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Each economic programme takes into account the government's desire to protect the country's environment and cultural traditions.
PTI | By HT Correspondent
UPDATED ON FEB 01, 2006 08:17 PM IST


One of the world's smallest and least developed economies - Bhutan - is based on agriculture and forestry, providing the main livelihood for more than 90 per cent of the population. Agriculture consists largely of subsistence farming and animal husbandry.

Most development projects, such as road construction, rely on Indian migrant labour. Bhutan's hydropower potential and its attraction for tourists are key resources. The industrial sector is technologically backward, with most production of the cottage industry type.

Each economic programme 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 the visits of upscale, environmentally conscientious visitors.

Bhutan's economy is wholly dependent on India. It was the benevolent Nehru, who put Bhutan on the path of economic development. India has been the largest donor of external aid to Bhutan and its main development partner.

Bhutan's first Five Year Economic Development Plan (1962-67) was totally funded by India. India had committed Nu/Rs.9000 million (US $ 215 million) for the Eighth Plan (1997-2002).

Once totally dependent on India for its development assistance and government's establishment expenses, Bhutan has been increasingly turning to various bilateral, multilateral, and international finances.

Model education, social, and environment programmes are underway with support from multilateral development organisations.

The United Nations, World Bank, Asian Development Bank, Australia, Austria, Finland, Denmark, Japan, Netherlands, Norway, Canada, Switzerland, Germany, Italy, New Zealand, Sweden, Republic of Korea, United Kingdom and the United States provide foreign aid to Bhutan.

Bhutan's economy saw a healthy growth in 2002 with the GDP climbing to 7.7 per cent in 2002 from 6.6 the previous year, according to the annual report of Bhutan's central bank, the royal monetary authority (RMA), and the momentum was maintained in 2003.

The renewable natural resources sector which includes livestock, forestry, logging and major cash crops like mandarin and apple, continued to dominate the share of the GDP with 33 per cent in 2002.

It remains the most significant sector, employing about 75 per cent of the country's labour force, the report pointed out. Construction and electricity were also key players in 2002, contributing 17 per cent and 9.7 per cent.


GDP: Purchasing power parity - $2.7 billion (2003 est.) 

GDP - Real growth rate: 7.7% (2003 est.) 

GDP - Per capita: Purchasing power parity - $1,300 (2003 est.) 

Budget: Revenues: $146 million expenditures: $152 million, including capital expenditures of NA 

Agriculture - Products: Rice, corn, root crops, citrus, food grains; dairy products, eggs 

Industries: Cement, wood products, processed fruits, alcoholic beverages, calcium carbide 

Electricity - Consumption: 379.5 million kwh (2001) 

Exports: 1.4 billion kwh (2001) 

Electricity - Imports: 16 million kwh (2001) 

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