ADB Approves $20 Million to Support Bhutan's COVID-19 Response

News Release | 4 May 2020

MANILA, PHILIPPINES (4 May 2020) — The Asian Development Bank (ADB) today approved a $20 million loan to support Bhutan’s efforts to stimulate the economy, protect public health, and mitigate the effects of the novel coronavirus disease (COVID-19) pandemic on its people.

“ADB commends the government’s quick actions in implementing strong public health measures for effective outbreak containment and formulating a pro-poor economic contingency plan to counteract the adverse impact of the pandemic on the people and the economy,” said ADB President Masatsugu Asakawa. “This budget support will help the government implement its plans and ensure effective targeting of vulnerable groups, building on ADB’s ongoing projects and long-standing development assistance to Bhutan in strengthening public health, and public sector and macroeconomic management.”

The COVID-19 Active Response and Expenditure Support (CARES) Program will contribute to the government’s measures to mitigate the immediate adverse effects of the pandemic on the population and businesses. This will be achieved through livelihood support and relief measures for vulnerable groups, including displaced employees, unemployed people actively seeking employment, and self-employed individuals in the informal sector, most of whom are women. The program will also support the government’s countercyclical measures and economic stimulus for the productive sectors.

The CARES Program is funded through the COVID-19 pandemic response option (CPRO) under ADB’s Countercyclical Support Facility. CPRO was established as part of ADB’s $20 billion expanded assistance for developing member countries’ COVID-19 response, which was announced on 13 April.

ADB’s response has been closely coordinated with other development partners, including the World Bank and the International Monetary Fund, to take into account their COVID-19 response assistance, advisory, and technical support to the government in fiscal, monetary, and financial management. ADB is also working closely with the World Health Organization and the United Nations Children’s Fund.

Bhutan has formulated an Economic Contingency Plan to mitigate the impact of the pandemic through a pro-poor countercyclical support package. The stringent measures to contain the spread of COVID-19 have resulted in an unprecedented decline in economic activity, including a standstill in industry, particularly tourism which contributes 13% to the country’s gross domestic product. An estimated 11,800 employees in the tourism and allied industries, such as airlines, hotels, restaurants, and tour operators, are expected to be adversely affected.

As an emergency response, ADB approved a grant of $100,000 on 27 March to support Bhutan in enhancing its capacity to prevent, detect, and respond to the COVID-19 outbreak. The grant was used to procure medical supplies and personal protective equipment for health care workers. On 25 April, ADB allocated an additional $1.07 million grant for procuring urgently needed personal protective equipment and intensive care unit equipment.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.