Watch video of panel where the VNR was presented

Summary of Key Messages from Bhutan’s Second VNR Report on the SDGs

While Bhutan’s progress towards implementing the Sustainable Development Goals (SDGs) has been impacted by the COVID-19 pandemic, it has handled the situation well—given strong preventative and inclusive response measures in place since early 2020. A total of 1111 positive cases were recorded as of 2nd May 2021, of which 117 were active, and only one related death. More than 93% of the eligible population have been vaccinated and efforts to ensure administration of the second dose are underway.

An Economic Contingency Plan of Nu. 4.492 billion provides priority support to the tourism and construction sectors, agriculture and livestock production, and towards stocking essential food and non-food items. The Druk Gyalpo’s Relief Kidu—an important social protection prerogative of His Majesty the King—has helped sustain livelihoods of about 52,644 individuals, besides supporting interest payment of more than 139,096 loan account holders. Several monetary and fiscal measures are also in place.

Meanwhile—with Bhutan’s Gross National Happiness (GNH) philosophy resonating strongly with the SDGs and forming the basis of its Five-Year Plans (FYP)—priority concerns identified in its first Voluntary National Review (VNR) report continue to be addressed through the 12th FYP (November 2018-October 2023). The Dewa Platform, an integrated dashboard to monitor GNH, SDGs and FYP progress, has also been developed.

Towards ensuring quality and inclusiveness of key social outcomes, a health flagship programme is under implementation. National policies on gender equality, disabilities, and mother and child health have been endorsed. Flagship programmes on sustainable tourism, organic agriculture, cottage and small industries, and digital transformation are being implemented to enhance productive capacity of the economy.

Bhutan’s smooth transition strategy for graduation from Least Developed Country (LDC) category by 2023 is being prepared; and a 21st Century Economic Roadmap is currently under formulation. Meanwhile, emphasis on improved efficiency and sustainable use of natural resources will be reinforced by the recently developed Sustainable Consumption and Production Strategy.

A national climate change policy, REDD+ strategy, and updated environment strategy, among others, have been adopted as part of efforts to manage climate change impacts. Bhutan has submitted its Third National Communication to the UNFCCC and is developing its second Nationally Determined Contribution alongside sectoral low-emission strategies. Gender-climate analyses have been initiated; and a roadmap for disaster risk management is in place.

However, impacts of the pandemic have been deep and far-reaching. While GDP had grown from 3% in 2018 to 5.46% in 2019, and was projected at 6.9% in 2020, growth projection decelerated to -6.1% by year-end given containment measures. A large number of people dependent on tourism and allied sectors were displaced, and many Bhutanese working overseas returned home. Overall unemployment reached 5% in 2020 as compared to 2.7% in 2019; and youth unemployment, a long-standing concern, has reached an all-time high of 22.6% as compared to 11.9% in 2019.

Domestic violence and protection issues form an integral part of the COVID-19 mitigation and response framework. Issues of online safety, cyber security and the digital divide were highlighted, as education and public services went online. Concerns over food and nutrition security were amplified as weaknesses in value chain management and distribution became apparent. The health system’s capacity to deal with a prolonged pandemic is an additional concern—with epidemiological changes already placing pressure on the sustainability of free healthcare services.

Meanwhile, Bhutan remains highly vulnerable to climate change impacts and natural disasters, which pose serious threats to its nature-dependent livelihoods and hydropower- and agriculture-based economy. As it maintains its carbon neutral status in the face of mounting pressure to accelerate economic growth, the additional burden of adaptation and mitigation entail huge costs.

Going forward, Bhutan is drawing important lessons from the pandemic—including the need and possibilities for long-term, transformative and green solutions for its food system, local economy, public services delivery, approaches to learning, data ecosystem, and preparedness for disasters and future pandemics. Therefore, while working to “build back better”, Bhutan remains committed to accelerating the SDGs so that progress towards an inclusive, low-carbon and resilient development pathway—as envisioned by its GNH approach—is sustained.

Bhutan’s Main Message for Voluntary National Review 2018

1. Guided by the development philosophy of Gross National Happiness, Bhutan is committed to realizing the 2030 Agenda for Sustainable Development. Bhutan will graduate from the Least Developed Country category on completion of its 12th Five Year Plan period (2018-2023). The 12th Plan will be Bhutan’s transition plan to non-LDC status during which concerted national efforts will continue towards implementing the Sustainable Development Goals (SDGs).
   
   
2. Bhutan is well on track in implementing the SDGs. Having made great progress in its socio-economic development, the incidences of income poverty reduced from 23.2 per cent in 2007 to 8.2 in 2017, while multidimensional poverty fell from 12.7 per cent in 2012 to 5.8 in 2017 respectively. Income inequality, on average, has remained at a minimal level; and the economy has grown at an average of 7.5 per cent along with structural changes. The share of the industry to total GDP has increased to 41.5 per cent in 2016 from 11.5 per cent in 1980, and service sector contributed about 42 per cent to the total GDP. Bhutan's population today is increasingly urbanized, young, and educated with half the population below 28 years; and unemployment under 2.5 per cent.
   
   
3. Despite the progress made, Bhutan is confronted with the following challenges in its development efforts:
• In ensuring that no one is left behind, Bhutan faces last mile challenges. In the 12th FYP, Bhutan aims to eradicate poverty, reduce inequality and address the needs of vulnerable groups. It endeavours to reduce income and multidimensional poverty to less than 5 per cent. The Gini coefficient increased slightly to 0.38 in 2017 from 0.36 in 2012, indicating a need to assess existing policies and programmes. Further, addressing the needs of vulnerable groups through targeted interventions is a priority. Promoting gender equality and empowering women and girls has been identified as one of the sixteen national key result areas. Fourteen different vulnerable groups have been identified through a Vulnerability Baseline Assessment. Bhutan is currently in the process of drafting the National Disability Policy and National Gender Equality Policy.
  
  
• Enhancing productive capacity to develop economic resilience is vital to sustainable graduation and achieving the SDGs. While the economy has grown steadily over the years, hydropower remains to be the major contributor to the economy and efforts to optimally tap the potential of this resource continues. Bhutan aims to diversify investments into tourism, organic agriculture, mining, and cottage and small industries, with the objective to increase the share of national revenue from non-hydro sectors to over 75 per cent and attract approximately Nu. 10 billion ($150 m) in FDIs. Although the overall unemployment is low, youth unemployment remains high at 11 per cent. Initiatives will be undertaken to establish ‘entrepreneurship ecosystem’ so as to provide a platform for innovation to generate green jobs through the participation of corporate and private sectors.
  
  
• Bhutan aims to further develop its human capital and needs to take advantage of its demographic dividend. While tremendous progress has been made in education with near 100 percent school enrolment, initiatives to improve the quality of education including learning outcomes, inculcate innovative and creative mindset, and enhancing employability will be undertaken.
  
  
• Sustainable graduation and effective implementation of the Agenda 2030 are contingent on the availability of adequate and timely resources. This necessitates a Financing Needs Assessment to develop a resource mobilization strategy for the effective implementation of the SDGs. Bhutan will explore both domestic and external financing mechanisms. Measures to increase domestic revenues through expansion of tax base and improvement in revenue collection systems will be pursued. Given Bhutan’s effective implementation of ODA and its relations with international development partners, Bhutan will further explore innovative financing opportunities with multilateral and bilateral partners. FDI and PPP will be key financing measures; and efforts to improve the ease of doing business are ongoing. In view of Bhutan's commitment to conservation, international green financing opportunities will also be explored.
  
  
4. Bhutan looks forward to receiving the support of the international community to ensure the hard earned developmental gains are not derailed by the perils of climate change and natural disaster; and that the institutional capacity including human resources are in place.