The helicopter view
Nestled in the Himalayas between India and China, Bhutan boasts a traditional Buddhist culture where Gross National Happiness is more important than Gross National Product, but it is carefully embracing global developments.
Bhutan is one of the world’s smallest but fastest-growing economies. GDP is expected to reach $2.9bn in 2019, rising to $3.1bn in 2020. Its annual average economic growth was 7.6% from 2007-17.
India, with which Bhutan has a free-trade agreement, accounts for more than 80% of international trade. The majority of exports are to India, Hong Kong and Bangladesh. Imports are mainly fuel, base metals, machinery, vehicles, wood and food.
The country is peaceful and carbon-neutral. To deter low-cost tourism, Bhutan requires visitors to spend a minimum of US$250 a day. It exports hydropower, which contributes 27% of government revenue and 14% of GDP, along with railway products, cardamom, gypsum and timber.
Supply chain issues
Bhutan has limited areas for agriculture; its mountainous terrain and road conditions make logistics and access expensive. CIPS has supported the country’s economy, offering training and qualifications to advance the procurement profession.
Bhutan and China are in negotiations to resolve territorial disputes. Policy uncertainty and weather have hindered development, while imports of equipment to build hydropower plants have led to large trade deficits and delays in construction.
The country is beginning to look outward and has ambitious goals, but still faces economic and cultural issues.