INTERNATIONAL TRADE CENTRE. Bhutan. Country factsheet

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1 INTERNATIONAL TRADE CENTRE Bhutan Country factsheet

2 How to read EPA country tables? Background, limitations and data information Export potential assessments (EPAs) are a data-based methodology to assist trade advisors in selecting promising export products for inclusion into export promotion activities. As data cannot reflect every single aspect of export or diversification potential, EPAs should be seen as a starting point in an export promotion decision-making process. Qualitative remarks from ITC and CBI country experts for most countries are available upon request but it is recommendable to also consult public and private sector stakeholders in the country. Depending on the needs of the country expansion of existing exports or diversification into new exports EPAs offer two concepts: the Export Potential Indicator (EPI) and the Product Diversification Indicator (PDI). The analysis is based on multi-year, cross-product and cross-country trade and market access information mainly coming from ITC s Market Analysis tools. Products that do not comply with CBI s mandate are excluded from the analysis. To provide a detailed, yet comprehensive picture of EPA results, Sections A and B list only the top products. The complete ranking is available upon request. Please refer to the glossary for explanations of the terms used. Section A. Export Potential Indicator (EPI): Growing your current exports The EPI combines export performance, market demand and market access information to identify high potential export products that are already exported by the country. On the demand side, the EPI considers, for a given market and product, the product s share in market demand, the growth of this share, as well as the country s relative tariff and geographic distance advantage in the market. On the supply side, the EPI considers a given country s revealed comparative advantage (RCA) in exporting the product and the growth of this RCA. The EPI further controls for re-exports and the global tariff disadvantage. Recombined, demand and supply shares give the potential share of each product in a given market. By considering total bilateral exports between the country and the market, potential export shares have been transformed into potential export values. The EPI table ranks products according to their potential export value in the EU & EFTA region and identifies the three European markets where potential exports are highest. This information is complemented by the product s potential export value in the BRICS+11 group and in the region to which the exporting country belongs (Africa & Middle East, Asia and Eastern Europe, or Latin America and Caribbean). The respective yellow, blue and green bars are comparable and illustrate in which market the product has a particularly high potential. The percentage gives the extent to which the potential is currently unrealized, corresponding to the white part of the clock-alike icons. The black part indicates the realized potential. The last four columns indicate if exporting this product can help a country improving the technological advancement and revenue stability of its export basket as well as strengthening the SME and female labour participation. The dot is green if the product is above the country s trade-weighted median and red otherwise. Empty cells indicate missing data. Section B. Product Diversification Indicator (PDI): Moving into new products The PDI considers the same demand side information as the EPI. On the supply side, the PDI builds upon the product space approach to assess the relatedness of products in a given country s export basket. If the country is currently able to export many products that are often found in the export baskets of other countries together with a product not yet exported by the country, it can be concluded that the country has the necessary capabilities to also produce and export this product. This outcome-based measure is complemented by information on natural resources: a suggested product is filtered out if it relies upon a type of land, sea access 1, or raw materials that the country does not possess. The PDI table ranks products according to their diversification potential in the EU & EFTA region. This information is complemented by the rank of the product in terms of its diversification potential to the BRICS+11 and to the regional group. Similar to the EPI table, the last four columns indicate if exporting the product would improve the country s technological advancement, export revenue stability, SME presence and female labour participation. 1 Note that some sea-related products are regularly exported by landlocked countries. No filter is applied in these cases.

3 CBI sector % of unused potential % of unused potential % of unused potential level of technology stability of export revenues SME presence female labour participation Bhutan Section A. Export Potential Indicator (EPI): Growing your current exports EPI: Growing your current exports What is the product's export potential value (in US$ thousand) in? Would this product help Bhutan improving its? Asia & Product description EU & EFTA Top 3 markets BRICS + 11 Eastern Europe S XX Particle board and similar board of wood % Germany, Italy, France 592 3% 605 5% S Xc Cardamons % Germany, Netherlands, United Kingdom 6,184 81% 6,200 81% S Film and sheet etc, non-cellular etc, of polyamides 4 100% Italy, Germany, France 24 3% 78 71% S21, S Fittings, plastic 4 100% Germany, Italy, France 22 7% 49 58% S Rice, husked (brown) 2 100% Germany, France, Italy 2 100% 1 100% S28 44XXXX (4408 & 4412) Plywood, veneered panels and similar laminated wood; s 2 90% Germany, Italy, United Kingdom 14 2% 21 36% S XX Other medicinal plants 2 98% Germany, Italy, France 17 80% 54 25% S8 0709Xb Mushrooms, fresh or chilled 1 100% Germany, Italy, France 0 50% 11 96% S Instruments and appliances used in medical or veterinary sciences, nes 0 100% Germany, Italy, France 0 100% 0 100% S21, S Tubes, pipes and hoses, rigid; of plastics nes 0 100% Germany, Italy, France 0 6% 1 51% S Rice, semi-milled or wholly milled, whether or not polished or glazed 0 100% France, Germany, Italy 0 100% 0 99% Note: Ranking according to EPI to EU & EFTA. Empty cells for additional indicators are due to missing data.

4 CBI sector level of technology stability of export revenues SME presence female labour participation Section B. Product Diversification Indicator (PDI): Moving into new products PDI: Moving into new products What is the product's diversification potential rank in? Would this product help Bhutan improving its? Product description EU & EFTA BRICS + 11 Asia & Eastern Europe S17, S Ground-nut oil, crude S Virola, imbuia and balsa, sawn or chipped lengthwise, sliced or peeled S Lumber, Meranti nes, Lauan, Seraya, alan sawn >6mm S XX Raw cane sugar S Palm hearts nes,o/w prep o presvd,whether o not sugard,sweet o spiritd S Technically specified natural rubber (TSNR) S Cocoa paste not defatted S Logs, Meranti red(dark, light, bakau) in rough S Lobster, prepared or preserved S17, S Palm kernel or babassu oil, crude S17, S Palm oil, crude S Black tea (fermented) & partly fermented tea in packages exceedg 3 kg S8 0805XX Fresh or dried lemons, limes, and other citrus fruit S Rice in the husk (paddy or rough) S Beans, shelled or unshelled, fresh or chilled S Melons, fresh, other than watermelons S Cashew nuts, in shell, fresh or dried S8 0714XX Arrowroot, salep (yams), etc Note: Ranking according to PDI to EU & EFTA. Empty cells for additional indicators are due to missing data.

5 Glossary Term Description Interpretation % of unused potential Export potential value Female labour participation Level of technology Product diversification rank Product group code SME presence Sum of unused potential exports (defined as the gap between actual and potential exports, or zero if the potential is already exceeded), divided by the sum of potential exports. Indicator aiming to identify high potential export products among those that the country already exports competitively and that have good prospects for export success in the target markets. It is based on export performance, market demand and market access indicators. The respective yellow, blue and green bars are comparable and reflect the potential value (US$ thousand) of exporting the product to the respective target market. Indicator based on the share of women in the sector to which the product belongs. Indicator approximating the level of technology embedded in the production of a good based on Hausmann and Hidalgo (2009)'s notion of complexity. Complexity combines two concepts: (i) Diversity: number of products a country exports with a comparative advantage (technologically advanced countries are more diverse) and (ii) Ubiquity: number of countries that export a product with a comparative advantage (technologically advanced products are less ubiquitous). Indicator aiming to identify new products for diversification. Supply conditions are captured through the proximity of new products to products in which the country already has a comparative advantage (product space approach). The average distance of the country's current export basket to new products is combined with demand and market access conditions. Range: 0 to 100%; a large percentage indicates that overall, the country's exports are significantly below their potential in the target market(s). Longer bars indicate higher export potential in value terms. Values: 0 (red dot) or 1 (green dot); a green dot indicates that female labour participation in the sector exceeds the country s export-weighted median. Values: 0 (red dot) or 1 (green dot); a green dot indicates that the product s complexity exceeds the country s export-weighted median. Rank by market. Diversification into top-ranked products is expected to be easier. 4- or 6-digit code that identifies the product group. The Harmonised System (HS) has been revised several times to keep product definitions in line with changing trade or technology patterns. As a consequence, HS codes have been dropped, added, split, merged or renamed. To ensure data consistency across countries and years, product groups whose content does not vary across revisions have been created. A product group code may either correspond to the HS 6-digit code or to a group encompassing several products within one HS 2-digit (2 digits followed e.g. by XXXX) or HS 4-digit (4 digits followed by e.g. XX) code. If a product group corresponds exactly to a 4-digit heading, the 4-digit code is used. Indicator based on the share of SMEs present in the sector to which the product belongs. Values: 0 (red dot) or 1 (green dot); a green dot indicates that the share of SMEs in the total number of companies operating in the sector

6 Stability of export revenues Top 3 markets Indicator measuring price volatility based on the standard deviation of the deflated average unit value over the time period Markets with highest export potential in the EU & EFTA. exceeds the country s export-weighted median. Values: 0 (red dot) or 1 (green dot); a green dot indicates that the product price volatility is below the country s export-weighted median. The stability of production, which may be an issue for some agricultural products, is not considered.

7 List of countries EU & EFTA BRICS+11 Asia & Eastern Europe Note: * includes South Sudan. Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, United Kingdom of Great Britain and Northern Ireland Bangladesh, Brazil, China, Indonesia, Islamic Republic of Iran, Republic of Korea, Mexico, Nigeria, Pakistan, Philippines, Russian Federation, India, Viet Nam, South Africa, Turkey, Egypt CBI target countries: Afghanistan, Albania, Bangladesh, Armenia, Bhutan, Bosnia and Herzegovina, Myanmar, Cambodia, Sri Lanka, Georgia, Indonesia, Lao People's Democratic Republic, Maldives, Mongolia, Republic of Moldova, Nepal, Pakistan, Philippines, India, Viet Nam, Thailand, the former Yugoslav Republic of Macedonia Other: Azerbaijan, Brunei Darussalam, Belarus, China, Hong Kong, China, Islamic Republic of Iran, Japan, Kazakhstan, Democratic People's Republic of Korea, Republic of Korea, Kyrgyzstan, Macao, China, Malaysia, Chinese Taipei, Montenegro, Timor-Leste, Russian Federation, Serbia, Singapore, Tajikistan, Turkey, Turkmenistan, Ukraine, Uzbekistan

8 List of CBI sectors Code Sector S1 Apparel S16 Nat. colours, flavours & thickeners S2 Automotive parts S17 Nat. ingredients for cosmetics S3 Cocoa S18 Nat. ingredients for pharmaceuticals S4 Coffee S19 Paints & coatings S5 Cut flowers & foliage S20 Personal Protective Equipment S6 Electronics & electrical parts S21 Pipes & process equipment S7 Fishery products S22 Plants & young plant material S8 Fresh fruit & vegetables S23 Processed fruit & vegetables, nuts S9 Grains & pulses S24 Rubber & plastic products S10 Home deco & textiles, toys S25 Sanitary products & ceramic tiles S11 Honey & sweeteners S26 Spices & herbs S12 Jewellery S27 Tea S13 Medical devices S28 Timber (products) S14 Metal products S29 Vegetable oils S15 Motion, drives, control & automation S30 Wine

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