Bhutan is a founding member of the SASEC Program, joining with Bangladesh, India, and Nepal in 2001 to form this project-based partnership. Maldives and Sri Lanka became full members of SASEC in May 2014, following several years as active observers.

Bhutan’s Eleventh Five Year Plan for 2013–2018 highlights "self-reliance and inclusive green socioeconomic development," with primary strategic thrusts on (i) inclusive social development, (ii) green accelerated economic development, and (iii) strategic infrastructure development. The Eleventh Plan further seeks to enhance cooperation with Bhutan’s neighbors.

SASEC Projects in Bhutan

Since 2003, the Government of Bhutan has signed nine ADB-financed SASEC investment projects worth more than $566.5 million.

Bhutan: SASEC Projects
Source: SASEC Project Portfolio, as of January 2019

Source: SASEC Project Portfolio, as of January 2019

In addition to projects, ADB-financed technical assistance has supported SASEC investment projects in Bhutan, regional cooperation forums and knowledge-sharing initiatives, and pilot projects since 2001. A total of 10 national technical assistance projects (cumulative worth $10.7 million) have assisted Bhutan in project preparation, strategic planning, and capacity building.

Trade Snapshot

Direction of Intra-regional Trade

The value of Bhutan's merchandise exports and imports trade with other SASEC member countries, using International Monetary Fund data from 2017, is captured in the tables below.

Bhutan's top import source worldwide is India, with imported goods valued at over $1.4 billion. Nepal and Bangladesh, ranking 11th and 12th worldwide, respectively, exports goods to Bhutan valued at around $4 million.

Bhutan's top export destination is India, with exported goods from Bhutan valued at $459 million. Nepal and Bangladesh rank 3rd and 6th, respectively, with exported goods from Bhutan valued at around $4 million and around $2 million.

Bhutan Trade in SASEC Subregion

Source: IMF Direction of Trade Statistics, as of May 2018

Bhutan Trade - Import

Source: IMF Direction of Trade Statistics, as of May 2018

Bhutan Trade - Export

Source: IMF Direction of Trade Statistics, as of May 2018

Ease of Doing Business

In 2018, Bhutan made paying taxes easier by introducing an online platform for filing corporate income tax and personal income tax returns. At 81st place among 190 countries, Bhutan is the second highest ranked economy in South Asia.

Source: Doing Business, accessed December 2018

Note: The World Bank/International Finance Corporation's annual flagship Doing Business Report measures the ease of doing business by ranking economies from 1 to 190, based on quantitative indicator sets that can be compared across economies and over time, with first place being the best and indicating a regulatory environment is conducive to business operation. Of immediate relevance to SASEC aims and goals are indicator sets on Starting a Business, and Trading across Borders.

Logistics Performance Index (LPI)

Bhutan registered an overall LPI score of 2.17 in 2018, below the South Asia regional average score of 2.51. Bhutan registered improved scores in logistics competence and tracking and tracing (both at 2.35), resulting in an overall 2018 rank of 149 out of 168 economies. The country's best score is in timeliness at 2.49.

Bhutan LPI 2018

Source: World Bank LPI (accessed December 2018)

Note: The LPI overall score reflects perceptions of a country's logistics based on six core dimensions: (i) efficiency of customs clearance process, (ii) quality of trade- and transport-related infrastructure, (iii) ease of arranging competitively priced shipments, (iv) quality of logistics services, (v) ability to track and trace consignments, and (vi) frequency with which shipments reach the consignee within the scheduled time. The scores for the six areas are averaged across all respondents and aggregated to a single score using principal components analysis. A higher score indicates better performance.

Economic Outlook

Asian Development Outlook

Growth edged up in fiscal year 2017 on moderate advances in industry and services. Inflation pushed slightly higher, and the current account deficit narrowed. The outlook is continued strong, stable growth. Delayed completion of two large hydropower plants has postponed a sharp upturn that was earlier forecast.

Source: Asian Development Outlook 2018 (ADB)
South Asia Regional Update

The outlook is generally favorable. Bhutan's growth has been strong at 6% in previous years, driven by construction of hydropower plants. Commissioning of hydropower projects will boost output, exports, and fiscal revenues. Inflation has picked up but is expected to remain stable.

Source: South Asia Regional Update, January 2018 (IMF)