Overview of Australia’s aid program to Bhutan

How we are helping

2013/14 Actual:
$14.3 million

2014/15 Budget Estimate:
$14.8 million

Australia and Bhutan have enjoyed a long and productive relationship, dating back to the early days of the Colombo Plan in the 1960s. Australia’s development cooperation with Bhutan rests on mutual understanding and friendship. In January 2012, Australia and the Royal Government of Bhutan signed a Memorandum of Understanding to cooperate on reducing poverty and securing sustainable development in Bhutan while promoting mutual economic and social links. Australia and Bhutan have also initiated annual high-level talks on bilateral cooperation, including development assistance. These talks will be aligned with the Royal Government of Bhutan’s strategic development objectives in accordance with its five-year planning cycle.

Bhutan's development has been guided by the concept of Gross National Happiness, which aims to balance spiritual and material advancement through sustainable and equitable economic growth and development, preservation and sustainable use of the environment, preservation and promotion of cultural heritage, and good governance. Bhutan is the only country in South Asia on track to achieve its targets under the Millennium Development Goals. The number of people living below the national poverty line fell from around 23 per cent in 2007 to 12 per cent in 2012. Development progress has been supported by sustained economic growth, largely driven by strong investment in hydropower. However, poverty still exists, particularly in rural areas where basic services are lacking. Gender equality for women is also a key development issue, including access to tertiary education and low levels of participation in political and high public office.

Australia’s assistance to Bhutan focuses on building human resource capacity and strengthening educational institutions so that Bhutan can meet its growing need for higher education and technical training. As Bhutan continues to consolidate its democracy and broadens its economic base, human resource development will become increasingly important in enhancing the gains of the last few decades. Australian volunteers will be placed in the critical areas of education, health, agriculture and forestry. The Bhutan Royal Institute of Management is receiving support to develop post-graduate courses in management and public administration, and this partnership is also building the skills of staff and the institution as a whole. Development assistance through Australia’s South Asia Regional program will also help reduce intra-regional trade blockages, and ensure better regional management of shared resources such as water and power.


Australia’s support to Bhutan focuses on developing human resource capacity and strengthening tertiary institutions. Scholarships for study in Australia, particularly in the government sector, are Australia’s focus for development cooperation with Bhutan.

Education assistance in Bhutan

Our results


Results to June 2014

  • Provided 480 Bhutanese with Australia Awards scholarships for tertiary education in Australia since 2007.
  • Contributed to Gross Primary Enrolment Ratio rising to 116 per cent in 2013 (106 per cent in 2007), as well as improved gender parity, through our support to the World Food Programme.
  • Provided 7200 students with two meals a day in 2013–14 through our support to the World Food Programme.
  • Support to Australian Electoral Commission for partnership with Election Commission of Bhutan enabled to train 450 participants including 145 females.
  • Australia’s support for the Royal Institute of Management has resulted in the establishment of masters courses in business administration, public administration and management. Three of these courses have been accredited with the University of Canberra.


Results to June 2014

Supported UNICEF to:

  • reconstruct sanitation facilities in 50 schools
  • reconstruct water supply schemes in 41 schools
  • reconstruct 13 community primary schools
  • provide associated maintenance and sanitation training, as well as emergency disaster preparedness (236 principals and teachers trained)

...in five districts affected by the 2009 earthquake.

Children in long robes standing outside a building, which is sited on a steep hillside
Students of a Bhutan primary school (credit: DFAT).