WB makes US$8 mil grant to Bhutan

New Delhi, June 22: The World Bank on June 20 approved a US$8 million grant to Bhutan, designed to create employment opportunities through private sector development, the bank statement reads.

Strengthening the private sector to create job opportunities is a high priority of the Bhutan government and is a central part of its development strategy, the Ninth Five-Year Development Plan. The Private Sector Development Project is designed to increase productive employment through enterprise development in the information technology (IT) sector, enhanced IT skills, and improved access to finance.

"With its small population spread over a difficult mountainous terrain, access to global markets, information technology, and services is particularly crucial, especially for the growth of the private sector," said Alastair McKechnie, World Bank Country Director for Bhutan. "This project will help the government to facilitate the growth of niche or priority sectors-such as information technology-as potential sources of growth and employment generation."

The project has three components: (i) development of the IT/IT enabled services (ITES) sector by establishing an IT Park and related infrastructure and IT promotion services; (ii) development of an IT skills program; and (iii) strengthening the financial sector through IT investments.

"The first two components aim to support government's efforts to develop IT and ITES industries to generate income and employment in the private sector," said Asya Akhlaque, Senior Economist and Task Leader for the project. "The third component reinforces these efforts through improved access to finance for private sector growth. Shared IT infrastructure, such as data centers in a planned IT Park coupled with the improvement of IT human skills and connectivity, can further enhance financial IT development, and vice versa."

The project is in line with the World Bank's Country Assistance Strategy for Bhutan which was prepared to reflect the goals outlined in the government's Ninth Five-Year Development Plan which serves as Bhutan's Poverty Reduction Strategy Paper. The project will contribute towards accelerating the pace of poverty reduction and diversifying the economy. As IT services would not impose a burden on the country's natural resources, the project is highly compatible with the country's goal of preserving the natural environment.

The US$8 million grant is from the International Development Association, the World Bank's concessionary lending arm. Bhutan News Service