Bhutan and the EU. Political and economic relations

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Caren Walters
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1 Bhutan and the EU The EU has had a very strong presence in Bhutan since It works closely with the Himalayan kingdom to reduce poverty, enhance food security and achieve democratisation. Political and economic relations European Union-Bhutan cooperation started with a development project in 1982, and the Royal Government of Bhutan and the EU established diplomatic relations in Contacts have intensified since 2004, when the EU and Bhutan started to hold biennial consultations covering all aspects of bilateral relations and regional and international developments, as well as on issues of mutual interest. The latest round was held in Thimphu on 26 November The Ambassador and Head of the Delegation of the EU to India (the Delegation is based in Delhi) is concurrently accredited to Bhutan. Recently, Bhutan has established an Embassy in Brussels, concurrently accredited to the EU and several EU Member States. Regular visits by the Ambassadors of the EU to Bhutan, sometimes jointly with Ambassadors of EU Member States to India, provide opportunities for in-depth discussions and help to further strengthen the EU-Bhutan relationship. At the invitation of the Royal Government of Bhutan, the EU deployed an Election Observation Mission (EOM) when the first National Assembly (NA) elections were held in 2008, as well as an Election Expert Mission (EEM) for the second NA elections in Inter-parliamentary cooperation started after the first NA elections took place. Members of the European Parliament visited Bhutan in 2009, 2011 and The former European Commissioner for Development, Mr Andris Piebalgs, visited Bhutan from 21 to 22 October The highlight of the visit was a signing ceremony to launch the EU's Multi-Indicative Plan (MIP) for for Bhutan which tripled the EU's assistance for Bhutan from EUR 14 million to 42 million. The main strategic objective of this cooperation is to support Bhutan's democratisation and modernisation process in line with the Royal Government of Bhutan's development plans (the current one being the 11th Five-year plan for ). The Commissioner also inaugurated the first EU film festival in Bhutan. Bhutan additionally benefits from several thematic and other EU funded projects, for instance in the area of climate change adaptation.

2 The Prime Minister of Bhutan, Mr Tshering Tobgay, visited Brussels from 2 to 5 June 2015 at the invitation of the President of the European Commission, Mr Jean- Claude Juncker, to participate in the European Development Days. The visit was historic as it was the first ever visit of a Bhutanese Head of Government to Brussels. The Royal Government of Bhutan and the European Investment Bank (EIB) signed a Framework Agreement in Thimphu in December 2014 which, once ratified by the Parliament of Bhutan, will enable the EIB to start financing capital investments in the country. EU-Bhutan cooperation also extends further to United Nations forums and important global issues, in particular climate change, as reflected in the EU-Bhutan Joint declaration on climate change at COP 21 in Paris on 10 December In recent years, Bhutan has participated regularly in the European Union's Visitors Programme, as well as in the higher education exchange programme Erasmus Mundus. Humanitarian aid ECHO in Bhutan The Directorate-General for European Civil Protection and Humanitarian Aid Operations (ECHO) has been present in Bhutan since 2011, providing support to projects aiming to enhance the capacity of local communities to mitigate and minimise the risk of future natural disasters. The aim is to achieve this through school-based disaster management and health emergency preparedness interventions. ECHO s contribution to disaster preparedness programmes in Bhutan to date has amounted to more than EUR 1.5 million. Due to its geographical location, Bhutan is prone to a wide range of natural hazards, including floods, glacial lake outburst floods, landslides, droughts and earthquakes. Preparing the local communities to better respond to natural disasters is therefore at the heart of ECHO operations in the country. ECHO-funded school disaster management initiatives have over the past five years been focusing on strengthening the preparedness, risk reduction and response capacities of the country s education sector through the development of a comprehensive disaster management plan. By working closely with national authorities, the school- and community-based action has led to the implementation of school safety measures, the development of safety training manuals and the introduction of safety training by qualified trainers. Since 2013, ECHO has also funded a health emergency preparedness project, introduced with the aim of improving the capacity of health facilities to respond to largescale disasters, particularly earthquakes. The action focuses on building mass casualty management schemes at a national and regional level as well as developing emergency preparedness plans in key health facilities. This is to ensure that the institutional

3 capacity to respond to emergencies is strengthened whilst targeted health centres are able to remain functional and provide essential medical services and support in times of disaster. Development cooperation The cooperation between the EU and Bhutan started in The EU has focused on intensive support for Bhutan's efforts towards poverty reduction, food security and, most recently, democratisation. Since Bhutan's economy is predominantly rural, the foremost challenge has been to bring health, education, higher agricultural productivity and rural development to small, far-flung habitations, some of which are without access to roads, markets and modern communications. Currently, Bhutan is implementing its 11th Five Year Plan (FYP). For , the EU assistance will include EUR 42 million under the Multi-annual indicative programme (MIP) Two focal sectors have been identified for support: Local Authorities & Civil Society and Sustainable Agriculture & Forestry. Additionally, the European Union provides support in the area of humanitarian assistance through its Directorate General for Humanitarian Assistance (ECHO). More than EUR 30 million has been provided through the United Nations High Commission for Refugees (UNHCR) in support of refugees from Bhutan in Nepal. ECHO is also providing assistance to Bhutan to improve disaster preparedness and disaster management. EU support is currently focused on the following sectors: Climate Change Cultural Diversity Education Local Authorities & Civil Society Sustainable Agriculture and Forestry Sustainable Tourism EU-BHUTAN COOPERATION PORTFOLIO Climate change Although Bhutan is a negative emitting country, i.e. the country stores more carbon than it emits, it is highly vulnerable to climate change due to the adverse impacts of rising temperatures and changing rain patterns in the Himalayas. An immediate climate change threat is posed by several glacier lakes which are at risk of overflowing due to melting snow. Isolated rural communities living downstream from melting glaciers are most at risk. Bhutan has also been affected by destructive cyclones such as cyclone

4 'Alia' which in May 2009 destroyed buildings, roads, irrigation and drinking water facilities, houses and farmlands. An additional impact of climate change is the occurrence of long dry spells with no rain, causing crops to fail unless irrigation water is available. Facing the challenge of climate change in Bhutan is all the more important in this landlocked country given the need to increase its food security. GCCA The EU, under its Global Climate Change Alliance (GCCA) funding scheme, assists the Government of Bhutan in planning and implementing climate change adaptation measures in the sectors of agriculture, livestock, and forestry under the 11 th FYP. The aim of the GCCA project is to enable a rural population that depends almost entirely on natural resources such as food crops, livestock, fodder, wood and water for their livelihood, to adapt its economic activities to the effects of climate change. The project also enables the Government to provide climate change resilient facilities to the rural population and helps to mainstream climate change, particularly into the renewable natural resources (RNR) sector. EU assistance will continue to address climate change impacts on Bhutan s population, economy and natural resources, of which glacial lake outburst floods (GLOF) are a constant threat, given the accelerating melting of glaciers. Where relevant, EU support will be provided with the involvement and consultation of local authorities and civil society. Currently, there is an ongoing GCCA programme of EUR 4.4 million, which will run until end In December 2015, the EU and Bhutan signed a joint declaration on cooperation and climate policies to express their common intention of mitigating the effects of climate change. A description of GCCA-supported interventions in Bhutan can be found here. A follow up project is envisaged for implementation in Local government The government highlighted decentralisation in favour of the local 'gewog' (county) and 'dzongkhag' (district) levels as their priority under the 11th FYP , with the ambition of ensuring more substantial transfers from central to local budgets. The transfer mechanism promotes cross-cutting themes such as the environment, climate change, gender and disaster preparedness, and enhances capacity building at local level. The EU provided support to local authorities up to 2013, and a new programme is envisaged for implementation in 2017 to continue the support (with a budget of EUR 16 million).

5 Public Finance Management The current reforms of the Royal Government of Bhutan in the area of public finance management envisage support of EUR 3 million in cooperation with the World Bank and Austria. The project is expected to start in Civil Society Organisations Officially recognised civil society organisations (CSOs) have only emerged since Their ability to voice people s opinions and influence policy making is still at a very early stage. Bhutan passed a CSO Act in 2007; as of today about 47 CSOs have registered with the CSO Authority. From 2017, EU assistance of EUR 2.5 million is envisaged in support of a funding mechanism and dialogue between CSOs and public institutions at central and local levels. Sustainable agriculture and rural development Background Renewable natural resources have been the primary focus of EU assistance to Bhutan since During the 1980s and 1990s, a large number of agricultural extension workers were trained to assist farmers in increasing crop yields. Since early 2000, the EU has supported marketing, livestock development and the production and distribution of traditional medicine. The construction of farm roads, renovation of irrigation channels, provision of seeds, building of fences and training of farmers to improve farming practices and market access have increased revenues in rural areas. Livestock has become an important source of income for many farmers thanks to improved feed and fodder availability, improved animal health services and diversification of livestock. These activities have contributed to better food security and reduced the incidence of poverty. A sector budget support program of EUR 6.6 million ended in July 2013 with positive results, while a technical capacity building project of EUR 4.6 million and a Global Climate Change Alliance (GCCA) project in the RNR sector for about EUR 4.4 million are still being implemented under the previous country strategy A new "Rural Development and Climate Change Response Programme" that will continue the support for the sector is expected to take off in The programme supports Bhutan's 11th FYP objectives in the sector: enhancing food and nutrition security, improving rural livelihoods and generating employment, accelerating sector growth through commercial farming and enterprises and promoting sustainable use of natural resources. EU interventions will be accompanied by capacity development for institutions and personnel to ensure sustainable development of the sector. The new programme integrates climate change components. An overall amount of EUR 21.5 million is foreseen. This new programme in the rural development area has the advantage of focusing on innovative actions enhancing resilience to climate change

6 and will support the Royal Government of Bhutan's 12th FYP ( ). Sustainable tourism The European Union is supporting sustainable tourism in Bhutan with a grant from its SWITCH Asia programme. The tourism sector - with tourists in 2011 and approximately EUR 800 million in revenue - is growing rapidly. The unspoilt and beautiful landscape, rich cultural heritage and friendly service are among its major attractions, but the authorities are well aware that growth must be planned in order to conserve resources, maintain the pristine environment and keep attracting tourists. Working with over 400 tour operators, 119 hotels and guesthouses, tour guides, around 70 crafts enterprises and 40 staff from key government agencies, EU experts are implementing a programme to reduce carbon emissions from this sector by tons/year of CO2 equivalent in 4 years. Sustainability initiatives will include measures to promote energy efficiency, the use of renewable energy technologies, water management, waste reduction and treatment, and transport. By the end of the EU project, staff from private enterprises and business associations, along with officials from public agencies such as the Tourism Council of Bhutan, the Ministry of Economic Affairs (MoEA), the Nature Recreation Eco-Tourism Division, the Department of Forestry (DOF), National Environment Commission (NEC), Royal Society for the Protection of Nature (RSPN), and Royal Institute for Tourism & Hotel will have participated in training programmes enabling them to promote low carbon development in the tourism sector after EU assistance has ended. The project has already resulted in completion of a series of awareness programmes across the country with participants from tour companies, hotels, restaurants, handicraft emporiums and schools. Education Through Erasmus Mundus, an international student and researcher mobility programme, over 142 students from Bhutan have been given the opportunity to study at European universities over the last 10 years. The students have been hosted at universities in 16 of the 28 Member States of the European Union. Action 1 of the programme supports the participation of foreign students in master's degree courses or doctoral studies offered jointly by two or more European Higher Education Institutions. Under Action 2, there are grants for consortiums of European and partner country institutions who wish to exchange faculty and students. The consortiums must have a

7 minimum of five institutions from at least three EU Member States and an unlimited number of institutions from partner countries such as Bhutan. How to apply for Erasmus Mundus On the Erasmus Mundus website: For Action 1 Click on the link and choose between Erasmus Mundus Masters Courses (EMMCs) or Erasmus Mundus Joint Doctorates (EMJDs). View all available courses or search for courses in a specific discipline. Select your course and go to the course website which has details about tuition, fees, application procedures, etc. Send your application directly to the co-ordinator of your selected course. For Action 2 Students of European and Bhutanese partner universities belonging to consortiums selected under Action 2 can apply directly within the consortium. These consortiums may also accept applications from students of non-partner universities. For information on scholarships for Bhutanese students, go to the link and see the list of countries covered by each project under Action 2. Governance and justice Good governance is key for EU-Bhutan development cooperation. In fact, both sides have signed a Memorandum of Understanding on a 'Partnership for Good Governance'. The EU provides funding for the Local Governance Support Programme (LGSP) under the Government-led multi-donor funded Good Governance Support Programme (GGSP). This helps the dzongkhags (districts) and gewogs (counties) to draw up their own development agendas. Source URL:

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