13th FYP to ensure sustainable and long-term economic growth

The 13th Plan will focus on national and government priorities

The 13th Five-Year-Plan (FYP) will adopt a dynamic planning approach and framework that accommodates national and government priorities while ensuring sustainable and long-term economic growth, according to the draft concept of the Gross National Happiness Commission (GNHC).

With this plan, the commission is expecting that it will also ensure the alignment of all future plans for the country’s overall development goal. The main objective of the 13th Plan is “A Dynamic, Prosperous, Inclusive and Sustainable Economy in Pursuit of GNH”. 

However, the development of the overall goal along with the National Key Result Areas (NKRAs) will be guided by the Royal Addresses, the draft 21st Century Economic Roadmap, various ongoing national-level reforms, emerging global and national issues, and priorities, and 12th FYP’s achievements and lessons.

According to the GNHC, the plan will be broadly made up of two components. One component will include long-term programs and projects spanning over four-five years or more.

“These will be a big-impact strategic programs and projects of national importance and objectives, which can be broken down into independent components that can be implemented within a plan period but will be a critical part of the whole long-term plan.”

In addition, these programs and projects are expected to allocate a fixed proportion of the planned budget and will have committed resources mainly from development partners. Development partners will be encouraged to make long-term commitments toward such programs and projects.

The second component will be more flexible, allowing the government to develop and implement innovative and creative plans that are in line with their priorities and the planned NKRAs. A portion of the planned budget will also be allocated toward this component.

However, in the 13th Plan, the spatial planning principles will be considered for maximizing sustainable use of resources, building resilience, addressing inclusion such as integrating rural-urban development, and promoting balanced regional and rural development within ecological, geographical, and population parameters.

According to the GNHC, behavioral change and sustainability in terms of waste management, energy use, water consumption, and food choices will be promoted. Along this line, capacity building will be emphasized toward a Circular Economy, in the long run, to promote cyclical resource efficiency and create green jobs.

The 13th FYP is expected to serve as the smooth transition strategy for Bhutan’s smooth graduation from the LDC category for which the strategy will be prepared and integrated.

A significant share of resources will be allocated largely for economic and commercial objectives and priorities, and to avoid sub-scale investments in prioritized national focus areas, GNHC states.

“Separate and adequate resources to be kept for the national and government’s priorities, for special programs, and crisis response strategies.”

With this, significant investments need to be mobilized to realize high growth and income aspirations. For that, the government needs to mobilize around Nu 750bn (lower side) and Nu 1,250bn (higher side) for the entire economy in the 13th FYP to realize high GDP growth, and high GNI per capita, and generate high employment.

However, as per the 4th quarter of 2021, MFCTC projected that around Nu 369bn in 2023-28 will be available from revenue and grants out of which Nu 122bn for capital expenditure and Nu 239bn for current expenditure is projected.

In addition, initiating and exploring new and innovative sources of financing from domestic, private, and foreign capital such as public-private partnerships, FDI, climate finance, blended financing options, and other sources are expected to be emphasized.

To that end, financing strategy and modality will be developed, and to attract much-needed FDIs and talents, especially from advanced economies. This will be underpinned by sound debt management and a domestic debt market strategy.

Meanwhile, flagship programs will be limited to a few numbers to focus on programs and projects with high potential for revenue generation, employment opportunities, and economies of scale.

The government before their tenure ends, GNHC states, will prepare a proper plan and pass the capital budget for one financial year, including plans and budgets of LGs to avoid a steep decline in GDP during the transition period.

Further, the government will provide planning guidelines for the 13th FYP preparation with national level thrust areas and strategies, key results areas, indicators, and indicative resource outlays to the sectors and LGs.

The LGs are expected to be guided by the local development planning manual in addition to policies and technical guidelines issued by the central agencies. The technical guidelines will be prepared by concerned agencies to inform policy prescription, standards, and criteria as guides to sectors and LGs for plan formulation and adherence.

The new government will finalize and approve the next FYP within a maximum period of three months (excluding three months interim period).

Kinley Yonten from Thimphu