Bhutan: Critical Development Constraints

Abstract

Guided by its philosophy of gross national happiness, Bhutan achieved strong growth during 1981–2011, and its per capita gross domestic product more than quintupled, with hydropower as the main growth driver. The government’s conscious efforts to invest in socioeconomic programs have helped reduce poverty in the country. Bhutan recognizes that it needs to continue its efforts to make growth resilient to external and internal factors. This report identifies the most critical constraints facing the economy and discusses policy options to assist the government in its endeavor to achieve strong, balanced, and resilient growth that is also inclusive. The report also highlights potential new drivers that can help complement Bhutan’s continuing efforts to achieve inclusive and sustainable socioeconomic development.