MANILA, PHILIPPINES -- Bhutan's Prime Minister Tshering Tobgay visited the Asian Development Bank (ADB) today to discuss the country's more than three-decade-long relationship with the Bank with ADB President Takehiko Nakao. During the visit, the Prime Minister spoke to the Board of Directors and addressed ADB's staff as part of its Eminent Speaker Forum on "Bhutan's Economic Vision: Prosperity for All." He also launched a book on Bhutan's drive for improved governance.
The Prime Minister thanked ADB for its contribution to Bhutan's development, highlighting the role ADB has played in Bhutan's near-universal rural electrification and financing roads to connect interior regions and boost links with neighboring countries.
"Since its partnership with Bhutan began in 1982, ADB has grown to be Bhutan's lead development partner," Mr. Tobgay said. "ADB's support over these years is very much appreciated, including its work to develop eco-friendly transport. The continued assistance from ADB is vital for the successful implementation of our ambitious 11th five-year plan, which targets self-reliance for all national development needs by 2020, including cutting poverty from the current 12% to 5% or less of the population, and carbon-neutral growth."
Mr. Nakao thanked Mr. Tobgay for the warm hospitality extended during his visit to Bhutan in February this year. He commended the Prime Minister for his government's prudent macroeconomic management and development progress. Poverty in Bhutan has dropped from 23.2% in 2007 to 12.0% in 2012. Economic growth is expected to rebound to 6.0% in the fiscal year ending June 2014.
"Bhutan has made great strides in poverty reduction in the last few years while boosting economic growth," Mr. Nakao said. "Challenges remain in broadening the economic base, ensuring equal access to basic public services such as education and health, and creating more jobs for youth. It is also critical to maintain macroeconomic stability through appropriate fiscal, monetary and prudential policies." Bhutan can channel the revenues from its vast hydropower resources to develop human capital and infrastructure. It should also enhance its efforts to attract foreign direct investment into manufacturing and agribusiness.
ADB's President assured Bhutan of ADB's continued support. ADB's 2014-2018 Country Partnership Strategy for Bhutan approved in July 2014 will focus on transport, energy, urban development, and finance. It will also provide technical assistance for skills development and water resource management. Bhutan is eligible for loans and grants from ADB's concessional lending window and is expected to receive about $180 million between 2014 and 2017. The newly established ADB office in Bhutan is expected to deepen the partnership with the country.
Finance Minister Namgay Dorji and President Nakao signed today, a loan and a grant agreement for a $69 millionSouth Asia Subregional Economic Cooperation (SASEC) Road Connectivity Project. This project will improve 70 kilometers of Bhutan's busy Southern East-West Highway, and build a dry port in Phuentsholing with a land custom station along the Bhutan-India border.
Since joining ADB in 1982, Bhutan had received $337.46 million through 29 loans, $135.39 million for 9 grants, and $54.89 million for 129 technical assistance projects, as of the end of 2013. Five ADB-financed rural electrification projects in the country have collectively electrified more than 37,000 households, or 43% of the rural households in Bhutan, contributing significantly to the government's 100% electrification target.