World Bank Backs Bhutan's Job-Creation Reforms

Financing to help strengthen policies for private sector-led job creation and economic resilience

Apr. 2, 2026 at 9:26am

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The World Bank has approved $25 million in financing to help the Royal Government of Bhutan strengthen policies to create jobs and boost economic resilience. The program aims to develop a stronger policy and institutional framework for private sector-led job creation by strengthening fiscal and debt management, enhancing systems to protect workers, and fostering private sector development.

Why it matters

Bhutan's strong economic growth has not translated into better-paid jobs for its population, particularly youth. This program supports the reforms needed to stimulate private sector investment and improve the quality of jobs, which is crucial for Bhutan to achieve its ambitious development objectives and reach high-income status by 2034.

The details

The financing will support wider access to finance, expand credit to businesses, improve the foreign direct investment framework, modernize the tax system, strengthen debt management, and enhance the efficiency of agricultural state-owned enterprises. It will also help improve the sustainability of the pension system and working conditions for women, youth, and vulnerable groups.

  • The World Bank approved the $25 million financing on April 1, 2026.
  • The program is the first in a series of three operations.

The players

World Bank

An international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects and promoting economic development.

Royal Government of Bhutan

The government of the Kingdom of Bhutan, which aims to reach high-income status by 2034 through ensuring a dynamic business environment, quality infrastructure, skilled labor force, and diversified economy.

H.E. Lyonpo Lekey Dorji

The Finance Minister of Bhutan.

Xavier Furtado

The World Bank Group Country Manager for Bhutan.

Yumeka Hirano

The World Bank Senior Economist.

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What they’re saying

“The Royal Government of Bhutan aims to reach high-income status by 2034 by ensuring a dynamic business environment, quality infrastructure, skilled labor force, and diversified economy. This program aligns with the 13th Five-Year Plan and will support policies for creating quality jobs for our people, particularly the youth, women, and vulnerable groups.”

— H.E. Lyonpo Lekey Dorji, Finance Minister of Bhutan

“Bhutan has had remarkable success in maintaining robust growth and in reducing poverty, but the Kingdom needs to create more better-paid jobs to achieve its ambitious development objectives. This program supports the reforms needed to stimulate private sector investment and improved the quality of jobs.”

— Xavier Furtado, World Bank Group Country Manager for Bhutan

“The program will also support reforms to modernize the tax system, strengthen debt management, and improve public investment management, fostering a more growth-friendly environment. Tax reforms will simplify the system, lower the corporate tax burden, reduce compliance costs, and encourage formalization - helping firms while enhancing domestic resource mobilization.”

— Yumeka Hirano, World Bank Senior Economist

What’s next

The financing is the first in a series of three operations, with $12.5 million provided as a grant and the remaining $12.5 million as concessional financing with a 40-year repayment term and a 10-year grace period.

The takeaway

This World Bank program supports Bhutan's efforts to create more and better-paid jobs, particularly for youth, women, and vulnerable groups, which is crucial for the country to achieve its ambitious development goals and transition to high-income status by 2034.