As Bhutan graduates from the list of Least Developed Country (LDC) to Middle Income Country (MID), the European Union (EU) will continue to support Bhutan in different areas. Additionally, the relation can progressively move from aid to trade, according to EU delegates.
Speaking to the Bhutanese media on April 27, 2023, Ugo Astuto, EU Ambassador to Bhutan and India, said that Bhutan has the potential to move from aid to trade. As an example, the Ambassador said that Bhutanese handicraft items can be branded for international markets.
Through economic diversification, the delegates said that they see a clear determination to look at the way and means to generate income; improving productivity in a number of sectors, including some traditional sectors such as agriculture, which still employed the largest section of the population.
Ugo said that when he visited Bhutan for the first time, he went to the Royal Textile Academy, and that he was looking for niche products that would excel the capacity craftsmanship of the traditional Bhutanese textile.
“Where we could look at niche products, which imply to diversify the economy, generate income, and create employment,” he said.
He said that the government should look for more ventures of the kind. However, he said it is up to the Royal Government of Bhutan to decide about the future pattern of current Bhutan.
He also added that after Bhutan’s graduation to a middle-income country, EU countries will progressively transfer their support and move from the current system of budget support into a single Bhutanese account.
The Ambassadors and Heads of Missions from sixteen European Countries led by Ugo Astuto, the Ambassador and senior officials of the EU are on a visit after the pandemic.
The European Union-Bhutan cooperation started with a development project in 1982 focusing on renewable natural resources.
In 1985, the Royal Government of Bhutan and the European Union established diplomatic relations. This relationship was further consolidated in 2004, when the EU and Bhutan held their first biannual consultations covering all aspects of bilateral relations, regional and international developments, and discussions on mutually beneficial topics.
Nidup Lhamo from Thimphu