Realizing Prosperity for the Bhutanese People

Congratulating the newly elected Prime Minister of Bhutan, His Excellency Lyonchhen Dr. Lotay Tshering (November 2018)

The Kingdom of Bhutan (Bhutan) and the World Bank Group (WBG) have had a long-standing relationship that has grown in recent years with the establishment of the WBG’s Bhutan Country Office in Thimphu in 2011.

Bhutan became the member of the World Bank (International Bank for Reconstruction and Development (IBRD) and International Development Association (IDA)) in 1981, followed by its membership with the International Finance Corporation (IFC) in 2003 and the Multilateral Investment Guarantee Agency (MIGA) in 2014. The Bhutan Country Office is represented by the Resident Representative (Yoichiro Ishihara) under the supervision of the Country Director (Qimiao Fan) for Bangladesh, Bhutan and Nepal based in Bangladesh.

WBG’s partnership with Bhutan has been fully aligned with the country’s development vision articulated in the Constitution, Bhutan Vision 2020 and the 11^th five-year plan (FYP). The partnership is articulated in WBG’s Country Partnership Strategy (CPS) for FY2015-2019. The CPS is organized its activities under three results areas: (a) improving fiscal and spending efficiency; (b) increasing private sector growth and competitiveness; and (c) supporting green development.

Newly elected Honorable National Council Members with the World Bank staffs and the staffs of the National Council Secretariat.

The Royal Government of Bhutan and the WBG also jointly conducted the Performance and Learning Review (PLR). The PLR assessed the implementation progress of the CPS to date, and based on the assessment, made necessary adjustments to the program for the remaining period of the strategy. The WBG has also started preparations of Systematic Country Diagnostics (SCD) as a basis for the formulation of its next County Partnership Framework (CPF) in alignment to the 12^th FYP of the Royal Government of Bhutan. The World Bank has committed to doubling its country allocation to $100 million for Bhutan with more favorable terms between 2017 and 2020. To support Bhutan’s development with the increased availability of IDA financing with better terms, the World Bank has started strategic discussions with the Government to ensure alignment with the government preparations of the 12^th FYP. Bhutan is one of about 30 Early Adopters for the Human Capital Project (HCP), a global effort to accelerate more and better investments in people for greater equity and economic growth.

World Bank’s operations are conducted through three channels: IDA credit, grants and trust-funded activities and, Advisory Services and Analytics (ASA). The Royal Government of Bhutan and the World Bank signed its first series of Development Policy Credits ($30 million) in April 2018. Second Urban Development Project ($29 million, until 2019) is under implementation with IDA credits. To complement the projects with IDA credits, the World Bank also provides support through more than nine grants / trust-funded activities including:

Bhutan Reducing Emissions from Deforestation and Forest Degradation (REDD) readiness project ($8.6 million)
Sustainable Financing for Biodiversity Conservation and Natural Resources Management ($4 million)
Global Agriculture Food Security Program ($8 million)
Hydromet Services and Disaster Resilience Regional Project ($3.8 million)
Bhutan BLSS Economic Census ($0.7 million)
The Preparation of Strategic Program of Climate Resilience ($1.5 million)

These activities are underpinned by ASAs. The World Bank, for example, has conducted an In-Depth Labor Study, Managing Environmental and Social Impacts of Hydropower in Bhutan, Investment Climate Assessment, Agribusiness Policy Note, Bhutan Development Update and Practical solutions for addressing labor related barriers to Bhutan’s private employment growth. Additionally, as part of World Bank’s engagement with broader stakeholders, National Council of Bhutan, the upper house, and the World Bank organized a three-day workshop on “Understanding the Fundamentals of Macroeconomics and the National Budget” in May 2018.

For further information, please contact Yoichiro Ishihara (Resident Representative and Senior Country Economist, yishihara@worldbank.org) and Tenzin Lhaden (Operations Officer and Economist, tlhaden@worldbank.org).

Recent Blogs on Bhutan

An update on Bhutan’s economy

Building up Bhutan’s resilience to disasters and climate change

From Japan to Bhutan: Improving the resilience of cultural heritage sites

Helping Bhutan’s parliamentarians better understand economics

Promoting better nutrition in Bhutan

Moving towards gender equality in Bhutan

Improving Agricultural Systems and Raising Prosperity in Rural Bhutan

When technology meets agriculture in Bhutan

Please visit:

World Bank in Bhutan: https://www.worldbank.org/en/country/bhutan
Visit us on Facebook: https://www.facebook.com/WorldBankSouthAsia
Follow us on Twitter: https://www.twitter.com/worldbanksasia