…and to stimulate economy
The Asian Development Bank (ADB) on May 4 approved a USD 20 million (M) loan to mitigate the effects of the novel coronavirus (Covid-19) pandemic and stimulate the Bhutanese economy.
The loan, approved through ADB’s Covid-19 Active Response and Expenditure Support (CARES) Programme, will contribute to the government’s efforts, according to a press release from ADB’s head office in Manila.
This loan be used to fund livelihood support programmes and relief measures for vulnerable groups, including displaced employees, unemployed people actively seeking employment, and self-employed individuals in the informal sector, most of whom are women.
The loan will also support the government’s countercyclical measures and economic stimulus for the productive sectors.
The CARES programme is funded through the Covid-19 pandemic response option (CPRO) under ADB’s Countercyclical Support Facility. CPRO was established as part of ADB’s USD 20 billion expanded assistance for developing member countries’ Covid-19 response, which was announced on 13 April.
ADB President Masatsugu Asakawa said, “ADB commends the government’s quick actions in implementing strong public health measures for effective outbreak containment and formulating a pro-poor economic contingency plan to counteract the adverse impact of the pandemic on the people and the economy.”
“This budget support will help the government implement its plans and ensure effective targeting of vulnerable groups, building on ADB’s ongoing projects and long-standing development assistance to Bhutan in strengthening public health, and public sector and macroeconomic management,” he added.
Bhutan has formulated an economic contingency plan to mitigate the impact of the pandemic through a pro-poor countercyclical support package. The stringent measures to contain the spread of Covid-19 have resulted in an unprecedented decline in economic activity, including a standstill in industry, particularly tourism, which constitutes 13 percent in the country’s GDP.
An estimated 11,800 employees in the tourism and allied industries, such as airlines, hotels, restaurants, and tour operators, have been adversely affected.
Earlier on March 27, ADB had approved a grant of USD 100,000 to support Bhutan in enhancing its capacity to prevent, detect, and respond to the Covid-19 outbreak as an emergency response.
The grant was used to procure medical supplies and personal protective equipment for health care workers. On 25 April, ADB allocated an additional USD 1.07 million grant for procuring urgently needed personal protective equipment and intensive care unit equipment.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.
ADB’s response is closely being coordinated with other development partners, including the World Bank and the International Monetary Fund, to take into account their Covid-19 response assistance, advisory, and technical support to the government in fiscal, monetary, and financial management.
ADB is also working closely with the World Health Organization and the United Nations Children’s Fund.