Proposed Changes to Financial Policy- Bhutan

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Proposed Changes to Financial Policy- Bhutan
Financial policy reforms need to target improving fiscal sustainability and access to finance to guarantee credit for enterprises, which is still a challenge. In the past few years, Bhutan’s policy reforms have targeted improved credit and investment climate access. However, further reforms still need to remove barriers to doing business, regulations in the private sectors, and better fiscal management (World Bank- Press Release). Bhutan is a landlocked country is part of the South Asian Association for Regional Cooperation (SAARC), which consists of 8 countries, with India being the economic powerhouse (Hussain et al., 32). Strengthening the investment climate includes guaranteeing legal protection for investors and promoting free markets.
Aid and foreign direct investment (FDI) may be beneficial, but mostly when there is good governance, targeting projects with potentially good returns, fiscal sustainability, and financial market development significantly improve. Redape in approving foreign investments, restrictions on equity investments, travel restrictions for foreign investors, and policy challenges are limiting FDI flows (World Bank 1). Aid that targets complementary inputs such as investments in human...