Asian Development Bank (ADB) Vice President Wencai Zhang was in the country on a three-day visit. Kuensel’s Tshering Palden met him briefly to talk about ADB’s programmes in the country. 

Photo courtesy: ADB

What is the purpose of your visit?

This is my third visit since I took this position as Vice President of ADB in 2013. I came here to meet the government to discuss our future cooperation including our ongoing cooperation programmes. As you know that the government will prepare the next five-year plan, from 2018- 2023, we in ADB will also prepare our new country partnership strategy for Bhutan. I just want to make sure that our new strategy will support your country’s development and reform priorities.

What are the significant changes that you noticed in Thimphu since your last visit?

I have returned after two years and I find many new buildings, constructions, more people, economic activities, and more cars. So I think the country is moving in the right direction. Your economy continues to enjoy relatively high growth.

The GDP growth in 2016 was 6.4 percent. This year we recently lowered our projections to some extent. The latest GDP growth projection is 6.9 percent and next year may be 8 percent because of some delays in hydropower projects and these delays impact the GDP growth. But in general even with 6.9 percent for this year your country is still one of the fastest growing economies in the region and even in South Asia. I hope that you can achieve even higher growth in future.

ADB is one of the important development partners for Bhutan. Could you tell us about its current and future projects in the country? 

Since 1983, we started operations in the country. Asian Development Bank (ADB) has supported Bhutan through various programs, mainly in energy, transport, finance, and urban development. ADB has approved loans totaling $498.81 million, grants of ADB helps expand economic opportunities in Bhutan by supporting infrastructure development, particularly in the energy, transport, water, and urban sectors; trade facilitation; and the development of the finance sector.

The total amount of current portfolio is about USD 276.53 million. This includes six lending projects worth USD 175.07 million, seven-grant projects worth USD 85.19 million and 14 technical assistance worth USD 16. 75 million.

Three years ago, we set up a new country office here and early this year we appointed a new country director. We’re going to move our office to a new area may be next year. So you see we’re trying to expand our portfolio in the coming years. We want to make sure we have an office here and enough resources and staff working for our county programme. So far I think our country programmes have been implemented very well and I think from the project performance and disbursement, basically we are happy with the project performances.

The future projects will be aligned with the 12th Plan. About USD 348.46 million has been programmed for concessional loan and grant resources for projects earmarked for next year’s social projects in education and skills development and health system strengthening project.

Would the Amochhu land development and township project take off as expected this month?

ADB has earmarked USD 53 million for the project. Of which USD 24.26 million is grant and the rest is a highly concessional loan. I know this project is important for the country and for ADB also. We finished negotiations with the government already. We are going to send the project to the ADB board for approval. Our plan is to get this project approved by this year. I was told by the country team that this project is very much ready for implementation and I hope we can speed up the process and get the project approved.

When did ADB- Bhutan collaboration start and what is the cumulative assistance from ADB to Bhutan so far? 

Bhutan joined the ADB in 1982. As of December 2016, ADB has approved sovereign loans totaling almost USD 500 million, grants amounting to USD 222 million, and technical assistance projects totaling USD 73.48 million.

Could you share your views on Bhutan’s economy and your recommendations? 

Bhutan has a relatively small economy, a narrow kind of economy base, but you have your advantages. Your potential sectors are hydropower, tourism and small and medium enterprises. I think hydropower can contribute more to GDP growth and in future we will support more projects. We supported the Dagachhu hydropower project, the ongoing Nikachhu hydropower project, and may be by 2019 we are going to support Nyeramari hydropower project. We’ll also support other renewable energy projects in solar and wind.

We’ll also continue support in transport sector including air. I hope that would attract more tourists to the country.

Other sectors like agro-processing in the country can do more. I met your governor, the finance minister, and visited the One Gewog One Product outlet. I am impressed. In the coming years, how the country develops this programme through micro financing so that small business holders, women and farmers can get the finance resources they need is important. Agro processing has also great potential. You have lots of agriculture products, by processing you can have more high value products and gradually export them.

I think that the agriculture sector is so important and is related to the micro, small and medium enterprises.  This will also help diversify the economy from relying on hydropower and tourism sectors. In the coming years we will have to think about how we can support your financial market development including support for your smaller industries. This is really about financial inclusion, to make sure that people have access to financial services.

More connectivity with other countries in the region is also important to open up the country further, which will benefit the private sector particularly in foreign direct investment. Setting up more special economic zones will attract investment not only from within the country but also from abroad.

What is the update on the loan that Bhutan availed from ADB to construct the Nganglam-Dewathang national highway?

ADB approved the project in 2014 and the government decided to suspend the project in early 2015. I personally talked to the government yesterday on how we can handle this project because it was already approved by the ADB. We do hope that the government can decide as soon as possible on whether they will implement soon or cancel it.

But from ADB side, we feel that this project is very important. We hope that we can continue to do this project but we’ll respect government’s decision at the end of the day. We’ve projects in several sectors such as transport, energy, finance, urban, water and other infrastructure projects. I think you know that we’ve a big portfolio in the coming years.

How do you define Bhutan – ADB relations?

Bhutan is one of our developing member countries. We have been working together actively for many projects. Bhutan needs ADB and we also support Bhutan’s socio-economic development. We can see that from the last 35 years in partnership, both side benefits. We benefit from this cooperation.  We have become one of the largest development partners in the country. The country is developed but the country still faces a lot of challenges. We feel that we should continue supporting Bhutan given the country’s heavy development agenda.

How was your visit this time?

I had a very good conversation with the government and senior officials. I discussed priorities for the next three years and I tried to understand the country’s priorities for the next five years.  I wish you a successful election next year so that the country can enjoy sustainability, development, and people can continue to enjoy high levels of happiness. I am very happy with this visit.


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