Despite Bhutan’s small population there has been much economic development in the recent years and economy is growing rapidly.
While a large part of Bhutanese people are still illiterate and reside in rural areas with approximately 1 in 5 still living under the poverty line, but majority of Bhutanese have shelter and are self-sufficient. Rapid modernization has brought about vast improvements in the living standard of Bhutanese people. All villages now have access to basic amenities such as education, running water, basic healthcare, electricity and are connected by roads. Even the most remote villages have connection to the telecommunication network including mobile phone service.
The Bhutanese economy is predominantly agricultural. Farmers supplement their income through the sale of animal products such as cheese, butter and milk. Farmers markets are common throughout the country, supplying people with fresh, organic, local produce. Main staple crops are rice, maize, wheat and buckwheat while cash crops are predominantly potatoes, apples, oranges, cardamom, ginger and chilies. A fruit based industry has been established in the capital allowing farmers from the nearby areas to sell their produce and thereby earn additional revenue.
Bhutan’s rich biodiversity provides the kingdom with ample forest resources and this has brought about the development of a thriving cane and bamboo handicraft industry. Craftsmen weave a number of beautiful and intricate items out of bamboo and cane including hats, backpacks, floor mats and traditional bowls. These items are then sold to tourists or Bhutanese, supplying a secondary income source.
The Bhutanese Tourism Industry was first opened in 1974. Since then it has grown to become, a major contributing factor to the Bhutanese economy creating countless employment opportunities and generating additional revenue for the government. The government is committed to building a sustainable tourism industry that is not only financially viable but also limits the negative cultural and environmental impacts commonly associated with the culture of mass tourism. By establishing the policy of “High Value Low Impact Tourism’ the kingdom of Bhutan seeks to ensure that it attracts only the most discerning visitors with a deep respect for cultural values, traditions and the natural environment.
To end this efforts have been made to ensure that even remote areas are publicized and able to reap the benefits of tourism while still respecting their traditions, culture and natural environment.
Due to its fast flowing glacier-fed rivers, Bhutan has enormous potential to produce hydroelectricity. With the construction of several major dams, power sector has undeniably been the biggest contributor to Bhutanese exchequer. Chukha Hydro Power Corporation, Tala Hydro Power Corporation, Baso Chu Hydro Power Corporation and Kurichu Hydro Power Corporation, under the umbrella of Druk Green Power Corporation are some of the existing mega projects in the country. The 1500 MW of power they generate, most of which is exported to neighboring country India, barely scratches the surface of Bhutan’s untapped hydroelectric potential. With its abundant water resources, Bhutan still has the capacity to generate another 30,000 MW of electricity. However, the government is proceeding cautiously with new construction projects in order to minimize the impact on surrounding areas.
The Manufacturing sector is another major contributor to national revenue. With the industrial sector established in Pasakha, small scale industries such as cement plants, calcium and carbide, steel and Ferro silicon, Coca Cola and also wood based industries have started developing.
As a result of the recent economic development, Bhutan has one of the highest per capita incomes in South Asia at US$1,321. However despite this high level of growth and development, efforts stringent regaliations have been enacted in order to protect Bhutan’s natural environment.