The Asian Development Bank (ADB) has approved a $25 million financing package to support Bhutan in expanding trade and diversifying its economy. The package includes a $13 million policy-based loan and a $12 million grant funded through the ADB-administered Asian Development Fund (ADF). The Trade Expansion and Diversification (TREAD) Program aims to implement comprehensive policy, legal, regulatory, procedural, and institutional reforms to strengthen Bhutan’s trade ecosystem and promote private sector–led inclusive growth, enhancing export competitiveness and market access for Bhutanese enterprises.
ADB Country Director for Bhutan, Sonomi Tanaka, highlighted that the program reflects ADB’s commitment to helping Bhutan build a resilient, export-oriented economy aligned with environmental sustainability and climate neutrality goals. The reforms are expected to widen access to global markets, attract foreign direct investment in priority sectors, and strengthen long-term economic resilience.
Bhutan faces structural economic challenges due to its narrow economic base, limited production capacity, low productivity, and an underdeveloped trade ecosystem. Its landlocked geography, rugged terrain, and inefficient logistics systems contribute to high trade costs and weak export competitiveness. While the country has eradicated extreme poverty, unemployment and underemployment, particularly among youth, remain persistent. Most registered enterprises are small, and state-owned enterprises dominate the economy.
The TREAD Program addresses these challenges by consolidating Bhutan’s fragmented institutional landscape, strengthening operational capacity, expanding formal trade partnerships, digitalizing customs and logistics systems, and improving policy and regulatory frameworks to facilitate private sector investment. These measures aim to generate economic benefits nationwide and foster inclusive growth.
The program builds on ADB’s ongoing efforts to develop South Asia’s trade facilitation ecosystem and aligns with Bhutan’s Thirteenth Five-Year Plan objectives, including enhancing the investment climate and promoting economic diversification. The ADF provides grants to the region’s poorest countries and has supported over 384,000 people to emerge from poverty and created approximately 500,000 jobs during 2021–2024.
ADB, founded in 1966 and owned by 69 members, is a leading multilateral development bank that supports inclusive, resilient, and sustainable growth across Asia and the Pacific. Through strategic partnerships and innovative financial tools, ADB works to transform lives, develop quality infrastructure, and safeguard the environment.
