The way toward the 11FYP

Under the National Planning and Resource mobilization, the PM reported to the ninth session of the National Assembly (NA) on the guidelines for preparation of the Eleventh Five year plan (11FYP-2013-2018) on 9July.
The State of the Nation report states that through an extensive consultative process which began in August 2011, the guidelines for the preparation of the 11FYP were finalized with the overall goal of the 11FYP as “Self Reliance and Inclusive Green Socio-Economic Development (SRIGSED).”
The theme is based upon “rural prosperity, urban well being.”
The PM stated that poverty reduction, private sector development, human resource development, balanced regional development, ICT, and media had been identified as the five strategies to achieve the National Key Results Areas (NKRA).
According to the PM, 16 NKRAs had been indentified under each of the five pillars of GNH.
The report on the 11FYP preparation states that the NKRAs being the key results at the national level needed to be achieved over the 11FYP period, in order to achieve the overall goal of the SRIGSED.
Lyonchhen added that in addition, a macroeconomic planning and policy exercise for the 11FYP was being carried out in collaboration with UN-Department of Economic and Social Affairs (UN-DESA) that will support more robust macroeconomic planning for the 11FYP and also build Bhutanese capacities in this area.
According to the guidelines for preparation of the 11FYP, the overall aim of the plan was to
Keep in tune with the core values of GNH.
‘Self-Reliance’ accordingly means was to meet the country’s national development needs as articulated through five year plans, by the end of the 11FYP.
“Inclusive” meant to reduce inequality by enhancing the standard of living and the quality of life of the most vulnerable sections of our society.
“Green” meant carbon neutral development.
The guidelines state that in order to achieve the overall goal, economic growth was a necessary condition for development, as economic growth by itself did not necessarily translate into effective poverty reduction and broad based improvement in people’s quality of life.
Therefore, the first pillar of GNH shall be the two key thrust areas for the 11FYP, with balanced regional development complementing the efforts under economic development and social development.
The second pillar is the carbon neutral or green development.
The third pillar stands for strengthening the Bhutanese identity and culture and the fourth pillar stands for strengthening good governance, this according to report is to be pursued under the cross-cutting theme.
The report shows that in contrast to the previous plans, where recurrent and capital expenditures were about 50% ratio each, the 11FYP ratio is expected to change with 65% of the resource allocated for recurrent expenditure.
The current expenditure mainly accounts on the increasing recurrent expenditure trends, due to past investments in socio-economic facilities, particularly rural infrastructure (gewog connectivity road, rural electrification, and rural water supply among others), all of which are expected to be completed by the end of 10FYP.
As a result, recurrent expenditures are expected to increase sharply on account of increased maintenance costs of the socio-economic facilities.
The report shows declining external grants in view of Bhutan’s improved socio-economic indicators and overall declining ODA trends. As such, resources for capital investments are expected to be limited.
In view of the above, the 11FYP will be focusing primarily on consolidation rather than
expansion of facilities. The allocation of resources for capital expenditure shall be on the following order of priority.
The socio-economic development programs, projects that contributes to direct achievement of NKRAs and other cross-cutting themes.
The report shows the interventions on the completion of 10FYP poverty reduction
Spillover projects; like projects that deferred during the 10plan mid-term review.
While formulating capital investment programs or projects, sectors are encouraged to
‘explore other financing mechanisms such as public private partnerships, build operate transfer modalities etc.’ to reduce dependency on external grants.
On the basis of the above limitations and based on the preliminary fiscal projections, the overall Indicative Planning Figure (IPF) for the 11th plan, including recurrent costs, is reported to be estimated at Nu. 201bn.
As usual the 11FYP has always been prepared through an extensive review and participatory procedures with all stakeholders.
The report for the tentative agenda for the 11FYP finalization shows that there will be submission of first draft to the Gross National Happiness Commission Secretariat (GNHCS), which will be on August 2012, followed by the review of 1st draft Plan.
By November end, there will be a review of first draft with consultations and by the year end a presentation of second draft to GNH Commission meeting to be scheduled and this will be followed by presentation to Cabinet, with this there will be finalization of 11FYP draft.