Trade Expansion and Diversification Program (Subprogram 1)

proposed

The role of trade as a driver of economic growth and poverty reduction has long been recognized, as manifested in various World Trade Organization (WTO) platforms and the principles behind Aid for Trade. The proposed PBL program aims to support the expansion and diversification of Bhutan's tradein trade partners and productsby unblocking policy bottlenecks, establishing institutional structures, filling legal and regulatory gaps, and rolling out new business processes and procedures. It aligns with the government's National Export Strategy 2022 and the 13th Five Year Plan (FYP), 2024-2028, which identifies the country's limited trade engagement as a barrier to deeper integration into the regional and international economy. The proposed program will help create an enabling environment for trade by complementing other interrelated enablers under the 13th FYP, such as transport connectivity, access to finance, skills development and job creation, and production scaling. The shortage of jobs has been one of the most critical development challenges in recent years, triggering an outward migration at an unprecedented scale. Given the small domestic market, the 13th FYP recognizes greater access to external markets as a cornerstone for strengthening the industry sector, which, in turn, will support job creation.