Report: Foreign aid to Bhutan in the form of the country programmable aid (CPA) will decline by USD 32M (million) from 2013 to 2015, according to a recent report published by the Organisation for Economic Cooperation and Development (OECD).

The CPA is the total amount of aid that comes through co-operation agreements between the government and donor agencies, minus short-term assistance like humanitarian aid.

The country will see a decline in development aid for three consecutive years – from USD 135M in 2013, USD 116M in 2014 and USD 103M this year.  The Paris-based OECD has classified Bhutan as one of the lower middle income countries (LMICs), which means that the country’s per capita income ranges from USD 1,006 to USD 3,975.

The annual report “2014 Global Outlook on Aid” was prepared based on donor countries’ spending plans and provides an overview of global aid allocations up to 2017.  It is also a key tool for the international community to better assess the prospects for meeting aid commitments, and to flag potential gaps in aid provision ahead of time.

“Though the overall aid levels are expected to increase over the coming years, foreign aid in heavily aid-dependent countries has been stagnant,” the report states.

However, the country will see a marginal increase in aid from USD 103M in 2015 to USD 106M in 2016.  In 2017, Bhutan is expected to receive USD 105M.

Per capita aid to Bhutan is also expected to fall from USD 180.7 in 2013 to USD 139.2 in 2017 due to population growth.  But still this will be higher than that of many countries.

This means that each person will receive USD 180.7 in 2013 and USD 139.2 by 2017, if the total aid is to be distributed equally among all the people.

Aid to aid-dependent countries like Bhutan is projected to increase by four percent in real terms in 2014.  From 2015 onwards, aid levels are projected to be relatively stable.

Bhutan has about 60 development partners including bilateral donors and international organisations.  There is a resource deficit of about Nu 15B (billion) in the 11th Plan that would need to be met through aid. The total estimated budget for the 11th Plan is Nu 214B.

Meanwhile, the OECD states that two-thirds of poor countries are expected to see a decline in assistance from donor countries based on the CPA of 36 donor countries for the period 2014-17.

“Aid per capita is expected to decline at a faster pace as a consequence of steady population growth,” said the OECD. “The worrying trend of a continued decline in programme aid to LDCs merits international attention as part of the post-2015 financing framework.”

Bangladesh, Nepal and Cambodia will be receiving a higher amount of foreign aid while most countries will see a decline.

By MB Subba