IFC suggests SEZs for Bhutan

October 31, 2009: International Finance Corporation (IFC) has advised Bhutan to plan strategically to get benefits from China and India by developing Special Economic Zones (SEZ) in the country.

Infrastructure in Gelephu provides hope for SEZ

IFC representatives Deborah Porte upon completion of her feasibility study for construction of SEZs in the country, said in a report that debates for works on SEZs have to be based on priorities outlined by new Economic Development Policy (EDP), Foreign Direct Investment policy and the current market realities.

She said Bhutan needs to understand the comparative advantages it can make out of its geographical location. She said the Himalayan kingdom must identify sectors that will benefit in the long run.

“Bhutan is between India and China and it is important to find competitive advantages over both countries before structuring the special economic zones,” her she said in her recent presentation.

Deborah Porte mentioned that existing industrial estates are poorly planned and there is a dearth of both local and foreign investors.

IFC has suggested constructing SEZs in Samtse and Gelephu, both border town with India having easy access to Indian markets.

Samtse is favored because of its geography, particularly its flat terrain and its close proximity to India. The SEZ at Jigmiling (Gelephu) is a good option with favorable flat land for future expansion, the abundance of water, but also is prone to floods and power supply.

The new Economic Development Policy identifies tourism, agriculture and information, communication and technology (ICT) as key areas of economic opportunities for Bhutan.