Bhutan to Graduate from Least Developed Countries Group by 2022

Bhutan has stable political, economic and social settings that could attract a lot of Foreign Direct Investments.

Bhutan has stable political, economic and social settings that could attract a lot of Foreign Direct Investments. (Source: http://www.bbs.bt/)

 

As Bhutan prepares to graduate from the Least Developed Country (LDC) category in next few years, concerns are particularly high in terms of the country’s economic vulnerability.

Bhutan will benefit tremendously from the graduation

However experts, defying the sense of cynicism, believe that Bhutan will benefit tremendously from the graduation both in terms of trade and foreign investments.

Bhutan is one of the 47 LDCs in the world, having unique structural challenges to its development progress.

The Foreign Ministry, in collaboration with the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) organised a three-day regional capacity building workshop to help countries like Bhutan to formulate national policies and strategies in preparation for its graduation from the LDC category.

Usually there are cynicisms surrounding the graduation since a graduated country loses access to multilateral LDC specific funds. In trade, as well, graduation could imply a loss of duty free access to foreign markets.

However, UNESCAP said graduation is not a complex issue. In fact, the UNESCAP believes it reflects Bhutan’s success and improvement in its social and economic standings.

“When countries graduate, one element that they lose in the transition period is the preferential access to markets mainly in developed economies in Europe and the US. However, if you look at the Bhutan’s export structure, it doesn’t do that much trade with Europe and the US. Its main trading partner is India. So if you graduate, you will not lose any access to Indian market -electricity export, it won’t be losing that. India is also the main partner for Bhutan in terms of providing loans and grants. So this won’t be affected by graduating from the LDC category,” said Oliver Paddison, Chief of Countries with Special Needs Section under UNESCAP.

Bhutan fulfilled the criteria for graduation from the LDC category for the first time in 2015 and will be considered for graduation at the 2018 review.

Bhutan has stable political, economic and social settings that could attract a lot of Foreign Direct Investments

“LDCs are, as I said, generally more conflict prone, vulnerable and maybe foreign investors are not willing to invest into LDCs because they are often considered to be politically unstable which is clearly not the case  in Bhutan. So if you graduate, you are also sending signals that we are doing really well, we have the stable political, economic and social settings and that could attract a lot of Foreign Direct Investments (FDIs) potentially,” added Oliver Paddison.

Bhutan has met the graduation threshold for income and human assets index, while falling short in the economic vulnerability criterion.  If a country satisfies at least two out of the three criteria for graduation in two consecutive triennial reviews, the Committee for Development Policy recommends to the UN’s Economic and Social Council that the country should be considered for graduation. If this is accepted, Bhutan then will graduate from the least developed country to the developing country category by 2022.

 

By Sonam Phuntsho (This article has been edited for the Bhutan Times)

This article first appeared on Kuensel.

 

 


Related Posts

Thimphu TechPark aims to attract foreign investment

The main mission of the company is to attract reputed IT/ITES companies from both within Bhutan and around the world to...

Oct 01, 2017 17:37

Another Techpark in Bhutan by 2019

The Ministry of Information and Communications (MoIC) will establish another Techpark by 2019. This is geared towards...

Oct 17, 2017 09:38

Entrepreneurship Course Equips Youth with Business Skills

More than 30 out of school youths are learning how to make banana bread, chips, fruit wine and cardamom tea at a basic...

Oct 15, 2017 15:21

Gross National Happiness of Business Assessment Tool Proposed

The proposed GNH tool is expected to systematically assess a business establishment’s effort to integrate GNH values...

Nov 08, 2017 13:48

Startup Weekend Begins in Phuentsholing

The Startup Weekend is organised in collaboration with Thimphu Techpark, Techstars, Department of IT and Telecom (DITT)...

Oct 29, 2017 12:00

Bhutan is the best place to do business in the Indian...

Compared to its neighbours, Bhutan is still the considered the best place to do business in the region. India is ranked...

Nov 06, 2017 10:23

Latest

News

Education Ministry Working on Providing Lunch in All Schools

There are 301 schools under the school-feeding programme out of which 147 schools provide three meals a day while 154 provide lunch only.

Dec 10, 2017 10:23

East-West Road Widening Project Enhances Travelling For Bhutanese Commuters

Prime Minister Tshering Tobgay, in an earlier interview with the Bhutanese media, said that the East-West Highway is an important project,...

Dec 05, 2017 06:01

Features

Impact of Regional Tourists on Bhutan’s Tourism Policy

Regional tourists, especially from the South Asian Association for Regional Cooperation (SAARC) countries do not have to pay the USD 200 to...

Dec 15, 2017 09:22

RENEW, Empowering the Disadvantaged

The organisation, which works towards renewing the dignity of women, addresses the issues of gender inequality through awareness, education,...

Dec 14, 2017 11:04

Sports

Athletes Seek Insurance to Cover Injuries

According to him, there were incidents in the past where an athlete had to bear his own expenses for injuries suffered in the match. “When...

Dec 13, 2017 07:06

​Bhutan to Face China on Dec 11

Bhutan will play China for the second time in five years on Monday. The two played for the first time in the same place in 2012 during the...

Dec 09, 2017 10:06

Business

Fuel Price Drop to Spur Economic Growth by 1%

“The drop in the prices will stimulate the economy by lowering the cost of transportation, resulting in a drop in prices for consumers and...

Nov 27, 2017 10:48

Ac​hieving the 100% Employment Pledge

The government has spent Nu 1.156 billions for the unemployed youths by involving them in trainings, workshops, internship opportunities for...

Nov 26, 2017 09:04

Travel

Journey to the Fascinating Royal Highland Festival in Laya

Chimi Wangmo, based in Thimphu, traversed through beautiful landscapes to witness the fascinating Royal Highland Festival in Laya.

Dec 07, 2017 09:18

Dochula Tschechu – Truly Captivating!

What makes the Dochula Druk Wangyel Festival unique is that while the mask dances performed elsewhere in Bhutan are centred around religious...

Nov 24, 2017 05:19

Lifestyle

Indulge in Awesome Japanese Food in Bhutan

On our various visits to the first ramen joint in Thimphu, we have seen Japanese diners as well as Bhutanese families stopping by for a...

Dec 06, 2017 07:40

Savour a Bit of Switzerland in Bhutan

The restaurant owners are a Swiss-Bhutanese couple who hail from Bumthang, where their family owns the Swiss Guest House, Red Panda Brewery...

Dec 01, 2017 08:29

Subscribe to our newsletter

Never miss out on new happenings and news stories!