Project Data Sheet

Project Data Sheets (PDS) contain summary information on the project or program: Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

PDS Creation Date
PDS Updated as of 29 Sep 2014

Project Name Enhancing Development Management for Sustainable and Inclusive Growth
Country Bhutan
Project/Program Number 46189-001
Status Approved
Geographical Location
In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
Sector Public sector management
Subsector Economic and Public Affairs Management
Strategic Agendas Inclusive economic growth (IEG)
Drivers of Change Governance and capacity development (GCD)
Gender Equity and Mainstreaming Categories

Financing

Type/Modality of Assistance Approval Number Source of Funding Approved Amount (thousand)
Technical Assistance8229Technical Assistance Special Fund475
Technical Assistance8229ATF - Danida Grant250
TOTAL US$ 725

Summary of Environmental and Social Issues

Environmental Aspects
Involuntary Resettlement
Indigenous Peoples

Stakeholder Communication, Participation and Consultation

During Project Design
The government will be consulted regarding the TA concept paper and the TA report.
During Project Implementation
The Ministry of Finance (MOF) willl be the executing agency. The Department of Public Accounts (DPA), MOF will be implementing agency. The Director of DPA will oversee the TA implementation.

Description

Project Rationale and Linkage to Country/Regional Strategy

The Bhutanese economy has consistently performed well over the last few decades. Its Gross Domestic Product (GDP) grew, on average, by about 8% between 2001 and 2010, which was the highest among South Asian economies. While growth is estimated to have moderated slightly to 8.3% in FY2011 from 9.3% in FY2010, it is forecast at 7.9% for FY2012 and 8.4% for FY2013 largely on the account of continued hydropower construction. In response to the high and sustained growth, Bhutan has also been successful in reducing poverty. Based on the national poverty line, the incidence of poverty declined from about 32% to about 23% between 2003 and 2007. Sustaining a high economic growth, however, remains a major challenge in Bhutan: the economic growth is largely financed by external aid; the fiscal deficit is high; balance of payment situation is weak; public debt is mounting; and foreign exchange reserves are difficult to sustain as it is not built through exports. The recent Indian rupee liquidity issue also highlights the vulnerability of the Bhutanese economy. Recognizing these emerging challenges, the Economic Development Policy 2010 aims to achieve economic self-reliance by 2020. As a provider of stewardship for the implementation of the Policy, there is a growing need for enhancing the capacity of the Ministry of Finance (MOF). For MOF to play a stronger stewardship role in a dynamic macroeconomic context, it needs to adopt best practices pertaining to, among other things, fiscal policy and medium term fiscal framework; budgeting and public expenditure management; taxation reforms and revenue forecasting; debt sustainability analysis; and government property management and public procurement reforms. As the nodal agency for all the ADB-funded projects, MOF also plays a critical role in ensuring efficient programming as well as providing oversight of effective portfolio management. The country assistance program evaluation (CAPE) conducted in 2010 rated ADB's operations in Bhutan as successful. Bhutan also achieved the 100% success rate for completed projects based on project completion reports issued in 2000-2011. Nevertheless, CAPE highlighted that implementation efficiency, although still above the ADB average, has been declining in recent years, possibly due to the increasing size of projects and complexity of project designs, frequent project design changes, and increasing work volumes coupled with limited capacity of domestic contractors. In light of the expected increase in ADB's operations in Bhutan in coming years, there is a need for enhancing MOF's stewardship role to enhance implementation efficiency and improve development effectiveness of ADB's support in the country. In order to enhance development effectiveness of the government interventions as well as ADB's support, it is critical to ensure that they are more evidence-based. Data from the Third Bhutan Living Standards Survey (2012) under ADB's ongoing TA will be particularly useful to update the country's assessment on poverty and other various development outcomes. The 2012 survey data together with data from the 2007 Second Bhutan Living Standards Survey also allow for evaluating key achievements of the government's Tenth Five Year Plan (2008-2013) and the development impact of some of ADB's key projects implemented in Bhutan. While ADB's support for undertaking such assessments will be useful, it is equally important for ADB to provide support for enhancing the government's analytical capacity to formulate more evidence-based policies. Bhutan 2020: A Vision for Peace, Prosperity and Happiness (Bhutan Vision 2020) indeed highlights the need for strengthening the capacity of the government to monitor and evaluate the development process and to undertake policy relevant research on development issues and this TA aims to support this identified need. In addition, the government is elaborating a new economic paradigm that is based on wellbeing and happiness. The proposed TA also aims to contribute to this effort in response to the government's recent request for ADB's support.

Development Impact

Improved socio-economic management of the government for sustaining a high and inclusive growth trajectory.

Project Outcome

Description of Outcome
Improved MOF and government capacity in development management
Progress Towards Outcome
Capacity building activities for selected local government officials have been conducted. Studies on selected macroeconomic issues are ongoing.

Outputs and Implementation Progress

Description of Project Outputs
Strengthened analytical skills in macroeconomic management and project implementation Enhanced knowledge of socioeconomic assessment and impact evaluation studies
Status of Implementation Progress (Outputs, Activities, and Issues)
Nima Tshering attended training on procurement. Study visits to Public Debt Management Office, Thailand were conducted to gain hands-on learning experience on the public debt policy in Thailand which then can be used as important reference in the formulation of Bhutan s debt policy. Institutional visits to Singapore and Republic of Korea were conducted to gain hands-on learning experience on how early warning system on economic shocks works in practice. A consultant has been contracted to conduct study on the development of early warning system of the banking sector. Consultants have been contracted to conduct study on the development of trade and industry framework within the Budget Policy and Fiscal Framework.
Status of Development Objectives
Material Changes

Business Opportunities

Date of First Listing 2013 Feb 25
Consulting Services
The TA will require an estimated 32 person-months of consulting services (20 person-months international and 12 person-months national). As the actual requirements of each type of expertise and the length of their inputs will be identified only during the implementation of individual studies, it is not possible to state the exact requirements. Given this limitation, the intermittent nature of assignments, and anticipated variety of expertise required, the TA will primarily meet its consulting requirements by recruitment of experts on an individual basis in accordance with ADB s Guidelines on the Use of Consultants (2010, as amended from time to time). Outline terms of reference for the consultants are in Appendix 2. Disbursements under the TA will be made in accordance with the ADB s Technical Assistance Disbursement Handbook (2010, as amended from time to time). All procurement will be carried out in accordance with ADB s Procurement Guidelines (2010, as amended from time to time).
Procurement
Procurement and Consulting Notices
http://www.adb.org/projects/46189-001/business-opportunities

Timetable

Concept Clearance 10 Oct 2012
Fact-finding 29 Oct 2012 to 31 Oct 2012
Management Review Meeting
Approval 28 Nov 2012
Last Review Mission

Milestones

Approval No. Approval Signing Effectivity Closing
Original Revised Actual
Technical Assistance 8229 28 Nov 2012 11 Jan 2013 11 Jan 2013 30 Nov 2014 30 Nov 2015

Utilization

Date Approval Number ADB (US$ thousand) Others (US$ thousand) Net Percentage
Cumulative Contract Awards
Cumulative Disbursements

TA Amount (US$ thousand)

Approval Number Approved Amount Revised Amount Total Commitment Uncommitted Balance Total Disbursement Undisbursed Balance
Technical Assistance 8229 725 725 180 545 115 610

Contacts and Update Details

Responsible ADB Officer Hoe Yun Jeong (hyjeong@adb.org)
Responsible ADB Department South Asia Department
Responsible ADB Divisions Regional Cooperation and Operations Coordination Div, SARD
Executing Agencies

Links

Project Website http://www.adb.org/projects/46189-001/main
List of Project Documents http://www.adb.org/projects/46189-001/documents