After becoming an observer of the World Trade Organization (WTO) in 1999, the government is now processing to join the Organisation before the country graduates from least developed country (LDC) this December as there will be advantages for Bhutan.
Prime Minister (PM) Dr. Lotay Tshering conveyed this to the Bhutanese media during the 49th Meet the Press session on April 13, 2023.
Speaking about the development, the PM said that by becoming a member of WTO, there will be more benefits and advantages. “Whether we will benefit or not will depend on how we take it as once we become the member we will have to follow trade rules as per WTO; but definitely we will not incur loss even if we are not able to make the profit,” the PM said
PM said that the process to become the WTO member is long. However, the PM shared that they are currently studying the process and will seek advice from the concerned government agencies and international experts.
Karma Dorji, minister of Ministry of Industry, Commerce and Employment (MoICE) said that Bhutan will benefit as WTO member. “The benefits of being as a WTO member is that we don’t have to make an agreement with each and every country,” the minister said, adding that rather Bhutan is already a step closer to become the member of WTO as Bhutan already trades with 105 countries from 165 WTO countries.
Lyonpo Karma Dorji also said that the biggest advantage of being a member of WTO is Foreign Direct Investment (FDI). “Since, we are trying to promote FDI; if we become a member of WTO we can take advantage of promoting FDI sector in Bhutan since WTO has the basic principle, policies and trade rules.”
MoICE minister also said that it will have more benefit if Bhutan becomes the member of WTO before graduating from LDC and show some interest to join WTO as even after graduating from LDC Bhutan will have about 14 benefits as WTO member.
Meanwhile, on questions asked about reduction in fund after Bhutan graduates from the LDC status, the media was informed that Bhutan’s graduation from LDC will not affect the relation with the government of India (GoI) and European Union (EU). Even after the graduation from LDC, Bhutan will continue to receive the support.
PM Dr Lotay Tshering said that GoI will continue to support Bhutan with the five year budget. Pertaining to the EU, PM said that the development grant from EU will not change despite graduation from LDC as the five year plan of EU goes until 2027.
However, PM said that there might be some changes on doing the business as the goods will have to qualify from certain criteria, meaning that the goods will have to be of a better quality and the tax might differ from country to country. If goods are not really wanted in the host country then they might impose high tax and if the goods are wanted in the host country then they might impose less tax as and when Bhutan export goods to EU countries.
The PM also shared that currently in Bhutan there aren’t any goods that qualifies to be exported to European countries aside products from few individual business owners.
Regarding LDC, PM shared that the human asset, income of the people, country’s economic vulnerability, economics’ strength and weaknesses are some of the criteria that a country should fulfil in order to graduate from LDC and even if two of the three criteria is fulfilled on two consecutive assessment at the interval of three years, then the country can graduate from LDC.
The PM shared that the criteria of LDC has so much relaxation with just three criteria, which Bhutan qualified in 2015 and similarly in 2018, Bhutan qualified to graduate from the LDC. During that year the DNT formed the government and submitted that Bhutan will do everything within the 12th five year plan as a preparation to graduate from LDC, which theUN approved.
“So that is how by the end of 2023, Bhutan will graduate from LDC and Bhutan has qualified from all the criteria,” said the PM.
Meanwhile, PM said that when the country is in the LDC group, there are many draw backs such as the international companies not willing to invest in the LDC country as the international companies think the LDC country has very low GDP per capita, low human asset, infrastructure and others.
PM Dr Lotay Tshering said that in order to set brand Bhutan and to invite unconditional international investors, Bhutan will have to grow by saying that Bhutan is capable to collaborate with other international companies. “I feel that the country graduating from LDC and with the brand Bhutan and transformations, the timing is very good as everything we are doing now is to make Bhutan rich by the next ten years,” PM said.
Sherab Dorji from Thimphu