Towards a smooth transition strategy for Bhutan

Graduation from least developed country status

The creation of the least developed country (LDC) category in 1971 was underpinned by the recognition of the structural impediments hindering these countries from achieving their development aspirations. LDCs are expected to graduate to developing country status once they have attained a level whereby, they no longer require LDC-specific support from the international community. Graduation from LDC status represents a significant milestone for Bhutan.

Bhutan is expected to graduate out of LDC status in 2023, following the country’s request to the United Nations for the graduation date to coincide with the end of the implementation of Bhutan’s 12th Five-Year Plan (12 FYP). The country is scheduled to graduate on 13 December 2023.

In granting the five-year preparatory period, the General Assembly asked Bhutan to prepare its national smooth transition strategy. Given this backdrop, the smooth transition strategy can be expected to cement the gains from the 12 FYP, complement the overall national development strategy and configure the implementation of the 13 FYP.

This report is intended to propose key elements for consideration by the Royal Government of Bhutan (RGB), its development and trading partners, and other interested stakeholders, as the country seeks to develop a national smooth transition strategy.

Bhutan’s national smooth transition strategy is expected to accord special consideration to the challenges that pose a potential hindrance to Bhutan reducing its economic and natural vulnerabilities and adjusting to the loss of LDC-associated benefits. It is also expected to consider the support that Bhutan could receive from the United Nations system in cooperation with Bhutan’s bilateral, regional and multilateral development and trading partners during the transitional period to enhance the country’s ability to adapt to functioning in the global economic and trade landscape post-graduation.

The report thus identifies and discusses LDC-associated benefits that are likely to be vital for Bhutan’s continued growth and development and that merit being retained beyond graduation to avoid a roll back on Bhutan’s development gains and the disruption of the country’s current development trajectory.

Towards a smooth transition strategy for Bhutan - Graduation from least developed country status  (UNCTAD/ALDC/2021/5)
23 Feb 2022