United Nations Capital Development Fund

Bhutan

Bhutan is a small, land-locked country in the Eastern Himalayas with an area of approximately 46,500 square kilometres. The terrain is amongst the most rugged in the world, rising steeply from altitudes of 160 metres above sea level at the base of the foothills in the south, to more than 7000 meeters at the highest peaks in the north. Bhutan has app. 700,000 inhabitants, more than 80 percent of whom live in rural regions. UNCDF has enjoyed a close partnership with the Royal Government of Bhutan (RGoB) since 1980. Fourteen projects with UNCDF assistance, totaling more than US$ 25 million, have been undertaken, with a primary focus on the transport and communications sector and the agriculture sector. Projects undertaken during the Seventh Five-Year Plan (1992-1997) and the Eight Five-Year Plan (1997-2002) included: a nationwide network of food storage facilities for the Food Corporation of Bhutan (FCB); construction of auction halls for the FCB in southern Bhutan; nationwide construction of suspension and suspended bridges in remote areas (in collaboration with the Government of Switzerland); establishment of a repair workshop for road construction equipment; construction of feeder roads in eastern Bhutan; construction and rehabilitation of primary schools and basic health units; and support to rural credits through the Bhutan Development Finance Corporation (BDFC).

In northeastern Trashigang, Bhutan's eastern district, road construction and rehabilitation funded by UNCDF has opened up an important wetland farming area along Gamri Chhu River Valley. While being densely populated and having a great potential, agriculture development in the area had so far been hampered by its geographical isolation. The construction and rehabilitation of the roads linked the area to the national highway network and thus connected it to the rest of Bhutan and neighbouring India. Farmers gained better access to markets, as well as agricultural inputs and extension services, information and technology. Better access to basic social services was another benefit.

Local Development

PROGRAMME PROFILE
Project/Programme Title	Decentralisation Support Programme (DSP)
Status & Cycle	Ongoing (2002-2007)
Total Costs/Funding (US$ m)	Funding sources	JOINT PROJECT RESOURCES			PARALLEL
	Funding sources	*UNCDF*	*UNDP*	*TOTAL*	PARALLEL
	UNCDF	1.0		1.0
	UNDP		1.75	1.75
	SNV		0.5	0.5
	DANIDA		2.5	3.348
	TOTAL	1.0	2.5	3.348
Project Description	The Decentralisation Support Programme aims to: Create a local enabling environment for effective implementation of the decentralization policy; Enhance citizen participation in local planning, decision-making and implementation through provision of capital investment funds to 32 geogs; Support the implementation of the Cooperatives Chatrims and Enhance capacity in the Ministry of Home and Cultural Affairs to provide overall management for decentralization policy.
Context, Strategy & Opportunities	DSP was designed to support the Royal Government of Bhutan (RgoB) implementation of its earlier decentralisation policy focussed on the (lower) gewog level. RGoB in the meantime has been redrafting Constitution and formulating a new local government policy (to be implemented from 2008) offering new scope for future programme support. DSP has been extended until end 2007 to allow a bridging phase.
National Execution Partners	Ministry of Home Affairs � Dept of Local Government Gewogs
Local Area & Coverage	6 Districts 100,000 persons
Reviews & Evaluations	2005 Mid Term Evaluation
Main Policy Impact & Other Achievements to Date	DSP has full GoB ownership, has been key to helping development of geog policy, and led to major policy commitments for decentralisation (echoed at Round Table) Government's full ownership and recognition that Geog block grant financing and planning policy shaped primarily by DSP experience. New legal framework under preparation, to be implemented from 2008, influenced by DSP results. Government has requested UNCDF support to develop and implement new local governance policy/legislation, and to develop pooled funding mechanism.
Main Challenges	Relative neglect of District level Until recently, lack of PO as interface with UNDP and GoB
Key Next Steps	2007 workplan needs to be developed, as bridging phase and preparation period for new programme, and also as policy support phase Partners for new programme need to be identified

UNCDF Contacts for Bhutan

Ms. Tshering Lham Yanki
Programme Assistant
tshering.yanki@undp.org

Asia Regional Office

Local Development

Mr. Roger Shotton
Senior Regional Technical Advisor
roger.shotton@undp.org

Ms. Npakrprawi Kridaratikorn
Regional Portfolio Specialist
npakrprawi.kridaratikorn@undp.org

UNCDF in Bhutan

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