Economy of Bhutan

The economy of Bhutan, , one of the world's smallest and least developed, is based on agriculture and forestry, which provide the main livelihood for more than 60% of the population. Agriculture consists largely of subsistence farming and animal husbandry. Rugged mountains dominate the terrain and make the building of roads and other infrastructure difficult and expensive. The economy is closely aligned with India's through strong trade and monetary links and dependence on India's financial assistance. The industrial sector is technologically backward, with most production of the cottage industry type. Most development projects, such as road construction, rely on Indian migrant labor. Model education, social, and environment programs are underway with support from multilateral development organizations. Each economic program takes into account the government's desire to protect the country's environment and cultural traditions. For example, the government, in its cautious expansion of the tourist sector, encourages visits by upscale, environmentally conscientious tourists. Detailed controls and uncertain policies in areas such as industrial licensing, trade, labor, and finance continue to hamper foreign investment. Hydropower exports to India have boosted Bhutan's overall growth, even though GDP fell in 2008 as a result of a slowdown in India, its predominant export market. New hydropower projects will be the driving force behind Bhutan's ability to create employment and sustain growth in the coming years.

Macro-economic trend

This is a chart of trend of gross domestic product of Bhutan at market prices [1] by the International Monetary Fund:

Bhutan's hydropower potential and its attraction for tourists are key resources. The Bhutanese Government has made some progress in expanding the nation's productive base and improving social welfare. Model education, social, and environment programs in Bhutan are underway with support from multilateral development organizations. Each economic program takes into account the government's desire to protect the country's environment and cultural traditions. For example, the government, in its cautious expansion of the tourist sector, encourages visits by upscale, environmentally conscientious tourists. Detailed controls and uncertain policies in such areas as industrial licensing, trade, labor, and finance continue to hamper foreign investment.

In 2004, Bhutan became the first country in the world to ban smoking and the selling of tobacco.

Other statistics

Industrial production growth rate: 9.3% (1996 est.)

Electricity:

• production: 2 TWh (2005)
• consumption: 380 GWh (2005)
• exports: 1.5 TWh (2005) (exports electricity to India)
• imports: 20 GWh (2005)

Electricity - production by source:

• fossil fuel: 0.39%
• hydro: 99.61%
• nuclear: 0%
• other: 0% (1998)

Oil:

• production: 0 barrel/day (2005)
• consumption: 1,200 barrel/day (2005 est.)
• exports: 0 barrel/day (2004)
• imports: 1,138 barrel/day (2004)

Agriculture - products: rice, corn, root crops, citrus, foodgrains, dairy products, eggs

Currency: 1 ngultrum (BTN) = 100 chetrum; Indian rupee (INR) is also legal tender

Historic exchange rates:

	2006	2005	2004	2003	2002	2001	1999	1998	1997	1996	1995
Ngultrum per US$1	45.279	44.101	45.317	46.583	48.61	47.186	43.055	41.259	36.313	35.433	32.427
Note: the ngultrum is pegged to the Indian rupee

References

•  This article incorporates public domain material from websites or documents of the CIA World Factbook.

•  This article incorporates public domain material from websites or documents of the United States Department of State (Background Notes).

External links

• Global Economic Prospects: Growth Prospects for South Asia The World Bank, December 13, 2006