Bhutan views decentralization as an instrument to reach its economic and social objectives and to preserve sovereignty, security, as well as contribute to equitable development. Its vision statement, Bhutan 2020: A Vision for Peace, Prosperity and Happiness sets out the nation's future directions for development and emphasizes the role of decentralization for its development.
Further, the Government’s 9th five-year plan (2002/03-2006/07) and 10th five-year plan (2008/09-2012/13) focus on the needs of the gewog plans (rural communities) and dzongkhags (districts). Devolution of resources and decision-making powers to the local level is a key aim of the plans.
Although the legislative framework is in place, the process of decentralization is, however, still in transition.
- - Many elements of the earlier centralized approach are overlapping with the new features on bottom-up expenditure and revenue management;
- - Local governments rely heavily on donor funding for capital spending; and
- - Weak capacity at the local level.
To advance the decentralization agenda, it is necessary:
- - To create system to transfer donor funds and other resources down to lower levels of local governments; and
- - To process administrative decentralization by implementing institutional reforms.
The FY2006-2009 Country Assistance Strategy (CAS) is aligned with Bhutan's vision, priorities and the goals of the Ninth Five Year Development Plan. The CAS focuses on better infrastructure and quality of social services, and will support the Royal Government's crosscutting efforts to promote decentralization, good governance, and environmental management.
Analytical Studies on Bhutan