bhutan, the CSI sector is identified as one of five “economic jewels” through which to enhance domestic production, diversify the economy and promote inclusive growth, boost employment, reduce inequality, and promote innovation and entrepreneurial skills.
The Deputy Governor added that changing the mindset is also an approach, in terms of moving from subsistence farming to enterprise farming, by using technology and entrepreneurial practices. Another reason for promoting CSIs to reap the demographic dividend that Bhutan is currently experiencing. Given Bhutan’s high population concentration in the 25-29 and 20-25 age groups, the CSI sector holds great potential to productively engage the youth.
The Deputy Governor shared that internationally, there is no set definition of the CSI sector. Countries define the Micro, Small and Medium Enterprises (SME/MSME) sector at national levels based on number of employees, sales turnover, or asset size/investment. Many countries use loan size as a proxy, which the RMA has also done. Bhutan’s MSME or CSI sector is defined by the Ministry of Economic Affairs (MoEA) along two parameters i.e. employment between one to 19, and investment size up to USD 43,000—with investment taking precedence in case of conflict. The need to review this definition has been brought up, considering that it was framed quite some time ago.
The Department of Cottage and Small Industries under the MoEA further segregates CSIs into three sectors i.e. production and manufacturing (11%); construction (10%); and services (79%). CSIs account for more than 90 percent of total industries in Bhutan, with a total of 21,280 licensed and operational as of September 2018. However, contribution to the economy is yet to be seen.
A sectoral definition of CSI has been further consolidated for the PSL initiative. CSI includes both agricultural CSI and non-agricultural CSI. Within agriculture, a value-chain approach is applied, looking primary at production as well as value-chain production such as processing, packing, marketing, and so on.
The Deputy Governor highlighted the need for a more integrated ecosystem approach, in order for the CSI sector to realise its potential of diversifying and transforming the economy. The CSI ecosystem is made up of capacity development and entrepreneurial culture; innovation and technology; market access; and access to finance and risk management. And underlying all this is an enabling regulatory environment.
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Currently many trainings are offered in the country, to develop capacity and entrepreneurial culture, albeit at a disaggregated level. These appear to be taken up mostly as a last option after young jobseekers are unable to find a public sector job. Many of the trainings are delivered by bureaucrats, which is not ideal. Sometimes the finances are missing. There is also a clear need to understand and take forward this entrepreneurial culture—what is the attitude of our youth and entrepreneurs towards risk-taking? How resilient are they? Do they persevere or easily give up? As entrepreneurship often entails repeated failures, the ability to move on is important, and the RMA is therefore looking into the institutional as well as softer aspects.
The adoption of innovation and technology is critical for CSIs. This is apparent from the experiences of PSL clients who are largely from the CSI sector, and who have mainly taken up agriculture and livestock activities. Currently the processes are found to be very narrow, due to which quality and hygiene are compromised. Issues related to scale are also experienced. The set-up of processing units in Trashigang has been helpful for farmers, as they no longer need to spend time and energy on finding markets, and can focus on producing their goods.
While youth entrepreneurs do come up with innovative ideas, this is quite sporadic. The importance of the Technical and Vocational Education Training (TVET) stream is apparent, given a general lack of entrepreneurial culture. Another critical issue is the lack of expertise and skilled manpower. For example, those who have adopted some form of technology face issues with maintenance, as in the case of machine breakdown.
Market access is also critical. Currently, efforts are being made at leveraging Brand Bhutan, and market access through e-commerce and FDIs are being explored. Some of the areas identified are the development of an international payments gateway; national e-commerce; and standards and certification. As meeting standards and the process of certification can be time consuming and complex, this is not easy process, especially for farmers.
CSIs also rely on access to finance and risk management. In Bhutan, financing from the banks are neither enough nor suitable to meet the need of start-ups and entrepreneurs, especially for non-farming CSIs. To help address this challenge, the RMA recently launched the “Jabchor” platform, which is based on the concept of angel investors, and involves many partners. So far, five entrepreneurs have been identified, of which two have signed agreements with established business houses. The RMA is working towards institutionalising this setup for sustainability. It is also open to additional reforms on financing, as well as to innovative forms of financing. In this respect, work is underway with the Stock Exchange to explore funding, and venture capital is also being considered.
Although many entrepreneurs have brilliant ideas, and quite a few are able to secure financing from the PSL scheme, this scheme is subject to a 70-30 debt equity—and most youth do not have that equity. While financing is critical for CSIs, especially for start-ups, they face difficulty in accessing funds due to a lack of credit history. There is therefore a need to look into alternate credit guarantee, into how SMEs can be de-risked, among others.
The Deputy Governor informed that preparations are underway for the Bhutan Economic Forum for Innovative Transformation (BEFIT) in July 2019. BEFIT provides an avenue for national stakeholders to come together for collective action. It should help catalyse CSIs, and will provide an avenue through which to network and to pitch ideas. The FDI policy is being reviewed, as it currently does not include the CSI and several other sectors, and considering possible FDI interest in CSIs. A new CSI masterplan is also being looked into.
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In conclusion, the Deputy Governor expressed that the CSI ecosystem will need the coordinated and sustained interest of many stakeholders. Support is required for knowledge sharing, funding, investor link-ups, technology and market link-ups. Taking this initiative forward will require a certain political boldness as outcomes will not necessarily materialise within the five-year political cycle.
Discussion
In opening up the floor to questions and comments on the two presentations, the co-chair for the session, Mr. Yoichiro Ishihara, encouraged development partners to share ideas and also to provide suggestions as to the broad areas in which they could collaborate with the RGoB.
With regard to innovative financing, the Resident Representative of the ADB mentioned its commitment of USD 10 million to the Health Trust Fund. Other endowment funds have also been established in the country, but in-country capacity to manage these funds is lacking. There is also a need for transparency and accountability in managing such funds and other extra budgetary support. With regard to CSIs and the need for skills development, it is essential that the Government moves quickly on this as with other flagship programmes; and also, to avoid duplication in efforts given that important but sporadic interventions are taking place.
The JICA representative recalled the emphasis given to innovation and technology, specifically digital communication, by the RMA Deputy Governor, to underscore that there is much more potential in this. The introduction of Industry 4.0 has many benefits—data can be imported and the creation of this culture can have a positive impact on the balance of trade. JICA has been promoting this idea of Industry 4.0. However, the two presentations did not clearly reflect this. What kind of impact is the promotion of Industry 4.0 in Bhutan expected to have on the balance of trade?
The representative from UNESCAP shared that with regard to innovative financing, it is working at launching technological transfer for CSI at the BEFIT in July. Second, beyond the CSIs and other economic opportunities, it would be important for Bhutan to harness opportunities to diversify activities within the hydropower and forestry sector. Third, UNESCAP is currently developing a project on harnessing market access through e-commerce for small and medium industries, and would be happy to work with Bhutan in leveraging e- commerce and new technologies to advance the CSI sector.
The representative from UNIDO expressed interest in supporting the entrepreneurship pillar for CSIs, bringing experiences from the region to Bhutan. In particular, CISs will need support with adopting technologies as they cannot be expected to be conversant in many of its attributes. The other side of market access that could be considered is the designs and specific opportunities for Bhutan—such as high quality and low volume produce.
The Deputy Resident Representative of UNICEF asked how much of the non-hydro debt (which is planned to be contained to 35 percent of GDP) is for the social sector? This is related to the point that there are very high returns from investing in the social sector, with positive outcomes over the long run—for example by investing in young children, prevention of NCDs, etc.
Regarding young people in Bhutan, the DRR shared that he is impressed with their potential, and that it is our obligation to create an enabling environment for them to realise this potential. It is important for all to come together as this requires a multi-sectoral approach. The
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appropriate role models and education approach are critical, as the values placed by society on vocational jobs, for example, has an impact on employment choices people make. UNICEF is working with the Fab Lab in Thimphu, to link innovation, skills and technology. What about distance learning, in reaching the last mile? What about e-health with better technology? Much potential exists and must to explored, and supported by development partners.
With regard to innovative financing, the Deputy Resident Representative of UNDP said that it is critical to identify new solutions such as private sector financing. Further, there are two aspects to financing in the sense of securing additional financing, while also optimising the available resources in the country i.e. domestic as well as international resources. Third, development partners can play a catalytic role in these areas, and the UNDP in its continued support to Bhutan will be finalising a draft report concerning innovative financing.
The IMF representative commended Bhutan’s prudent fiscal management and economic outcomes, and highlighted areas in which progress could be made in the next few years. As processes become more complex in the macroeconomic sector, capacities would need to be enhanced. Specifically, the monetary policy framework could become more active. On efforts to broaden the tax base to 12 percent of GDP, this is on the lower side given Bhutan’s income level, and could be higher. Resource mobilisation from domestic resources could be increased, and the financial market could provide different financing options while also containing risks. Data could also be improved to facilitate policy decisions. The 12th FYP could also be a good time to re-think the whole planning process—as the Finance Secretary’s presentation showed, the credit deficit and sharp spikes in inflation suggest this need. The IMF is happy to work with the RGoB on these and other areas.
The representative from Austria suggested there is sufficient potential in the hydropower sector to spill over into other sectors, and contribute to horizontal diversification. For example, the RGoB’s plan to develop a reservoir hydropower project could be approached from an integrated perspective i.e. to plan an economic zone alongside a nature reservation zone, which would then translate into an integrated socio-economic zone. This could offer employment through SMEs in the areas, through eco-tourism, for example. The RGoB could also provide more flexibility in the FDI policy for such kinds of joint ventures.
The representative from Australia encouraged Bhutan to continue building clarity around the various policies as it works towards its ambitious economic/financial targets. On tax reforms and efforts to broaden the tax base, the target appears a bit low and could be increased; and an update on the smart GST reform would be appreciated. Regarding TVET, the comments from ADB and UNICEF on the need for clear identification of the required areas and skills, while also continuing with the provision of general skills for electricians, plumbers, etc., is seconded. Australia remains ready to support in the area of developing capacities for entrepreneurship as well, and looks forward to discussion on this.
The EU representative shared that EU support is through budget programmes, and budget support is probably the best way through which to support Bhutan as it places trust in the Government and also allows flexibility in using this for its priorities. This requires very strong public finance management and macroeconomic stability, which Bhutan has. There is need for stronger support in vocational training, but not as just education per se. The link between private sector and education still seems to be missing. Afghanistan offers a good example of where a strong link between private sector and skills development brought a sharp increase in exports. This is also what is being attempted in Bhutan through the ‘Brand Bhutan’ initiative. Another concern is that there are only a limited number of countries being looked at for
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exports, and this could be expanded. What hasn’t really come through as clearly is the gender component—the activities being suggested could be more gender-focused to increase the participation of women. On innovative financing, the private sector needs to be brought in, while also mixing grants with loans.
The representative from NORAD reiterated the importance of innovative financing, particularly those linked to environmental conservation. What is the potential to upscale eco- tourism to harness more income towards environmental protection? This could be an important source through which to finance some of the deficits.
The representative from ITC said that the ecosystem approach to CSIs has to start with market access. Has some analysis been done to identify the markets and product combinations related to those markets? On the huge role that youth can play as aggregators in the rural economy, has some thought been given as to how this can be done? Given Bhutan’s remoteness, has some thought been given to services exports (education, health, etc.) in the 12th FYP?
The representative from ITU reiterated the importance of ITC, specifically digital transformation, in improving innovation towards economic transformation. Sharing information on the work it has done with various countries in the region to develop such relevant strategies and initiatives, ITU would continue to be available to support Bhutan in developing innovation frameworks, etc. With all things regarding ICT, it is also important to ensure online security as well as the safety of children.
The Foreign Secretary, RGoB commented that Bhutan always faces the challenge of cheaper alternative imports to whatever it may try to produce domestically. At the same time, efforts to export its products are subject to certification, which is not easy. As such, some preferences (facilitated by development partners) for Bhutanese products would be appreciated as CSIs look for export markets.
In a consolidated response to the comments and enquiries, the Finance Secretary said that Bhutan’s development financing needs continue to grow in order to maintain what it has achieved, and also given new aspirations of the people.
In addition to those outlined earlier, another innovative financing mechanism is the ‘Bhutan Economic Stabilisation Fund’—set up as a counter-cyclical measure to ensure macroeconomic stability and long-term fiscal sustainability. Revenue gains from hydropower will be diverted to this Fund, to be used to stabilise any external imbalances. A ‘Universal Service Fund’ has also been established to support rural telecommunication and connectivity services in rural areas.
The Secretary agreed that capacity is a major challenge with regard to fund managers. But the Bhutan Health Trust Fund has sustained well for the last 30 years, so there are some good examples. As turnover in general is high, capacity-building will be a continuous process for Bhutan, with emphasis also on transparency and adoption of international best practices going forward.
On non-hydro debt for the social sectors, direct borrowing is less than one percent for health, education and TVET. But the policy has shifted from specific project borrowing to programme borrowing, which is budget support—and under this, a major portion of the budget is allocated to health and education. 24 percent of total budget is towards social sector outlay. Eight percent is spent on direct health support from the budget. This does not include private sector
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expenditure on health, which is substantial. In terms of broadening the tax base, Bhutan is looking into a modern GST system, which will incorporate successful elements of tax systems from other countries.
Hydropower will continue to be a major investment area for Bhutan, but there will be increasingly more focus on diversifying the economy, with development of the CSI sector being one of many approaches.
The RMA Deputy Governor expressed appreciation for all the comments and suggestions which would help take their work forward in more robust ways, and for the overwhelming support within the Government as well as development partners for the CSI agenda.
The timely reminder for Bhutan to take a more integrated view towards the five economic jewels was much appreciated, with CSIs standing to gain meaningfully from mainstream sectors like hydropower.
For the purposes of BEFIT, the RMA is already in discussion with OGOP on a list of export- ready products, which considers the differing certification and other requirements of different countries/markets.
In terms of the participation of Bhutanese youth as aggregators, the view here is that this has to be approached along the PPP model—and perhaps there is potential to pursue this with state- owned enterprises, with the Government providing much of the support. Enterprise farming is very important as well, and looking ahead it is important to consider sustainability once the subsidies are withdrawn.
The Deputy Governor concluded by saying that in terms of courageous leadership, cohesion and sense of purpose, Bhutan is at a huge advantage as it can draw from the inspiration of His Majesty the King, and as the Government is ready to go the extra mile with political boldness— both critical for taking the CSI agenda forward.
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Session 6: Last Mile Challenges and Opportunities
Presentation on Development Challenges, Opportunities, and Continued Partnership by Mr. Juergen Nagler, Deputy Resident Representative, UNDP, Bhutan
Session Co-Chaired by H.E. Lyonpo Loknath Sharma, Minister for Economic Affairs, RGoB, and Ms. Raffaella Iodice, Head of Unit Asia, Central Asia, Middle East/Gulf and Pacific, European Commission
The objective of this session was to provide a summation of the opportunities for development cooperation between Bhutan and development partners, considering its key achievements and challenges as it stands on the threshold of LDC graduation.
Co-chair for the session, H.E. Lyonpo Loknath Sharma, Minister for Economic Affairs expressed gratitude to Bhutan’s development partners, making special mention of the Government of India, for their unstinted support throughout the decades. Lyonpo said that national ownership is key to Bhutan’s graduation strategy, supported by partnerships and consultative processes—with this RTM being one such process. With continued and enhanced partnerships at multiple levels, Bhutan would be able to convert its unique challenges into opportunities.
Development Challenges, Opportunities, and Continued Partnership The Deputy Resident Representative of the UNDP in Bhutan, Mr. Juergen Nagler, provided a summary of Bhutan’s development achievements, challenges, and opportunities, as presented and discussed over the past two days of the RTM. He noted that this presentation was a co- creation of the Joint Task Force (JTF) for the RTM, which together with the UNDP comprises the GNH Commission, the Ministry of Foreign Affairs, and the Ministry of Finance.
Recalling that the 12th FYP is the last Plan before LDC graduation, Mr. Nagler highlighted two pillars for sustainable graduation. The first is to address the various development challenges including health, education, gender and other social sectors. Second is to build a strong economic base through diversification and resilience to climate change. All this would aim at an effective graduation by the end of the 12th Plan in 2023, which must be smooth and sustainable.
Bhutan today has a strong foundation with good socio-economic performance and achievements. In summary, economic growth averaged 7.5 percent over the recent years. Poverty has reduced significantly to around eight percent in 2017. Trade volume and composition has increased and improved. Life expectancy has improved to over 70 years, and literacy rate is over 71 percent. For the 12th FYP, 100 percent of current expenditure will be met by the Government. These achievements show that Bhutan provides good value for money from international support. Bhutan also has a global demonstration effect. For example, how many countries are carbon neutral like Bhutan? Not many.
However, there is the dilemma of national averages (in the socio-economic indicators already discussed), and several challenges lie ahead. As covered by previous speakers, the issue of economic vulnerability is critical especially in the context of LDC graduation.
Bhutan remains highly dependent on a single sector for achieving growth, with the hydro sector contributing to about 30 percent of GDP. While structural transformation has taken place over
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the decades, it remains limited. For instance, the agriculture sector’s share to GDP is relatively low at 17 percent, especially as 51 percent of the population depends on this sector. Meanwhile, it faces low productivity and instability, as well as significant threats from climate change.
While export is growing, 80 percent of exports is restricted to only 10 commodities, and 75 percent is going to a single market i.e. India. As a mountainous and landlocked country, climate change is one of the most important challenges for Bhutan—and given Bhutan’s carbon status and environmental contributions, this is an important argument. With the increasing risks of climate change, measures have to be stepped up on global climate action and to support countries such as Bhutan in their own adaptation and development efforts.
Against this backdrop, there are several opportunities for investment and support. Bhutan has a strong ethos of environmental conservation and sustainable development. It enjoys high political stability—with ten years of democracy documented in the recently launched National Human Development Report. It ranks as the 26th least corrupt country in the world, indicating transparency in governance.
Significant strides have been made in improving the ease of doing business, ranking 81st out of 180 countries. The young population (median age of 26.9 years) is highly literate and online, with much creative potential. Thus, Bhutan increasingly has a conducive environment for sustainable investments. As covered by earlier speakers, additional efforts including the review of several policies are underway to enhance this enabling environment.
This RTM is being held in the spirit of partnerships, which is SDG 17. The achievements of the SDGs hinges on multilateralism and on continued collaboration. As the UNDP Administrator underscored, LDC graduation does not mean that development partners walk away; it implies that partnerships must keep evolving, so that sustainable graduation is ensured for the long term. Going forward, some of the interventions are immediate, others are more medium- and long-term, and these all require continued support.
With regard to institutional capacity, the capacity of various institutions has improved, but there is need for continued support in project development and accessing development financing. While there are increasing funding opportunities in the area of climate financing, some of these are becoming increasingly difficult and complex for small countries to access, thereby requiring continued partnership and support.
In the area of innovative financing, there is need to remove existing bottlenecks, and to strengthen capacities of national stakeholders. This includes increasing trade diversification, which also requires more business-to-business and people-to-people interactions. With regard to productive sector development and capacity, there is need to diversify and strengthen the sector through technology transfer, increasing entrepreneurial capacity, and changing and supporting the mindset-shift of young people to also create their own employment opportunities.
In concluding, Mr. Nagler urged development partners to stay the course with Bhutan in its journey towards successful and sustained graduation from LDC status, and beyond.
Discussion The representative from JICA shared their experience of providing support for Bhutan’s highland population, which was challenging given sparse and scattered population and other restricting factors. In line with SDG 17, JICA expressed interest and the need to partner with
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the Ministry of Education (MoE), CSOs, and other development partners, so that efforts could be combined and made more effective, in contrast to working alone. The co-chair for the session, Ms. Raffaella Iodice from the European Commission, affirmed the need for such partnerships going forward.
The ITC representative remarked that private sector development in Bhutan must be a Bhutanese model, leveraging youth and working towards social entrepreneurship. Using young entrepreneurs to further the concept of GNH would strengthen the fabric of private sector development. Referring to the MoEA Minister’s comment on the need to attract “happy investments” to the country i.e. those that are conducive and appropriate to Bhutan, did Bhutan intend to reach out to small scale investors (especially in CSI sector), or is it to bring in the big investors? In this regard, Bhutanese embassies could play an important role given their potential to identify impact investors. Lastly, what was the view on Bhutan’s accession to the WTO?
MoEA Minister, Lyonpo Loknath Sharma, said that a Task Force has been working on assessing Bhutan’s accession to the WTO, and the findings would help inform the way forward. On investments, Bhutan is looking for “kind investors”, interested in working with small producers and entrepreneurs. While not restricting investments only to small investors, there would be more focus on attracting small scale investors especially in the CSI sectors. The wish is to encourage growth in rural communities and to narrow the gap in economic benefits. Such considerations will be made when reviewing the FDI and CSI policies.
Mr. Nagler underscored the importance of private sector development, and highlighted a natural convergence between GNH with its emphasis on “development with values, and social entrepreneurship with its emphasis on making good social impact. Bhutan today has the GNH of Business Certification initiative, which is an important step in this direction. While noting the relatively young and nascent nature of the Bhutanese private sector, there are already some small-scale impact enterprises in the food and waste management sectors that could be scaled up. UN agencies such as UNICEF are working with young people in skills development, and other development partners would continue working with vocational training.
The Deputy Resident Representative of UNICEF expressed appreciation for the commitment of the leadership and partners in Bhutan’s development. The Bhutanese government is willing to take risks and trying to do things differently—for example with the decentralisation of resources in the 12th FYP, which is not easy but if managed well could bring about sustainable results. The “last mile” is always difficult, requiring the most effort and energy to reach the unreached. UNICEF with the MoE is piloting the provision of ECCD services for nomadic children, in places that are at least one- to three-walking days away. Innovative approaches can be thought of, such as mobile ECCD centres. This is not easy and does not exist elsewhere, but there is need to be innovative in order to reach the last children.
Similarly, what can we do for children with disabilities? Bhutan is very committed to this concern, but capacities are very limited—and so how can we support the Government on this agenda? The funding that is brought to Bhutan can achieve results to scale, because of the commitment, the approach to development, and the enabling environment. With limited funding, it is possible to make a big difference in Bhutan. Therefore, by working together, we can bring transformational change to ensure that no one gets left behind.
The Resident Representative of the World Bank observed that the narrative around LDC graduation tends to focus on negative implications and based on a fear that development
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partners will depart. On the other hand, graduation is an acknowledgement of the achievements that Bhutan has made. From the perspective of development partners, a key question is how to strategise cooperation, not only from the financial but also from the technical assistance aspect. It is better if the needs of the Government are made clear, so that the corresponding support can be customised. Graduation is not a goal, but a mid-point to achieve the next stage of development.
The representative from Japan expressed interest in exploring business-to-business collaborations, with Japanese companies interested in business opportunities in Bhutan. Japan would like to continue providing technical assistance in developing essential infrastructure to attract investments, as well as in developing human resources to support economic growth.
The representative from Australia expressed that this RTM has been an excellent opportunity to hear from Bhutan on its development needs and aspirations. How could this communication and coordination be taken forward, on a regular basis, so that development partners can continue to adapt accordingly and also coordinate among ourselves?
MoEA Minister, Lyonpo Loknath Sharma, said that the 12th Plan is about coordination, collaboration and communication—this is the first step. Bhutanese embassies in different parts of the world will actively work on deepening relations with development partners, and follow up on the discussions of the RTM.
In terms of coordination, the UN Resident Coordinator Mr. Gerald Daly said that discussions will have to be driven by the RGoB, led by the GNHC. The UN System in Bhutan will continue with the development coordination meetings that take place every two months, but the specifics on how to take this forward will continue to be discussed.
Conclusion The session co-chair, Ms. Raffaella Iodice, echoed previous speakers by saying that Bhutan’s graduation is part of a longer journey ahead. Critical challenges remain to be addressed, but the challenges confronting Bhutan can be converted into opportunities. As in Bhutan, the European Union is also looking into reviewing policies and changing approaches to measurement—involving civil society and private sector, and mixing grants and loans, to name a few examples. For their part, the EU would continue to work with Bhutan.
In closing, the RGoB session co-chair Lyonpo Loknath Sharma said that this is just the beginning, with various forms of partnerships to be taken forward. He reiterated Bhutan’s efforts at improving the business climate in the country, especially for the small and cottage industries. Bhutan requires support in improving its ICT services, moving from “aid to trade”, and also compensatory measures for its carbon status and contribution to the global environment. At this critical time in Bhutan’s development, development partner- support and -partnerships are important. Lyonpo expressed that delegates and participants must leave this RTM as “GNH ambassadors” around the world.
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IV. Development Partner Statements Sessions 4 and 7: Partnerships During the two sessions on Partnerships, development partners delivered their statements for the 14th RTM. The sessions were held in the afternoons of 13th and 14th March, and were co-chaired by Mr. Sonam Tshong, Secretary, Ministry of Foreign Affairs, RGoB, and Mr. Gerald Daly, Resident Coordinator, UN System, Bhutan. Development partners applauded Bhutan’s achievements and imminent graduation from LDC status, while also acknowledging the need to address remaining challenges. Expressing appreciation for its pioneering GNH-led development, and for its commitment to implementing Agenda 2030 and the SDGs, they reaffirmed their commitment and support to Bhutan.
Summary of Commitments and Recommendations While copies of the full statements as submitted by development partners are included in Annex 4, key points of the deliveries in terms of commitments expressed and further recommendations to the RGoB are provided below.4
SI. Development Commitment Recommendations to RGoB No Partner 1 Asian For the 12th FYP, Bhutan has access to at least USD 417.5 Encouraged making the best use of ADB’s field office in Development million in grants (for disaster risk reduction) and Bhutan, given its increased capacities and responsiveness Bank concessional loan Requested timely advice on the Government’s willingness A resource envelope of over USD 400 available for and ability to absorb the available resources, to avoid time additional/ piggy-back technical and advisory assistance; and budget overruns—as project readiness is a requirement and co-financing funds from partners and ADB- for timely commitment of these resources administrated special funds Actively exploring non-sovereign investment opportunities and assistance to complement ADB’s sovereign program The ongoing technical assistance project to support OGOP will be delegated to BHRM in April 2019
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SI. Development Commitment Recommendations to RGoB No Partner
2 Australia A two-year project to build capacity in Bhutan's Technical To remain outward-looking, and continue the process of and Vocational Education and Training sector, led by political and economic reform including private sector TAFE Directors Australia development Support implementation of the 12th FYP
3 Austria Continued cooperation, with focus on Governance and Improvement of accountability should lead to even more Sustainable Energy tangible results-oriented public service delivery Collaboration possibilities will be explored, on potential Encouraged all countries in the region to make extensive projects related to climate change adaptation and use of Renewable Energy and Energy Efficiency Capability mitigation for the Hindu Kush Himalaya, REEECH—an initiative of ICIMOD
4 Bangladesh To sustain long term structural change, the service sector has to be modernised in terms of technology and skills Implement policies targeting the growth of more productive sectors, to overcome challenges of slow structural change and ensure smooth transition from LDC status Identify the linkages between SDGs and Bhutan’s LDC graduation
5 Bhutan Will continue to support programme areas in line with Foundation GNH, and in alignment with 12 of the 17 NKRAs of the 12th FYP, including elements from several of the Flagship Programs Will explore synergies that best support the country’s goals and aspirations, through place-based interventions in program communities
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SI. Development Commitment Recommendations to RGoB No Partner
6 Bhutan Trust USD 7.5 million for environmental projects in the 12th FYP Fund for Environment Annual contribution of USD 2.5 million to Bhutan for Life Conservation
7 European Union Ongoing cooperation through thematic and regional programmes such as Erasmus (opportunity for Bhutanese students to study at European universities); the EU-South Asia Capacity Building Disaster Risk Management; and the Global Climate Change Alliance Plus (GCCA+). Disbursement of a total of EUR 9.5 million in budget support – EUR 4 million for LG capacity development and fiscal decentralization; and EUR 5.5 million for rural development and climate change. Look forward to engaging with authorities to jointly identify the priorities for the next EU financial framework (2021-2027), and consultations with other development partners in the process. Remains committed to accompany Bhutan in the transition process after LDC graduation, and to engage on innovative development instruments such as blending and investment in the country’s priority sectors Interested to discuss EU's recent Strategy on Connecting Europe and Asia strategic objective with Bhutan, including attraction of private sector investments
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SI. Development Commitment Recommendations to RGoB No Partner
8 Finland Possible future areas of cooperation in Education, including vocational education; Forestry i.e. sustainable management of forest resources; and Healthcare, especially digitalisation of healthcare and health technology
9 Green Endorsement of GCF on the Project Preparation Facility or Technology PPF fund for Green Transport Project in Bhutan. Expected Center, Korea to secure total USD1.5 million from the PPF and the World Bank counterpart funding (technical assistance fund). Main project, USD 50 million. Finalisation of the forest sector (REDD+) among the GCF Readiness project in Bhutan. Support Bhutan through another source of co-financing to strengthen project components of the GCF Readiness project. Establish Master Plan and administration of pilot project on waste management in Thimphu from Korean ODA fund in 2019: USD 500,000
10 HELVETAS Contribute to achievement of the 12th FYP, with support towards local governance and decentralisation, CSO engagement, youth engagement, skills training and entrepreneurship
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SI. Development Commitment Recommendations to RGoB No Partner
11 ICIMOD Under the Adaptation and Resilience Building (Recommendation is more generally oriented) (International programme, will support National Organic Agriculture; The Hindu Kush Himalayan region is a global asset, and the Centre for Highland Development and Mountain entrepreneurships; region deserves more attention and investment for ensuring Integrated and engage in the area of 'Renewable Energy and Energy resilience and sustainable development Mountain Efficiency in Bhutan' Consider the results of assessment in designing contributions, Development) Under the Transboundary Landscapes programme, will support and investment in the Hindu Kush Himalayas including support eco-tourism, yak value-chain, and management of Bhutan non-timber forest products and other natural resources Continue engagement in programmes such as River Basins and Cryosphere; Atmosphere, Mountain Environment and Regional lnformation Systems; and Mountain Knowledge and Action Networks Committed to deepening engagement in Bhutan and wish to play an active role in supporting the last mile progression towards LDC graduation
12 India Support towards implementation of 12th FYP Support for infrastructure development, smaller community-focused grassroots projects, as well as human and institutional capacity building in various sectors (Intervention by the Foreign Secretary highlighted magnitude of GoI assistance through grants and hydropower investments)
13 Indonesia Will support development needs and priorities through cooperative programmes that would be distinctively tailored to meet Bhutan’s specific requirements
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SI. Development Commitment Recommendations to RGoB No Partner
14 International To be a long-term partner by providing advisory assistance, Continue with the steps taken so far towards private sector Finance policy support and non-sovereign financing for the private development i.e. improving the business support Corporation (IFC) sector environment, using more PPP instruments, attracting FDIs, developing the market for equity, and outsourcing certain Support the channeling of new financing mechanisms to public services tackle complex public issues such as food security and climate change—through the upcoming Country Develop the capabilities of the various regulatory bodies Partnership Strategy for Bhutan being developed with the concurrently—given that this is an important precursor as World Bank and the Multilateral Investment Guarantee the new Government revisits the role and operations of Agency (MIGA), for which broad consultations with state-owned companies, that have the potential to be various stakeholders will be ensured leveraged to enhance Bhutan's competitiveness. Private financing, blended finance and other financing instruments will remain important complements to public loans and grants, to help Bhutan avoid falling into the “lower middle-income trap”
15 International Support implementation of the 12th FYP and Bhutan’s Sustaining and further expanding the progress made in monetary Fund sustainable development efforts. terms of incomes and human development will be the key (IMF) challenge for Bhutan as the country graduates from the Advisory activities will focus largely on policy issues Least Developed Country (LDC) category. related to NKRA 1; will provide policy advice and undertake analytical work in support of other NKRAs such as economic diversification, poverty eradication and reducing inequality, gender equality, and reducing corruption Maintain strong engagement in providing capacity development, including through SARTTAC Provide capacity-building assistance in strengthening macroeconomic statistics with more focus in balance of
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payments and government finance statistics, national accounts, and price statistics. Provide training and technical assistance in areas such as financial sector supervision and regulation; public financial management, including budget execution/control and the management of fiscal risks; and monetary policy implementation and other central bank operations
SI. Development Commitment Recommendations to RGoB No Partner
16 International Ready to contribute to Bhutan’s GNH aspirations Welcomes opportunities to utilise the strengths of IUCN to Union for further develop partnership and contribute to the achievement Conservation of of the 12th Five Year Plan in following ways: Nature (IUCN) Furthering engagement in the Asia Protected Area Partnership (APAP), in which Bhutan has joined other countries from across Asia in sharing knowledge to strengthen regional collaboration and promote effective protected area management Opportunities to scale up ecosystem-based adaptation approaches to climate change in mountainous regions which would contribute NKRA 6 as well as other NKRAs Supporting water management through IUCN’s flagship transboundary BRIDGE programme, and implementation of the Ramsar Convention, thus supporting NKRA 17 on Sustainable Water Contributing to best practices in protected area management and the Green List of Protected Areas Further developing opportunities for Red List species assessments, building on the successful Red List of the
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Endemic Plant Species of Bhutan, thus strengthening research on biodiversity information in line with NKRA 5 Working together to address human wildlife conflict, drawing on the experience of IUCN’s HWC Taskforce, and facilitating opportunities to share Bhutan’s wealth of knowledge on this issue
SI. Development Commitment Recommendations to RGoB No Partner
17 Ireland Fully committed to support Bhutan through engagement on LDC graduation at the UN
18 Israel Building on cooperation in agriculture and education, would like to explore prospects for further cooperation, possibly in water management, advanced agricultural technologies, health, education, and innovation and high- tech areas
19 Japan Support Bhutan’s efforts according to the 12th FYP, in Make the most of Japanese cooperation under Bhutan’s addressing remaining development needs, and its ownership, in order to enhance living standards and to endeavors towards self-reliant development promote self-reliant development Steady implementation of the 12th FYP in coordination with development partners, based on the proactive discussions at the RTM
20 KOICA Endeavors to expand exchanges in the areas of skill development, climate change, HRF, and international trade promotion Support ‘Industry Oriented TVET’ capacity building program, which will kick-off this year to increase number of youth and adults with relevant skills for employment,
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decent jobs and entrepreneurship, in alignment with SDG 4/quality education Broaden collaboration with Bhutan by starting a World Friends Korea volunteer program, with the first group of KOICA volunteers expected to be in Bhutan byNovember 2019 Based on bilateral agreement, KOICA’s liaison office in Thimphu will open by the end of 2019 Korea Green Technology Center will implement 'Thimphu City Low Carbon Transportation Project’, using the ‘Bus Information System' with the support from World Bank and Green Climate Fund respectively Support Bhutan’s transition, form LDC status
SI. Development Commitment Recommendations to RGoB No Partner
21 Kuwait Stands ready to contribute towards financing priority areas: infrastructure development projects and/or social sector projects, such as education and health projects, by extending concessional loans Willing to consider extending Technical Assistance Grants upon receipt of such requests from the RGoB
22 NORAD Will continue to assist Bhutan through multilateral Norway will phase out its role as a bilateral donor to Bhutan arrangements due to its Graduation from LDCs The BIOFIN team, with support from NORAD, will assist Revenues from hydropower production present possible to fully take the next BIOFIN step, complete the financing solutions for development biodiversity finance plan and implement identified finance solutions for biodiversity
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SI. Development Commitment Recommendations to RGoB No Partner
23 SAARC Purchase of new ATR aircraft for Druk Air Corporation under Development the Sovereign guarantee: USD 13 million Fund
24 Save the Children Continue to support RGoB; and programmes in child International development, and others that target the hardest to reach and protect the most vulnerable Look forward to exploring new potential areas of 25 Singapore Cooperation with RGoB through the Singapore cooperation Cooperation Programme, and other collaborations with CSOs Singapore agencies working with Bhutanese counterparts on TVET projects
26 Slovenia Continue cooperation, particularly in the fields of dendrology, dendro-climatology and sustainable forest management Share know-how in developing the concept and strategy of sustainable tourism
27 SNV Continue supporting RGoB and people of Bhutan in the coming years
28 Thailand Building on existing areas of cooperation, Thailand, through TICA, will further support the Community-based Tourism Promotion project in which some selected villages will be strengthened as a model tourist attraction Enhance Bhutan’s capacity for human resource and institution building
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SI. Development Commitment Recommendations to RGoB No Partner
29 UN Joint Support during the critical period before graduation while Capacity development of CSOs in the country is critical, Statement also looking beyond 2023 to ensure a sustainable and is a critical action for the UN as it assists Bhutan on the graduation and thereby avoiding reversal of development last mile to LDC graduation. gains to date If women make up 50 percent of Bhutan’s population but Continue to strengthen partnership with the Bhutanese only 15 percent of the National Assembly and National media given their crucial role in deepening understanding Council members, there is still a distance to travel to and commitment to society achieve a more gender-inclusive governance system Only 20 percent of children aged 3-5 years have access to early learning—the need is more in rural and remote communities The high degree of trade concentration leaves the country vulnerable and dependent. Exports need to be diversified, both in terms of markets and value-added products or services, to generate revenue and livelihood for small producers, women and youth Enhancing cybersecurity and protecting critical information infrastructures is essential to every nation’s security and economic well-being- particularly in the global move towards the digital economy and information society
30 WHO WHO remains committed to support Bhutan in all its The commitment to controlling and eliminating diseases endeavours must continue; therefore, resolve must be steadfast and the required resources secured to overcome last-mile challenges To accelerate impact and the quality of PHC generally, increased budgetary allocations would help
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Bhutan’s health spending is considerable, further allocations would be welcome, and should be seen as an investment rather than an expense While all people should have trouble-free access to primary care services, eHealth and mHealth tools can help fill gaps and supplement services as and where needed
SI. Development Commitment Recommendations to RGoB No Partner
31 World Bank In addition to the Bhutan Development Report for Addressing the job challenges are critical, so as to harness Economic Diversification, the World Bank plans to publish demographic dividend opportunities. At the micro level, it the Urban Policy Notes, and reports on Agriculture and is critical to address demand and supply mismatch. At the Rural Development and Poverty Assessment macro level, as job absorption capacity of the public sector is limited, private sector development through improving Support towards the use of a “whole of government” business climate and economic diversification needs to be approach and the formulation of a Human Capital Action a priority Plan including facilitation of the Human Capital Forum Economic diversification is critical to addressing Support towards establishing the Bhutan Climate Fund macroeconomic volatility and vulnerability; currently the Reaffirmed commitment to support Bhutan’s development link between sectors is weak agenda as described in the 12th FYP. The World Bank has Spatial disparities and vulnerability to natural disasters also started preparing its new Country Partnership remain, with room for improvement in the reliability and Framework for Bhutan for the next five years, which will quality of infrastructure fully align with the 12th FYP Investment in ICT is likely to contribute to not only economic diversification, but also to enhancing data management and communication system (such as hydro- met information services), in order to foster systematic approaches to prepare/react to natural disasters RGoB is encouraged to accelerate reforms for economic diversification, tax policy and administration, public financial management, agricultural productivity, connectivity and business climate, as well as policies to
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encourage energy efficiency and address climate change and urban development. Bhutan can take advantage of ‘its smallness and strong governance’ to effectively and efficiently formulate and implement wide-ranging and multiple policy reforms Given that human capital development is a cross-cutting issue requiring strong coordination among stakeholders, RGoB is encouraged to use a “whole of government” approach and to formulate a Human Capital Action Plan based on the 12th FYP While prioritising expenditures is critical, identifying sustainable financing sources is equally important. As part of the strategy, it is important to discuss pros and cons of each financing source, including debt financing, grants and innovative financing Utilise its IDA country allocations as well as other IDA windows. The latter include regional windows that it could tap into with the same financing terms for regional projects Tap into the Catastrophe Deferred Drawdown Option (Cat DDO), to better prepare for natural disasters. This is an innovative contingent line of credit that can provide immediate liquidity to countries, in the aftermath of a disaster resulting from an adverse natural event Invest in data and statistics i.e. conduct evidence-based policy formulation; and improve quality and frequency of data and statistics. Going forward, quality data and statistics will be critical for successful decentralization
32 WWF Bhutan for Life has been established with a USD 3 million endowment fund
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V. Conclusion
The 14th RTM—through its formal sessions as well as opportunities for various engagements on the side lines—provided a space to discuss, reflect and facilitate a deeper understanding of how Bhutan and development partners can work together to “enhance happiness and sustainable development through partnerships”.
As highlighted by Government representatives and other speakers, Bhutan has been blessed with wise and compassionate monarchs. The commitment and confidence that it enjoys from development partners, for its GNH-led approach to sustainable development, has also been instrumental in bringing it to the threshold of graduating from LDC status.
However, impressive socio-economic indicators sit side by side with some unfulfilled basic needs, thereby necessitating intensified efforts to reach the unreached. A reorientation of the education system is also called for, to ensure quality outcomes that are relevant for Bhutan’s job market and other needs. The country’s provision of free basic healthcare requires enhancement though improved quality in services. Therefore, Bhutan’s traditionally high levels of investment in the social sectors need to be sustained.
Meanwhile, it faces special vulnerabilities to the impacts of climate change, including livelihood and economic loss. Concerns over disaster preparedness include poor awareness, weak coordination, low data preparedness, and inadequate capacities at all levels. Bhutan’s wish to adapt to climate change and to implement mitigation measures will only be possible with international support and cooperation.
With economic vulnerability a persisting challenge—attributable in part to its geography and high reliance on hydropower-led growth—diversification is key for working towards a more inclusive, resilient and sustainable economy. As such—while investments in the hydropower sector will continue—more effort is required in developing the rest of the “five jewels”5 through an integrated approach. In the example of on-going efforts to catalyse the CSIs, the approach is to reap Bhutan’s demographic dividend by tapping into the innovation, creativity, and employment opportunities offered by the sector, especially for the youthful Bhutanese population.
To take all of this forward in the 12th FYP and beyond, development financing is important. Domestic resources and traditional ODA (grants and loans) will be complemented by the implementation as well as further exploration of innovative financing mechanisms—thereby expanding resource windows and implementing outcomes of the Addis Abba Action Agenda.
Critical to addressing Bhutan’s remaining and emerging challenges is the need to develop national capacities at multiple levels—be it at the central or local Government levels; across Government as well as civil society and private sectors; and spanning a wide range of skills including technical, vocational, innovation and creativity, resource mobilisation and management, to name a few.
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A recurring message of the RTM deliberations was that Bhutan’s graduation is an accomplishment to be proud of—but it is not the end goal, instead it represents a transition in the on-going process of development.
As expressed by the UNDP Administrator, LDC graduation is to some extent an arbitrary milestone, with room to improve its measure to better reflect the realities of LDCs such as Bhutan.
As a pioneer in developing and using broader measures of progress and assessment, Bhutan could perhaps contribute to this discussion. As deliberated during the RTM, a change in mind- set could lead to sustainable actions and outcomes, supported by consultative processes that are in tune with and appreciates local realities and knowledge.
In summary, its purpose-led approach to development, access to sustainable development financing, and strengthened partnerships are critical for Bhutan’s effective and sustained graduation—as well as achievement of GNH and the SDGs. Therefore, far from being a reason for development partners to depart, Bhutan’s graduation is a reason for further engagement through broadened and evolving forms of partnerships.
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Annexures Annex 1: Programme for the 14th RTM
Programme 12th to 14th March 2019
Day 1: Tuesday 12th March, 2019 Venue: Taj Tashi, Thimphu Inaugural Session
1630 hrs – 1730 hrs Registration
1730 hrs – 1745 hrs Opening Ceremony with the Offering of Marchang
Welcome Remarks by Mr. Sonam Tshong, Secretary, Ministry of Foreign 1745 hrs – 1750 hrs Affairs, RGoB
Inaugural Address by H.E. Lyonchhen (Dr.) Lotay Tshering, Prime Minister 1750 hrs – 1805 hrs of Bhutan
Introductory Remarks by H.E. Mr. Achim Steiner, UNDP Administrator and 1805 hrs – 1820 hrs UN Under-Secretary General, Co-Chair for the 14th RTM
1820 hrs – 1835 hrs Group Photograph of Dignitaries and Delegates
1835 hrs – 1900 hrs Press Briefing by Co-Chairs, H.E Lyonpo (Dr.) Tandi Dorji, Minister for Foreign Affairs, RGoB and H.E. Mr. Achim Steiner, UNDP Administrator and UN Under-Secretary General, Co-Chair for the 14th RTM
Reception Dinner hosted by H.E. Lyonchhen (Dr.) Lotay Tshering, Prime 1900 hrs – 2030 hrs Minister of Bhutan
Day 2: Wednesday 13th March, 2019 Venue: National Convention Centre, Thimphu Introductory Remarks by H.E Lyonpo (Dr.) Tandi Dorji, Minister for 0900 hrs – 0915 hrs Foreign Affairs, RGoB, Co-Chair for the 14th RTM
Session 1: Gross National Happiness (GNH) – Reimagining Development for Happiness and Wellbeing
Brief Introduction on GNH by the Moderator, Dasho Karma Tshiteem, 0925 hrs – 0930 hrs Chairperson, Royal Civil Service Commission
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Panel Discussion on GNH - Reimagining Development for Happiness and Wellbeing
Panellists: Dasho Karma Ura, President, Centre for Bhutan and GNH Studies H.E. Mr. Achim Steiner, UNDP Administrator and UN Under-Secretary 0930 hrs – 1100 hrs General Dr. Sabina Alkire, Director, Oxford Poverty & Human Development Initiative Aum Chime P. Wangdi, Secretary General, Tarayana Foundation, CSO
Moderator: Dasho Karma Tshiteem, Chairperson, Royal Civil Service Commission Opening of Side Events by the Co-Chairs, H.E Lyonpo (Dr.) Tandi Dorji, 1100hrs – 1115 hrs Minister for Foreign Affairs, RGoB and H.E. Mr. Achim Steiner, UNDP Administrator and UN Under-Secretary General
1115 hrs – 1145 hrs Tea/Coffee Break
Session 2: National Development Priorities Co-Chaired by H.E Lyonpo (Dr.) Tandi Dorji, Minister for Foreign Affairs, RGoB, and H.E. Mr. Achim Steiner, UNDP Administrator
1145 hrs – 1215 hrs Presentation on the 12th Five Year Plan and SDG Integration by Mr. Thinley Namgyel, Secretary, Gross National Happiness Commission 1215 hrs – 1315 hrs Discussion and Wrap-up of Session by the Co-chairs
1315 hrs – 1430 hrs Lunch
Session 3: Climate and Disaster Resilient Development
Panel Discussion on Climate Change and Disaster Resilient Development
Panellists: H.E Lyonpo Yeshey Penjor, Minister for Agriculture and Forests Mr. Koji Yamada, Chief Representative, JICA Bhutan Office 1445 hrs – 1600 hrs Mr. Svante Helms, Head of Office, WFP, Bhutan Ms. Paola Pampaloni, Deputy Managing Director, European External Action Service
Moderator: Ms. Srilata Kammila, Head, Climate Change Adaptation a.i, UNDP, Bangkok Regional Hub
1600 hrs – 1630 hrs Tea/Coffee
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Session 4: Partnerships Co-chaired by Mr. Sonam Tshong, Secretary, Ministry of Foreign Affairs, RGoB, and Mr. Gerald Daly, Resident Coordinator, UN System, Bhutan 1630 hrs – 1700 hrs Statements by Development Partners
Global Live Stream – A Special Dialogue on ‘Rethinking Development: Advancing Human Wellbeing and Protecting the Planet’ (optional for participants)
1800 hrs – 2000 hrs Speaker – Mr. Achim Steiner, UNDP Administrator and UN Under- Secretary General, Co-Chair for the 14th RTM
Venue: Royal University of Bhutan (RUB) Conference Hall
Day 3: Thursday 14th March, 2019 Venue: National Convention Centre, Thimphu Session 5: State of the Economy and Development Financing Co-Chaired by H.E. Lyonpo Namgay Tshering, Minister for Finance, RGoB and Mr. Yoichiro Ishihara, Resident Representative, the World Bank Group, Bhutan
Presentation on Bhutan’s Macroeconomic Performance and Outlook by Mr. 0900 hrs – 0925 hrs Nim Dorji, Secretary, Ministry of Finance, RGoB; and
Economic Diversification by Ms. Yangchen Tshogyel, Deputy Governor, 0925 hrs – 0950 hrs Royal Monetary Authority, RGoB 0950 hrs – 1020 hrs Discussion 1020 hrs – 1030 hrs Wrap-up of Session by the Co-Chairs 1030 hrs – 1100 hrs Tea/Coffee Break Session 6: Last Mile Challenges and Opportunities Co-Chaired by H.E Lyonpo Loknath Sharma, Minister for Economic Affairs, RGoB, and Ms. Raffaella Iodice, Head of Unit Asia, Central Asia, Middle East/Gulf and Pacific, European Commission Presentation on Development Challenges, Opportunities, and Continued 1100 hrs – 1120 hrs Partnership by Mr. Juergen Nagler, Deputy Resident Representative, UNDP, Bhutan 1120 hrs – 1150 hrs Discussion 1150 hrs – 1200 hrs Wrap-up of Session by the Co-Chairs
Session 7: Partnerships Co-Chaired by Mr. Sonam Tshong, Secretary, Ministry of Foreign Affairs, RGoB, and Mr. Gerald Daly, Resident Coordinator, UN System, Bhutan
1200 hrs – 1230 hrs Statements by Development Partners
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1230 hrs – 1400 hrs Lunch
1400 hrs – 1600 hrs Statements by Development Partners
1600 hrs – 1630 hrs Tea/Coffee Break
Concluding Session
Concluding Statement by Mr. Gerald Daly, Resident Coordinator, UN 1630 hrs – 1645 hrs System, Bhutan
1645 hrs – 1700 hrs Concluding Statement by Mr. Thinley Namgyel, Secretary, GNHC
Press Briefing by Mr. Tenzin R. Wangchuk, Director, Department of 1700 hrs – 1745 hrs Multilateral Affairs, Ministry of Foreign Affairs, RGoB, and Mr. Gerald Daly, Resident Coordinator, UN System, Bhutan
Concluding Dinner
Concluding Dinner hosted by H.E Lyonpo (Dr.) Tandi Dorji, Minister for 1800 hrs – 2000 hrs Foreign Affairs, RGoB, Co-chair, RTM at Le Meridien, Thimphu
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Annex 2: Inaugural Address by the Honourable Prime Minister of Bhutan
Address by the Honorable Prime Minister of Bhutan His Excellency Lyonchhen (Dr.) Lotay Tshering at the Inaugural Session of the 14th Round Table Meeting 12th March 2019
Before I begin, let us all take a moment to remember the 157 lives from over 35 countries lost during the air crash of the Ethiopian Airlines on 10 March.
Your Excellency Mr. Achim Steiner, Excellences, Distinguished Delegates, Ladies and Gentlemen.
Kuzungpola.
A very good evening to you all. At the very beginning, I have the great privilege of conveying to you the greetings of His Majesty the King. I was commanded to convey His best wishes to all delegates and to make sure that your visit is a wholesome one; so please do let us know if you want us to arrange anything differently.
It is my honour to welcome all our distinguished guests to Bhutan. We are most grateful for your time and commitment.
I would like to extend a special welcome to His Excellency, Mr. Achim Steiner, Under Secretary General of the United Nations and UNDP Administrator, on your first visit to our country.
We are most happy to have you with us and we thank you for consenting to co-chair the RTM with our Foreign Minister.
Your presence here today speaks to the importance of our good relations with the United Nations and the global community. Thank you very much, Your Excellency.
In this regard, I wish to acknowledge with gratitude the kind support of the United Nations System in Bhutan in organising this RTM.
Excellences, Distinguished Delegates, Ladies and Gentlemen. GNH-guided development
As you are aware, Bhutan has decided to pursue its Gross National Happiness (GNH) development philosophy seriously, knowing that rapid economic development and material wealth will not give what we all want in our lives i.e. Happiness.
This philosophy of GNH and the wisdom of our selfless Monarchs have long guided Bhutan along a development path that is holistic, inclusive, sustainable and responsible—What our Monarchs call “development with values”.
Guided by GNH, we have strong institutions that support good governance at the national and local levels. Bhutan today enjoys well-balanced, good social and economic development with
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pristine environment. Our sense of community remains strong, and our quality of life is enriched by our vibrant culture.
Excellences, Distinguished Delegates, Ladies and Gentlemen. With our limited resources, over the last few decades, Bhutan has performed well in the social sectors:
Our life expectancy today is close to 70 years (compared to about 61 years in 2000) General literacy rate is over 71 percent (compared to 52.8 percent in 2005) Income poverty has been greatly reduced—from close to 32% in 2003 to about 8% in just a decade. Multi-dimensional poverty has also decreased from 12.4% to 5.4 % today, over the last 6 years Similarly, despite our small economy, our GDP has tripled over last 10 years. Road infrastructure and telecommunications have expanded Health care indices like infant mortality, maternal mortality, immunization coverage, and access to safe drinking water have all improved significantly
All this with your generous support.
I must take this excellent opportunity to thank all our development partners for your generous support and cooperation. Without your support, we would not have reached where we are today. Thank you, my dear friends.
But despite our many successes, we still have much to do. We need to reach the unreached, and ensure that no one is left behind, as echoed in the Sustainable Development Goals (SDGs).
In this regard, please allow me to briefly outline some of the key challenges and strategies that we are looking at during the 12th Five Year Plan (FYP).
This plan will be the last plan to be implemented as a LDC. With all your generous support, we are set to graduate from LDC status by 2023. But a deeper dive into this transition is making me more worried! We really have to be strategic during this last-mile ride, because we consistently qualified only with the social indices and never on the economic vulnerability front. By this, we risk being a very poor country behaving like a rich one!
We will make targeted interventions to uplift our poor and keep the vulnerable out of poverty. We will strive to ensure that every poor household has the necessary opportunities for livelihood and employment. This will include access to credit, renewed focus on agriculture, private sector development, universal health coverage, and inclusive and relevant education for all. We will work to ensure consistent supply of safe drinking water, and that all our people have access to proper sanitation facilities. We will review the Housing Policy (2002) to improve access to affordable housing.
Without these basic needs, transition from LDC status will be meaningless.
Social development
We are proud with the success of our primary health care. We are doing very well with our primary health care system; so now, we pledge to bring secondary health care to the community level and to make all facilities of tertiary health care available in the country— which is currently availed through referrals to India at the expense of the Government. Our State
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provides 100% free health care to all Bhutanese but allots less then 3% of our national budget to health; this clearly brings up questions on the quality of our health care. Therefore, we are looking into enhancing our healthcare system.
We are now providing free basic education up to the 12th standard, which until this year was only up to the 10th standard. With the previous policy, 50 percent of students who passed the 10th standard dropped out of school due to limited support, and they hit the streets - what we call the ‘Job Market’. Most of these students come from humble backgrounds, and they are the ones who require enhanced opportunities to continue their education.
We will review our school curriculum and try to switch from summative to formative style of education as we know that textbook-based learning and exam-based assessment are not the best forms of education.
We have realised the mismatch between the available jobs and the knowledge and skills possessed by the job seekers.
We have to make our education system relevant to the present-day needs.
We want to invest as much as we can in wholesome development, emotional wellbeing, and resilience of our children and young people. Today, more than half our population is under the age of 27. We need to understand this and be able to take advantage of this youthful potential— one may call it demographic dividend. We will therefore review and ensure effective implementation our National Youth Policy.
Bhutan’s fertility rate is 1.9 currently and projected to further decease to 1.7 by 2020. With rapidly decreasing fertility rate, increasing life expectancy and increasing youth unemployment in a small nation of just 0.8 million population, I really doubt if we are on the right track! If we do not take this seriously and bring in the appropriate interventions, the little that we earn from hydropower will not be enough to support our unemployed and aging population.
We have pledged to extent the 6 months paid maternity leave to all mothers, specially the rural mothers because we are not able to achieve the targeted 100% antenatal check-up, institutional delivery and immunization coverage.
And we will have about 12% of malnutrition and stunting, understandably among our rural children.
We will focus on nutritional requirements of our school children—we call it qualitative rather than quantitative feeding of our school children.
We are all aware of the 1000 golden days’ program. We would like to extend it to all the preschool-going children and call it 1000 Plus golden-days package, so that every child from the time of conception to attending his or her school is very closely monitored by the government.
Only then can we be confident of the future of this Nation.
Excellences, Distinguished Delegates, Ladies and Gentlemen. Economic development
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Over the last 3 decades, our GDP per capita has increased from USD 170 to almost USD 3500 today. With a GDP of only about USD 2.4 billion, we remain one of the smallest economies in the world. But with growth rate averaging 7.5 percent in the last three decades, we are also one of the fastest growing economies.
However, economic vulnerability is a persisting challenge. Our economic growth is largely driven by the hydropower sector which is climate-dependent and contributes almost 30 percent of GDP. This however, has not translated into a corresponding sectoral share of employment.
Despite the fact that hydropower generation is vulnerable to the impacts of climate change, hydropower will remain our biggest revenue-generating resource.
Since our target of 10,000 MW by 2020 is not happening, we are currently re-setting our goal in this sector. In addition to the on-going projects, we will pursue few inter-governmental mega projects with the Government of India. My request to the Government of India on 2500 MW reservoir project over Sunkosh river was received positively by my counterpart during my last visit to Delhi. As we expand our hydropower projects, we are mindful of its impact on our environment and vice versa.
On the other hand, our agriculture sector engages more than half the population (approximately 57.2 percent of labour force). However, this is mainly at a subsistence farming level. Contribution to growth is proportionately low, at about 17.4 percent of our GDP.
We are aware that we import huge quantities of agricultural products but most of our land in the rural area are left fallow due to rural-urban migration. We want to encourage and substantially support our youth to take up agriculture at the commercial level.
So, to ensure sustainable economic growth and employment generation, we must diversify our economy and private sector development will be a priority. We have to draw a line between private sector development and the State-Owned Enterprises (SOEs). For this purpose, we have recently established a Private Sector Development Committee. We are also reviewing our FDI and CSI Policies, in preparation for LDC graduation.
We fought the last election with the concept of ‘Narrowing the Gap’. Bhutan’s Gini index has increased from 0.35 to 0.38 in last 10 years. The concern here is not just the widening income gap but also that it coincides with our 10 years of Democracy.
So, it is time to ask: Are the politically elected Governments doing things differently? Are there any holes that we need to plug before it is too late? Should we rethink the form of governance that we have?
To address income inequalities, we are looking into several fiscal reforms. We will review the current taxation policy and bring in an efficient re-distributive taxation system. As a component of ‘ease of doing business’, we are also looking into its sub-set i.e. the fairness in doing business.
Ladies and Gentlemen.
Environment
Climate change is real and we must do something about it.
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Our pursuit of socio-economic development is delicately balanced with a strong focus on environmental conservation. Although we are mandated to maintain (at least) 60 percent of the country under forest cover as per the Constitution, today we have 71 percent of the country under forest cover.
Bhutan, as you know, has made an international commitment to remain carbon neutral. Climate change considerations are well integrated across all our economic and other development policies. For your information, all our policies will have to go through our GNH policy screening tool which is very environment-sensitive. Such stringent policies impede our economic growth but our mission, like that of the SDGs, is sustainable development guided by our GNH philosophy. We are aware that our natural resources belong not just to the present but also the future generations.
In this regard, Bhutan requires the support of international community, as the impacts of climate change has no physical boundaries. In addition to our stringent laws related to environmental conservation, we have projects to encourage electric vehicles, taxis and busses to start with, as we are currently spending billions on fossil fuel imports.
Excellences, Distinguished Delegates, Ladies and Gentlemen. Partnerships for development
With the participation and contribution of all the ministries, constitutional bodies, the judiciary, Local Governments, autonomous agencies, CSOs, private sector representatives, and the political parties, we have started the process to draft a long-term vision document for Bhutan. This document will guide us for decades to come…because our singular aim is to strengthen and further the progress of this country.
Over successive five-year plans, the Royal Government’s share of funding has steadily increased to more than 60 percent of total outlays since the 7th FYP. The 12th FYP is by far our most ambitious plan to date, with an outlay that will clearly exceed 4.5 billion USD. Out of this, we are trying to meet 70 percent from our domestic resources, and 20 percent through identified external grants.
The remaining 10 percent will be the overall fiscal deficit in the 12th FYP. We look forward to continuing our partnerships with our development partners to bridge this gap through innovative financing mechanisms.
So, my dear friends, in conclusion
I would like to state that Bhutan is most fortunate that we have the:
guidance of visionary leadership in the form of our Monarchs clear objectives stable government strong policies, and the continued and generous support from our development partners.
I wish to thank each and every one of you for your unwavering support. Bhutan’s success is our shared success. Your presence here is the testimony of your goodwill, friendship and
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solidarity at this crucial juncture in our development.
Thank you, Your Excellency, Mr Achim Stiener for making yourself available for us.
We look forward to the continued good relations and cooperation of all our development partners, and to working closely, especially in this last push towards LDC graduation.
You have come here as our guests, but please leave Bhutan as our Ambassadors.
I wish the 14th Round Table Meeting great success.
Thank you and Tashi Delek!
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Annex 3: Introductory Remarks by the RGoB Co-Chair for the 14th RTM
Introductory Remarks by H.E. Lyonpo (Dr.) Tandi Dorji, Minister for Foreign Affairs and Co-Chair for the 14th RTM 13th March 2019 ------
Your Excellency Mr. Achim Steiner Administrator of the United Nations Development Programme Excellencies, Distinguished Delegates, Ladies and Gentlemen,
I am most honoured to welcome you to the 14th Round Table Meeting between the Royal Government of Bhutan and our development partners. On behalf of the Royal Government I would like to thank each and every one of you for taking the effort to be with us for this very important event. We all know that Bhutan is not the easiest of places to travel to, but the presence of such a large number of delegates today is overwhelming and goes on to show the friendship and support that we continue to receive from our friends.
I am also pleased that His Excellency, Mr. Achim Steiner, UNDP Administrator despite his busy schedule, travelled across half the world to be with us today to co-chair the Round Table Meeting with me. I am truly grateful.
The Hon’ble Prime Minister last evening outlined that Bhutan has made tremendous achievements since embarking on planned socio-economic development almost six decades ago. In addition to our good fortune to be guided by wise and compassionate monarchs, we have enjoyed strong support of our development partners who continue to be with us on our development journey. Bhutan has experienced unprecedented growth and progress which has impacted the lives of our people. Socially, economically and politically, Bhutan is a vastly different country than it was few decades ago.
The dynamics of evolving time and circumstances also presents Bhutan with opportunities and challenges, both new and old. Through our deliberations today and tomorrow, I am confident that distinguished delegates will be able to get a deeper sense of where Bhutan stands today and perhaps more importantly, in which direction we progress as a nation.
Excellencies, Ladies and Gentlemen,
The 14th Round Table Meeting is taking place against the backdrop of some important developments, which has a direct bearing on the country. It has always been our national goal to attain self-reliance and reduce dependency. Therefore, the Royal Government of Bhutan welcomes the decision of the United Nations General Assembly to graduate Bhutan from the category of the Least Developed Countries by December 2023. This is a significant achievement for both the Royal Government and our development partners. While Bhutan is far from being self-reliant, our progression to graduate in 2023 is deliberate and a matter of great satisfaction.
The 12th Five Year Plan will be the Royal Government’s last Plan as a Least Developed Country and therefore it assumes high degree of importance that the implementation of the Plan is timely and resourced adequately. This Plan is the principal strategy to ensure that Bhutan’s graduation is sustainable and not symbolic. Our development partners, both bilateral
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and multilateral, have important roles to play in supporting Bhutan on its last mile as a least developed country.
The democratisation of our political system since 2008 has resulted in three different political parties elected to office. Our Government is only about four months in office and this Round Table Meeting is our first major undertaking, and one which will define the next five years and beyond. Our Government has pledged to narrow socio-economic inequities in the country on the platform of “narrowing the gap” and several policy measures will be put in place to address the growing gap between the rich and the poor. Our socio-economic data indicates that income gap has increased and clearly the fruits of development have not been shared equally by different segments of our society. About 8% of our people still live in poverty and most of them are in far flung rural areas.
We believe that good health and education are the fundamentals of empowering our people and the lack of it should not be ignored. The Government has ambitious plans to make access to quality health and education easier and equitable. Significant portion of the resources in the 12th FYP will be allocated to health and education.
The 12th FYP with an allocation of Nu. 310 billion is by far the most ambitious the Royal Government has put in place. It is a matter of great satisfaction that we will be financing 70% of the Plan with our own resources. We are projecting that 20% of the Plan will be funded through external borrowing and grants, leaving a fiscal deficit of about 10% of the total outlay, which is about Nu. 29 billion. While we are hopeful that we will be able to address this through innovative international financing mechanisms, the Royal Government will be undertaking major tax reforms as a means to increase internal tax revenues while also addressing the widening income gap.
The Bhutanese economy is categorised as highly vulnerable. It is our plan to address this through export diversification of both markets and goods. As a landlocked country, there is a need to address the issue of connectivity in all its forms. The sluggish private sector has not quite been the engine of our development we all aspired. The resulting low job creation in the economy coupled with high labour supply has created high level of youth unemployment. We also recognise the need to reform of our tourism industry. Many of the priority areas I have mentioned will be taken up as flagship programmes in the 12th FYP.
Climate change has received much attention in the global discourse but climate action plans, both adaptation and mitigation, are not resourced adequately. If we are to rescue our planet from the brink of disaster, the world must collectively work together to address the issue. Bhutan is already experiencing the adverse impacts of climate change. Hydropower and agriculture, two main drivers of our economy, are extremely sensitive to climate change. There is a need for more international support to address climate change issues. On our part, the Royal Government remains committed to the climate pledges it made as part of the Paris Agreement.
Over these next two days, as we delve deeper into Bhutan’s successes and challenges, we will invariably go back to fundamental principles that continue to guide and inform our development. We will discuss the efforts at pursuing happiness and sustainable development, and we will also deliberate on the means to taking the process forward. Therefore, a panel discussion on “Gross National Happiness (GNH) –Reimagining Development for Happiness and Wellbeing” is the first order of the day.
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I am particularly happy that H.E. Mr. Achim Steiner will be one of the distinguished panellists for this session. And later this evening, we look forward to your global livestream special dialogue on advancing GNH and the SDGs. I thank Your Excellency, for joining us in such an engaged and thorough manner.
Indeed, we in Bhutan are humbled that the global community finds inspiration in a small country like ours. While His Majesty the Fourth Druk Gyalpo expressed the noble vision of GNH to lead Bhutan along a development path of its own choosing and on its own terms, the world has gradually taken notice.
Bhutan could have, but did not take the easier path of pursing short-term economic gains, because that would have led to irreversible damage to the vitality of our culture, environment and communities. By giving balanced importance to a much wider set of criteria for progress since the early years of socio-economic development, Bhutan has been a quiet pioneer in questioning the very purpose of development.
The profundity of GNH has become more apparent over the years. In July 2011, for the first time in the history of UN resolutions, happiness was recognised as a fundamental goal. Resolution 65/309, entitled Happiness: Towards a Holistic Approach to Development, was initiated by Bhutan and co-sponsored by 68 countries, and unanimously adopted by the United Nations General Assembly.
The resolution invited countries to elaborate additional measures that would capture the pursuit of happiness and wellbeing in development. Therefore, several years later, Bhutan was honoured to join the international community in adopting the Sustainable Development Goals (SDGs) as the new global development agenda.
It is no surprise then that the SDGs are already well-integrated into our national development framework, and we will continue to take this process forward in the 12th Five Year Plan. As we move ahead towards LDC graduation and towards implementing the SDGs, we recognise the fundamental importance of partnerships for sustainable development. In fact, given the indivisible and integrated nature of core components of both GNH and the SDGs, the effective implementation of the 12th Five Year Plan hinges on coordination, consolidation, and collaboration across all sectors and development actors in the country.
As such, on the domestic front, efforts to strengthen partnerships between the Central and Local Governments and with the private sector and civil society are on-going. In this regard, beyond our borders, Bhutan will continue to strengthen the foundations for broader partnerships, in keeping with our long-held policy of establishing meaningful ties that are underpinned by shared aspirations and ideals.
At this point, I would like to acknowledge with deep gratitude the role played by our development partners, past and present, in supporting our development plans. Today we continue to benefit from our collaboration in wide-ranging areas. Bhutan would not be what it is today without the financial and technical support of our bilateral and multilateral partners. To all our development partners today—we will continue to count on your support in implementing the 12th FYP, and we look forward to many more years of cooperation and friendship. To ensure that the progress we have collectively achieved so far can be strengthened, the Royal Government is further committed to working on strategies that can
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help to ensure sustained financing flows. We will therefore look into prospects for integrated and innovative financing mechanisms.
We will explore these opportunities not only as a means to supplement financial requirements, but also as a means to drive positive outcomes across GNH-led key result areas, which in turn will contribute to the SDGs.
Excellencies, Distinguished Delegates, Ladies and Gentlemen.
Thank you once again for your very kind presence and participation in the 14th Round Table Meeting. We look forward to a most engaging and fruitful dialogue that will take us further in our means to ensure Bhutan’s smooth and sustainable graduation, and contribution to Agenda 2030 and the SDGs. I also hope you will be able to take time to explore parts of our country during your stay here. I wish you all a pleasant stay in Bhutan.
Kadrinche, Thank you.
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Annex 4: Statements Submitted by Development Partners
Annex 4.1: Statement by Asian Development Bank (ADB)
STATEMENT ASIAN DEVELOPMENT BANK Kanokpan Lao-Araya, Country Director, Bhutan Resident Mission The 14th Round Table Meeting 13 March 2019, Thimphu, Bhutan
Good afternoon to distinguished representatives from the Royal Government of Bhutan and development partners:
I am pleased to participate in this Round Table Meeting (RTM), which is my second participation over my 2 years in my assignment here in Thimphu as the resident Country Director of ADB Bhutan Resident Mission.
I would like to make 3 key points:
1. ADB is fully committed to align our support for 12th Five Year Plan (FYP), as will be reflected in our new Country Partnership Strategy (CPS). 2. Together with the government and other stakeholders, we need to act swiftly to make a strategic decision to ensure that Bhutan avail of large resources envelope from ADB that has become available to Bhutan over the next 5 years. 3. The government and partners are encouraged to make the best use of ADB’s field office in Bhutan given its ever increased responsibilities and capacities to be responsive to the country’s development needs.
ADB support for 12th Five Year Plan. This particular RTM is very critical given that it marks the beginning of a development journey to implement the 12th FYP, which aligns with the five-year tenure of the new government. And toward the end of the Plan in 2023, the country will graduate from the least developing country status.
As a long-term partner to Bhutan since 1982, we are happy to be part of the kingdom’s amazing development journey. Since 1982, we have provided accumulative assistance in grants, loans, and technical assistance totalling $891 million. ADB’s ongoing portfolio of investment projects (grants and concessional loans) of $285 million and ongoing TA grants of about $12.8 million covers a comprehensive scope covering urban development projects (in Thimphu, Pheuntsholing, and secondary towns); hydropower and other sources of renewable energy; road and air connectivity projects; skill development project that update technical and vocational education curriculum, training, and facilities to match skills with market demand; health sector development to ensure financial sustainability of the Bhutan Health Trust Fund and efficiency of health service delivery.
We also have an ongoing non-sovereign investment in equity of a hazelnut value-chain company that benefits more than 15,000 farmer households. There are ongoing several technical assistance projects that we are implementing, including technical assistance to the One Gewog One Product (OGOP) project aiming to enhanced livelihood of rural dwellers and building capacity of the new Public-Private Partnership (PPP) Unit in the Ministry of Finance 76 | P a g e
in preparing an infrastructure PPP project so that private sector can participate and contribute to development.
Going forward, ADB is committed to support Bhutan’s efforts in the 12FYP to promote sustainable and inclusive economic growth by building a more diversified economy and minimizing economic, social, and environmental vulnerabilities.
Absorbability of substantive resources available to Bhutan. Bhutan was assessed to perform outstandingly during the 2018 Country Performance Assessment, with the highest composite scores among the ADF recipient member countries. From 2019–2023, Bhutan can access at least $417.5 million of grant (for disaster risk reduction) and concessional loan from ADB for sovereign investment projects and reform programs. This amount does not include additional/ piggy-back technical and advisory assistance and co-financing funds from partners and ADB-administrated special funds such as regional funds for special purposes. Plus, we are actively exploring non-sovereign investment opportunities and assistance to complement our sovereign program.
Based on the 12FYP, the financing gap (after incorporating commitments from bilateral partners and the UN agencies) is Nu 29 billion or $400 million. So ADB’s resource envelop of over $400 million can fill this financing gap completely.
That sounds like good news, but there are challenges associated with it. The commitment of these resources is time-bound. We need to receive timely advice on the government’s willingness and ability to absorb these resources. The government is in the driver seat of the country’s development agenda. For priority investment projects, time and efforts for preparing them properly is required to avoid time and budget overruns. Project readiness is a requirement for us to program and plan projects in the pipeline.
We look forward to discussion and consultation with the government and other partners on our country program to plan a series of investment projects and reform programs. This way, we can timely commit these resources for efficient implementation, and the results can be realized during the 12th FYP period.
Strengthened capacity of Bhutan Resident Mission for greater responsiveness. ADB’s Bhutan Resident Mission has been relocated to a new, larger office in August 2018 and staffed with additional human resource and become fully staffed by end 2019. In addition to leading country programming (formulating the new Country Partnership Strategy and Country Operations Business Plan) and portfolio management, BHRM this year starts to implement the first batch of delegated projects, including health sector development program, skills development project, and Pheunsholing Township Development Project. These projects were approved in 2018. The ongoing technical assistance project to support OGOP will also be delegated to BHRM in April 2019. This will enable the government agencies to have regular interactions to ensure efficient project implementation. We look forward to ever stronger interaction and collaboration with the government.
In closing, I am pleased to reiterate ADB’s commitment to continuing support to Bhutan.
Look forward to working together to implement the 12th FYP.
Tashi Delek.
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Annex 4.2: Statement by Australia
STATEMENT BY AUSTRALIA – 14th RTM MARCH 2019
Honourable Co-Chairs, Your Excellencies, Secretaries, Distinguished Delegates, Ladies and Gentlemen.
Australia is privileged and deeply honoured to be represented at this important 14th Round Table Meeting. On behalf of the Australian Government, I thank the Royal Government of Bhutan for its excellent convening of this meeting, to commence implementation of the all- important 12th Five Year Plan which will guide Bhutan’s graduation to middle-income status by 2023. I also thank the Royal Government for the exceptional hospitality extended to all the delegates. Special mention must also go to the Protocol Officers, whose support for each of the delegations is to be commended and has helped make our time in Bhutan all the more enjoyable. Many thanks.
On a sadder note I also offer, as did the Honourable Prime Minister in his address last night, sincere condolences to our United Nations family who lost colleagues and friends in the recent plane crash. We are saddened by the loss of so many people who were doing life-changing work in developing countries.
Australia and Bhutan have long enjoyed a warm, friendly and productive relationship. Diplomatic relations were established in 2002, but the foundation for our partnership dates back to 1962 when Bhutan was invited to be an Observer at the Colombo Plan meeting in Melbourne. Ashi Tashi Chodzom Dorji led an all-female delegation to this meeting, which saw Bhutan become a member of the Colombo Plan and laid the foundation for the strong friendship between our countries. For this, and for her efforts in opening Bhutan to the international community, Ashi Tashi was given an Honorary Order of Australia – which is Australia’s highest award – in July 2018.
Australia commends Bhutan on its balanced approach to development under the philosophy of Gross National Happiness, which we have heard has also been a very significant contribution to the global development discourse. We welcome the Royal Government’s visionary 12th Five Year Plan – underpinned by key principles of leaving no one behind, narrowing the gap between the rich and poor, and equity and justice for all. Positive signs for taking the Plan forward include Bhutan’s continued successful transition to full democracy, demonstrated by national elections in 2018, and sustained and impressive development gains in health, education, and poverty reduction.
We congratulate the Royal Government on its achievements, and note that the 2018 Voluntary National Review, presented at the United Nations General Assembly, showed the country is on track to meet the Sustainable Development Goals. We also commend the Royal Government on its frankness in articulating the challenges Bhutan continues to face as it moves toward graduation: regional poverty disparities; rising youth unemployment; private sector development; dependence on hydropower; last mile challenges in the health and education sectors; and vulnerability to climate change.
Australia is proud that we have been able to work with Bhutan to help meet these challenges. Our collaboration has been centred on the education sector, and since 2007 hundreds of scholarships (both short-term and long-term) have been offered to Bhutanese tertiary students.
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Many senior officials, career bureaucrats and other influential Bhutanese who have been educated in Australia have returned to Bhutan and are making a strong contribution to achieving its development objectives.
While education has remained a key focus of our relationship, Australia’s contribution has broadened in recent years to building human resource capacity in different sectors in response to Bhutan’s changing needs. The Australian Volunteers program works alongside the Australia Awards Masters-level scholarships to help strengthen the workforce. Our long-term assistance to the Royal Institute of Management has helped enhance the Bhutanese tertiary education sector. An increased focus on Australia Awards short courses has meant that even more people can benefit from exposure to Australian institutions, workplace practices and skills.
The Bhutan-Australia relationship continues to be strengthened through building people-to- people linkages that will maintain the relationship between our countries over time. The Australia Awards alumni network will play a significant role, as will the increasing number of Bhutanese – currently around 2000 people - who are studying at Australian tertiary institutions.
To help address youth unemployment and trade skill shortages, we will shortly commence a two-year project to build capacity in Bhutan's Technical and Vocational Education and Training sector, led by TAFE Directors Australia. And, for intake 2020, in line with the Royal Government’s objectives, Australia Awards scholarships are being offered for vocational, as well as Masters level, education.
Bhutan’s increased focus on educational policy and reform, outlined by the Honourable Prime Minister yesterday, is applauded by Australia and is critical to Bhutan achieving its future aspirations. In line with this, several recipients of Australia Awards Masters-level scholarships, who commenced study in Australia in January this year, are undertaking study in primary and special education. This will contribute to improving quality in these sectors and in turn equip students for secondary education and skills development.
Gender equality is an important priority across Australia’s development program, and Bhutan’s commitment to enhancing the status of women resonates strongly. Australian support is continuing to build the capacity of the NGO RENEW, whose advocacy campaign aims to decrease the level of gender-based violence and contribute to the economic empowerment of women across the country. The support RENEW offers to vulnerable individuals and families across the country can have a positive impact on the broader capacity building efforts of Australia and other development partners.
The Honourable Prime Minister, and many other speakers have noted that Bhutan is highly vulnerable to climate change. We commend the recognition of this in Bhutan’s 12th Five Year Plan, and the efforts being made to build resilience to minimise impact on livelihoods and sustainable development.
For example, springshed management has been prioritised as a major activity to address the issue of drying springs for better water security for mountain communities. Australia is pleased to support this work, implemented by the International Centre for Integrated Mountain Development (ICIMOD). ICIMOD’s efforts are complemented by those of SNV Netherlands, which, under our Water for Women Fund is collaborating with the Royal Government to achieve equitable and universal access to safely managed water, sanitation and hygiene services in rural areas of Bhutan.
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Australia also contributed to the recently launched Hindu Kush Himalayan Monitoring and Assessment Programme (HIMAP) report, developed by ICIMOD with inputs from over 350 scientists, that confirms the region’s vulnerability to global warming. We commend the Royal Government’s commitment to environmental protection, which can help mitigate these impacts and have a positive effect on more than a billion people who live in downstream regions in the Hindu Kush Himalaya.
Stability and prosperity across the Indo-Pacific region, including Bhutan, are important priorities for Australia. As Bhutan moves forward with graduation to middle-income status by 2023, from Australia’s perspective, it is important that Bhutan remains outward-looking, and continues the process of political and economic reform including development of the private sector. Implementation of the 12th Five Year Plan presents an opportunity for all development partners to coordinate their efforts to support Bhutan’s graduation and contribute to increased peace, prosperity and security in our region. Australia looks forward to playing its part in this.
On behalf of the Australian Government, I would like to reaffirm Australia’s ongoing and sincere commitment to assist Bhutan in achieving its aspirations. We look forward to continuing our fruitful and close partnership and friendship for many more years to come, and will continue to be happy ambassadors and advocates for Bhutan.
Thank you, and tashi delek.
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Annex 4.3: Statement by Austria
Statement by Austria Mr. Matthias RADOSZTICS, Minister Plenipotentiary, Deputy Head of Mission, Statement on the Occasion of 14th Round Table Meeting, Thimphu, Bhutan 12th to 14th March 2019
Your Excellency Dr. Tandi Dorji, Minister for Foreign Affairs, Dear Secretary, and UN Resident Representative, Distinguished Delegates, Ladies and Gentlemen,
Let me on behalf of the Government and people of Austria and on my own behalf thank the Royal Government of Bhutan and the United Nations on convening this 14th Round Table Meeting. The meeting is an important forum to take stock of the achievements and challenges of Bhutan in pursuing its development goals under the 12th Five Year Plan and a good opportunity for discussion and coordination between the Royal Government of Bhutan and the International Donor Community on the way forward to Bhutan’s graduation from the Least Developed Countries (LDC) category by 2023.
Only two weeks ago, H. E. Dr. Karin Kneissl, Minister for Europe, Integration and Foreign Affairs of Austria visited Bhutan reinforcing and further strengthening the existing close relationship Bhutan and Austria have been enjoying for the last 30 years and will continue to do so. This high level visit concluded with the joint adoption of the Bhutan Country Strategy 2019-2023. It aligns with Bhutan’s 12th Five Year Plan and emphasizes our joint commitment to the 2030 Agenda on Sustainable Development.
Austria sincerely recognizes the democratic and sustainable socio-economic progress made by Bhutan which is now poised to graduate from a Least Developed Country Status. Bhutan enjoys peace and stability and a robust economic growth. We highly appreciate the successful conduct of the third Parliamentary elections and an increase in the number of women Parliamentarians. However, there are also the last mile challenges that continue to confront Bhutan, not least the challenges notably of: low female participation in political and decision-making positions, high youth unemployment in general and high female youth unemployment, in particular; violence against women and children and the risks posed by climate change.
Austria believes that establishing, respecting and enhancing the rule of law is the core element to continue progress and to ensure “nobody is left behind”. Furthermore, improvement of accountability should lead to even more tangible results oriented public service delivery.
During 2019- 2023, Austria’s cooperation with Bhutan will continue from the successful past to focus on the two thematic areas of Governance and Sustainable Energy. The interventions in the field of Governance shall promote the mentioned principles of Rule of Law and Accountability while the sector invention in Sustainable Energy shall promote energy security through diversification, efficiency and efficient management systems.
In our partnership we have incorporated a human rights based approach connected to the GNH concept in all our programs and projects in Bhutan especially through the Legal Sector Program where access to an independent, competent and fair justice system should be enhanced and law education-in cooperation with Bhutan’s first law school- strengthened.
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Building on Austria`s long track record in supporting sustainable energy in Bhutan, Austria continues contributing to the diversification of sustainable energy sources, increasing the energy efficiency of the infrastructure, and therefore contributes to climate action in Bhutan. In the regional context, the Renewable Energy and Energy Efficiency Capability for the Hindu Kush Himalaya, REEECH, an initiative of the International Centre for Integrated Mountain Development (ICIMOD) has been launched with funding from the Austrian Development Cooperation. This facility can also play an important part, and I encourage all countries in the region to make extensive use of this new initiative.
Besides Austria’s engagement in the field of Governance and Sustainable Energy another important pillar to support Bhutan in becoming a strong economy and achieving self-reliance are business partnerships. Austria and Bhutan have tremendous potential of developing even closer business relations in the future! A business delegation from Austria visited Bhutan from 1-6 December 2018 to explore potential areas of cooperation. Austria is a leader in hydroelectric power, organic farming and in the health sector and Bhutan’s second largest partner in the hydropower sector! There are a lot of business opportunities to explore. Bhutan is eligible for Austrian soft loans and ADC business partnership financing mechanisms. Further, the Austrian Development Agency has been accredited to the Green Climate Fund and we are exploring the possibility of collaborating with GNHC on potential projects related to climate change adaptation and mitigation.
Finally, let me renew my gratitude to the organizers who successfully organized this Round Table Meeting. We look forward to our further work with the concerned agencies of the Royal Government of Bhutan and development partners in deepening our understanding of Bhutan`s specific development needs and challenges on Rule of Law and Sustainable Energy in order to provide tailor-made support! Together we can accomplish more than each of us can do individually and contribute to Bhutan’s graduation.
Thank you and Tashi Delek!
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Annex 4.4: Statement by Bangladesh
Statement of Bangladesh Delegation delivered by Mahbub Uz Zaman, Secretary (Asia and Pacific) Ministry of Foreign Affairs of Bangladesh at the 14th Round Table Meet (Enhancing Happiness and sustainable development through partnerships, Thimphu, Bhutan (12-14 March 2019)
Excellencies, ladies and gentleman.
It’s truly satisfying to be with friends once more. I bring greetings from the leadership of Bangladesh. Let me point out to the similarities and identical interests that Bangladesh and Bhutan have in their developmental objectives. They are: Securing efficient economic growth, attain distributive justice and promote fundamental freedoms and protecting human rights. These are the values that our two political leaderships share.
Our Father of the Nation Bangabandhu Sheikh Mujibur Rahman always championed the cause of the downtrodden people and the toiling masses. He wanted to bring happiness and smile to the workers and labourers. Bangabandhu aspired for an exploitation free society and dreamt of a self sufficient Sonar Bangla (Golden Bangla). That’s why we broke away from all kinds of social and economic subjugation and domination and created an independent country.
The government under the dynamic leadership of Sheikh Hasina through the election manifesto 2018 titled “Bangladesh on march towards prosperity “focuses on 33 sectors to be dealt with two strategic plans - the SDG and Delta PLan 2100. The vision is to increase the GDP growth rate to 10 percent from 7, 8 percent at the moment in the next five years and bring down poverty rate to zero from about 22 percent now by 2041. The priorities of the government are Good governance and show zero tolerance for Militancy and drug abuse and to crack down on corruption.
Good governance is an important domain of GNH. Gross National Happiness (GNH) was a term that was coined by His Majesty the Fourth King of Bhutan, Jigme Singye Wangchuk. His Majesty took a holistic approach where equal importance was given also to non economic aspects of well being. UNCTAD rightly observes that graduation is the first mile stone in the marathon of development, not a winning post of a race to leave the LDC category . Graduation with momentum requires a dedicated approach to facilitating structural transformation of economy in the era of SDGs.
The Hon’ble Prime Minister of Bhutan was stating about the structural transformation that is taking place especially in the agriculture sector. But the dilemma that policy makers often face is how to make growth and productivity in the agriculture sector a sustainable one. Gunnar Myrdal in his famous book Asian Drama has rightfully remarked that it is in the agriculture sector that the Long run battle for economic development would be won Or lost. Agriculture provides foodstuffs, raw materials and Employs a substantial portion of the labour and work force. It’s contribution to GDP is big but as the proportion of agriculture’s contribution to GDP, food stuff and output and employment goes doing due to structural transformation the agriculture sector itself has to grow in absolute terms to feed an ever growing population and rising demand for raw materials.
On 12th March, the 14th Round Table Meeting on the Theme “Enhancing Happiness and Sustainable development through Partnerships” was inaugurated by the Honble Prime Minister
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of Bhutan. He gave a very inspiring speech in which he emphasised on just not only growth but a structural transformation. I agree with his contention that growth is not merely about numbers. His concept is more akin to Meier and Baldwins definition of development to which I also allude. Baldwin defines “Economic development as a process whereby the country’s real per capita income increases over a sustained period of Time, provided that the number of people living below the absolute poverty line does not increase and the distribution of income and wealth does not become more unequal”.
As I was seeing the objectives of the RTM, I felt that Bangladesh could share her experience in least three of the five identified objectives of the RTM. Objective number One that calls upon development partners to address the last mile challenges and consolidate development gains.
Objective number Three that stresses upon the stock taking of Bhutan’s developmental progress, challenges and future priorities including smooth transition. Objective Number four that emphasises on leveraging the opportunity presented by the 2030 Agenda And The SDGs To set out a joint vision of Bhutans sociology economic development through effective partnerships. AS regards objective number one, structural transformation enabled smooth transition after gradation of countries indicates how structural transformation and graduation from the LDCs arts Connected.
For countries to overcome the challenges of slow structural change, policies targeting the growth of more productive sectors such as manufacturing and services could be implemented. To sustain long term structural change, the service sector has to be modernised in terms of both technology and skills.
Bangladesh has become eligible for graduation at the 2018 Triennial review of the Committee for Development Policy of the UN ECOSOC given its progress in Gross. National Income Per Capita and the Human Assets Index. It has been emphasised by policy planners that LDCs need to graduate with momentum in order to avoid the pitfalls of the post graduation phase.
AS regards objective number two, Development of productive capacities and structural transformation has been identified as key factors for graduation (UNCTAD Report 2016). Given the identical situation and similarities that Bangladesh and Bhutan face, their efforts towards implementation of the Sustainable Development Goals May facilitate graduation since several objectives of the Istanbul Program of Action (IPoA ) and SDGs have similarities .
As regards objective number three, Many of the SDGs are also similar to Bangladesh’s objectives for the medium term outlined in its Seventh Five Year Plan (7FYP) for the 2016 - 2020 period. For Bhutan it is important that the core objectives of the SDGs are well incorporated in the 12th FYP. It is heartening to note that the 12th FYP of Bhutan generate synergies between GNH and SDGs and will be underpinned by the principle of ‘leaving no one behind “
I am sure that the policy planners of Bhutan have identified the linkages between SDGs and LDC graduation. The 169 targets under 17 SDGs falls under the domain of economic, social, and environmental pillars of sustainability. The IPoA also delineates the priorities for smooth graduation. However, due to time constraints, I could not discuss the Istanbul program of Action for LDCs in details. The IPoA has goals, targets and actions. The priority areas of the IPoA include productive capacity; agriculture; food security and rural development; trade;
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commodities; human and social development; multiple crises and other emerging challenges; mobilising financial resources for development and capacity building and good governance at all levels. Our development partners could do much in this regard.
At the end I would like to conclude with a few lines of a famous poet Alexander Pope. In his poem “Happy the man” he says that:
Happy the man, whose wish and care A few paternal acres bound Content to breathe his native air In his own ground, Blest! Who can unconcernedly find Hours, days and years slide soft away, In health of body, peace of mind Quiet by day Sound sleep by night, study and ease.
Thank you, All.
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Annex 4.5: Statement by Bhutan Foundation
Honorable Co-chairs, Excellencies, Distinguished Delegates, Ladies, and Gentlemen,
It is my honor to convey to this august gathering greetings from Her Majesty Gyalyum Tseyring Pem Wangchuck and the Board of Directors of the Bhutan Foundation.
As many here may not be aware, kindly allow me to briefly elucidate the history of the Foundation. In the late 1940s, Her Majesty the Royal Grandmother, Ashi Kesang Choedon Wangchuck, attended school in London with Henrietta Fanner of England (who later became Henrietta Goelet) and Lisina Von Schulthess of Switzerland (who later became Lisina Hoch). A life-long friendship then began between our Royal Family and the Goelet and Hoch families that now spans over four generations. This friendship led to the establishment of the Bhutan Foundation on March 25, 1986, as the only American nonprofit focused solely on Bhutan.
Over the next decade and a half, the Foundation concentrated mostly on projects that developed Bhutan’s agriculture and supported Bhutanese students to study abroad. However, in 2002, Her Majesty Gyalyum Tseyring Pem Wangchuck commanded that the Bhutan Foundation could do much more to develop the relationship between Bhutan and the United States to build capacity and fill critical gaps created by rapid development. Therefore, in 2007, a new Board of Directors was instituted and our offices established in Washington, DC and Thimphu, to function as a bridge between the United States and Bhutan, and to tap into the growing interest in the Kingdom.
Bhutan’s environmental stewardship has won the country accolades from the global community. Today, the Global Tiger Center under the Ministry of Agriculture and Forests joins the ranks of a few (maybe three) fully national teams of professionals that exist globally and have the expertise to capture and collar wild tigers repeatedly and successfully.
Bhutan’s medical doctors and health-care professionals, who are at the forefront of the country’s noble duty of providing universal quality health-care to every Bhutanese, benefit from international certification trainings imparted through the Hoch Center for Emergency Education and Training at the Khesar Gyalpo University of Medical Sciences.
As the Ministry of Education gears up to roll out inclusive education across the country, we look back with aplomb and satisfaction at our almost decade-long partnership to build a cadre of Bhutanese educators trained in teaching children with special needs.
Along the banks of the great rivers of lower Kheng, the River Guides of Panbang, an ecotourism enterprise fully owned and operated by members of the community, have now become change agents within this community, carrying forward the country’s aspiration to curb out-migration from villages, create gainful employment, and promote sustainable eco-tourism.
We are deeply honored to have played a small role in enabling all of these to happen. And in doing so, we have stayed true to the mission of the Bhutan Foundation to enable the people of Bhutan to reach their full potential by developing local capacity and facilitating global support.
As we strive to improve the quality of Bhutan’s human capital, we foster professional relationships between Bhutanese institutions and agencies, and those abroad. We also accord
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great importance to and take pride in performing our role as a bridge between Bhutan and many friends of Bhutan in the United States.
May I take this opportunity to commend the Royal Government of Bhutan, the vibrant civil society, the private sector, and all the development partners in the collective efforts to successfully usher Bhutan into the middle-income country category.
As Bhutan embarks on the last leg of this graduation, it is an honor for the Bhutan Foundation to further commit our support towards the country’s aim of creating a Just, Harmonious, and Sustainable Society. Our program areas, originally defined within the four pillars of Gross National Happiness, align with 12 of the 17 National Key Result Areas of the 12th Five Year Plan and include elements from several of the Flagship Programs. It is, therefore, imperative that we explore synergies that best support the country’s goals and aspirations through our place-based interventions in our program communities.
In closing, I would like to thank all our government and civil society partners in giving us an opportunity to contribute towards creating a knowledge- and skill-based human capital in Bhutan. The Bhutan Foundation remains committed in offering our steadfast support to the next five years of Bhutan’s extraordinary journey of progress. For it is the vision of the Foundation to see Bhutan as a progressive society enriched by GNH values.
Thank you and Tashi Delek.
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Annex 4.6: Statement by Bhutan Trust Fund for Environmental Conservation
Your Excellencies, Hon’ble delegates and members of the GNHC.
It is indeed an honor and an opportunity for me to say a few words on behalf of the BTFEC to this August gathering. For the benefit of those who may know little of the BTFEC may I be permitted to say a few words on the BTFEC.
The BTFEC was conceptualized by a few like-minded environmentalists guided by the visionary leader no other than His Majesty the Fourth Druk Gyalpo for sustainable financing of the environmental activities in Bhutan. BTFEC was conceptualized in early 90s and had become fully functional by mid 90s.
I would like to put on record here today for the unchallenging support we have received from Governments of Sweden, The Netherlands, Norway, Switzerland and the GEF, UNDP, WWF for their contributions to the endowment fund of USD 20 million as the initial capital fund. We are indeed proud to inform this gathering here that as of this day our capital endowment has grown to 69 million; living up to the vision of sustainable financing for environment set by our beloved Monarchs and at the same time conserving our natural resources as a legacy for generations to come.
Since its inception BTFEC has supported 218 projects and spent approximately USD 19 million.
In addition, BTFEC has implemented a five years project of USD 4.08 million that targeted the High-Altitude Northern Areas under the GEF funding. BTFEC is grateful to the GEF for their confidence in us and making the life of the highlander more comfortable and encouraging the dwellers of these areas not to migrate to lowlands. BTFEC also has implemented as vendor the CIF project of USD 150,000 that has enabled us to develop capacity of our communities and document GIS maps in sustainable land management and explore for innovative financing for Sustainable land management which is critical for mountainous country like ours which is ravaged by impact of climate change.
Your excellencies and honorable delegates, it gives me great happiness to convey that BTFEC has been accredited as the National Implementing Entity for the Adaptation Fund in January 2018 as the 28th NIE in the World and 2nd in the South Asia.
We are also trying to get accredited to GCF and readiness grant has been provided in preparation to the direct access modality and we are on 2nd step of the review process.
Lastly, we would like to commit here USD 7.5 million for the 12th FYP for the environmental projects in the country. This is besides the commitment that BTFEC has made to annually contribute USD 2.5 million to Bhutan for Life.
Trashi Delek and Thank you.
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Annex 4.7: Statement by the European Union
Intervention by the European Union, Deputy Managing Director Paola Pampaloni, European External Action Service
Excellencies, Colleagues, Development partners,
I am happy to be back in Thimphu and attend the Round Table Meeting on behalf of the European Union. This is a good opportunity to confirm our excellent cooperation with Bhutan, to listen to the presentation about the objectives of the 12th Five Year Plan and improve coordination with development partners.
We look forward to intensifying our partnership with Bhutan in the coming years and working together to address global challenges, such as climate change.
The EU wishes to congratulate Bhutan for its hard work which has paved the way to the graduation to a Middle Income Country. This is a concrete recognition that Bhutan has gone a long way in recent years with the support of its development partners.
We have witnessed a successful democratic transition and healthy economic growth in recent years.
After listening to the presentation, we are pleased to say that the 12th Five Year Plan is a useful and conducive framework for our future support. Almost 80% of our portfolio in Bhutan is channelled directly through country system. Our budget support programme is a sign of maturity in our relationship, both operationally and politically, and the result of the good policy work and implementation by the Bhutanese authorities.
We believe that budget support is respectful of country ownership. For us, it is important to have the Royal Government of Bhutan in the driving seat in the years ahead.
Under this current seven year financial framework (2014-2020), the EU has supported (with Euro 42 million): 1. Support to rural development and climate change response (Euro 21.5 million, including 20 million in budget support). 2. Support for civil society (Euro 2.5 million). In this respect we hope civil society will be regularly consulted in the implementation of the 12th Five Year Plan. 3. Support for bilateral trade between EU and Bhutan (Euro 4 million) which supports farmers and traders in all 20 districts of the country. 4. Capacity building for local Government to implement fiscal decentralisation and local government reforms (Euro 20 Million, including 16 million in budget support).
I am happy at this occasion to announce that this week the EU decided the disbursement of a total of EUR 9.5 million in budget support – EUR 4 million for capacity development for local government and fiscal decentralisation and EUR 5.5 million for rural development and climate change.
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Bhutan is also benefitting from a number of thematic and regional programmes such as Erasmus (giving opportunity to Bhutanese students to study at European universities), the EU- South Asia Capacity Building Disaster Risk Management and the Global Climate Change Alliance Plus (GCCA+).
We look forward to engage with the authorities in the coming months to identify jointly the priorities for the next EU financial framework covering the period 2021-2027, and to consult with other development partners in the process.
The EU confirms that we will remain committed to accompany Bhutan in the transition process after graduation and to engage on innovative development instruments such as blending and investment in priority sectors for the country.
Finally, allow me to also highlight the EU's recent strategy on Connecting Europe and Asia, adopted in the end of 2018. The main aim of the strategy is to better connect Europe and Asia through transport links, energy networks, digital networks and people-to-people connections. The EU is now working to prepare an action plan for the implementation of the strategy. We would be interested to also discuss this strategic objective with Bhutan, including attraction of private sector investments.
To conclude, the EU wishes to reassure that we will remain committed to support and cooperate in partnership with the Royal Government of Bhutan also after graduation to Middle Income Country.
Thank you.
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Annex 4.8: Statement by Finland
Statement by H.E Mr. Harri Kämäräinen, Ambassador of Republic of Finland to Bhutan during the 14th Round Table Meeting
Finland-Bhutan Cooperation
Finland’s focus changing towards multilateral cooperation
1. UN and its special agencies Doing an immensely important work on the ground in Bhutan. One example can be eradication of measles in Bhutan as informed by the WHO. Other UN special agencies have similar success stories to share from various regions in Bhutan. Finland believes in rule-based international order and the strength of the UN. In today’s world, we need more UN- not less.
2. Finland as an active EU member state is proud and happy to participate in EU program in Bhutan, among the other 27 EU member states. One example of such EU-funded projects is the cooperation between Finland’s Aalto University and the Royal University of Bhutan. This project is funded by EU Erasmus+ and is about “Problem-Based Learning”. One of its aims is to strengthen the capacity of higher educational institutions to contribute to socially responsible innovation ecosystem.
3. Finnish Government is also supporting Finnish NGOs and Civil Society organizations active in supporting Bhutan. For example, WWF Finland supports and cooperates with the WWF Bhutan in preserving the biodiversity and protecting the unique wildlife of Bhutan. FIDA International is working on “Future belongs to our Children” Project, which focuses on empowerment of women and vulnerable groups, including the disabled in the society and especially in the rural areas with the aim of creating work opportunities locally.
Through the Asian Development Banks’s Future Carbon Fund, Finland is supporting a Hydro Power Plant Project in Bhutan. Finland’s State Auditing Authority has established good cooperation with Bhutan’s Royal Audit Authority. FINCENT is training Bhutanese peacekeepers at its center in Finland.
4. Business-to-Business Partnership Finnpartnership, one of the Finland’s funding agencies is granting funding for the Finnish private companies for doing business with Bhutan. So far, the interest from the Finnish companies has been rather limited but all those companies which have submitted their applications have received a grant.
5. Possible future areas of cooperation between Finland and Bhutan i. Education, including vocational education ii. Forestry: Sustainable management of forest resources iii. Healthcare, especially digitalization of healthcare and health technology
6. On 1 July, 2019, Finland will resume the rotating EU-Presidency for the second-half of 2019. During her EU Presidency, Finland will focus very much on gender equality and combatting climate change.
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7. Finland believes that even our small and modest support for Bhutan’s development has had an impact, as Bhutan is taking the international cooperation with due seriousness. We congratulate Bhutan for her remarkable achievements during the past ten years of democracy.
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Annex 4.9: Statement by Green Technology Center
Statement of Director-General of Green Technology Center
Dear ladies and gentlemen. It is my great honor to have an opportunity of making a statement at the Round Table Meeting on behalf of Green Technology Center Korea or GTC. I am Jongsoo Jurng, Director-General of the GTC. The GTC, Korea’s leading national institute, is 1) making climate policy and international strategy, and 2) developing projects with other development partners.
Together with the Green Climate Fund or GCF, a funding agency, and Global Green Growth institute or GGGI a policy and capacity building agency, the GTC consists of a Green Triangle. Last December, 17 Official Development Assistance or ODA institutes, including KOICA and Korea Export-import Bank, formulated a cooperative platform, manage total grant of around USD 3 billion per year. The GTC is a secretariat of this platform, with a role of developing feasible climate technology projects through the pre feasibility study and needs assessment activities.
Until now, GTC has developed about 40 projects across 20 countries. Taking this opportunity, I would like to briefly explain on three projects to be developed in Bhutan.
First of all, we have received the endorsement of GCF on the Project Preparation Facility or PPF fund on Green Transport project in Bhutan on 27 January in this year. We expect to secure total USD1.5 million from the PPF and the World Bank counterpart funding (technical assistance fund). We will complete the preparation of the main project proposal by not later than the first half of the next year, and plan to submit the same to GCF for the approval of the main project, USD50 million. On top of this project, we have received a series of request for the similar project processing from Ethiopia and Nepal.
Secondly, we have started to discuss on the finalization of forest sector (REDD+) among the GCF Readiness project in Bhutan. GTC and other Korean agency, Korea Forest Service are planning to participate in this exercise, and following the confirmation of GCF Readiness project, Korea Forest Service is expected to support Bhutan through another source of cofinancing to strengthen the project components of the GCF Readiness project.
Thirdly, but not the last, GTC has already secured around USD500,000 for the establishment of Master Plan and administration of pilot project on waste management in Thimphu from Korean ODA fund in this year. GTC has lots of working experiences of conducting Master Plan and required feasibility study with other Korean consortium partners in other countries such as Indonesia. We will aim to further develop follow up projects through demand analysis, needs assessment, proper technology match, and linking to finance.
I trust that GTC has already stood up as a lead climate technology agency, as shown in various projects in multiple countries. At this moment, we are focusing on seven major sectors such as (i) green transport, (ii) waste management, (iii) smart city development, (iv) energy efficiency, (v) enhanced access to water, (vi) enhanced adaptation including smart farm, and (vii) other innovative technology such as carbon capture utilization or CCU. GTC expects to expand our possible cooperative works with other development partners including the multilateral financial banks, bilateral development partners, government agencies, and other related stakeholders as well as Bhutan government. Thank you.
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Annex 4.10: Statement by HELVETAS
Fourteenth Round Table Meeting between Royal Government of Bhutan and Development Partners Thimphu, 12-14 March 2019 Statement of the Delegation of HELVETAS Swiss Intercooperation
Excellencies, Dashos, distinguished delegates, ladies and gentlemen
1. Switzerland and Helvetas in particular, have a long history in Bhutan. Our partnership for the development of the country is already almost 45 years old. Throughout the years, Helvetas has accompanied Bhutan in its progress towards the MDGs – _and now the SDGs, particularly in the sectors of education, infrastructure, rural economic development, and more recently, vocational skills training, decentralisation and local governance and support to civil society.
2. With the graduation as a middle-income country by 2023 in target, Bhutan has compiled an ambitious 12th FYP. Bhutan’s pace of development, out of poverty, has been rapid and still is. Bhutan is a small country that moves fast. The country manages to keep this unique blend of tradition and pioneering spirit. Culture and century-old traditions are preserved and revived all over the country, as well as forward looking and innovative stands are made: Bhutan is probably the only country to be carbon negative and therefore certainly well equipped to face future global challenges.
3. Bhutan is changing fast, as is the entire world. Global warming, migration, urbanisation, pollution, new geopolitics, technology and big data, etc. are only a few of the global trends that affect and will affect all of us ever more. How is Bhutan getting ready with it? What are the typical challenges that the Bhutanese society will have to face. What will this mean to the poor and vulnerable people – _be they rural or urban? Is the country really preparing the ground for a sustainable, harmonious and people centred sustainable development in social, environmental and economic terms? Helvetas will remain a partner besides Bhutan to contribute to those reflections and to the achievements of the last mile plan.
4. The 12th FYP envisions a just, harmonious and sustainable society through enhanced decentralisation. With its commitment to actively support decentralisation and local governance, foster Civil Society Organisations and support the youth in taking up new professional and life challenges, Helvetas is confident that its added value as a foreign technical assistance provider will contribute to the realisation of the government’s vision.
5. I am pleased to reaffirm HELVETAS commitment to remain engaged in Bhutan until at least 2022. Keeping in mind the above-mentioned challenges in the country and the priorities in the 12th plan, our focus in the next five years will be on skills training and entrepreneurship, local governance and decentralization, as well as strengthening the emerging civil society. This shall contribute to the National Key Result Areas 7, 11, 13.
HELVETAS Swiss Intercooperation thanks the Royal Government of Bhutan for the excellent preparation and arrangements for this Round Table Meeting. We would like to take this opportunity to wish the people of Bhutan the very best for the future. Thank you and Tashi Delek.
Thimphu, March 14th, 2019
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Annex 4.11: Statement by ICIMOD
lnternational Centre for lntegrated Mountain Development The 14th Round Table Meeting, Royal Government of Bhutan 13th-14th March, Thimphu
Dr. Eklabya Sharma, Deputy Director General
I am grateful to the Royal Government of Bhutan for Inviting ICIMOD at this 14th RTM: Enhancing Happiness and Sustainable Development through Partnership. We are privileged and honored to be part of this august gathering.
Bhutan is one of the founding members of ICIMOD- an intergovernmental organization that was established in 1983. With the head office based in Kathmandu, our vision is "Men, Women and Children of Hindu Kush Himalaya (8 member countries) Enjoy improved wellbeing in a Healthy Environment”.
ICIMOD is a regional 'Learning and Knowledge Sharing Centre', and today at this august gathering, it is my honor to share one of our latest knowledge product – the "Hindu Kush Himalaya Assessment Report 2O19" prepared by 350 professionals over the past 4 years and published by Springer Nature with open access. This is the first comprehensive assessment report like mini-IPCC report for this region that has implications for more than half of the humanity of the planet EARTH.
Some of the key messages from the assessment are: Firstly, there are sufficient evidences now for taking URGENT actions Secondly, costs of non-action will have huge impacts not only to the people of the Hindu Kush Himalayan mountains, but also to a large population in the downstream and globally Thirdly, mountains are facing altitudinal amplification in temperature rise making them hotter than global average temperature rise, and having a huge impact on the cryosphere such as glacier melting Fourthly, the HKH is a global asset and the region certainly deserves more attention and investment for ensuring resilience and sustainable development ICIMOD is developing "HKH Call to Action" to take forward the results of the assessment in partnership with the eight countries including Bhutan and with global partners I also call to all the development partners who are present here to consider the results of this assessment in designing their contributions, support and investment in the Hindu Kush Himalayas including Bhutan.
More specifically, we are proud to mention that Bhutan's 12th Five-Year-Plan also coincides with ICIMOD's Medium Term Action PIan lV. Therefore, our next five years operational plan are aligned with the "Royal Government's 12th FYP Priorities: A Just Harmonious and Sustainable Society".
ICIMOD delivers its impacts through 6 Regional Programmes and I am happy to report that Bhutan is part of all the 6 regionat programmes. For instance, under the Adaptation and Resilience Building, we will be supporting National Organic Agriculture, Highland
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Development and Mountain entrepreneurships, which are some of the key priorities of the Royal Government of Bhutan. As a part of adaptation and resilience, we will also be engaging in areas of 'Renewable Energy and Energy Efficiency in Bhutan'.
Under the Transboundary Landscapes programme, we are actively working to support eco- tourism, Yak value chain and non-timber forest product and other natural resources management efforts of the government. River Basins and Cryosphere, Atmosphere, Mountain Environment and Regional Information Systems and Mountain Knowledge and Action Networks are other programmes that ICIMOD will continue to engage with the Roya! Government of Bhutan.
Currently ICIMOD is associated with some 15 plus partners in Bhutan, with Gross National Happiness Commission (GNHC) as strategic partner and Ministry of Agriculture and Forests (MOAF) as nodal agency of ICIMOD in Bhutan. ICIMOD is committed to deepen its engagement in Bhutan and wish to play an active role in supporting Bhutan's last mile progression towards LDC graduation.
Before I conclude, I would also like to express our gratitude to the Royal Government of Bhutan for continued support to ICIMOD. Specially, we acknowledge the support of the Royal Government in guiding us for "developing Happiness and Well-being framework" that we wish to upscale through our ongoing programmes in the 8 HKH member countries.
Tashi DELEK
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Annex 4.12: Statement by India
1. Let me begin by congratulating the Royal Government of Bhutan and the UNDP for the successful organisation of this 14th Round Table meeting, which brings together all of Bhutan’s development partners for a dialogue with the highest levels of the Bhutanese leadership. The theme chosen for this edition of the Round Table Meeting, namely “Enhancing Happiness and Sustainable Development through Partnerships” captures well the existing and potential synergies between Bhutan’s philosophy of Gross National Happiness, as distilled into the 17 National Key Result Areas, and the 17 Sustainable Development Goals identified by the United Nations.
2. India has been associated with Bhutan’s planned development efforts since the 1960s. From the beginning, the contours and pace of this collaboration have been determined by the development priorities of the Bhutan Government, and have benefited from the enlightened guidance of Their Majesties the Kings of Bhutan. We feel privileged that India has been able to partner successive Bhutanese Governments to advance development in critical areas while preserving the traditional ethos and philosophy of the Kingdom. In this context, I would like to put on record our special appreciation for the quality of governance, including the effective oversight provided by the Gross National Happiness Commission for the overall development enterprise in Bhutan. On the whole, it is our conviction that the evolution of the relationship between Bhutan and India over the past half-century, and the results it has achieved, stands out as a unique model of good-neighbourliness, mutual respect, and mutual benefit between countries of markedly different size.
3. In this context, let me recall that last year, Bhutan and India celebrated the Golden Jubilee of the establishment of diplomatic relations between our countries. The visit of His Excellency Lyonchhen Lotay Tshering to India in December 2018 was a fitting finale to this landmark year, and allowed both countries to review the achievements and modalities of our past cooperation. It also allowed India to express full support to the new Government of Bhutan, and to its laudable agenda of ‘narrowing the gap’ within different sections of Bhutanese society.
4. During Lyonchhen Lotay Tshering’s visit, Government of India announced that it would support the implementation of Bhutan’s 12th Five Year Plan to the same extent as it had done for the 11th Five Year Plan. As in the past, we are confident that Indian support will help the Royal Government of Bhutan in implementing the different facets of the XII Five Year Plan, including infrastructure development, smaller community focused grassroots projects, as well as human and institutional capacity building in various sectors.
5. I would also like to mention the cooperation between Bhutan and India in the field of hydroelectricity, which has been a major component of our partnership portfolio and which offers a unique model of win-win collaboration between contiguous countries. The hydro-electricity projects developed in Bhutan with Indian support have contributed over the years to providing clean energy to India’s vast population while simultaneously being the most important source of export revenue to Bhutan.
6. Like other development partners of Bhutan, we share a sense of pride and joy at the imminent graduation of Bhutan from the ranks of Least Developed Countries. This is a
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remarkable achievement, especially for a small landlocked nation with few natural resources, and owes itself entirely to the exemplary leadership that the Kingdom has been blessed with. While we congratulate Bhutan on this achievement, I would like to underline that India’s development cooperation with Bhutan is not linked to any specific status, but is based, instead, on the historical, physical, cultural, commercial, and emotional contiguity between our countries, our people and our leaders. Therefore, the future of the unique and special relationship that Bhutan and India share will continue to be determined by the expressed needs and priorities of Bhutan, and India’s capacities to contribute towards them.
7. I will end by once again thanking the organisers of the Round Table Meeting for the excellent arrangements made and for the exemplary quality of the presentations and discussions during the Meeting. On behalf of the Government of India, I reiterate that India will continue to walk alongside Bhutan, as the Kingdom progresses into ever higher levels of development, prosperity, climate-resilience and national happiness.
Tashi Delek and Thank You to all of you!
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Annex 4.13: Statement by Indonesia
Indonesia Country Statement Delivered by Ambassador Sidharto Suryodipuro at the 14th Round Table Meeting: Enhancing Happiness and Sustainable Development through Partnerships Thimphu, 12-14 March 2019
Co-Chairs, Excellencies, Distinguished delegates, Ladies and Gentlemen,
1. Allow me to convey our sincere gratitude to the Royal Government of Bhuan for the warm hospitality and excellent arrangement extended to the Indonesian delegation.
2. We are pleased to be part of this important meeting as one of Bhutan’s partners in the development sector.
3. Indonesia commends Bhutan’s achievement in completing its 11th Five Year Plan and welcomes Bhutan’s development priorities under its 12th Five Year Plan. We seek to work with Bhutan to identify what we can contribute to assist Bhutan.
4. In this context, the Prime Minister of Bhutan, H.E. Dr. Lotay Tshering, presented a very clear articulation of the opportunities and challenges of Bhutan’s development in the next five years. His views serve as a broad guideline for us in exploring where we can best add value in Bhutan’s development needs.
Co-Chairs, 5. Indonesia’s partnership with Bhutan in development goes back more than a decade, even before both countries established diplomatic relation in 2011.
6. In more than a decade, our technical cooperation has covered natural disaster management, vocational training for persons with disabilities, good governance, economic development, small and medium enterprises, air transportation, medicine, women empowerment, and media. Recently, we hosted a participant from Bhutan for the Indonesian Fellowship Training Program on Foam Tender Operation and Defensive Driving.
7. Under the broader context of South-South and Triangular Cooperation framework, Indonesia’s programs are mainly focused on the three aspects, namely: development; economy; as well as good governance and peace building. In the Asia Pacific region, Indonesia’s development and good governance programs are focused on specific topics that include agriculture, fisheries, tourism, infrastructure, women empowerment, disaster mitigation, as well as multimedia and journalism.
Co-Chairs, 8. The Government of Indonesia has provided scholarships for thousands of foreign students from friendly countries to study in Indonesia, including under the schemes of Darmasiswa
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Scholarship, Indonesian Arts and Culture Scholarship, and Developing Countries Partnership scholarship. In the past ten years, we provided 1,163 Developing Countries Partnership scholarships to students from 71 developing countries to obtain master degree in various fields.
9. Indonesia is pleased to share its experiences, best practices, and lessons learnt in the fields of tourism, hotel management, wood processing as well as art and crafts through vocational and practical trainings. Cooperation schemes could include trainings in Indonesia as well as train-the-trainers program in Indonesia or Bhutan.
Co-Chairs, Excellencies,
10. Let me reiterate Indonesia’s readiness to support Bhutan for its development needs, in line with its priorities. Indonesia would be ready to do so also through cooperative programs that would be distinctively tailored to meet Bhutan’s specific requirements.
11. I hope that we can strengthen our partnership in support of our respective development needs and, above all, for Bhutan’s further impressive progress and achievement in the next five years and beyond.
Thank you.
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Annex 4.14: Statement by International Finance Corporation (IFC)
Statement by the International Finance Corporation (IFC) Bhutan’s 14th Round Table Meeting with its Development Partners 14 March 2019, Thimphu Delivered by: Mr. Om Bhandari, Country Coordinator, International Finance Corporation
Your Excellencies:
The International Finance Corporation (IFC) continues to assist the Royal Government to engage the private sector in addressing key development gaps of Bhutan. The Government has rightly identified the need to diversify its economy away from hydropower while recognizing the importance and continuing to develop its power sector. We believe this approach is well placed and shall aid the nation in achieving the 12th five-year plan which is carefully crafted using GNH principles and aligned to the sustainable development goals (SDGs). The continued efforts in developing Bhutan’s health, education, agriculture, tourism, mining, IT, financial and other infrastructure and services, coupled with concerted efforts to develop its small and cottage industries (CSIs) will only help strengthen the kingdom’s economic resilience and create the much-needed jobs. In all the afore mentioned areas the IFC will remain a long-term partner by providing advisory assistance, policy support and non-sovereign financing for the private sector.
We have been working in Bhutan since 2003. IFC has financed private companies that are financially and environmentally sustainable. We continue to provide advisory services on private sector development. We have helped enhance financial inclusion by supporting financial infrastructure development with the Royal Monetary Authority and by working with local commercial banks by enhancing their risk management capabilities. Our investments in the tourism sector have supported Bhutan’s policy of high value – low impact tourism. We helped promote the quality of Bhutan’s tourism services with local and international operators. We also supported the largest private agribusiness company in the country. This project is showing initial results and will ultimately help increase the incomes of 15,000 mostly rural, mostly poor smallholder farmer families. The initiative has introduced modern agricultural and farming practices along with a high value niche product. We are glad to see one of the country’s first major public private partnership (PPP) projects being rolled out and are delighted to have served as transaction advisor. Further, we are pleased to learn that the model is being replicated for other projects.
We welcome and encourage the steps Bhutan is taking to make the most out of the private sector: these are improving the business support environment, using more public-private partnership (PPP) instruments, attracting foreign direct investments (FDIs), developing the market for equity and outsourcing certain public services. Here, we would like to highlight the importance of developing the capabilities of the various regulatory bodies concurrently. This will be an important precursor as the new Government’s revisits the role and operations of state-owned companies which have the potential to be leveraged to enhance Bhutan’s competitiveness.
Your excellencies,
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We all recognize and celebrate the admirable socio-economic progress Bhutan has made in a short span of time by prudently making the best use of development assistance. As we discuss Bhutan’s graduation from the least developed countries (LDC) category, private financing, blended finance and other financing instruments will remain important complements to public loans and grants to help Bhutan avoid falling into the “lower middle-income trap”. The 2030 Agenda for Sustainable Development clearly spells out the need for the private sector to engage responsibly to meet the SDGs. With experience of channeling new financing mechanisms to tackle complex public issues such as food security and climate change in other countries, we see an opportunity for Bhutan to do so as well. This becomes important as the Royal Government decides to shift its responsibility from being a provider to an enabler of inclusive growth. To support this, our upcoming country partnership strategy for Bhutan, being developed together with our sister agencies, the World Bank and the Multilateral Investment Guarantee Agency (MIGA) will ensure to have broad consultations with various stakeholders.
The International Finance Corporation, is here to stay for the long term and back Bhutan up in this new journey. We extend our sincere thanks to the various agencies of the Royal Government of Bhutan and all other developmental partners for their continued support to us and to Bhutan’s private sector. The informative presentations and rich dialogues we are having are indicative of the commitment of the Royal Government to achieving its development agenda to increase Gross National Happiness for the people of Bhutan. We reiterate our steadfast support to the Royal Government of Bhutan in its economic development strategy.
Tashi Delek.
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Annex 4.15: Statement by International Monetary Fund (IMF)
Statement by Andreas Bauer, Senior Resident Representative, International Monetary Fund 14th Round Table Meeting in Thimphu, Bhutan March 13, 2019
In the context of the recently concluded 11th 5-year plan, Bhutan has made significant further strides in raising per capita income, reducing poverty, and improving more broadly the well- being of its population. These achievements were supported by a generally stable macroeconomic environment, characterized by low inflation and sustained growth, which in turn reflected prudent policies.
Looking ahead, sustaining and further expanding the progress made in terms of incomes and human development will be the key challenge for Bhutan as the country graduates from the Least Developed Country (LDC) category.
The International Monetary Fund (IMF) has been a close partner in Bhutan’s development efforts since the country became a member in 1981. Our institution’s engagement with Bhutan focuses on two main activities: the provision of policy advice and capacity development.
A comprehensive policy dialogue between the IMF and the Bhutanese authorities takes place every 24 months in the context of the so-called Article IV consultations. In between such consultations, less formal policy discussions take place through field visits.
In the area of capacity development, the IMF offers training for officials and technical assistance through expert missions. The delivery of capacity development to Bhutan has risen considerably with the inauguration in early 2017 of the IMF’s South Asia Regional Training and Technical Center (SARTTAC) in New Delhi. In less than two years of operation, SARTTAC has already trained almost 160 officials from the Royal Monetary Authority, Ministry of Finance, National Statistics Bureau, Gross National Happiness Commission, and other agencies, and delivered more than 40 technical assistance missions. With these and other activities conducted by IMF staff from Washington headquarters and other regional training centers, Bhutan has been among the largest recipients of IMF capacity building in per-capita terms.
The IMF is strongly committed to continue working closely with the authorities, supporting implementation of the 12th Five-Year Plan and more broadly Bhutan’s sustainable development efforts.
Consistent with the IMF’s mandate, our advisory activities will focus largely on policy issues related to the National Key Result Area (NKRA) 1 in the 12th Plan, which aims to create a strong macroeconomic environment by ensuring stable growth, sustainable fiscal deficits, price stability, full employment, and a sound financial system. However, the IMF may also provide policy advice and undertake analytical work in support of other NKRAs such as economic diversification, poverty eradication and reducing inequality, gender equality, and reducing corruption.
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In the period ahead, the IMF will maintain its strong engagement in the provision of capacity development, including through SARTTAC. A major project already underway supports the authorities’ efforts to strengthen domestic revenue mobilization with equity. For this, the IMF has already deployed a resident revenue advisor who is working closely with the Bhutanese project team for the implementation of a broad-based goods and services tax. The project, which spans over two years, further includes a series of short-term expert visits and specialized training for tax administration officials.
Another capacity building area in which the IMF is planning to provide assistance is the strengthening of macroeconomic statistics. Enhancing the availability, frequency, and quality of economic data is essential to enable improved policy-making. The IMF’s focus in these areas will be on enhancing balance of payments and government finance statistics, national accounts, and price statistics.
Training and technical assistance from the IMF is also envisaged in areas such as financial sector supervision and regulation; public financial management, including budget execution/control and the management of fiscal risks; and monetary policy implementation and other central bank operations.
The IMF looks forward to continued close and fruitful collaboration with the Bhutanese authorities and other development partners.
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Annex 4.16: Statement by International Union for Conservation of Nature
IUCN Statement for the 14th Round Table Meeting, 12th-14th March 2019
Your Excellencies, Co-chairs, esteemed colleagues, ladies and gentlemen.
I am delighted to be in Bhutan for this, the 14th Round Table Meeting. This is my first visit to Bhutan, but I can already see why so many speak of the country’s beauty and the warmth of its people.
On behalf of IUCN, the International Union for Conservation of Nature, I would like to express my sincere appreciation to the Royal Government of Bhutan for your invitation, hospitality, and for organizing this important meeting. I also extend congratulations to the Royal Government of Bhutan on the successful adoption of the 12th Five Year Plan. IUCN is a membership Union, uniquely composed of both government and civil society organisations. It provides public, private and non-governmental organisations with the knowledge and tools that enable human progress, economic development and nature conservation to take place in harmony.
Created in 1948, IUCN has evolved into the world’s largest and most diverse environmental network. It harnesses the experience, resources and reach of its 1,300 Member organisations and the input of some 13,000 experts. IUCN is the global authority on the status of the natural world and the measures needed to safeguard it. Our experts are organised into six commissions dedicated to species survival, environmental law, protected areas, social and economic policy, ecosystem management, and education and communication.
The ability to convene diverse stakeholders and provide the latest science, objective recommendations and on-the-ground expertise drives IUCN’s mission of informing and empowering conservation efforts worldwide. We provide a neutral forum in which governments, NGOs, scientists, businesses, local communities, indigenous peoples groups, faith-based organisations and others can work together to forge and implement solutions to environmental challenges.
By facilitating these solutions, IUCN provides governments and institutions at all levels with the impetus to achieve universal goals, including on biodiversity, climate change and sustainable development, which IUCN was instrumental in defining. Through their affiliation with IUCN, Member organisations are part of a democratic process, voting Resolutions which drive the global conservation agenda. They meet every four years at the IUCN World Conservation Congress to set priorities and agree on the Union’s work programme. The next congress will be held in June in 2020, hosted by the Government of France.
The partnership between the Royal Government of Bhutan and IUCN has been developing over the last 10 years. IUCN welcomes opportunities to utilize the strengths of our Union to further develop our partnership and contribute to the achievement of the 12th Five Year Plan.
This includes; opportunities to scale up Ecosystem-based adaptation approaches to climate change in mountainous regions which would contribute to National Key Result Area 6 as well as other NKRAs;
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furthering engagement in the Asia Protected Area Partnership (APAP), in which Bhutan has joined other countries from across Asia in sharing knowledge to strengthen regional collaboration and promote effective protected area management; supporting water management through IUCN’s flagship transboundary BRIDGE programme, and implementation of the Ramsar Convention, thus supporting NKRA 17 on Sustainable Water contributing to the best practice in protected area management and the Green List of Protected Areas and;
We also welcome; further developing opportunities for Red List species assessments, building on the successful Red List of the Endemic Plant Species of Bhutan, and thus strengthening research on biodiversity information in line with NKRA 5 and, working together to address the complex issue of Human Wildlife Conflict, drawing on the experience of IUCN’s HWC Taskforce, and facilitating opportunities to share Bhutan’s wealth of knowledge on this issues which was apparent at the Third APAP Technical Workshop on HWC successfully hosted by the Department of Forest and Park Service here in Thimpu in 2017.
In closing, and on behalf of IUCN, I thank you again for the opportunity to participate in this important meeting, and affirm how much INCN values its partnership with the Royal Government of Bhutan. As Bhutan continues to show leadership in creating harmony between environment and sustainable development agendas, IUCN stands ready to contribute to the country’s aspirations for Gross National Happiness. Thank you and Tashi Delek.
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Annex 4.17: Statement by Ireland
Statement of Ireland 14th Round Table Meeting, Bhutan, March 12-15, 2019
Mr. Prime Minister, Honorable Chair Mr. Steiner,
Ireland wishes to thank the Royal Government of Bhutan for the invitation to attend the 14th Round Table Meeting. We are honoured to be here.
We congratulate you on this meeting and we are conscious of its very substantive agenda. We are also very supportive of the serious aspirations that you have set out for the Kingdom of Bhutan in your 12th Five-Year Plan which runs until 2023. In particular, Bhutan’s continued emphasis on the happiness and wellbeing of its people is an approach we greatly admire and respect.
We warmly welcome the international and multilateral context in which you are setting your ambitions. Simply looking around this conference hall is evidence of this. Ireland is strongly committed to the multilateral system. We see it as strengthening our well-being, our prosperity, our security and our sovereignty.
Indeed, Ireland as a small country, located on the periphery of Europe, has first-hand experience of this through our membership of the European Union. We are proud that the European Union is an important and valued partner of Bhutan.
Ireland is very happy to be part of EU-Bhutan Cooperation in the areas of Human Development and Migration; Sustainable Growth and Development; and Clean Energy, Environment and Climate Change.
‘A Better World’, Ireland’s new policy for International Development was recently launched by Ireland’s government. The new policy focuses Ireland’s international development on the Sustainable Development Goals and assisting the ‘the furthest behind first’.
‘A Better World’ commits Ireland to support countries’ transitions towards middle income status. It is clear that issues around economic and climate vulnerability continue to cause concern in countries which have recently or are due to ‘transition’ from least developed country status. Ireland recognises that the pace of transition varies, and the process can be challenging. We are fully committed to supporting Bhutan and other countries, including through our engagement on LDC graduation at the UN.
Ireland is also working with the OECD and a number of graduating Least Developed Countries on this issue. We would be very happy to share further information on this work with Bhutan.
We are very struck by the unrivalled and principled action Bhutan has taken to tackle the impacts of climate change. We are also struck by your special vulnerabilities to these same impacts.
Climate action is a key priority in the Irish Government’s new policy for international development. In this context Ireland would like to warmly congratulate the Kingdom of Bhutan
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on your new role as chair of the Least Developed Countries Group of the UN Framework Convention on Climate Change (UNFCCC). Ireland continues to financially support this group. This support is part of our objective to ensure that the voices of those countries most vulnerable to climate change and most affected by its impacts are heard.
Bhutan has, in particular, shown strong leadership in the fight against climate change as one of the few countries that has achieved a net zero carbon footprint and is in a position to influence real change. We can all learn lessons from you. Ireland greatly looks forward to working closely with Mr Sonam Phuntsho Wangdi and his colleagues in representing the LDCs that are especially vulnerable to climate change – especially as we are mindful that you have done the least to cause the grave problem of climate change.
We congratulate the Royal Government of Bhutan on developing its ambitious 12th Five-Year Plan which will act as your strategy for graduation. We hear your message that Bhutan will need the continued support of your development partners to ensure that you consolidate your impressive development gains. In the words of Ireland’s Prime Minister, “the next decade may well define the world we live in for the rest of the century”.
Therefore, Bhutan’s concerns that the pace of your graduation from LDC status must absorb the withdrawal of international support is logical. Your call for a smooth transition is fair. The call to address your remaining last mile challenges is right. We are very conscious that the UN Secretary-General’s 2018 report on progress towards the SDGs highlights that LDCs remain far below many of the SDG targets. In this respect, it is true that the performance of the LDCs will have a great influence on the success of Agenda 2030.
The road to 2030 is complex. Our world is volatile. On our own, no individual country or organisation in this hall can make a sufficient impact. Ireland knows this from our own national story, our history and our experience of development, modernisation and gloablisation. We have known poverty and hunger, but we have also seen our country transformed over the past 50 years, through our own efforts and, very importantly, with the assistance of others.
The principles and the partnerships that underlie my country’s progress and that of many of our European neighbours is something that we wish to see replicated elsewhere. In this respect, we welcome being invited to attend this Round Table Meeting and, as a UN Member State and a member of the European Union, we will seek to support the Royal Government of Bhutan as it embarks on implementing the 12th Five-Year Plan.
Thank you.
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Annex 4.18: Statement by Israel
Honorable Prime Minister Dr. Lotay Tshering, H. E. Mr. Achim Steiner, Honorable Ministers, Distinguished delegates, Ladies and Gentlemen,
I would like to begin by thanking for inviting Israel to participate in this important and inspiring conference for the first time. I am extremely proud to represent Israel here in Bhutan. From one small country to another with appropriate structure of development at the heart of its priorities, we extend our hand in partnership and friendship.
I commend the Kingdom of Bhutan, HIs Highness the King, and the Bhutanese government on the vision with which you have decided to take Bhutan forward. As an economist, I fully understand the challenges involved in transitioning from a developing country to a middle income country, but I firmly believe you are bravely taking the right steps in the right direction.
As a nation who faced great developmental challenges in a variety of fields in its early days of nation building, Israel has developed a wide and diverse collection of breakthrough technologies, practices and know-how. All the solutions Israel created to answer the country’s needs were designed to be sustainable, knowing Israel could not rely on its immediate neighbours to answer its needs. Our sustainability was and remains crucial to our national resilience.
Today, Israel is happy to share its sustainable development solutions with its neighbours and friends around the world. Bhutan, of course, is among the nations with which Israel has shared its knowledge and with whom Israel is keen to share even more. I believe that what Israel has done for its survival, Bhutan can do for its development.
I am proud to say that for many years now, Israel has been cooperating with Bhutan in agriculture and education. Together, we have focused both on the immediate needs of the population as well as the economic needs of society in the modern era. Both these areas are stepping stones in Bhutan’s transition into a middle income country, and we believe there is so much more we can do together for the future of prosperity of Bhutan. Further areas of cooperation we would be happy to explore together with Bhutan include water, advanced agricultural technologies and practices, as well as innovation and high tech, as a start.
In today’s world, state governments do not need to carry the burden of development alone. This is true not only thanks to bilateral cooperation but also through multilateral cooperation and international organisations. Israel is happy to work with the United Nations in Bhutan as well, as part of its commitment to the UN Sustainable Development Goals. This commitment to the positive power of the international community can be seen in Israel’s resolution on entrepreneurship for development, a force we believe can contribute to Bhutan and many more countries around the world.
Finally, on a personal note, this has been my first visit to Bhutan, but I already feel at home in this wonderful country. It bears so many similarities to Israel in the importance it gives to family values and ensuring basic human rights and personal needs while protecting the environment in our small corner of the world. It seems clear to both countries that all of the above are necessary for wellbeing, happiness and true national resilience.
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However, there is still much for Israel to learn about the like-minded people and country of Bhutan. Israelis are extremely interested to learn about the novelty of the Bhutanese Gross National Happiness Commission and I am personally inspired by this concept. It comes as no surprise that Israelis are so curious about Bhutan and keen to know it better.
I truly hope that my presence here today is a promise of the growing interaction to come between Bhutan and Israel in the near future, as we join hands to make the happiest nation in the world even happier.
Thank you.
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Annex 4.19: Statement by Japan
The 14th Round Table Meeting (12-14 March, 2019, Thimphu) Statement by Ministry of Foreign Affairs of Japan
Mr. Chairman, H.E. Lyonpo Dr. Tandi Dorji, Minister for Foreign Affairs, Kingdom of Bhutan, Mr. Chairman, Mr. Achim Steiner, Administrator, UNDP Excellencies, Distinguished Delegates, Ladies and Gentlemen,
It is my great honor to be given an opportunity to address the audience on behalf of the Government of Japan at this 14th Round Table Meeting. First of all, I would like to congratulate the people and the Royal Government of Bhutan on the successful accomplishment of their third general elections held last October, and welcome Bhutan’s steady progress towards consolidation of democracy. Also, I would like to take this opportunity to express my sincere respects to the Royal Government of Bhutan for its strong ownership endorsing the 12th Five Year Plan.
The Kingdom of Bhutan and Japan have enjoyed historically cordial and friendly relations with wide-ranging and multi-layered interactions. These include mutual visits between the Japanese Imperial Family and the Bhutanese Royal Family, as well as grass-roots exchanges in various fields. Japan began its cooperation for Bhutan’s socio-economic development with the dispatch of an agricultural expert, late Mr. Keiji Nishioka, who was bestowed the Honorary title of “Dasho” by His Majesty the King of Bhutan for his life-long contribution to the development of agriculture in Bhutan．Since then, fruitful results of our cooperation have been witnessed, particularly in the agriculture and rural development sectors. Moreover, Japan, as one of the major donors, has supported self-reliance efforts of Bhutan for the progress and consolidation of democracy, elevation of living-standards, and other socio-economic development.
Mr. Chairmen, Japan has continuously supported Bhutan’s development endeavors focusing on areas such as agriculture and rural development, and infrastructure development mainly by providing grants and technical cooperation more than 50 years. In the area of agriculture and rural development, Japan has supported Bhutan’s modernization and improvement of productivity in the agricultural sector by grant aid such as provision of more than 3,000 power tillers, construction of agricultural roads and rehabilitation of irrigation system.
In the area of economic infrastructure development, Japan has extended a grant aid for reconstruction of bridges on National Highways, aiming at stable transportation by improving capacity and safety of those bridges. In the area of countermeasures for environmental issues and climate change, Japan has extended cooperation such as a grant aid for construction of a backup system for Mobile Network and technical cooperation for fostering Bhutan’s capacity of disaster prevention. Last but not the least, Japan has supported Bhutan’s capacity building through a grant aid for providing Bhutanese young public officers with a scholarship for masters and doctors in Japan.
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As Bhutan now prepares to graduate from the category of least developed countries, Japan will continue to support Bhutan’s efforts according to the 12th Five Year Plan, and hopes that Bhutan will make the most of our cooperation under Bhutan’s ownership, in order to enhance the living standard of the people of Bhutan and to promote Bhutan’s self-reliant development.
Mr. Chairmen and distinguished colleagues, Having high regard for Bhutan’s national development plan based on the basic principles of Gross National Happiness, Japan will continue to support Bhutan in addressing its remaining development needs, and always be ready to provide its full support to Bhutan’s endeavors toward self-reliant development.
Japan hopes that Bhutan will steadily implement the 12th Five Year Plan in coordination with its development partners, based on the proactive discussions held during these three days.
Thank you for your attention.
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Annex 4.20: Statement by Korea Development Cooperation Agency (KOICA)
Statement by Mr. Joe Hyun-Gue Country Director of KOICA Bangladesh and Bhutan “14th Round Table Meeting” (Date: 14th March, 2019/ Venue: National Convention Centre, Thimphu)
Honorable Chair and Co-Chair, Excellencies, Distinguished Delegates, Ladies & Gentlemen,
On behalf of Korea Development Cooperation Agency (KOICA), Korean government development wing, it gives me great honor to be here today at the ‘14th Round Table Meeting’ which is the highest forum for policy dialogue between Bhutan and its development partners.
Ladies & Gentlemen, Firstly, I would like to begin by extending my sincere gratitude to the Royal Government of Bhutan for its close cooperation with Korea. My heartiest congratulations for the remarkable development achievements it has made in recent years and this dialogue provides an opportunity for all development partners to discuss their development cooperation with Bhutan and identify areas of cooperation.
This year marks the 32nd year of the bilateral ties between Bhutan and Korea and the Korean government is proud to continue its long-standing relationship to advance the socio-economic development of the country. I believe that through dedication and hard work, the people of Bhutan will be able to touch the apex of development in every sector in line with its 12th Five Year Plan and national priorities.
"No development without peace, and no peace without development and human rights."
This message from the late Kofi Annan, former Secretary General of the United Nations reminds us that peace and human rights are both the preconditions and the core values of development.
I would like to introduce about KOICA’s core values in line with the four pillars of People, Peace, Prosperity and Planet. This 4P constructs an important part of our government’s foreign policy strategy and that of KOICA.
First, People at the center of the development of society; Second, Peace as a precondition for a sustainable society, economy, and environment; Third, Prosperity ensured by economic growth; Fourth, Planet that should be protected for future generations,
The Korean government recognizes Bhutan as one of its vital partners in the region and endeavors to expand exchanges in diverse fields such as skill development, climate change, human recourse development and international trade promotion.
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KOICA has been supporting Bhutan to secure human resources for their development and sharing technical skills by building institutional capacities for Bhutan’s sustainable socio- economic development.
Korea recognizes crucial roles that human resources can play in the process of national development through its experience. Till date, KOICA has dispatched about 500 Bhutanese government officials to Korea to receive hands-on training in diverse fields such as Education, Health, Agriculture, ICT, Governance to enhance their respective institutions for the enhancement of Bhutan’s policy making.
Under this scheme, KOICA is pleased to support ‘Industry Oriented TVET’ capacity building program which will kick-off this year aiming to increase the number of youth and adults with relevant skills for employment, decent jobs and entrepreneurship aligned with SDG 4 of quality education. Also, KOICA has been supporting Bhutan’s film industry for the last 5 years which is closely linked with the national identity as well as tourism promotion. Furthermore, KOICA will broaden its collaboration with Bhutan by starting World Friends Korea volunteer program this year. The volunteers are known to have great roles in development exchanges as they render services in fields such as Skill training, Health, Sport, Agriculture, ICT, etc. We expect that the first group of KOICA volunteers will land in Bhutan in November. In addition, KOICA will open its liaison office in Thimphu by the end of this year based on its bilateral agreement.
In addition, I would like to take this opportunity to mention that Korea wishes to expand its collaboration with Bhutan in the field of combating climate change. As Bhutan commits to remain carbon neutral and places highest priority to preserve its environment. For your information, from this year Korea Green Technology Center will implement ' Thimphu City Low carbon Transportation project by using Bus Information System' with the support from World Bank and Green Climate Fund respectively.
Ladies & gentlemen, Finally, I would like to conclude my speech by thanking the Co-Chair, H.E. Lyongpo Dr. Tandi Dorji, Minister of Foreign Affairs for hosting this exceedingly significant forum and giving us the opportunity to share our development experiences.
KOICA will be happy to support Bhutan towards transitioning from LDC to Middle Income Country. Once again, on behalf of Korean government, I would like to reaffirm that KOICA stands ready to serve as a development partner contributing to accomplishment of SDGs in achieving Bhutan’s 12th FYP and development goals for the happiness of its people.
Tashi Delek (Thank you).
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Annex 4.21: Statement by Kuwait
Kuwait Fund for Arab Economic Development 14th Round Table Meeting for Bhutan “Gross National Happiness and Global Goals”
Messrs. Co-Chairmen, Your Excellencies, Ladies and Gentlemen,
I am honoured and privileged to be attending this Round Table Meeting on behalf of the Government of the State of Kuwait and Kuwait Fund and I would like to express our sincere thanks and gratitude to the Government of Bhutan for extending this invitation to such an important meeting. I sincerely believe that this event is an excellent opportunity to further enhance the development cooperation not only between Kuwait Fund and the Government of Bhutan but with other Development Partners and to strengthen the friendship ties between our two countries and other institutions.
Messrs. Co-Chairmen,
We are indeed pleased to note that kingdom of Bhutan has continued to enjoy high economic growth and rapid socio-economic development and has made considerable progress in meeting the Millennium Development Goals and working towards achieving success with regard to the Sustainable Development Goals, and that it is in the graduation process from LCD by 2013. I am also pleased to learn that Bhutan is moving from a status of transforming democracy to one that is working to deepen its democracy. I take this opportunity to extend our appreciation to the Government of Bhutan, especially that it has completed 10 years of successful democracy in 2018. We look forward for more success for Bhutan with the implementation of its 12th five year plan.
Messrs. Co-Chairmen,
Kuwait Fund began its development operations in the Kingdom of Bhutan in 1983 by supporting the implementation of a Wood Industries Complex Project. Since then Kuwait Fund has committed about US Dollars 28.2 million as soft concessional loans to 5 Projects in sectors such as wood manufacturing industry and operations program of Bhutan Development Bank as well as 1 million US Dollars for 2 Technical Assistance Grants for feasibility studies.
Finally, Messrs. Co-Chairmen, I am pleased to indicate that Kuwait Fund stands ready, to consider participation in financing your top priority infrastructure development projects and / or social sector projects, such as education and health projects by extending concessional loans. Furthermore, the Fund is also willing to consider extending a Technical Assistance Grants upon receipt of such requests from your esteemed Government.
Thank you, we wish this meeting and its outcome as well as the 12th five year plan every success.
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Annex 4.22: Statement by Norway (NORAD)
14th Roundtable Meeting in Bhutan Statement by NORAD
Prime Minister, Administrator, honorable ministers, your excellences, distinguished members of the international community.
Thank you for the invitation to this conference and to beautiful Bhutan.
Norway and Bhutan share a deep love for nature. We are both beautiful mountainous countries, where the love and respect for nature lies deep in our national culture. Outdoor activities, and especially mountain hiking, is one of the most popular leisure activities in Norway. This is maybe why concern for nature and the environment is such a high political priority both for Bhutan and Norway. We both share a concern for the environmental challenges the world is facing, where climate change and loss of biodiversity are two of the most serious ones. These are challenges which might affect the nature we both love so much in a very negative way.
In 2016 world leaders agreed on the Paris treaty to combat climate change and we are looking forward to a good outcome in Beijing in 2020. Preserving global biodiversity is important for Norway. That is why we support UNDPs BIOFIN program. The expected impact of the BIOFIN program is to create a biodiversity finance plan with innovative finance solutions for countries to protect their own biodiversity.
Norway has a long, proud history in working with Bhutan, especially in developing your hydropower. Now Bhutan will graduate from bring a less developed nation and can move to the status of middle-income country by 2023, partly through the revenues earned with hydropower. As a consequence of that, Norway will, as other donors, phase out our role as a bilateral donor to Bhutan. However, Norway continues to be a close friend of Bhutan.
NORAD is therefore happy to continue to assist Bhutan through our multilateral work in and it is in this role NORAD is participating in this conference. The financial resources Norway is committing to the BIOFIN program are channeled to two countries: Cambodia and Bhutan. We are happy to see the results Bhutan has achieved so far through your participation in the BIOFIN program. through addressing three different 3 SDGs explicitly in the financing assessments and plans.
We have noted with great interest that protection of the environment plays a significant role in Bhutan’s Gross National Happiness concept. We are pleased to see that, as a consequence, preserving nature has taken a central role in Bhutan’s policies, and that it has a central role in your 5-year plan. With this plan, we also hope that Bhutan will be able to fully take the next BIOFIN step, finish your biodiversity finance plan and implement your identified finance solutions for biodiversity. The BIOFIN team, with support from NORAD, will assist you in this.
One possible financing solution is through the revenues from your hydropower production, even though it plays a crucial role in a transition from a fossil based to a renewable society, hydropower also has an impact on nature. Norway, as another large hydropower producer, has experience in using a part of our taxation on hydropower production for nature protection.
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However, we understand that revenues from hydropower is important in financing many important social needs, and hydropower revenue is also only one of several possible sources to finance biodiversity.
Management of forests plays a significant role in environment policies. Forests are crucial both for mitigation of climate gas emissions through CO2 sequestration and for biodiversity as a large part of the worlds endangered species depend on forests. Bhutan’s significant forest assets has high potential both for carbon sequestration and for biodiversity as the nation’s forest coverage exceeds 70% of the land surface. Bhutan’s forests also have the capacity to sequester 6.3 million tons of carbon dioxide – four times what Bhutan emits – making Bhutan the only carbon negative country in the world. The focus on forests is also something our two nations have in common. Norway- through our engagement in the Norwegian International Climate and Forest Initiative- is a champion of forest protection.
Bhutan may be a small country when it comes to population, but as these figures show, Bhutan can play an important role when it comes to taking care of the environment. With your integration of environment in your Gross National Happiness concept and the way you show this through practical policies, not least in the way that you manage your forests, even through your constitution, you can be an example to the world at large.
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Annex 4.23: Statement by SAARC DEVELOPMENT FUND
Note: Copy of the presentation slides of the SDF can be accessed at: https://rtm.gnhc.gov.bt/wp-content/uploads/2019/03/SAARC-Development-Fund.pdf
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Annex 4.24: Statement by Save the Children International
Save the Children’s Statement at the 14th Round Table Meeting of Royal Government of Bhutan and Development Partners held in Thimphu: 13 – 14 March 2019
Hon’ble Foreign Secretary Dasho Sonam Tshong, Mr. Gerald Daly, Resident Coordinator of UN System in Bhutan, Hon’ble Ministers, Senior Government Officials of the Royal Government of Bhutan and esteemed Colleagues from development partner agencies.
I would like to thank the Royal Government of Bhutan for the opportunity provided to Save the Children to be part of the Round Table Meeting, for the clarity of the presentations made by the Secretary of the GNHC on the challenges and aspirations of the 5 year plan, and the opportunity to make a statement.
Save the Children has been a friend and partner of Bhutan for almost 40 years, I would like to thank the Royal Government of Bhutan for the mutual trust, confidence and partnership that we have shared for the length of our common journey.
Today, I would like to assure the Royal Government of Bhutan that Save the Children is a fully committed partner and will continue to support the government and its child development programs.
Bhutan’s commitment to children’s wellbeing and protection is well known. It was one of the first countries to sign and ratify the UN Convention on the Rights of the Child (UNCRC) in May 1990. Bhutan ratified the two Optional Protocols on the Sale of Children, Child Prostitution and Child Pornography in October 2009 and on Children in Armed Conflict in December 2009. Bhutan also signed the Convention on the Rights of People with Disabilities in September 2010.
In spite of the limited resources and many development challenges, Bhutan has always prioritized child protection and children’s wellbeing.
Bhutan has consistently labored to make all its laws and services child friendly and child rights oriented. Most recently, The National Commission for Women and Children (NCWC) was established to regulate, oversee and monitor women and children’s issues; and The Child Care and Protection Act of Bhutan are both testimony to Bhutan’s serious commitment to child wellbeing and protection, among the many protections established for children. The recent launch of the Tollfree Women and Child Helpline 1098 is the latest addition to the long list of achievements made by Bhutan on its road to making Bhutan a better place for women and children.
Save the Children is proud to have contributed and been a partner in these achievements of the Royal Government of Bhutan.
Please receive my commitment, that we will continue to support those programs that target the hardest to reach and those programs that protect the most vulnerable. We see excellent alignment with the 12th Five Year Plan Objectives and National Key Result Areas.
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Finally, I would also thank the Royal Government of Bhutan and in particular the Gross National Happiness Commission and the Ministry of Foreign Affairs for all the courtesies, guidance, friendship and collaboration accorded to Save the Children in Bhutan.
Thank You and Tashi Delek!
Mr. Ned Olney, Country Director for Nepal and Bhutan Country Office, Save the Children
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Annex 4.25: Statement by Singapore
His Excellency Dr Tandi Dorji, Minister for Foreign Affairs, the Kingdom of Bhutan, His Excellency Achim Steiner, Administrator, United Nations Development Programme,
Excellencies, Distinguished participants, Ladies and gentlemen,
1 Let me begin by first conveying my appreciation to the Royal Government of Bhutan for your warm hospitality and arrangements for the 14th Round Table Meeting (RTM). As with previous RTMs, the briefings and presentations have painted a clear overview of Bhutan’s economic, social, and environmental situation. These in turn offer useful insights into the country’s opportunities and challenges. This RTM, coinciding with the start of Bhutan’s 12th Five Year Plan, takes place at a particularly important juncture. As many have pointed out over the past two days, it marks the last mile before Bhutan graduates as an LDC in 2023.
2 Whenever I visit Bhutan, I am reminded of the stark differences between our two countries – one a tropical island at the tip of peninsula Southeast Asia, and the other an idyllic Kingdom nestled high in the Himalayas. Scratch beyond the surface, however: we see many similarities in our national circumstances that make Singapore and Bhutan natural partners. As small states, we share many similar concerns. Both countries have had to work to make the most of our limited natural resources and small populations. These realities will not change.
3 The similarities in our predicaments and outlooks have contributed to the warm and growing friendship between our countries. Our leaders and senior ofcials interact regularly, both formerly as well as informally. In May 2017 Dr Vivian Balakrishnan became the first Singapore Foreign Minister to make an Official Visit to Bhutan. We look forward to increased exchanges between the two countries. People-to-people links are also growing. Since Druk Air commenced direct flights from Bhutan to Singapore in 2012, more Singaporeans have been visiting this beautiful land of the Thunder Dragon. I am told that inbound arrivals from Singapore grew almost 37% from 2016 to 2017.
4 In the earlier years of our development, and in fact even today, we have benefitted from the experience of other countries. We have done some things right, and some things not so right. Just as we learn from others, we are more than happy to share our experiences in our journey with others - both the good and the bad. The primary vehicle through which we do so is the Singapore Cooperation Programme, or SCP. We are glad that SCP is one of the main areas of our cooperation with Bhutan: About 1,100 Bhutanese officials have participated in programmes in fields such as finance, public administration, and economic development. Working closely with Bhutan, we have also collaborated on customised programmes in areas such as banking, legal frameworks, and healthcare. Beyond the SCP, our anti -corruption agencies and libraries have also done work together.
5 Looking ahead, we understand that skills training remains a key priority for Bhutan. In particular, there is a need to ensure that Bhutanese youths are provided up-to-date training in relevant fields that can be applied both in and out of the country. To this end, Singapore’s ITE Education Services and Bhutan’s Ministry of Labour and Human Resources are working
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together on a TVET project, that would hopefully contribute in some small way to Bhutan’s skilling needs.
6 Beyond government collaboration, there are many other organic linkages that have sprouted up over the years. For example, since 2013 Smile Asia – an NGO specialising in treating cleft lip and palate as well as other facial deformities - has been coming often to Bhutan. In fact, a delegation from Smile Asia was in Punakha just last month. Singapore Polytechnic is working closely with the Royal Civil Service Commission on public sector innovation. SingHealth collaborates with Bhutanese healthcare professionals in areas such as Emergency Medicine and palliative care, including ENT Doctors clinical attachments in Singapore. As our people-to-people links deepen, it is my hope that such initiatives grow as well.
7 Many of the areas of collaboration I have outlined above have been going on for several years, and we look forward to working with the Bhutanese government in the days ahead to explore new areas of potential cooperation. Singapore-Bhutan ties have strengthened over the years, and I am confident that our relationship will continue on this upward trajectory.
8 Thank you.
. . . . .
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Annex 4.26: Statement by Slovenia
Statement by H.E. Mr JoZel Drofenik, Ambassador of the Republic of Slovenia to Bhutan (accredited from New Delhi) at the 14th Round Table Meeting 12 - 14 March 2019, Thimphu
Honorable Co-chairs, Distinguished delegates, Ladies and Gentlemen,
Let me first express profound appreciation for the warm hospitality of the Royal Bhutanese Government extended to the all of us. It's a great honour for me to represent Slovenia at the Fourteenth Round Table Meeting. It has been with great interest that I have been following the discussions for the past 2 days. ln particular because Slovenia and Bhutan share similar, if not common, views on environmental issues, sustainable development, efficient use of energy, and belief that high quality of life is an essential part of happiness of our two peoples. Sharing the same views also means we can learn much from each other. ln a short period since the establishment of diplomatic relations between our two countries in 2012, Slovenia and Bhutan have developed close and friendly relations. Our cooperation has mainly focused on sustainable management of forests. We were also privileged to exchange the experiences and best practices in Voluntary National Review on the implementation of the 2030 Agenda for Sustainable Development with representatives of Gross National Happiness Commission during the visit of Slovenian Minister for Development, Strategic Projects and Cohesion in January 2018.
Slovenia is now exploring possibilities to further strengthen our forestry cooperation, and to broaden cooperation into the field of beekeeping and sustainable tourism.
Slovenian Forestry Institute is keen to continue cooperation, particularly in the fields of dendrology, dendroclimatology and sustainable forest management.
In the field of sustainable tourism we are looking into sharing our know-how in developing the concept and strategy of sustainable tourism. We could also exchange lessons learnt and best practices, especially regarding the development of the so- called farm tourism or village stays.
Another interesting area could be beekeeping. Especially with the recent establishment of Beekeeping Academy of Slovenia, which also offers many opportunities for cooperation. Its programs not only offer awareness raising of the importance of bees and pollination in food production but also possibility of improving employment and income opportunities in the country side and among women.
In conclusion, I would like to congratulate Bhutan on its impressive progress in development, clearly demonstrated by process of graduating from Least Developed Countries last year. The priorities and goals set in 12th Five Year (Development) Plan also shows strong determination of creating a stronger, self - reliant Bhutan and developed country by 2045.
Slovenia stands ready to expand our collaboration for, and support to the sustainable development of Bhutan and the happiness and wellbeing of Bhutanese people.
Thank you and Tashi Delek.
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Annex 4.27: Statement by SNV, Netherlands Development Organisation
2019 Bhutan RTM statement by SNV, Netherlands Development Organisation
Let me start by congratulating the RGoB for organising this excellent 14th RTM.
SNV, Netherlands Development Organisation, has been working in Bhutan since 1988 and is proud to have witnessed the tremendous progress the country has made over the past couple of decades and been able to support the RGOB in achieving these results, since the 6th Five Year Plan period (1987 – 1992).
SNV is now working in the areas of Agriculture, WASH and Energy integrating nutrition and climate change (through for example climate smart agriculture technologies) in our activities.
Promoting gender equality remains a key focal area for SNV. SNV is now working in a new area of creating opportunities for youth employment. SNV’s main focus is on capacity building of the Government, private sector and local organisations and communities.
Listening to the discussions over the past couple of days I believe these areas will remain relevant to address the needs of Bhutan. I would like to thank the Royal Government of Bhutan for their continued collaboration and our donors, the Government of the Netherlands and Australia, for their continued support.
SNV is committed to continue supporting the Royal Government and the people of Bhutan in the coming years contributing to increased happiness of the country.
Tashi Delek.
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Annex 4.28: Statement by Thailand
Statement by His Excellency Mr. Vijavat Isarabhakdi Advisor to the Ministry of Foreign Affairs of the Kingdom of Thailand at the Fourteenth Round Table Meeting (RTM) on 14 March 2019, Thimphu, Kingdom of Bhutan ------
Your Excellency Lyonpo Dr. Tandi Dorji, Minister for Foreign Affairs of the Kingdom of Bhutan, Your Excellency Mr. Achim Steiner, Administrator of the United Nations Development Programme,
Excellencies, Distinguished Delegates, Ladies and Gentlemen,
1. I have the great honour to make this statement on behalf of His Excellency Mr. Don Pramudwinai, Minister of Foreign Affairs of the Kingdom of Thailand, who sends his best wishes for the success of this meeting. At the outset, allow me to express my deep appreciation to the Royal Bhutanese Government for the very warm hospitality extended to me and the members of my delegation ever since we arrived in this paradise.
2. For myself, this is the second time I have had the privilege of visiting this beautiful “Land of the Thunder Dragon”. It is a great pleasure for me to be here again, after a span of 14 years, to participate in this Fourteenth Round Table Meeting. It is a very timely opportunity for my delegation to witness the progress Bhutan has made along its socio-economic development course. We are also highly interested in learning more about Bhutan’s strategic framework for achieving the 2030 Sustainable Development Goals and how this endeavour has been managed.
3. Thailand and Bhutan have been development cooperation partners for more than two decades. Both countries have many things in common, including some similar socio-economic settings. For our part, Thailand, in the past, has learned how to tackle our problems through a combination of our own domestic wisdom coupled with some external assistance from our development partners. Bhutan is currently also proceeding along the same process. Thailand is, therefore, pleased to share with our Bhutanese colleagues our home-grown experiences regarding the Sufficiency Economy Philosophy (SEP) of His Majesty the late King Bhumibol Adulyadej. At the same time, we also seek to learn more about Bhutan’s concept of Gross National Happiness (GNH).
4. As both our countries proceed along our respective development paths, let me say that Thailand remains firmly committed to further enhancing Bhutan’s capacity for human resource and institution building. We hope that this will play a part in helping Bhutan to achieve its Gross National Happiness (GNH) and Sustainable Development Goals (SDGs) in harmony and synergy under the country’s 12th Five-Year Plan (2019-2023).
Distinguished Delegates, Ladies and Gentlemen,
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5. Over the past decades, we are very pleased that Bhutanese officials have availed themselves of various fellowship and scholarship programmes extended by Thailand in a wide range of fields. These include education, engineering, medicine, public health, agriculture, community development and tourism. All told, I understand that over a thousand officials from Bhutan have had the opportunity to learn from Thailand’s experiences in these fields.
6. Thailand considers that people-to-people contacts are of utmost importance. For this reason, we have sought to build bridges for closer engagement between our two peoples. Thailand has provided opportunities for young Thai volunteers to exchange skills and experiences with their counterparts in various Bhutanese government agencies under the Friends from Thailand Programme. Since 2008, a total of 74 young Thai volunteers have been dispatched to Bhutan. Four of them are currently on various assignments in Bhutan and thoroughly enjoying the experience.
7. A number of development cooperation projects have been recently implemented. The One Gewog, One Product (OGOP) Development Project is one of our development flagship projects. It was initiated in 2013 by the Queen’s Project Office of Bhutan, aimed at enhancing the Kingdom’s magnificent indigenous work and making Bhutanese products available in the domestic and international markets. This project has significantly helped in finding new markets for Bhutanese goods and improving the livelihoods of the rural people. Thailand is delighted to see the remarkable progress made by the OGOP Project since its implementation, bringing benefits to some 400 families in 80 Gewogs. Furthermore, many selected products under the OGOP Project were exhibited at Thailand’s own OTOP Fairs, at year end in both 2017 and 2018. They received a highly positive response from Thai buyers and consumers.
8. I am pleased to note that, with the aim of expanding the tangible outcome of the OGOP Project, the Queen’s Project Office (QPO) and the Thailand International Cooperation Agency, or TICA, have agreed to continue onwards to the second phase of our development cooperation regarding “Establishment of a Sustainable Community Development Model based on the Application of the Sufficiency Economy Philosophy for the One Gewog One Product (OGOP) Project” at a number of selected villages in Bhutan. This project would directly respond to one of the priorities of Bhutan’s 12th Five-Year Plan in strengthening the grassroots economy through economic diversification.
Distinguished Delegates, Ladies and Gentlemen,
9. Tourism plays a very significant part in the Thai economy and there is no denying that a very large number of people from all over the world would love to enjoy the natural beauty of Bhutan as well. That is why the Prime Ministers of Thailand and Bhutan committed in July last year to promote tourism of the two countries under the theme “Two Kingdoms, One Destination”. Towards, this end, Thailand, through TICA, will further support the Community- based Tourism Promotion project in which some selected villages will be strengthened as a model tourist attraction.
10. With health as a very important issue for the welfare of our peoples, Thailand has also committed to support the implementation of the Eye, Ear, Nose and Throat (EENT) Care Center in Bhutan. This is aimed not only at treating patients in general but also building the capacity of Bhutanese medical personnel.
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11. In addition, during the 14th to the 17th of this month, TICA is dispatching a parallel mission of Thai medical experts to Bhutan to formulate a medium-term Bhutan-Thailand Development Cooperation Programme on Health Services and Education. This cooperation programme aims to strengthen the capacity building of Bhutan’s medical services and human capacity of the public sector in direct response to the priorities of the 12th Five-Year Plan in improving the quality of Bhutan’s health and education services.
Distinguished Delegates, Ladies and Gentlemen,
12. In closing, I would like to highlight with great pleasure that this year marks the 30th anniversary of diplomatic relations between Thailand and Bhutan. Therefore, I wish to reaffirm that Thailand is more than ready to expand our collaboration with Bhutan in any way possible. We are also committed to joining with other development partners at this gathering to support Bhutan in its implementation of “the last mile plan” towards LDC graduation” as the Kingdom moves ever closer towards reaching this milestone.
13. I have every confidence that Bhutan will steadily implement its 12th Five Year Plan in coordination with its development partners and in accordance with the proactive discussions held during these two days of sessions. Together, we will help ensure that the goals set by Bhutan for the year 2023 will be successful and attain the outcomes desired.
Thank you.
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Annex 4.29: Joint UN Statement
Joint UN Statement at the 14th Round Table Meeting, Thimphu, 14 March 2019 Read by Mr. Gerald Daly, UN Resident Coordinator
“Today, GNH has come to mean so many things to so many people but to me it signifies simply - Development with Values. Thus, for my nation today GNH is the bridge between the fundamental values of kindness, equality and humanity and the necessary pursuit of economic growth. GNH acts as our National Conscience guiding us towards making wise decision for a better future.”- His Majesty the King.
INTRODUCTION On behalf of the United Nations in Bhutan, I am honored to be addressing the Royal Government of Bhutan and its development partners at this 14th Round Table Meeting. 2019 is an important year as it is the first year of implementation of the RGoB’s 12th Five Year Plan and, the first year of implementation of the UN’s Five-year strategic partnership framework for Bhutan—the United Nations Sustainable Development Partnership Framework (UNSDPF). Let me take the opportunity to inform you that, in the spirit of UN Delivering as One, this Joint Statement is being delivered on behalf of the 25 UN Agencies, Funds and Programmes that support Bhutan. These entities are:
Eight Resident Agencies: (FAO, UNDP, UNICEF, UNODC, UNFPA, UN Women, WFP and WHO)
16 Non-resident Agencies: (IFAD, ITC, UNAIDS, UNCDF, UNCTAD, UNDESA, UNEP, UNESCAP, UNESCO, UNHABITAT, WiPO, UNIDO, UNOCHA, UNOPS, UN Technology Bank, UNV and ITU)
In preparation for Bhutan’s LDC graduation by 2023, the UN Country Team is adapting to the needs of the country. Three additional UN entities will be working here in Bhutan for the coming 5 years: UNDESA; the UN Technology Bank (under the OHRLLS) and; the International Trade Centre (ITC). These entities, and the rest of the UN Country Team will support Bhutan during this critical period before graduation such that we’re not only looking at the graduation as the only key milestone, but looking beyond 2023, to ensure a sustainable graduation thereby, avoiding reversal of development gains already achieved.
LEAVE NO ONE BEHIND When all 193 United Nations member states adopted the 2030 Agenda for Sustainable Development, we made a pledge to ensure “no one will be left behind” and to reach the “furthest behind first.” In practice, this means taking explicit action to end extreme poverty, curb inequalities, confront discrimination and fast-track progress for the furthest behind.
Bhutan is on-track in implementing the Sustainable Development Goals. Bhutan’s development policy of Gross National Happiness is well aligned with the objectives of the Agenda 2030.
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The role of civil society in working with the Royal Government to advance a rights-based approach and improve participation and accountability is increasingly recognized. CSOs have an important role to play to help vulnerable groups have their voices heard and acted upon.
In this pursuit to reach the furthest behind, the UN partners with the CSOs in Bhutan in enhancing their role and effectiveness as a civil society, which will be increasingly important as a bridge between vulnerable groups and the government.
For this reason, we at the UN believe capacity development of CSOs is very important for the country and a most critical action for the UN as we assist on the last mile to LDC graduation. Their Majesties’ vision of a compassionate and just society has been enabled because of the work that the CSOs have done for the country.
GENDER EQUALITY AND WOMEN EMPOWERMENT One of the UN’s priority is increasing women’s representation in decision-making and promote women’s participation in politics and governance, as well as in business, society and the economy at large. If women make up 50% of Bhutan’s population but only 15% of the National Assembly and National Council members, there is still a distance we must travel to achieve a more gender-inclusive governance system. The conferment of the Gyen-tag by His Majesty to Bhutanese women in senior position is a recognition of the important roles played by women and a recognition of gender equality in this society.
The first comprehensive National Survey Report on Violence Against Women and Girls launched last week on the International Women’s Day confirm the need for raising further awareness on violence against all vulnerable groups -children, women and girls, Domestic Violence Prevention Act (DVPA) and the support services available in the country.
I am mindful of what UN Secretary General, Antonio Guterres said last Friday on international Women’s day: “Think Equal, Build Smart, Innovate for Change,” addresses infrastructure, systems and frameworks that have been constructed largely in line with a male-defined culture. We need to find innovative ways of reimagining and rebuilding our world so that it works for everyone.”
HEALTH Much progress has been made in the areas of child health and education. Further investment is necessary to reduce neonatal, infant and child mortality, stunting and anemia. Today, many more children are celebrating their fifth birthday than a decade ago, and many more mothers are surviving pregnancy and delivery-related complications to celebrate it with them. With sustained health efforts undertaken in the past two decades, today, there are many more doctors and nurses and health workers in the country who are equipped with knowledge and skills to provide quality services. And as we saw last week in the National press the government is committed to doing even more – especially in terms of raising quality.
EDUCATION Contributions made to the national and global goals in education through Early Childhood Care and Development (ECCD), basic inclusive education focusing on the most marginalized, and education of children in monastic institutions has come a long way. However, only 20% of children aged 3-5 years have access to early learning. The need is more in rural and remote communities.
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More than a third of children in Bhutan show signs of stunted growth caused by chronic malnutrition. The UN’s work in Bhutan aims to combat child malnutrition and, by encouraging school enrolment and attendance, to support the country’s development plan to reduce poverty.
The UN supports the development of human capital through expansion of quality Early Childhood Care and Development (ECCD) and the national education assessment framework. About 2 million USD was mobilized for the Royal Government through Global Partnership for Education (GPE) (2018-2020).
Increased focus on upstream policy work also includes the development of an equivalency framework for non-formal education, a ten-year inclusive education roadmap, and a multi- sectoral national ECCD strategic plan.
CLIMATE CHANGE Climate scientists have warned there are only 12 years for global warming to be kept to a maximum of 1.5 degrees, beyond which, even half a degree increase will significantly worsen the risks of drought, flooding, extreme heat and poverty for hundreds of millions of people.
Bhutan has already started to face the ill-impacts of climate change through erratic weather patterns, fast receding glaciers and the risks of Glacial Lake Outburst Floods.
The Paris agreement pledge is to keep temperatures between 1.5 to 2 degrees. At 1.5 degrees, the proportion of the global population exposed to water stress could be 50% lower than at 2 degrees. The impacts of climate change include increasing water scarcity and flood risk, along with declines in water quality which will impact both human and natural ecosystem. If world temperatures increase to 2 degrees, 99% of corals will be lost.
We must all take responsibility and act for we are the generation to feel the sharpest impacts of Climate Change. And we are the ones who can act to secure the future for those to come. It is the greatest challenge of our time and the biggest threat to our future. Our future generations will look back on us all and ask us what we did. It is worth recalling that Climate Action is one of the top 5 priorities of UN Secretary General Guterres for 2019.
I wish to take the opportunity to commend the work of the Secretary of National Environment Commission, Dasho Sonam P. Wangdi who was recently appointed as Chair of the 47 Least Developed Countries Group at UN on climate change negotiations. As Chair, Dasho Sonam represents the negotiating group of the 47 Least Developed Countries which, despite contributing the least to climate change, suffer the most from its impacts. I wish to commend the leadership role that Bhutan is taking on Climate Action.
Sem-dha No-sam Thing-go. From a Buddhist point of view, we know that wisdom and compassion are two wings of a bird. When it comes to Climate Change, as much as possible, we must look at it like combining mind and heart thinking with action. We need to convert our compassion for the planet into practical financing for relevant Climate Action here in Bhutan and this includes UN support in the area of innovative financing.
DISASTER RISK MANAGEMENT AND PREPAREDNESS Asia is the most disaster-prone region in the world and disasters are increasing in both frequency and severity. As part of our efforts to prepare for and reduce the risk and impact of disasters in Bhutan, the Government, UN and development partners have developed a
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coordination platform – a Road Map – for disaster risk management across 6 priority areas: disaster awareness, data preparedness, governance and coordination, resourcing and sector preparedness. This “Roadmap for Disaster Risk Management in Bhutan” will serve as an instrument to guide our future activities to move towards a safer and more resilient Bhutan.
CULTURE Bhutan will soon nominate its first Biosphere Reserve which will symbolize its commitment to the Agenda 2030 at the local level, with integration of nature conservation, sustainable development, culture and education. The Cultural Heritage Bill which is yet to be endorsed by the Parliament of Bhutan will play a crucial role in the conservation of Bhutan’s unique cultural heritage and would also be a milestone and will potentially pave the way for the inscription of a first Bhutanese site on the World Heritage list.
TRADE AND ECONOMIC DEVELOPMENT Bhutan's exports are highly concentrated, with about 80% consisting of 10 commodities, and 80% destined to one market (India). This high degree of trade concentration leaves the country vulnerable and dependent. Exports should be diversified, both in terms of markets and value- added products or services, to generate revenue and livelihood for small producers, women and youth. Economic and trade diversification is among the top priorities of the government and will be part of UN support to Bhutan in the coming years.
CYBERSECURITY In this digital age, modern societies are globally interconnected and increasingly dependent on ICTs and digital infrastructure. However, the interconnectivity also creates interdependencies, and vulnerabilities to emerging threats that need to be managed at the national, regional and international levels. Enhancing cybersecurity and protecting critical information infrastructures is essential to every nation’s security and economic well-being- particularly in the global move towards the digital economy and information society. The UN has supported the RGoB in establishing a Computer Emergency Response Team in Bhutan, a National Cyber Strategy and a Child Online Protection to ensure children and youth stay safe online.
INNOVATIVE FINANCING The UN is supporting the government in identifying the best practices in innovative financing to achieve the Sustainable Development Goals and national development plans of Bhutan. Innovative finance comprises of initiatives to raise new funding or to optimize the use of traditional funding for development. Innovative finance is not about replacing or realigning international assistance, but to identify solutions that mobilize new financing for development, more sustainably and more predictability.
It is also about generating a new relationship on development with the private sector and non- state actors. Innovative finance is at the heart of LDC graduation and to take a recent quote of the Prime Minister, to ‘convert donors to trading partners.’ I trust we will do this transition deliberately and strengthen the country’s inherent strengths when it comes to self- reliance.
INVESTMENT CASE FOR DEVELOPMENT WORK The Royal Government of Bhutan is committed to economic reforms and removing constraints to growth within the concept of Gross National Happiness and its four constituent pillars: Good Governance; Sustainable Socio-economic Development; Preservation and Promotion of Culture; and Environmental Conservation.
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The SDGs represent tremendous investment opportunities. However, a major challenge in financing the Agenda 2030 remains in the importance of fostering an enabling environment of financing and investment, assisting the private sector to mobilize long-term investment, and thus champion innovation solutions to financing the SDGs.
The agriculture sector plays a critical role in contributing to the country’s development and private sector investment, especially considering the wider-base implementation of agriculture programs and its part in balanced-economic growth.
With Bhutan’s graduation by 2023, the government, development partners and all stakeholders recognize that farming will continue to play a key role in socio-economic development into the next decade, along with its crucial contribution to food security, nutrition, poverty reduction and social safety-net.
In Bhutan, we the UN, need to continue, to innovate. One way to do this is to highlight some of the investment cases for development work that we undertaken:
A case-study for investment for Early Childhood Care and Development (ECCD) was carried out in Bhutan to address inequalities in health, ability, achievement, opportunity and long-term success.
Electric Vehicles is one of the new technologies that has garnered attention in developed countries and is increasing in developing countries as one of the key green low-carbon urban mobility options. Electric Vehicle initiatives will play a catalytic role in creating an enabling environment for people to switch to electric mobility, reduce our oil imports and strengthen our private sector.
Food fortification is a cost-effective way to address micronutrient deficiencies. In 2017, Bhutan joined the global fight against micronutrient deficiencies through the introduction of fortified rice in school meals. Today 75,000 school children eat fortified vegetable oil and fortified rice enriched with vitamins and minerals every day. Over the coming years the Government will set-up a regulatory framework for fortified food and work on bringing fortified foods to the commercial market to the benefit all Bhutanese people.
Gender-based Violence: Girls and women are the drivers of sustainable development and powerful agents of change. Violence against women has many costs, especially physical and emotional…increasingly countries are documenting the financing costs and in doing so we add even further reasons as to why we need to stay fully committed to Gender Equality in all the work both in Bhutan and around the world.
PARTNERSHIPS While innovation is good, innovation with partnering is better. The sharing of information, the increasing availability of big data, the range of expertise, technologies, and financial resources can drive entrepreneurship, connect a geographically diverse range of stakeholder, civil society organizations, academia, the private sector and communities to find the best solution for any given challenge.
Expanding alliances with media and other non-traditional partners is crucial to strengthening the work of the UN regarding social mobilization, advocacy and engendering citizen engagement with the SDGs. We the UN will continue to strengthen our partnership with the
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media here in Bhutan for we know they are crucial to deepening our understanding and commitment to the society.
Our partnership with Bhutan is about to reach the 50-year milestone and over the next 5 years, the UN in Bhutan will bring in grants to the value of USD 120 million, a 40 percent increase, over the last 5 years. This work will be especially targeted to 4 main areas of work:
a) strengthening data, so as to produce, disseminate and use statistics in accordance with internationally agreed standards. b) strengthening social services (especially education and health), c) strengthening governance (including support to parliament) and d) achieving results in the area of climate action and disaster preparedness. Whether you are a parliamentarian, government counterpart, CSO counterpart, member of the academic community, member of the media, or a development partner, we stand ready to work alongside you to support the development of the country which is grounded within the paradigm of Gross National Happiness.
HUMAN RIGHTS I wish to take the opportunity to thank the RGOB and its commitment to protecting and supporting its most vulnerable people. We saw this most recently in January where the mission of the UN Working Group on Arbitrary Detention was warmly received and supported and also in the preparations leading up to the Universal Periodic Review this coming May in Geneva. This is a country that takes seriously its international obligations.
UN PEACEKEEPING OPERATIONS I am mindful that Bhutan joined the fraternity of troop and police contributing countries in 2014 and I am mindful of the Bhutanese troops and police and civilians that are serving and maintaining international peace and security around the World today. This is a testament to Bhutan’s commitment to share the burden along with other Member States. I wish to take this opportunity to thank His Majesty, the RGoB and the People of Bhutan for your commitment to international peace and security.
CONCLUSION In conclusion, on behalf of the UN in Bhutan, I am reminded this is a UN Delivering As One — where we are tasked to provide strategic, relevant, effective and coherent results. On behalf of the 25 agencies working here in Bhutan, this is our commitment to the Government and people of Bhutan.
LDC graduation is an opportunity to enhance the work the UN does in Bhutan. We know we have to adapt and thus provide the support that further deepens Bhutan’s self-reliance and further strengthens Bhutan’s standing within the international community.
This year, we also embark on a new journey of UN Reform. To accomplish the 2030 Agenda, a bold change has been made to the UN Development System so as to further empower a new generation of country teams to accomplish the goals enshrined in the Sustainable Development Goals. This reform is inspired by the support and commitment we receive from the 193- member states: we the UN take our responsibility seriously to consistently deliver better results in the most efficient manner possible.
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Sem-dha No-sam Thing-go. Wisdom and compassion are two wings of a bird. Across all the issues outlined above we will strive to combine mind and heart thinking with action. We know we have done a good job when our various partners across parliament, RGOB, academic community, CSOs, private sector and media provide us with the feedback that our work is strengthening Bhutan’s own self-reliance and we are supporting the most vulnerable in society.
I would like to end with a quote from the UN Secretary General, Antonio Guterres. “Let’s keep showing all people that we care. Let’s keep proving our worth through action. And let’s accelerate our efforts to move our world forward and leave no one behind.”
Kadrinche and Tashi Delek.
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Annex 4.30: Statement by the World Health Organisation
14th Round Table Meeting, Thimphu, Bhutan, 12-14 March 2019
WHO Regional Director’s Address
Excellencies, partners, distinguished participants,
It is a privilege to be with you today and to participate in what is a unique and immensely valuable exercise.
That Bhutan has conducted this Roundtable Meeting for the past 14 years is testament to the wisdom of bringing together a range of partners, from a range of disciplines, to strengthen support to the Royal Government of Bhutan and its vision.
In acknowledging the Roundtable’s significance for Bhutan’s development generally, and keeping in mind the organization I represent, I will focus on health.
For many years Bhutan has been a global example when it comes to prizing health and well- being over other metrics of progress.
This is currently reflected in the presence of five health experts in the Royal Government’s Cabinet.
It is also reflected in the fact that the Hon’ble Prime Minister himself, is a renowned and highly respected medical doctor.
Notably, it is manifest in the many significant public health achievements Bhutan has made in recent years.
In 2014, for example, Bhutan shared in the Region’s success of being certified polio-free.
In 2016 it likewise celebrated the Region’s achievement of maternal and neonatal tetanus elimination as a public health problem.
Bhutan was of course one of the first of the Region’s countries to achieve that goal, having done so before the turn of the millennium.
Significantly, in 2017 Bhutan eliminated measles three years ahead of the Regional target, which made headlines everywhere.
In the same year, Bhutan was awarded the World No Tobacco Award due to policies that outpaced even the most pro-active countries.
In 2018 Bhutan was verified to have controlled rubella and congenital rubella syndrome – one of the few countries in the world to do so.
And I understand several significant achievements are around the corner.
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In line with the Region’s Flagship Priority of finishing the task of eliminating neglected tropical diseases, Bhutan is on the verge of eliminating kala-azar.
Bhutan is also on the verge of eliminating mother-to-child transmission of HIV, hepatitis and syphilis.
These would indeed be groundbreaking achievements, and would reverberate not only in our Region but across Asia and the world.
Nevertheless, as always, there is more to do and additional ways to help change the lives of all people everywhere leaving no one behind.
As I reiterated at last year’s WHO Regional Committee, as well as at my re-appointment as Regional Director in January, it is imperative that we sustain our many achievements, accelerate progress, and harness the full power of innovation.
On each of these points, WHO and Bhutan’s Ministry of Health are fully aligned. First, let us focus on sustaining Bhutan’s very substantial achievements.
Over the years Bhutan has been a leader both in the Region and across Asia in controlling and eliminating diseases that have taken a significant toll elsewhere.
That commitment must continue. To do so, resolve must be steadfast and the required resources secured to overcome last-mile challenges.
Second, we must strive to accelerate progress.
Despite Bhutan’s topography, its immunization programme has forged exceptional gains that have been recognized the world over.
That means its primary health care system can do the same, especially when it comes to providing services for noncommunicable diseases. Commendably, Bhutan was the first country in the Region to introduce WHO’s Package of Essential Noncommunicable Disease Interventions, commonly referred to as the PEN package.
To accelerate its impact and the quality of PHC generally, increased budgetary allocations would help.
Though I appreciate Bhutan’s health spending is considerable, further allocations would be welcome, and should be seen as an investment rather than an expense. Third and finally, we must seek-out ways to harness and make full use of innovative technology.
As many of you appreciate, we just had back-to-back meetings in New Delhi concerning the positive role digital technologies can – and should – have in modern health systems. The benefits for a country like Bhutan are clear to see.
While all people should have trouble-free access to primary care services, eHealth and mHealth tools can help fill gaps and supplement services as and where needed.
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Excellencies, distinguished participants,
Though Bhutan has made remarkable strides in a range of areas, like all countries it faces persisting and emerging challenges.
But as this Roundtable demonstrates, it is well positioned to face those challenges head-on, and to develop, cost and implement the policies needed to chart transformative progress.
I trust Bhutan’s 12th Five Year Plan will do exactly that, guiding the country through a time of global change and at the same time as building on the wise and able leadership Bhutan’s Royal Government has demonstrated for many years.
You can, as always, count on WHO’s full support in each and every one of your endeavors. I look forward to working with you to achieve the full scope of your vision and the entirety of your ambition.
Thank you very much.
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Annex 4.31: Statement by the World Bank
March 14, 2019 World Bank Statement at the 14th Round Table Meeting
Honorable Prime Minister, Ministers, Your Excellences, Distinguished Delegates, Ladies and Gentlemen, on behalf of the World Bank, I would like to thank the Royal Government for the collaboration between Bhutan and the World Bank for about 40 years since 1981.
The World Bank would like to congratulate the government for successfully organizing the 14th Round Table Meeting (RTM), the highest forum for policy dialogue between Bhutan and its development partners. The RTM is instrumental to learn the latest development direction and to discuss key issues among the stakeholders.
Bhutan has a strong track record of reducing poverty and maintaining solid growth. Using the international poverty rate of $3.2 a day, the poverty headcount rate fell from 36.4 percent in 2007 to 12.1 percent in 2017. Annual average economic growth rate in the past decades is 7.5 percent, one of the highest in the world. Bhutan’s unique philosophy of Gross National Happiness, good governance and remarkable environmental management are foundations of the strong track record. Building on the strong track record, Bhutan has a lot of opportunities to address its development challenges including: (a) creating quality jobs for youth and opportunities for female, (b) reducing macroeconomic volatility and vulnerability and (c) addressing spatial disparities and vulnerability to natural disasters.
On creating quality jobs for youth and opportunities for female, the 2017 Labor Force Survey Report shows that the youth unemployment rate stood at 12 percent in 2017 with the urban youth unemployment rate at 17 percent. The female labor force participation rate of 60 percent is much lesser than the male labor force participation rate of 72 percent. Addressing the job challenges are critical to harness opportunities for demographic dividend (i.e., the increase in the share of working-age population in total). On the micro level, addressing demand and supply mismatch is critical. About 65 percent of employed persons has either no education and primary/lower education. On the other hand, more than 90 percent of unemployed youth has middle/higher education or bachelor’s degree. On the macro level, as job absorption capacity of the public sector is limited, private sector development through improving business climate and economic diversification is a priority.
Economic diversification is also critical to address macroeconomic and vulnerability. Currently, hydropower accounts for 30 percent of GDP. Also, the link between sectors is weak. For example, the link between hydropower and the rest of the economy can be improved. To consider economic diversification in Bhutan, there are two points. One is that economic diversification is not an end, but a means for private sector development and quality job creation. Second, economic diversification is not away from hydropower but how to use hydropower including revenues for economic diversification. The recently published Bhutan Development Report recommends investing in physical capital (including road networks and ICT), human capital and institutional development, all of which are foundations for economic diversification. On business climate, Bhutan’s global ranking on World Bank’s 2019 Doing Business fell to 81, the second in South Asia after India.
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There remain spatial disparities and vulnerability to natural disasters. The poverty rates are low in Thimphu and Paro at about 1 percent. On the other hand, rates are high in Dagana and Zhemgang at about 40 percent. Also, the quality of services such as electricity have spatial disparities among districts. Bhutan is highly vulnerable to natural disasters affecting people’s life through agriculture, water resources, tourism, and hydropower, while reliability and quality of infrastructure has room for improvement. In this regard, investment in ICT is likely to contribute to not only economic diversification, but also enhancing data management and communicating system (such as hydromet information services) to foster systematic approaches to prepare/react to natural disasters.
Addressing these challenges require (a) accelerating reforms; (b) investing in human capital; (c) identifying financing for development; and (d) investing in data and statistics.
On reforms, the World Bank would like to encourage the government to accelerate reforms for economic diversification, tax policy and administration, public financial management, agricultural productivity, connectivity and business climate, as well as policies to encourage energy efficiency and address climate change and urban development. These reforms will enable Bhutan to harness its opportunities and to address its challenges. Though these areas sound many, Bhutan will be able to take advantage of ‘its smallness and strong governance’ to effectively and efficiently formulate and implement policy reforms. The World Bank has been supporting Bhutan in these reforms areas through the combination of analytical work, technical assistance and lending. In addition to the Bhutan Development Report for economic diversification. Also, the World Bank plans to publish the Urban Policy Notes, a report on Agriculture and Rural Development and Poverty Assessment. On economic diversification, the World Bank commends the government initiative to organize the second BEFIT in July 2019. The World Bank appreciates the opportunity extended to the World Bank Group by the government and the Royal Monetary Authority to partner in this initiative.
On human capital, the World Bank has been reengaging in health, education and social protection. The World Bank recently launched the Human Capital Project, a global initiative to accelerate more and better investments in people for greater equity and economic growth. We are glad that Bhutan is one of the early adopters of the Human Capital Project. The World Bank applauds the government’s strong commitment to invest in its people’s health and education through its “Narrowing the Gap” strategy. As the Human Capital Project is a global initiative, the World Bank has been collaborating with other development partners on this issue. As human capital development is a cross-cutting issue which requires strong coordination among stakeholders, the World Bank encourages the government to use a “whole of government” approach and to formulate a Human Capital Action Plan based on the 12th FYP. The World Bank would like to offer our support in this area including facilitating the Human Capital Forum.
As financing for development, the 12th FYP has identified development financing needs of US$420 million. While prioritizing expenditures is critical, identifying sustainable financing sources is equally important. In the 2018 Voluntary National Report (VNR) for the SDGs, the government committed to develop a financing strategy. As part of the strategy, it is important to discuss pros and cons of each financing source, including debt financing, grants and innovative financing, needs to be discussed. For example, the World Bank has secured $100 million allocation for Bhutan from July 2017 to June 2020 at concessional rate (0 percent interest rate and 40-year repayment period). Given its relatively high GNI per capita ($3,000), it may not have access to IDA financing at current terms in the next IDA cycle. Therefore, the
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World Bank has been encouraging Bhutan to utilize its IDA country allocations as well as other IDA windows. Other IDA windows include regional windows in which Bhutan would be able to tap regional IDA window as well with the same financing terms for regional projects. Also, the World Bank has been encouraging to tap Catastrophe Deferred Drawdown Option (Cat DDO) to better prepare for natural disasters. This is an innovative contingent line of credit that can provide immediate liquidity to countries in the aftermath of a disaster resulting from an adverse natural event. The financing terms are the same as IDA lending. Also, the World Bank is happy to support to establish Bhutan Climate Fund.
On data and statistics, for the government to conduct evidence-based policy formulation, quality and frequency of data and statistics need to be improved. Despite recent efforts, Bhutan ranks lower than other South Asia countries in the World Bank’s 2018 Statistics Capacity Indicator. The World Bank has been supporting statistics development especially in household survey and economic census. However, there is room for improvement. For example, a lack of quality of education data has prevented Bhutan from participating in the Human Capital Index under the Human Capital Project. Going forward, quality data and statistics will be more important for successful decentralization.
In conclusion, the World Bank stands ready to continue supporting Bhutan’s national priorities that are consistent with World Bank Group’s goals of ending poverty and boosting shared prosperity. The World Bank would like to reaffirm its commitment to support Bhutan’s development agenda as described in the 12th Five-Year Plan. The World Bank has also started preparing its new Country Partnership Framework (CPF) for Bhutan for the next five years, which will fully align with the government’s 12th FYP.
Thank you very much and Tashi Delek.
Resources World Bank in Bhutan: http://www.worldbank.org/en/country/bhutan The Policy Notes: http://documents.worldbank.org/curated/en/484471550069124862/Bhutan- Rising Bhutan Development Report: http://documents.worldbank.org/curated/en/259671548449315325/Bhutan-Development- Report-A-Path-to-Inclusive-and-Sustainable-Development Bhutan Development Update: http://documents.worldbank.org/curated/en/510171542039840599/Bhutan-Development- Update-Accelerating-Reform-Momentum
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Annex 5: Closing Statement by the UN Resident Coordinator
Closing Remarks by UN Resident Coordinator – 14th RTM
1. On behalf of the United Nations System in Bhutan, I would like to express our sincere appreciation to the RGoB for its leadership in convening this very important RTM, of which, we the UN are a proud partner.
2. A big thank you to all the delegates and other participants for contributing to our open and positive discussions over the last two days in the spirit of true partnership.
3. Although not present here today, I would like to especially thank Mr. Achim Steiner, UNDP Administrator and UN Under-Secretary General for Co-chairing the RTM with the Honourable Foreign Minister of Bhutan.
4. We’ve had deliberate discussions on topical development issues such as climate change, that is relevant not only to Bhutan but globally. GNH as a “purpose-led vision”, in the words of Mr. Achim Steiner, was also discussed extensively.
5. I would like to reiterate the commendable efforts made and the progress that Bhutan has made over the last few decades.
6. Bhutan is at the threshold of LDC graduation and it is comforting to learn that “sustainable graduation” overrides “graduation” on the RGoB’s development agenda.
7. The 12th FYP’s focus on “Narrowing the Gap and Leaving No One Behind”, is evidence of the RGoB’s sincere commitment to the achievement of the SDGs, that places people at the centre of development. 8. We are pleased to note the RGoB’s commitment not only to sustained development, but also to sustained financing of development. In this regard, we welcome the RGoB’s initiative to explore innovative financing options in meeting national development goals and the SDGs.
9. We appreciate the RGoB’s recognition of the need to enhance partnership at all levels and across all sectors, including with the CSOs. This was also conveyed by one of the CSO representatives (Aum Chimi) yesterday.
10. We’ve heard from the RGoB, including the Honourable Prime Minister himself, the need and its commitment to strengthen governance that underpins the achievement of economic and social issues, to ensure that no one is left behind.
11. Most notable is the RGoB’s deep and continued commitment to urgent climate action and the need to strengthen disaster preparedness and resilience and in this regard, we welcome the RGoB’s capacity and research development initiatives in this area.
12. Even as Bhutan graduates from the LDC category, we cannot ignore the fact that climate change will impact us and that a whole-of society approach is needed to lift the people of Bhutan out of the LDC realities that will continue to persist.
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13. As the United Nations Resident Coordinator in Bhutan, I take upon myself, the onus to provide relevant, coherent and effective UN support to the Royal Government and the people of Bhutan.
14. We take note of the concerns expressed on Bhutan’s LDC graduation by delegates during the course of our discussions and your commitment to leaving no one behind.
15. let me reiterate that, going forward, the United Nations will work in close collaboration with the RGoB and all development partners to ensure that Bhutan’s graduation is sustainable.
16. In concluding, let me thank all the delegates once again for your commitment to supporting Bhutan and at the same time assure you of the UN’s commitment to further walk together with all of you, in the development journey that lies ahead of Bhutan.
17. I wish all the delegates a pleasant rest of your stay in Bhutan.
Thank you and Tashi Delek.
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Annex 6: Closing Statement by the Secretary, GNH Commission, RGoB
Hon’ble Prime Minister, Excellencies, Distinguished Guests, Ladies and Gentlemen.
As we come to the close of the 14th Round Table Meeting, it is my humble privilege to make this concluding statement on behalf of the Royal Government of Bhutan.
Firstly, I would like to take this opportunity to thank all our development partners for participating in this very important 14th Round Table Meeting, many of whom have travelled long distances to be with us over the last three days.
I would also like to thank H.E. the Foreign Minister Dr. Tandi Dorji, and H.E. the UN Under Secretary General and UNDP Administrator Mr. Achim Steiner, for co-chairing the 14th RTM themed “Enhancing Happiness and Sustainable Development through Partnerships”.
I would also like to thank our ministers of Agriculture, Finance and Economic Affairs; representatives of development partners and Bhutanese participants who helped co-chair and moderate some of the thematic sessions and also participated as panellists.
Briefly to summarise some of the important takeaways from our deliberations over the last three days:
1. Bhutan has achieved significant socio-economic progress as a result of which we will be graduating from the LDC category to developing category of countries by the end of 2023. Bhutan welcomes this milestone in its development journey and I take this opportunity, on behalf of the Royal Government of Bhutan, to thank all our development partners for their goodwill, support and cooperation in Bhutan’s socio- economic development efforts.
2. The meeting also took note of some of the key challenges Bhutan continues to face – such as the last mile challenges in the social sector (improving quality of education and health services and reaching the unreached), vulnerabilities due to climate change and disaster, economic vulnerability of single-sector driven economy, and disparities at disaggregated levels.
3. The 12th Plan has been formulated to address these challenges and to ensure smooth and sustainable transition from LDC status.
4. To ensure successful implementation of the 12th Plan, financing resources will be critical. As shared by our Finance Secretary this morning, we still have a fiscal deficit of Nu. 29 billion (USD 415 million). RGOB will therefore continue to explore innovative financing mechanisms including enhancing domestic revenues through tax reforms to bridge the gap. At the same time, we also look forward to the continued support of our development partners.
5. In this regard, I take this opportunity to thank all our development partners for their generous support in the 12th Plan, in particular Government of India, our single largest partner contributing over 70 % of the projected external grants of Nu. 63 billion.
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6. Going forward from our meeting over the last three days, we will prepare a report of the proceedings of the meeting and this will be shared with all participants. Also, we have received very useful and constructive comments and feedback that will be taken into consideration in the 12th plan documents, which will be finalised and published over the next couple of weeks.
7. We will be reaching out to all our development partners to follow-up on the commitments/indications of support made over the last three days. Accordingly, project concept/proposals will be formulated and shared.
8. Further, we will continue our discourse on re-imagining development for happiness and wellbeing in the context of Gross National Happiness and the Sustainable Development Goals.
Excellencies, Distinguished Guests, Ladies and Gentlemen.
In conclusion, on behalf of the Royal Government of Bhutan, I would once again like to thank you all for your active participation in the meeting and continued goodwill and support to Bhutan and its people.
As you travel back home, we wish you a safe journey.
Thank you and Tashi Delek!
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