UN DESA | DPAD | Development Policy Analysis Division
Macroeconomic Advisory Capacity (MAC)
UN-DESA • Government of Bhutan
Bhutan’s High Level Committee Study Mission
Gaborone, Botswana / Santiago, Chile
4-11 October 2012
As recommended UN-DESA/DPAD, Bhutan is seeking to establish a fiscal Stabilisation Fund to prevent macroeconomic instability and also to ensure that the huge capital and revenue inflows from its hydropower sector do not lead to a "resource curse" or "Dutch disease" in Bhutan. The Prime Minister of Bhutan formed a High Level Committee (HLC) in June 2012 to explore the feasibility of a Stabilization Fund and make necessary recommendations. Secretary, GNHC, in his capacity as the HLC Chair, requested DPAD to provide necessary technical assistance/capacity development support and sponsor a technical mission for HLC members to countries that have successfully established and are in the process of establishing a similar fund. Technical mission to Botswana and Chile was undertaken by HLC accompanied by UN-DESA/DPAD senior macroeconomic advisor in October 2012. The purpose of the technical mission is to strengthen the capacity of the key officials of the planning, finance, and central bank authorities of Bhutan to design and implement a stabilization fund that would broaden the policy space and enhance the efficacy of its national development strategy, including its 11th Five Year Plan, to prevent macroeconomic instability and vulnerability and generate employment and inclusive growth. The technical/capacity development mission did not only enhance national capacities for Bhutan but also promoted South-South cooperation, as underscored in Paragraph 12c of the Busan Declaration on Aid Effectiveness (2011) and paragraph 280c of the Rio Outcome Document on Sustainable Development (2012).