Annual Session of the Executive Board of UNDP, UNFPA and UNOPS 30th May to 8th June 2017

Intervention by Counsellor Karma Choeda on agenda item 9: UN Capital Development Fund on 2^nd June 2017

1. I thank Executive Secretary for presenting UNCDF’s integrated report, covering the results of their work in 2016 and the cumulative results on their current strategic framework.

2. Bhutan commends UNCDF on the good results achieved across the different policy outcomes and particularly in the LDCs, some of whom are also LLDCs. We appreciate UNCDF’s continued commitment and support to these groups of countries.

3. Bhutan has enjoyed good cooperation with UNCDF, starting in the late 90s, during which UNCDF supported Bhutan’s decentralization efforts by introducing a nation-wide system for fiscal decentralization for local investments.

4. In 2011, Bhutan was the first pilot country in the Asia-Pacific region where the Local Climate Adaptive Living Facility, LoCAL, was introduced and implemented. LoCAL is increasing community resilience to climate change by improving the local government capacity and unlocking the local government access to the climate change financing both from national and international resources. In Bhutan, LoCAL is operating in half of the local governments with focused investments in water management. In 2017, LoCAL will be scaled up to cover the entire country.

5. Such cooperation shows that UNCDF, with its unique capital mandate and focus on LDCs, is well poised to supporting these countries in their sustainable development efforts.

6. As a country that is doubly challenged of being least as well as a landlocked country, we place high importance on the economic goals within the SDGs – SDG7 through SDG9, which can bring about transformative change.

7. It is there that UNCDF, given its expertise can support these groups of countries in being able to tap into the wide range of financial instruments – from public to private, domestic and international. The establishment of an LDC Investment Fund and their support in the development of SME’s in LDCs could contribute to the development of our private sector.

8. We recognize that work on financial inclusion is one of UNCDF’s strengths, and this is an important element with our overall economic development strategy. Recognizing its importance, we have launched the Bhutan Economic Forum for Innovative Transformation (BEFIT).

9. Under this forum, an International Financial Inclusion Summit on the theme of “equitable growth through financial inclusion” was recently organized in Bhutan by Royal Monetary Authority and the Royal Institute for Governance and Strategic Studies, in partnership with the International Finance Corporation. One of the objectives from the Summit is to assist Bhutanese authorities in drafting a national financial inclusion strategy to serve as a roadmap for Bhutan’s financial inclusion activities.

10. On LDC graduation, we welcome the fact that this will be a priority in UNCDF’s next strategic framework. Bhutan is one of the countries that have been found eligible for graduation along with few other LDCs. But graduation does bring in its own share of concern, especially because of the modest success that we have achieved, most of the bilateral development partners are phasing out and multilateral development banks have started hardening their lending terms. We believe that UNCDF can indeed play an instrumental role in supporting LDCs in their smooth graduation efforts.

11. In closing, we hope that UNCDF will continue to maintain the focus on LDCs in their next strategic framework and support us in our sustainable development efforts, including support to smooth graduation out of the LDC category.