Manila, Philippines (BBN)- The Asian Development Bank (ADB) has signed a trade finance agreement with the Bhutan National Bank Limited.
The agreement was made under ADB’s Trade Finance Program (TFP), which provides loans and guarantees through banks to facilitate international trade in ADB’s developing member countries.
Bhutan’s economy has grown an average of 7 percent a year since 2000, helping to lift many people out of poverty.
However, the mountainous country has a narrow economic base that relies heavily on the generation and sale of hydropower to India. With good jobs scarce and more than one-fifth of the population still living beneath the poverty line, the government aims to diversify its economy by developing the private sector – a central pillar of the government’s growth, employment generation, and poverty reduction strategy.
Many banks in Bhutan’s neighboring countries – Bangladesh, the People’s Republic of China, India and Nepal – as well as much of the rest of Asia and the Pacific, are already participating in the program.
Through its partnership with over 180 banks around the world, ADB’s TFP has supported $4.3 billion in trade since it started operating in 2004.
Last year, the program supported $2 billion in international transactions – half of which were between ADB’s developing member countries – and it expects to support around $2.5 billion worth of international transactions this year.
ADB, which has a triple A credit rating, will continue to expand the reach of the TFP in 2011 to support intraregional trade and economic integration.
BBN/AD/SI-10Dec10-1:53 am (BST)