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Bhutan Foreign Economic Relations
Aid
Whereas Bhutan was once nearly totally dependent on
India not
only for its development assistance but also for its
entire
government revenue, it increasingly turned to various
international
organizations, such as the United Nations, the Colombo
Plan, the
World Bank, and the Asian Development Bank, for loans.
Since the
1960s, Bhutan, through the Colombo Plan, has received aid
from
several countries in the form of farm machinery, motor
vehicles,
school books and laboratory equipment, livestock, seeds,
dairy
equipment, medicine, and refrigeration and irrigation
systems.
Participating countries included Japan, Australia, New
Zealand,
Britain, Austria, Switzerland, West Germany, and Canada.
The World
Bank granted a US$9 million interest-free loan to help
with the
development of a calcium carbide plant near Phuntsholing.
As of
1990, total Asian Development Bank loans to Bhutan since
the latter
joined in 1982 amounted to US$30 million. In 1987 and 1988
alone,
the bank approved loans totalling more than US$6.9 million
to cover
the modernization of industrial estates and to provide
foreign
currency for the Bhutan Development Finance Corporation,
which in
turn provided credit for agricultural projects and
private-sector
businesses. Asian Development Bank loans to Bhutan for
1990-93 were
projected at US$35 million, plus a grant of more than
US$4.85
million; the aid was for technical assistance.
The Sixth Development Plan saw increased involvement of
aid
both through UN auspices and the non-profit Swiss
organization
Helvetas (Swiss Association for Technical Assistance).
Helvetas
began providing funding to Bhutan in 1975 through
contributions
from association members and the Swiss government. In
1990, for
example, Helvetas contributed Nu32.8 million (69 percent
of total
foreign aid) to establish the Natural Resources Training
Institute,
a two-year technical training school. The Japanese
government gave
Nu74 million in grants for agricultural development and
audio
training equipment in 1990-91.
In 1989 the World Food Programme approved a two-year
US$700,000
project to establish food reserves that would help Bhutan
handle
local emergencies and interruptions of food supplies. The
Food and
Agriculture Organization of the United Nations (FAO)
sponsored a
program to assist Bhutan in achieving food
self-sufficiency by
1992.
Another form of aid received by Bhutan was through
international and foreign volunteer programs. A UN
volunteer
program initiated in 1980 brought foreign specialists in
to assist
and advise in the areas of education, health, engineering,
animal
husbandry, agriculture, and urban planning. By 1990 Japan,
New
Zealand, Britain, and Canada also were operating volunteer
programs
in Bhutan.
In addition to the substantial aid it received, Bhutan
was
itself an aid giver. For example, in 1987 Bhutan provided
disaster
relief aid to the Maldives (Nu1 million), Bangladesh
(Nu0.5
million), and India (Nu5 million).
Data as of September 1991
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