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Bhutan is a small country in the eastern Himalayas and Thimphu is the capital city. It is a land-locked nation sandwiched between two giant neighbors and fastest growing economies in the world – China in the North, India in the East, West and South. It occupies an area of 38,394 sq. km and is inhabited by about 650,000 people. The country is sub- divided into twenty districts or administrative regions. The geography of the Himalayan mountain terrain has physically kept the country in isolation and the modernization process started only from the early sixties. Even today after the completion of four decades, mountainous and rugged terrain has impeded the development efforts where the cost of building modern development infrastructures such as roads, schools, rural electrifications, drinking water supplies, etc. have been prohibitively high in addition to being difficult and time consuming. The literacy rate of Bhutan is 59.5% and per capita GDP is about US$ 1,400 with unemployment rate of 2.5%. The Buddhism is the predominant religion of the country. Bhutan’s economy is one of the smallest and least developed (low income) in the world which is based on agriculture and forestry that provides the main livelihood to more than 69% of the population. As of 2008, only 66% of the total households have access to electricity and the government has mandated to provide electricity to all by 2020. Hydropower, cement, wood and food products constitute its main industries. Bhutan has a forest cover of 72.5% and the new constitution further mandates the forest cover to be maintained at 60% for all times to come. The rich cultural heritage, pristine environment and of late the adoption of a distinct and holistic growth philosophy of Gross National Happiness – a policy most constructively defined a favoring sustainable development, cultural preservation, social wellbeing and happiness over Gross Domestic Product has made Bhutan a top destination for tourists and topic of discussions in the academia worldwide. The country has been unanimous in maintaining that, economic growth as it is achieved in the west is not the solution for true development in the country, rather the development should encompass efforts to sustain economically, culturally and ecologically. According to a recent study on happiness by sociologist Adrian White, University of Leicester, United Kingdom, Bhutan is the eighth happiest country in the world. Yet, Bhutan remains a poor country, heavily reliant on foreign aid and with little industry other than tourism. India is the largest donor and trading partner as the country’s economy is intrinsically linked with that of India’s through strong trade and monetary arrangements. The hydropower export and tourism are the main revenue contributed by the hydroelectric sales was 38.52% since 2000 and is expected to provide 60% in 2009. In 2006, Bhutan commissioned the 1,020 MW hydropower project more than tripling the country’s total generation, the largest facility in the country which was financed by India. However, this represents only 5% of the country’s hydropower potential, estimated at 30,000MW.
On the political front, the remarkable political change initiated by 4th King had transformed the country from monarchy to constitutional democracy and is the youngest democracy in the world. As such, there was a sudden change in national policies and outlook on development activities under a new government while the long – term national goal will be to achieving self sufficiency and becoming a strong, happy and a dynamic nation.
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The
economy, one of the world's
smallest and least developed,
is based on agriculture and
forestry, which provide the
main livelihood for more than
60% of the population.
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 and
dependence on India's
financial assistance. 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. Model
education, social, and
environment programs 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. For
example, the government, in
its cautious expansion of the
tourist sector, encourages
visits by upscale,
environmentally conscientious
tourists. Complicated controls
and uncertain policies in
areas such as industrial
licensing, trade, labor, and
finance continue to hamper
foreign investment. Hydropower
exports to India have boosted
Bhutan's overall growth. New
hydropower projects will be
the driving force behind
Bhutan's ability to create
employment and sustain growth
in the coming years.
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