Bhutan's Race Against Time: Building Resilience in the Land of the Thunder Dragon

Picture a country where ancient monasteries cling to mountainsides and pristine rivers carve through valleys. This is Bhutan, the Land of the Thunder Dragon. But beneath its stunning exterior lies a nation grappling with a complex web of environmental and economic vulnerabilities that demand urgent attention.

A Perfect Storm of Challenges

Imagine being one of the many Bhutanese farmers who make up half of the country's workforce. Your livelihood depends entirely on the whims of nature – rain-fed farming in both drylands and wetlands. In October 2021, this precarious balance was brutally demonstrated when heavy rainfall wreaked havoc across 18 of Bhutan's 20 districts (dzongkhags), devastating around 2,400 tons of crops.

But farming isn't the only sector walking a tightrope. Bhutan's economic backbone – its hydropower sector – faces its own set of challenges. While the country’s fast-flowing rivers have fueled hydropower development, with electricity exports to India playing a critical role in national revenue, climate change is now reshaping this reality. Erratic rainfall, shrinking glaciers, and extreme weather events are putting hydropower production—and the entire economy—at risk.

The Hidden Crisis

Beyond these visible challenges lies a more insidious threat: food insecurity and malnutrition. Bhutan's agrifood system stands on shaky ground, heavily dependent on imported food items. Add to this mix the constant threat of floods, landslides, earthquakes, glacial lake outburst floods (GLOFs), and wildfires, and you have a recipe for compound disasters that could be further amplified by pandemics.

TAKING STOCK: WHERE DOES BHUTAN STAND?

Our recent Crisis Preparedness Gap Analysis (CPGA) of Bhutan sheds light on the country's current state of readiness and highlights areas that require urgent attention to enhance its resilience against various crises (see Figure 1)

• The Human Resource Puzzle: Bhutan faces a unique demographic challenge. Its small population, further diminished by recent emigration of approximately 64,000 Bhutanese or 9% of the population, has left critical sectors understaffed – from disaster risk management to infrastructure, hydrometeorology, and finance.

• The Preparation Gap: The absence of comprehensive multi-hazard risk information, combined with financial constraints, has left the country without evidence-based crisis preparedness plans across various sectors and local governments. While the country has established solid institutional arrangements for disaster management, this is not enforced for implementation.

• The Financial Conundrum: The country's heavy reliance on small-scale external aid, without adequate disaster risk management budgets from the Ministry of Finance, has resulted in a fragmented approach to crisis preparedness. The absence of a requirement to insure public buildings and infrastructure, except hydropower plants, leaves the country exposed to potentially devastating losses. Only 18% of households have insured their properties, reflecting their exposure to huge losses in case of disasters and the country’s underdeveloped insurance market.

Figure 1: Crisis Preparedness Maturity Levels of Bhutan

CHARTING A PATH FORWARD

Our analysis highlights key steps Bhutan must take to strengthen its resilience:

1.      Strengthening the Legal and Institutional Foundation

• Enforce the National Disaster Management Act and its Rules and Regulations and allocate adequate budget to address the implementation bottlenecks.
• Strengthen the legal and regulatory frameworks for resilient infrastructure and adaptive social protection.

2.      Understanding Risks

• Implement integrated multi-hazard risk assessments, bringing together different sectors to enable risk-informed planning and response.          
• Enhance the country’s capabilities for impact-based weather forecasting, early warning systems, and integrated services for critical economic sectors.
• Pilot a landslide early warning system in critical landslide hot spots along national highways.

3.      Financial Innovation

• Develop a risk-layered disaster risk financing and insurance strategy.
• Improve property and land valuation profession and services for accurate disaster risk insurance.
• Explore sovereign risk transfer solutions such as Cat Bonds after exhausting concessional financing.

4.      Improve Emergency Response

• Update the Health Emergency and Disaster Contingency Plan and strengthen diagnostic capabilities.
• Retrofit vulnerable critical buildings built before the introduction of the new seismic codes in the early 2000s, including health facilities and 315 schools.
• Establish Emergency Operation Centers and institutionalize the Incident Command System.
• Enhance Paro International Airport's emergency preparedness through strengthening aviation met services and the capacity of Aircraft Accident and Incident Investigation Unit.

5.      Strengthen Social and Livelihood Support

• Expand social protection coverage and strengthen governance with well-established data and information.
• De-risk the agrifood sector through agricultural insurance and agromet advisory services.
• Update education sector disaster management plans based on multi-hazard risk information.
• Develop housing reconstruction policies for displaced populations in the event of a major disaster.

LOOKING AHEAD

Bhutan stands at a crossroad. While the challenges are formidable, the roadmap is clear. For a starter, the Kingdom of Bhutan and the World Bank have recently signed a US$40 million Bhutan Climate and Disaster Resilience Development Policy Financing with a Catastrophe Deferred Drawdown Option. With the implementation of recommendations from the CPGA, Bhutan can further build a more resilient future for its people and economy.

The preparation of the CPGA Technical Report and its Policy Brief was made possible with funding from the Global Facility for Disaster Reduction and Recovery.