Bhutan's economy is based mainly on agriculture,
and forestry which provide the main livelihood
for 80% of the population and account for about
40% of GDP. Although the living condition of
most of the people in Bhutan does not seem as
dire as that of the poor peoples of other third
world countries mainly owing to our small population,
Bhutan is without doubt, one of the least developed
countries in the world. The Government of Bhutan
gets most of its revenue from selling hydroelectric
power to India. Chhukha Hydroelectric Power
Corporation supplies electricity to the northern
states of India. Thus we get money from them.
There are two huger hydro-electric power projects,
Tala and Kurichhu, under construction at this
time. After their completion, it is hoped that
our revenues will be further increased. Other
sources of revenue include tourism and minerals
like coal, gypsum, cement production and Ferro-chemicals.
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.
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.
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.
GDP growth averaged 5% per year in 1991-95 with
information not yet available for 1996-97. Detailed
controls and uncertain policies in areas like
industrial licensing trade labor and finance
continue to hamper foreign investment.
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