Bhutan Leads in Sustainable Development Goals amid Global Delays

Bhutan Leads in Sustainable Development Goals amid Global Delays

13th FYP to play a major role in guiding towards the realization of goals

As the global community reaches the mid-point of the 2030 Agenda for Sustainable Development, Bhutan emerges as a front runner, having achieved over 40% of its Sustainable Development Goals (SDGs) targets, starkly contrasting with a global average of just 15%. This achievement highlights the country’s dedicated efforts, particularly in addressing climate action, while meticulously planning its economic development and wellbeing through the ‘ambitious’ 13th Five Year Plan (FYP).

Dubbed as the ‘most important’ FYP in the history of the nation, Bhutan has allocated a historic budget of Nu 512.48 billion (B) aimed at transforming its economy and achieving high-income status by 2034. The plan, representing a 30% increase over the previous cycle, will focus on doubling the nation’s GDP from USD 2.5B to USD 5B by 2029 and aiming for USD 10B by 2034.

The budget earmarks Nu 80B for economic transformation, the largest allocation in the plan, highlighting the government’s commitment to ‘substantial and sustainable’ economic growth. This surge in funding is anticipated to elevate GDP per capita from the current USD 3,833 to USD 4,256 by 2029 and exceed USD 12,000 by 2034, aligning with the plan’s ambition to uplift living standards substantially.

Employment is also a key priority, with the plan targeting full employment (97.5%) by 2027 and aiming to quadruple the income of the bottom 40% by 2029.

The capital expenditure is pegged at Nu 250B, while Nu 262.48B is designated for current expenses. Noteworthy is the increase in funds from domestic resources amounting to Nu 318.89B and generous grants totaling Nu 140B, with significant contributions from international partners including the government of India, the European Union, Japan, and various UN agencies.

An additional Nu 10B is set aside from ‘green or climate’ financing initiatives.

Sector-specific targets include substantial growth in agriculture, mining, tourism, manufacturing, and construction, aiming to boost employment, increase exports, and foster sustainable development. The agriculture sector alone aims for an 8% growth rate, focusing on commercial and subsistence farming enhancements, and a significant increase in irrigation and water management funding.

Tourism efforts include doubling government revenue from the sector and increasing tourist arrivals by 150% from pre-pandemic levels. The sector also plans infrastructure improvements and workforce upskilling to support this growth.

The manufacturing and construction sectors are poised for growth, with plans to improve raw material access, introduce new transportation modes, and enhance domestic supply chains.

Finally, the digital economy is targeted for expansion, with the goal of establishing Bhutan as a hub for digital entrepreneurship and e-commerce.

Similarly, the USD 14,603,177 World Food Programme’s (WFP) Country Strategic Plan for Bhutan 2024-2028 will strengthen and support the Government’s efforts to deliver ‘equitable and inclusive’ economic growth and advance human capital development.  This strategy is anchored in and guided by Bhutan’s 13th FYP for 2024-2028 and the associated priorities of the United Nations Sustainable Development Cooperation Framework (UNSDCF) for 2024-2028.

It is informed by WFP’s analyses of smallholder production, agricultural markets and nutritious diets, carried out under the previous country strategic plan for 2019-2023, and the valuable learning gained from institutional capacity strengthening following the successful transition of school feeding interventions to full government management in 2019.

Through greater attention to transformative actions, WFP will prioritize rural women’s economic empowerment, the inclusion of persons with disabilities and the generation of business and employment opportunities for young people of both sexes.

The UNSDCF for 2024-2028 articulates the collective vision and contribution of the United Nations system to support Bhutan to accelerate actions towards the achievement of its national development priorities and the 2030 Agenda for Sustainable Development.

Despite these advances, Bhutan faces significant challenges, particularly in combating poverty and adapting to climate change. According to the United Nations Development Programme (UNDP), Bhutan excels in Goal 13-Climate Action, but struggles with Zero Poverty due to issues of poverty, inequality, and vulnerable populations.

Meanwhile Bhutan, which ranks 61st out of 166 countries in the SDG index, is particularly vulnerable to natural disasters exacerbated by climate change. The country has reported significant economic and human losses from over 32 extreme weather events between 2016 and 2022, emphasizing the urgent need for substantial investment in climate adaptation and mitigation.

To combat these challenges, Bhutan’s Nationally Determined Contributions (NDCs) require an immediate investment of USD 0.385 billion (B) for adaptation and USD 0.6B for mitigation. Over the long term, the country requires an additional USD 6.484.8 million (M).

Globally, the struggle to meet the SDGs is hampered by insufficient financing. The UNDP highlights that emerging markets and developing economies need to increase their annual spending by at least USD 3 trillion by 2030 to make meaningful progress. Bhutan, along with many other nations, faces high debt risks, with its debt burden increasing significantly over the past decade.

Amid these financial challenges, the Asian Development Bank (ADB) projects a hopeful economic outlook for Bhutan, with an estimated growth of 4.4% this year and 7% next year. This growth could provide a pathway to better address SDG financing needs.

“Bhutan’s progress and the challenges ahead signify a crucial juncture for the global community in achieving the SDGs by 2030. The nation’s efforts emphasize the broader call for international cooperation and increased financing to ensure sustainable and resilient future development,” an official from the Ministry of Finance (MoF) said.

He added, “As the 13th Plan progresses, it holds the promise of steering Bhutan towards unprecedented economic milestones, setting a robust foundation for sustainable and inclusive growth”.

By Tashi Namgyal, Thimphu