chapter  4
19 Pages

Bhutan: Chencho Dorji


Located in the eastern Himalayas, Bhutan is a small landlocked country surrounded by India on three sides and the Tibetan region of China in the north. It is an extremely mountainous country covering about 47,000 sq. km., with altitude changing from 200 to 7,500 metres above sea level. It was not colonised, and managed to maintain an undiluted culture based on Vajrayana Buddhism. The total population is about 700,000 and around 80 per cent of the total population live in rural areas. The fertility rate is high and the population growth rate is around 2.0 per cent in Bhutan. The adult literacy rate is low. The annual GDP growth rate was around 3.0 per cent for the past decade. Per capita national income has more than doubled in the first decade of this century (from $730 in 2000 to $1,900 in 2008). The country is still classified as a Least Developing Country by the United Nations. After long years of the monarchy system of the Kingdom of Bhutan, a new democratic system was introduced recently to form a National Council and a National Assembly. The first democratic elections were held in March 2008. Bhutan started to integrate into the world economy in the 1960s, ending

economic isolation. In addition to its gradual trade liberalisation process, Bhutan has entered into a number of preferential trade agreements in recent years. In terms of the theme trade-poverty nexus in South Asia, Bhutan can be used as a case study of a small and landlocked country, with a small and scattered population, rich cultural heritage, well-maintained natural biodiversity, empowerment of women at the forefront of the development policy and decades of sound political stability. The concept of Gross National Happiness has been its overall guiding principle. All these unique characteristics of Bhutan provide an interesting and a special case different from large countries in the region like India and Pakistan. This chapter is organised as follows: section 2 provides the trade policy

framework which includes trade policy, trade regime, regional free trade agreements and the foreign development policy framework; section 3 outlines the trends in economic growth and poverty; section 4 discusses the relationship between trade, growth and poverty; section 5 summarises the key findings of the report and some policy measures for poverty reduction.