Bhutan is a founding member of the SASEC Program, joining with Bangladesh, India, and Nepal in 2001 to form this project-based partnership. The 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 approved nine ADB-financed SASEC investment projects worth around $566.65 million.

Bhutan: SASEC Projects
Source: SASEC Project Portfolio, as of April 2018

Source: SASEC Project Portfolio, as of April 2018

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 2015, is captured in the tables below.

Bhutan's top import source worldwide is India, with imported goods valued at nearly $1.5 billion. Nepal and Bangladesh, ranking 8th and 13th worldwide, respectively, exports goods to Bhutan valued at around $11 million and $3 million.

Bhutan's top export destination is India, with exported goods from Bhutan valued at around $494 million. Bangladesh and Nepal rank 2nd and 4th, respectively, with exported goods from Bhutan valued at around $66 million and around $13 million.

Bhutan Trade in SASEC Subregion, 2015

Source: IMF Direction of Trade Statistics

Bhutan Trade - Import

Source: IMF Direction of Trade Statistics

Bhutan Trade - Export

Source: IMF Direction of Trade Statistics

Ease of Doing Business

In 2018, Bhutan enacted four reforms that made it easier to do business:

  • Speeding up the processing time to obtain a Security Clearance Certificate, register at the Office of the Registrar, and register for taxes;
  • Distributing payment data from two utility companies to enable better access to credit information; and
  • Defining ownership and control structures to strengthen minority investor protections, but at the same time also lessening shareholder rights.

Source: Doing Business, as of April 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 189, 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's overall LPI score of 2.32 in 2016 is slightly up from 2.29 in 2014, although below the South Asia regional average score of 2.62. The overall 2016 rank of 135 out of 160 countries is an improvement from 143 in 214, and a result of better scores in Customs, international shipments, and timeliness components.

Bhutan LPI 2016

Source: World Bank LPI

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.

Bhutan LPI 2007-2016

Source: World Bank LPI

Economic Outlook

Asian Development Outlook

Industry growth in Bangladesh in FY2016 was higher than expected, in line with a strong garment sector. Services growth also boosted the economy, supported by higher wages in the public sector. Bangladesh can expect lower inflation in 2017 thanks to domestic factors such as ample food supply and slow private sector credit growth, and still low global fuel and commodity prices.

Source: Asian Development Outlook (ADO) 2016

Regional Economic Outlook

Bangladesh experienced solid growth in 2015 as it continued to benefit from lower commodity prices and strong FDI inflows. Frontier economies and small states in Asia and the Pacific are expected to continue to record steady growth. Bangladesh’s growth is expected to accelerate to 6.6% in 2016 and to 6.9% in 2017, helped by lower commodity prices and strong investment in the manufacturing sector.

Source: Regional Economic Outlook: Asia and Pacific