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Bhutan and other Bilateral Relations

Today, Bhutan maintains bilateral relations with 19 countries. Out of the 19, Bhutan maintains diplomatic relations with twelve countries outside of South Asia, most of whom are members of the OECD and industrialized. These relations are more economic in nature than political. They have acted as aid-providers (technical or financial) and economic partners of Bhutan. Bhutan has made a conscious decision to develop diplomatic relations with smaller countries to avoid being drawn in the politics of the "major powers". Therefore, almost all the countries that Bhutan has bilateral relations with, apart from Japan are smaller countries, most of them in Northern Europe.

Bhutan presently receives external assistance from 19 individual donor countries through bilateral relations. Bilateral relations are very important for Bhutan, as the assistance they give amounts to a significant amount. During the 7th Five Year Plan, bilateral donors' contribution amounted to US $173.7 million out of the US $262.3 million Foreign aid that was received, 66.2%.

Bhutan indeed has greatly benefited from these bilateral relations. There are numerous development project aided by individual donor nations through either technical or financial assistance. Japan has played a major part in many projects in the Agriculture and Communication sectors of the country in the recent years.

Bhutan shares very good relations with Switzerland(1985), a country very much like itself in terms of size and neutrality. The Swiss Association for International Cooperation, Helvetas, has been involved in projects concerning building infrastructure and the Agriculture and Forestry sectors. Switzerland has also helped Bhutan in the Education sector, specifically the Teachers Training Centre in Bhutan.

Denmark(1985) has provided Bhutan with consultancy assistance and research resource base, in addition to other technical and financial assistance in the Urban Development, Health and Education and Environmental sectors.

Bhutan in also currently involved in a Sustainable Development Project with Benin, Costa Rica and the Netherlands, on a partnership basis rather than as the "recipient- donor" relation. SNV, an organization from the Netherlands, has also been assisting Bhutan in Rural Development projects.

Austria, is another country that has bilateral relations with Bhutan. It has been providing assistance in the hydro-electric project and also in the restoration of Dzongs(Fortresses).

Norway(1985) has indirectly contributed to Forestry institutional related development and also contributed to the Health sector.

Outside of Europe, Australia has aided Bhutan in the Human Resource Development sector by offering numerous scholarships for Bhutanese students to study in Australia.

Within Asia, apart from India, Bangladesh and Nepal, Hong Kong and Thailand(1989) are also trading partners of Bhutan. Thailand as in fact provided assistance to Bhutan in the health sector. Bhutan also has diplomatic relations with Maldives(1984), Pakistan(1988) and Sri Lanka(1987), members of the SAARC, but it does not share any trading relations with any of these countries as yet, but there is potential for the development of trade in the future.

Bhutan also shares diplomatic relations with Finland(1986), South Korea(1987), EEC(1985), Sweden(1985), Kuwait(1983) and Bahrain(1992).