Regions and Countries

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p. 5 of 20 BACK | NEXT I. Country Performance Assessment A. Economic Performance Assessment B. Poverty Assessment C. Assessment of Socio-Environmental Performance D. Governance: Sound Development Management E. Implementation Assessment II. Country Operational Strategy III. Sector Strategies IV. Regional Cooperation V. Donor Activities and Aid Coordination VI. Cofinancing and Catalyzing External Resources VII. ADB’s Operational Program VIII. Economic and Sector Work Program IX. Local Cost Financing

Country Assistance Plans - Bhutan : I. Country Performance Assessment

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D. Governance: Sound Development Management

34. For many years, Bhutan has accorded high priority to the development of its administrative institutions and system of governance. Since the 76th session of the National Assembly concluded in July 1998, a new system of government was established. The King remains the Head of the State but he is no longer the Head of the Government. The latter position is now being rotated on an annual basis among the members of the Cabinet of Ministers (six of them) who are nominated by the King and elected by the National Assembly. In the opinion of most observers, the Government deserves much credit for the achievements made. The civil service is staffed by dedicated and committed officers and led by ministers and other senior staff who exhibit professionalism and understanding of a high order. Refreshingly, and generally agreed by all, there is little if any corruption in the civil service and administrative hierarchy. In the few cases where corrupt practices surfaced in the past, corrective actions were swift and severe. Moreover, discussion on policy and governance issues with government officers, even on issues that might be regarded as politically sensitive, can be conducted openly and directly, without the need for euphemism or the fear of causing offense.

35. Mindful of the possibilities for corruption that could accompany economic growth and resulting social changes, a series of seminars was held to raise public awareness of the different forms of corruption, particularly the potential nature of the problem in the country, the control mechanisms, and preventive measures. These efforts also advocate the need to focus on people and to recognize that the Ministry of Finance, Ministry of Trade and Industry, the media, the judiciary, the education system, the business community, and the Royal Audit Authority each have a role to play in curbing unethical, "rent-seeking," and irregular activities. Indeed, the theme for the commemoration of the King's Silver Jubilee in 1999 - efficiency and effectiveness in governance, prevention of corruption in Bhutanese society, and uplifting of the morale of civil servants - testifies to the Government's commitment to good governance¹¹.

36. Specific recommendations were proposed including measures to prevent corruption and abuse of authority. These includes (i) realignment and clearer definition of authorities and responsibilities in the administration; (ii) introducing a standard administrative structure of all ministries; (ii) bifurcation of 3 ministries into 6: ministry of communications into ministry of construction and ministry of communications and information; ministry of health and education into ministry of health and ministry of education; and ministry of trade and industry into ministry of trade and industry and ministry of energy and water resources; and (iii) preparation for establishing ministry of labor and ministry of law. While full implementation of these initiatives will be expected by the end of FY2002 (the end of the current Eighth Five-Year Plan). The preparation for introducing a personal income tax and a three-year rolling budget are also commendable.

37. In addition, the Government is pursuing to reconstitute the planning and monitoring structure and process. In this context, the Government has recently concluded mid-term review of the Eighth Plan (FY1997-FY2002), which has estimated 30 percent overall physical achievement of original targets. Human and financial resources are identified as key impediments to achieve the envisaged targets. Policy issues in various sectors to support respective sector development and objectives were also discussed. The recommendations of the mid-term review were translated to necessary guidelines and directives to expedite project implementation and realization of plan objectives and targets.

38. Development efforts in Bhutan have also usually been the result of an "inclusive" process, involving the participation of many elements of society. This is exemplified by the continuing efforts of the King to visit all districts in the country, often on foot or pony, to discuss with villagers and local officials the development needs and initiatives of the different parts of the country to ensure that the latter's views are reflected in the process of governance. Moreover, moves in recent years toward the decentralization of government and development planning to district and block levels are further raising the involvement and commitment of local government officials and local people in the planning and decision processes, and have contributed positively to popular participation, transparency, accountability, information flow, and good governance.

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