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Poverty alleviation: key to 10th Plan

19 April 2008

The draft plan intends to bring down to 15 percent the number of Bhutanese living below the poverty line from the existing 23 percent.

The overview of the draft 10th Five Year Plan was yesterday presented to the Prime Minister, the Cabinet Ministers and senior government officials by the Secretary of the Gross National Happiness Commission, Karma Tshiteem, at the agriculture conference hall.

Poverty affects mostly those living in rural areas of Bhutan. In addition to income poverty, substantial rural-urban differences still remain in terms of access to social services, basic amenities and economic opportunities.

The major priority needs of the rural communities were related to education, economic activities,household income, health, communication, physical facilities and transport needs, according to the presentation.

On the basis of needs, the 10th Plan has framed a poverty reduction strategy that focuses on enhancing rural development, ensuring balanced development, promoting private  ector development and expanding infrastructure.

Poverty reduction has been articulated as the main objective and theme of the 10th Plan to be realized through the strategies of vitalizing economic and industrial  development, implementing national spatial planning, synergizing integrated rural-urban development, expanding strategic infrastructure, investing in human capital and fostering an enabling environment for good governance.

These strategies also simultaneously constitute the 10th Plan’s strategic framework for achieving GNH.

The conceptualization of industry and industrialization is not restricted to the  manufacturing sector but includes various other economic productive areas like hydro power and industries such as tourism, cultural industries and ICT, said Karma Tshiteem.

He said there will be a clear industrial policy as the basis for all other sectors to sharpen their interventions for enhancing economic growth and reducing poverty.

The economic benefits from future hydro power development will further strengthen the economy to make Bhutan even more prosperous and self-reliant than before and hydro power development in the country has been pursued in a manner that is environmentally friendly and socially responsible.

In Bhutan, rural poverty is directly linked to low levels of agricultural productivity and inadequate access to markets, economic opportunities, resources, assets and social services. Poverty is thus to a great extent equated with and a resulting condition of the underdevelopment of rural areas and subsistence farming.

Activities under the 10th Plan will seek to harness the commercial prospects of various primary, secondary and tertiary economic activities within the rural-urban field and efficiently integrate rural supply chains with the urban and export markets.

It was pointed out that if Bhutan is to attain the poverty reduction targets set for the 10th Plan; it will need to break the cycle of poverty engendered by subsistence farming and low agricultural yields.

It was found highly imperative to further strengthen efforts to restructure and transform Bhutan’s subsistence agriculture by enhancing production and productivity, expanding farm and feeder road networks and improving commercial orientation through innovative and relevant agricultural marketing mechanisms. It will be implemented without compromising household food security.

While the country has made significant progress in the expansion of education over the last four decades, this may have come at the expense of quality education. Achieving excellence in education requires capacities for self-learning and developing student’s cognitive, analytical and critical skills. This obviously must start from an early stage of a student’s education and be reinforced throughout secondary and tertiary levels.

The creation and promotion of quality employment opportunities was a high priority and a vitally important thrust area for the 10th Plan. Over the 10th Plan, modest projections indicate that close to 93,000 jobs will have to be created – which is slightly more than the total number of people employed in the formal sector at present and thus constitutes an enormous challenge.

Health issues were also underlined as health is a prerequisite to happiness and therefore forms one of the keystones to achieve the national goal.

Meanwhile, the total development outlay for the 10th Plan is presently estimated at Nu. 140.445 billion. Domestic revenues are expected to be sufficient to fund around 55 percent of the total plan outlay or around Nu 77.2 billion. However, the country will still require external assistance of around Nu 63 billion to help meet its capital expenditures in the 10th Plan.

The resource gap for financing the 10th Plan will be below eight percent of GDP, while efforts will be made to strictly maintain fiscal deficits below five percent of GDP. Past trends reflect that this may be difficult to achieve.

Karma Tshiteem said plan activities will be linked to outcome targets and accompanied by indicators for monitoring. It will also be linked to annual budgeting framework. Once ready, plan activities will be directly linked to the GNH Index to ensure alignment to GNH.

Sonam Pelden

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