National Resilience Fund (Bhutan)

The National Resilience Fund (NRF) is a fiscal mechanism established by Royal Command of His Majesty King Jigme Khesar Namgyel Wangchuck in April 2020 in response to the economic crisis precipitated by the COVID-19 pandemic. Announced in the King's address to the nation on 11 April 2020, the NRF was created to provide financial resources for immediate relief, economic stabilisation, and long-term resilience-building in the Kingdom of Bhutan. With a total fund size of approximately Nu 30 billion (roughly USD 400 million), the NRF represented an unprecedented fiscal mobilisation for a country with a GDP of approximately USD 2.5 billion.^[1]

The creation of the NRF reflected the central role of the monarchy in Bhutan's crisis response architecture. While the government managed day-to-day pandemic operations through its public health and administrative systems, the King personally directed the establishment of strategic economic interventions, drawing on the institution of Kidu (royal welfare provision) that has historically served as a safety net in Bhutanese society. A team of specialists was constituted by Royal Command to work with the government in developing plans and strategies to address the immediate economic challenges, recognising that the exceptional circumstances demanded unconventional policy responses.^[2]

Financing and Fiscal Space

The NRF was financed through a combination of mechanisms. A critical component was the reprioritisation of programmes and activities within the 12th Five-Year Plan, which created Nu 3.7 billion in fiscal space by deferring or restructuring lower-priority expenditures to free resources for pandemic response. This was supplemented by bilateral and multilateral assistance, domestic revenue reallocation, and borrowing. The total fund size of approximately Nu 30 billion provided the financial envelope for implementing a range of relief, stimulus, and resilience measures over the course of the pandemic and its aftermath.^[3]

The approach of creating fiscal space through plan reprioritisation was notable for its pragmatism. Rather than relying solely on external borrowing or depleting reserves, the government reallocated resources from the development budget to meet urgent consumption and relief needs. This strategy was facilitated by Bhutan's relatively disciplined fiscal framework and the centralised planning capacity of the Gross National Happiness Commission, which oversees the Five-Year Plan process.^[4]

Druk Gyalpo's Relief Kidu

The most visible component of the NRF was the Druk Gyalpo's Relief Kidu, a direct income support programme established by Royal Command to assist individuals who had lost their livelihoods due to the pandemic. The Relief Kidu provided monthly income support to people who had been laid off, placed on reduced salaries, or otherwise lost income owing to business closures and economic contraction. In addition to income support, the programme covered loan interest payments for affected borrowers, easing the burden of debt service during a period of severely reduced economic activity.^[5]

The Relief Kidu was administered through a dedicated website (royalkidu.bt) and a hotline (1188) to provide information and process applications. The programme was initially designed for a limited period but was extended multiple times as the pandemic persisted. In April 2021, His Majesty commanded that the Druk Gyalpo's Relief Kidu be continued for an additional 15 months, providing ongoing income and interest payment support to individuals who continued to face economic difficulties and uncertainties. The Relief Kidu served not only as an economic safety net but also as a source of morale and social cohesion, reinforcing public trust in the monarchy and the state's capacity to protect its citizens during a crisis.^[6]

Broader Economic Measures

Beyond the Relief Kidu, the NRF financed a range of economic measures, including loan deferment programmes through the banking sector, support for businesses affected by border closures and supply chain disruptions, agricultural support to boost domestic food production, and infrastructure investment to sustain employment. The Royal Monetary Authority of Bhutan complemented these fiscal measures with monetary policy adjustments, including reductions in the policy interest rate and relaxation of provisioning requirements for banks. The Fiscal Incentives Act of 2021, enacted later in the pandemic, provided additional tax relief to businesses in priority sectors.^[7]

International support also played a role. The United Nations Development Programme (UNDP), the World Bank, the Asian Development Bank, and bilateral partners such as India provided financial and technical assistance to Bhutan's pandemic response. However, the domestic mobilisation through the NRF—driven by the King's personal intervention and the government's fiscal discipline—was widely credited as the backbone of Bhutan's resilience.^[8]

Legacy

The NRF demonstrated the capacity of Bhutan's governance system to mount a coordinated, large-scale fiscal response despite the country's small size and limited resources. The Relief Kidu, in particular, became a model of rapid, targeted social protection in a low-income country context. The experience has informed subsequent policy thinking, including the government's approach to economic transformation and the development of more robust social safety nets to protect vulnerable populations during future shocks.^[2]

References

1. Press Release. Cabinet Secretariat, Royal Government of Bhutan.
2. "Bhutan: Pandemic and Economic Resilience." Observer Research Foundation.
3. Press Release on COVID-19. Department of Disaster Management.
4. "Containing COVID-19 in the Land of the Thunder Dragon." IMF Finance & Development, December 2021.
5. Druk Gyalpo's Relief Kidu — Official Website.
6. "Druk Gyalpo's Relief Kidu Extended for 15 More Months." BBS.
7. "Kidu, Monetary and Fiscal Measures: A Savior for Bhutanese." Kuensel Online.
8. "Bhutan's Support to National Response." UNDP Bhutan.