ECONOMY OF BHUTAN

Introduction

Bhutan, a small landlocked kingdom nestled in the Eastern Himalayas, is renowned for its unique approach to governance, valuing Gross National Happiness (GNH) over Gross Domestic Product (GDP). This Buddhist kingdom has a distinctive blend of cultural heritage, economic policies, and environmental conservation. Despite its small size and limited resources, Bhutan has maintained a stable economy and a peaceful political environment, striving for balanced development and sustainability.

Economy of Bhutan

Bhutan’s economy is primarily agrarian, but it also depends heavily on hydropower, tourism, and forestry. With an emphasis on sustainable development, the Bhutanese economy reflects its cultural and environmental preservation efforts.

• GDP (2023 est.): $2.84 billion USD
• GDP per capita (2023 est.): $3,366 USD
• Major Goods Produced: Hydropower, agriculture (rice, maize, barley), handicrafts, textiles, cement
• Main Exported Goods: Hydroelectricity (to India), minerals (gypsum, calcium carbide), wood products
• Main Imported Goods: Fuel, vehicles, machinery, foodstuffs
• Major Trading Partners: India (dominates both imports and exports), Bangladesh, Nepal, Japan
• Major Companies: Druk Green Power Corporation, Bank of Bhutan, Bhutan Telecom

Geography and Climate

• Geography: Bhutan is a mountainous country bordered by China to the north and India to the south. The terrain ranges from subtropical plains in the south to Himalayan peaks in the north, with Gangkhar Puensum being the highest peak.
• Climate: Bhutan’s climate varies from subtropical in the south to temperate in the central regions, and alpine in the north. The country experiences monsoon rains from June to September.
• Weather: Bhutan has four distinct seasons. Summers are warm, monsoons bring heavy rainfall, winters are cold and dry, and spring/fall are mild.

Social and Cultural Overview

• Religion: Bhutan is predominantly Buddhist (Vajrayana Buddhism), with Hinduism also practiced, especially among southern Bhutanese.
• Major Ethnic Groups: The Drukpa (Bhutia) ethnic group forms the majority, with significant Lhotshampa (Nepali origin) and Sharchop communities.

Political System

• Parliamentary System: Bhutan has a constitutional monarchy with a bicameral Parliament, consisting of the National Council (upper house) and the National Assembly (lower house). The King of Bhutan is the head of state, while the Prime Minister is the head of government.
• Major Political Parties: Druk Nyamrup Tshogpa (DNT), People’s Democratic Party (PDP), and Druk Phuensum Tshogpa (DPT).

Major Infrastructure and Projects

• Major Highways: The East-West Highway, also known as the Lateral Road, connects the country. Several other road networks link urban centers and rural areas.
• Major Airports: Paro International Airport is the main international gateway. Domestic airports include Bumthang, Gelephu, and Yonphula.
• Major Projects: Bhutan’s hydropower projects, such as the Tala Hydroelectric Project, are crucial for economic growth. Other significant projects include the construction of high-quality roads and schools, and digital infrastructure development.
• Major Universities: Royal University of Bhutan (RUB) is the premier institution of higher learning.

Major Sports and Stadiums

• Major Sports: Archery is Bhutan’s national sport, with soccer, basketball, and cricket also popular.
• Major Stadiums: Changlimithang Stadium in Thimphu is the largest and most important sports venue.

International Relations

• Major Friendly Nations: India is Bhutan’s closest ally, providing financial aid and acting as a primary trade partner. Other friendly countries include Bangladesh, Japan, and Nepal.
• Major Enemies: Bhutan has historically had territorial disputes with China but maintains a neutral stance and seeks peaceful resolutions.

Transportation System

• Main Transport System: Bhutan’s transport network consists mainly of roadways, with an expanding infrastructure of highways. Air transport is limited to Paro International Airport for international travel. There is no railway system.

Historical Overview

• Past History: Bhutan’s history is deeply rooted in Buddhism, with its unification in the 17th century by Zhabdrung Ngawang Namgyel. The Wangchuck dynasty, established in 1907, brought stability. Bhutan modernized significantly in the 20th century, especially after the 2008 introduction of a democratic parliamentary system.

Conclusion

Bhutan’s focus on happiness, environmental sustainability, and cultural preservation makes it a unique example in global development. Its economy, rooted in hydropower and agriculture, continues to grow steadily, with India as its primary trade partner. Bhutan’s political system and international relations emphasize peace, stability, and gradual modernization while adhering to its rich traditions.

References

1. World Bank, “Bhutan Economic Overview 2023.”
2. Government of Bhutan, “National Statistics Bureau 2023 Reports.”
3. Royal University of Bhutan – “History of Bhutan.”
4. Bhutanese Parliament – “Constitutional Setup of Bhutan.”