A cross-sectoral strategy for sustainable industrial competitiveness

Bhutan, a small kingdom in the Himalayas between India and China has put “the Middle Path” at the centre of its development endeavours. The concept emphasises the importance of environmental and cultural preservation at the core of its development. As a consequence "Gross National Happiness" (GNH) replaces “Gross Domestic Product” (GDP) as main indicator to track the country’s well being. In line with these core Bhutanese development priorities the CSCP and its project partners introduce environmental and social criteria to the public procurement cycle in order to scale-up demand for more sustainable products across different sectors and to leverage green industrial development through public demand.

 

Why public procurement?

 

Public authorities are major customers in countries worldwide and, in particular, in Bhutan where public procurement accounts for 60-70% of the government budget. Whereas in the European Union, similarly to the United States, public procurement accounts for 17% of the GDP, in the Kingdom of Bhutan it amounted to approximately 35% of the GDP in 2012/13. Areas of frequent spending are among others office and server ICT equipment, vehicles, office suppliers, fuel and electricity, services as well as construction works.

 

GPP as a driver of green and socially responsible industrial development

 

Public institutions have significant purchasing power to choose more sustainable goods and services and to contribute to sustainable consumption and production (SCP). GPP is an instrument to increase the demand for sustainable goods and services and thereby facilitates sustainable production. Moreover public demand for more environmentally friendly and socially advantageous goods and services will catalyse sustainable innovations in Bhutan.

 

How does GPP work?

 

GPP aims at value for money across the asset life cycle rather than simply at the point of purchase. As the European Commission states, “it provides a process whereby public authorities seek to procure goods, services and works with a reduced environmental impact throughout their life cycle when compared to goods, services and works with the same primary function that would otherwise be procured.” To be a success, GPP needs clear and verifiable environmental criteria for products and services.

 

Key components of the project and expected impact

 

The project shall leverage GPP in Bhutan as a powerful up-scaling tool to

• lower the direct negative impact of state-consumption on the environment,
• incentivise sustainable production among suppliers in Bhutan, in particular SMEs,
• build demand-side (procurers) and supply-side (SMEs) capacity,
• encourage sustainable consumption of private households and facilitate green economic transformation.

 

The project will have a significant impact on greening Bhutan’s procurement policies, support more sustainable production of small and medium enterprises and increase sustainable consumption in Bhutan. It is expected that GPP will increase FDI in Bhutan by 6-8% across the target sectors energy, roads, forestry, public services, and agriculture. With the help of this action, Bhutan will embark on a long-term pathway to utilise GPP as a lever to ‘switch’ towards more SCP patterns.

 

Project implementation

 

The project kick-off meeting took place in Thimphu, Bhutan, on 31^st March 2014. The project will run for 3.5 years in total and is funded through the EU SWITCH-Asia Programme.

 

A multi-stakeholder consortium of international and national partners implements the project and comprises the following organisations:

• International Institute of Sustainable Development (IISD)
• Collaborating Centre on Sustainable Consumption and Production (CSCP)
• Bhutan Chamber of Commerce and Industry (BCCI) 

• Royal Society for the Protection of Nature (RSPN) 
• Royal Institute of Management of Bhutan (RIM) 

 

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