Bhutan THE ECONOMY, BHUTAN
Weaving on a backstrap loom, an important home industry
Courtesy Bhutan Travel, Inc., New York (Marie Brown)
The Economic Context
Bhutan, recognized by international aid agencies as one
of the
poorest of the least developed countries of the world, had
a
primarily subsistence agricultural economy in the early
1990s. In
the late 1980s, around 95 percent of the work force was
involved in
the agricultural sector (agriculture, livestock, forestry
and
logging, and fishing). The government projected that the
agriculture sector would produce 46.2 percent of the
nation's gross
domestic product
(GDP--see Glossary) for 1991,
representing a
decade-long slight decline as government services and
electric
power generation increased. Manufacturing and
construction,
although important, were expected to contribute only 14.2
percent
of the projected total GDP (nearly Nu4.1 billion) for 1991
(see
table 24, Appendix). The gross national product
(GNP--see Glossary)
was nearly Nu3.9 billion in 1988, and in the same year,
the GDP had
risen to Nu3.4 billion (see
table 25, Appendix). The
World Bank (see Glossary)
calculated Bhutan's 1989 per capita GNP,
based on
revised population estimates (600,000 persons), at US$440.
Despite these seemingly bleak economic indicators, the
actual
quality of life was comparatively better than that of
countries to
the north and south. World Bank analysts believed the
numbers were
low because of inaccurate population estimates and
differences in
measuring subsistence output and barter transactions, as
well as
the difficulties in reconciling the differences between
fiscal-year
and calendar-year accounts. Nutritional intakes, and the
availability of housing, land, livestock, and fuel, all
pointed to
higher per capita income. And, when measured in 1980
constant
prices, according to Bhutanese government statistics, the
economy
experienced a highly respectable .8 percent annual growth
rate
during the 1980s.
Although Bhutan has a minuscule private sector, it was
growing
in the late twentieth century in conjunction with
government
development plans. It was controlled, however, by a small
sector of
society, members of the royal family, and individuals or
families
with government ties. The Companies Act of 1989 provided
for the
separation of all public and joint sector corporations
from the
civil service by mid-1990, and, as a result, certain key
enterprises became independent of the government.
Data as of September 1991
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