Bhutan — a tiny and remote kingdom and a lower-middle income country with a GDP per capita of about $3,718 — has various development potentials. It has improved its educational opportunities, access to income opportunities and many other aspects, improving living standards. There is a potential for diversifying its economy by developing the ICT and private sectors, sustainable tourism and promoting hydropower and organic agriculture further that will help generate revenue, create income opportunities and contribute to economic growth, increasing the chance of providing better opportunities for its people. Among others, Bhutan has the potential to promote environmental sustainability and the scope of improving political and civil rights conditions further.
But there are limited resource-based and other challenges to the development of Bhutan, which became independent in 1947. Notably, there is a narrow economic base, high youth unemployment and a lack of diverse income opportunities, inadequate infrastructure in rural areas, hindering access to services, and growing income inequality between urban and rural populations. Bhutan’s economy is dependent on a small number of sectors and imports (such as hydropower, agriculture, forestry and tourism). There is also a lack of technological advancements and digital literacy among Bhutanese, a lack of sustainable economic growth strategies and vulnerability to climate change impacts, including natural disasters. Among others, political prisoners, restrictions on freedom of movement, discrimination against minorities and restricted media freedom are notable development challenges.
Development policy-based, governance-oriented and other steps help address different development challenges. Importantly, Bhutan, a landlocked country in the eastern Himalayas, has been implementing various development policies including the 13th Five-Year Plan and the Comprehensive National Development Plan 2030 — designed to achieve economic development, reduce poverty and promote sustainable development — and putting emphasis on the Gross National Happiness based policies that have been helping not only attract foreign direct investment, promote sustainable development practices and foster community participation but also achieve the balanced economic growth while preserving its unique cultural heritage and natural environment. But various limitations in the government steps have resulted in the limited outcomes of the development efforts of Bhutan.
While there is a lack of funding and inadequate steps to address the lack of investment, infrastructure deficit and poor connectivity, which hampers its development persuasions, steps are taken less to address insufficient stakeholder engagement, bureaucratic hurdles in decision-making processes (though Bhutan’s focus on the decentralization, strengthening local governments and improving service delivery has helped improve its governance) and inadequate coordination among government agencies that hinder the effective implementation of policies and delay or lead to the incomplete execution of development projects. Among others, steps are also less to address various human rights concerns in the Kingdom of Bhutan, which has a relatively low level of corruption.
Addressing challenges and flaws will help the development of Bhutan on various grounds. But the government of Bhutan needs to put emphasis on several aspects including economic diversification, developing human capital, attracting foreign investment and promoting private sectors. Notably, the private sector faces challenges including restrictive business regulations and a high cost of doing business — that impact its growth. It is also important to foster collaboration between the government and other organizations to leverage resources and expertise for maximum impact and engage with local communities and stakeholders to ensure their input and participation in solutions and implement sustainable and culturally appropriate interventions.
The challenges to governance and widely documented arbitrary arrests, torture and restrictions on freedom of movement and freedom of speech including media freedom and assembly need to be addressed. Bhutan’s crackdown on dissent in 2022 drew condemnation from the international community. Enforcing the constitution and ratifying international human rights treaties can be helpful in addressing the challenges to political and civil rights. The government needs to work on improving the equal treatment of all ethnic groups. But reflecting political maneuvers in maintaining relations with India and China will be helpful.