COUNTRY BACKGROUND - Gross National Happiness Commission

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Aid Policy 9.13 Technical Assistance is a very important component of the aid that Bhutan has received, and further Technical Assistance will be sought during the 7FYP. Here too, the Royal Government is determined that the use of TA should be carefully judged and will take steps to ensure that the overall level of assistance will be related to the country's absorptive capacity, that the assistance is provided to priority sectors, and that such assistance is provided in such a way as to improve the skills of Bhutanese as rapidly as possible. Responsibilities for Aid ManagementResponsibilities for Aid Management 9.14 Most of the projects and programmes described in this Plan will draw upon external finance or technical assistance from one or more of the aid agencies active in Bhutan. The coordination and management of aid is therefore an important aspect of the implementation of the Plan. Aid management responsibilities are assigned amongst several agencies: the Planning Commission, the Ministry of Finance, the Royal Civil Service Commission, the Ministry of Foreign Affairs, and the various sector Ministries, Departments and specialised agencies of the Royal Government. In order to improve the overall management of aid and donor activities, the Royal Government will ensure that the roles and responsibilities of all those involved are more clearly defined. These responsibilities will also be made clear to all aid agencies. 9.15 The Planning Commission has the ultimate responsibility within the Royal Government for managing and coordinating aid to Bhutan; strategic and policy decisions are made by the Planning Commission itself, while dayto-day aid management is handled by the Planning Commission Secretariat. The Planning Commission's responsibility for aid management is one aspect of its overall responsibility for long term economic planning, and the Commission is thus well placed to ensure that aid complements local resources. The Planning Commission Secretariat is the main contact point for aid agencies within Bhutan. 9.16 The Ministry of Finance's responsibilities concerning aid include: (a) Loans: MF is the only agency of the Royal Government that has the power to negotiate loans on the Government's behalf, or to provide Government guarantees for loans to third parties. In practice, there is consultation between the Planning Commission and the Ministry of Finance before any aid agreement is concluded, since even aid on grant terms has implications for the future commitments of domestic resources. (b) Annual Budget: MF has overall responsibility for preparation of the annual budgets; it liaises with the Planning Commission to ensure that each annual budget properly reflects the Five Year Plan, and also reflects anticipated external aid. (c) Recording Aid Flows: it is important that aid flows are recorded, whether or not the funds involved pass through the RGOB accounting system; MF tries to ensure that the Royal Government's financial records include all aid flows, both in cash and in kind. 9.17 The Royal Civil Service Commission has primary responsibility for the Royal Government's manpower planning, and hence for related aspects of Technical Assistance. Direct recruitment of expatriates on long-term contracts is an RCSC responsibility, although the task may be delegated to the sector ministry most concerned (as with the Department of Education in recruiting teachers). RCSC is also the main contact point for the various volunteer agencies. Project-related consultancies, however, are approved by the Planning Commission. 9.18 The Ministry of Foreign Affairs is the formal contact point for missions that are diplomatically accredited to Bhutan, is responsible for matters of diplomatic protocol, and plays an important part in making Bhutan's case for assistance internationally. It is also required to approve technical assistance proposals. 9.19 Early in the Seventh Five Year Plan, the arrangements for coordination amongst the Planning Commission, RCSC, the Ministry of Finance and the Ministry of Foreign Affairs will be reviewed and strengthened, with particular attention to the coordination of technical assistance. 4
Aid Policy 9.20 Sector Ministries, Departments and specialised agencies of the Royal Government are not allowed independently to solicit aid: only the Planning Commission, which operates in close coordination with the Ministry of Finance, may do so, and, as noted earlier, the Planning Commission is the authorised contact point for aid agencies in their official dealings with the Royal Government. However, it is recognised that, in the course of preparing aid projects which have already been included in the RGOB development programme, and in their subsequent implementation and monitoring, the external financing agency needs to have good contacts at technical level with the implementing Ministry, department or agency. Such contacts are encouraged, but the Planning Commission, the Ministry of Finance and the Royal Civil Service Commission should be kept fully informed of all such contacts, and should be appropriately represented on aid agency/RGOB coordinating committees. Within sector ministries, it is expected that the Policy and Planning Divisions (PPDs) which are now being strengthened will be the main contact point for aid agencies. The PPDs in turn, will have strong working links with the Planning Commission which will continue to exercise overall responsibility for aid coordination. Aid Management IssuesAid Management Issues Absorptive CapacityAbsorptive Capacity 9.21 During the 6FYP, some donors were concerned that Bhutan's capacity to absorb aid was limited by bottlenecks in project preparation and implementation. During the 7FYP, the problem of absorptive capacity will be addressed by: · adopting realistic expenditure targets (see Chapter 7); · strengthening planning and project preparation capacity, both in the Planning Commission and in sector Ministries through the Policy and Planning Divisions; · addressing constraints in the construction sector, by expanding the national Labour Force and relaxing restrictions on the employment of non-nationals; · emphasis on human resource development, so as to make Bhutan less dependent on external skills for preparation and implementation of development programmes; · increasing the role for the private sector in productive activities to leave RGOB to concentrate on proper governmental concerns. 9.22 In the past much aid has been provided through turnkey projects. This can sidestep implementation capacity constraints, but can fail to transfer skills that will make Bhutan less dependent in the long run. There may continue to be a limited role for turnkey assistance, but the Royal Government will seek to ensure that there is always a provision for the training of Bhutanese to undertake the operation and management of new facilities. Aid CoordinationAid Coordination 9.23 The allocation of responsibilities within the Royal Government for aid management and coordination was summarised in the previous section. RGOB recognises that there is a significant coordination problem, stemming from the numbers of different agencies involved in assistance to Bhutan, and exacerbated by the fact that so few of Bhutan's aid partners are permanently represented in the country. There is no absolute "cure" for problems of coordination, but there are a number of measures that can be taken to minimise the problem. · strengthening RGOB's own planning and monitoring procedures; · continuing consultation between the RGOB and its aid partners through the periodic Round Table meetings, and through sectoral meetings with donors to be held in Bhutan from time to time; · encouraging donors to concentrate their aid on particular sectors and/or geographic regions; · as far as possible, avoiding the involvement of several donors in a single project, since this can make the management of the project much more complicated and time consuming. Technical AssistanceTechnical Assistance 9.24 The Royal Government's aims in relation to Technical Assistance are (a) to limit dependence on TA, but (b) to maximise its effectiveness. Effectiveness has to be considered both in terms of job performance by TA personnel and in terms of the passing on of skills to Bhutanese. As these may be conflicting considerations, job descriptions or Terms of Reference will include a clear description of the counterpart training to be provided. The requirements will vary from case to case: in some cases the basic training requirement may be met by formal training of Bhutanese, while in others, the passing on of skills to Bhutanese colleagues will be a major element of the TA role. Where this is the case, both RGOB and the sponsoring aid agency will take account of the training requirement in the selection of personnel. 5
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COUNTRY BACKGROUND I. Physical Char
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COUNTRY BACKGROUND Minerals The exa
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COUNTRY BACKGROUND Bhutan is the le
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COUNTRY BACKGROUND personnel polici
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CHAPTER 2 ECONOMIC PERFORMANCEECONO
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Page 13 and 14: Figure 2.2 Economic Performance IV.
Page 15 and 16: Table 2.4 Government Expenditures 1
Page 17 and 18: Table 2.5 Summary of RGOB Budgetary
Page 19 and 20: Figure 2.5 Economic Performance 2.2
Page 21 and 22: Economic Performance of Infant Mort
Page 23 and 24: Approach to Development · sustaina
Page 25 and 26: Approach to Development 3.19 The fo
Page 27 and 28: Environment and Sustainable Develop
Page 29 and 30: Environment and Sustainable Develop
Page 31 and 32: Women's Involvement in Development
Page 33 and 34: CHAPTER 6 PRIVATISATION AND PUBLIC
Page 35 and 36: unacceptably high inequalities of i
Page 37 and 38: CHAPTER 7 ECONOMIC OUTLOOKECONOMIC
Page 39 and 40: Economic Outlook 7.9 This section e
Page 41 and 42: Table 7.2 Seventh Plan Outlay and S
Page 43 and 44: Figure 7.2 Figure 7.3 Capital Expen
Page 45 and 46: Economic Outlook economic sector wi
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Page 49 and 50: Financing GapFinancing Gap Table 7.
Page 51 and 52: Fiscal and Monetary Policy Table 8.
Page 53 and 54: Fiscal and Monetary Policy Strategy
Page 55 and 56: Fiscal and Monetary Policy Table 8.
Page 57 and 58: Fiscal and Monetary Policy TABLE 8.
Page 59 and 60: I. IntroductionI. Introduction CHAP
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Page 75 and 76: Education Higher EducationHigher Ed
Page 77 and 78: Education 11.24 In 1986, the enrolm
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Page 87 and 88: of Bhutan + Corporation Planning Co
Page 89 and 90: Joint and Public Sector IndustriesJ
Page 91 and 92: Table 12.5 Sectoral Training Funded
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Page 95 and 96: CHAPTER 13 HEALTH SERVICESHEALTH SE
Page 97 and 98: Table 13.2 Health Institutions July
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Human Settlements only a fraction -
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Human Settlements awareness of the
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CHAPTER 15 TRANSPORT SECTORTRANSPOR
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Table 15.2 Passenger Carriage by Dr
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Civil AviationCivil Aviation Transp
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Transport Sector 15.25 In the 7FYP,
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Transport Sector target for formati
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Transport Sector 11
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CHAPTER 16 COMMUNICATIONS SECTORCOM
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Table 16.1 Telephone Facilities 199
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A. Objectives for the 7FYPA. Object
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Communications Sector Dzongkhags -D
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TOTALS FOR Department of Post, Tele
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Renewable Natural Resources Table 1
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Renewable Natural Resources earning
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Renewable Natural Resources 17.27 T
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Renewable Natural Resources Table 1
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Renewable Natural Resources coopera
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Renewable Natural Resources Institu
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Renewable Natural Resources 17.67 A
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Renewable Natural Resources Wildlif
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Renewable Natural Resources TOTALS
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Chapter 18 MANUFACTURING AND TRADEM
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18.8 (see Chapter 19 on Mineral Dev
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Input supplyInput supply Manufactur
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Manufacturing and Trade Polythene P
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Manufacturing and Trade Formulation
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Manufacturing and Trade V. Financia
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Mineral Development Coal mining and
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Mineral Development Table 19.2 Esti
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Mineral Development be purchased: 3
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CHAPTER 20 ENERGY SECTORENERGY SECT
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Exports and ImportsExports and Impo
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Energy Sector 20.21 Most of the rur
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shortages. Energy Sector 20.34 Alte
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Energy Sector items will include pu
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COUNTRY BACKGROUND - Gross National Happiness Commission

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