Bhutan's Economy

       In 1991, Barbara Crossette wrote an article for the New York Times named “Building an Economy, Bhutan’s Way,” which described the nation as an emerging economic entity. Crossette was optimistic with regard to Bhutan’s financial future, citing its fruit, coal, stone, dolomite, cement, ferrosilicon (an alloy used in steelmaking), cut flowers, high-quality mushrooms, strawberries, asparagus, and other fruits as potential exports. Crossette also stated, “Unlike most other nations in this region, Bhutan has been developing its human resources along with its industries. By giving a high priority to skilled labor, Bhutan will sooner or later surge ahead of its bigger neighbors in per-capita income and the ability to undertake sophisticated manufacturing.”

        I have yet to ascertain the validity of this statement, especially in light of the recent economic crisis. It would be interesting to see how the current global economy is effecting Bhutan, and more specifically, Bhutan’s GNH. An anonymous article from BBC Monitoring South Asia, “Bhutan halts licensing of commercial banks until 2013,” discussed “The Royal Monetary Authority’s (RMA) recent decision not to license another commercial bank until 2013.” While many argue that this movement is not in line with economic liberalization, “RMA officials say that their analysis of the present financial market portrays a situation where it has hit the saturation point with the entry of two new banks.” These two new banks, Druk PNB and T-bank, which opened in 2010 (the year the article was written) seem to have brought economic growth to the nation, however the central bank is worried that more banks and stronger competition will lead to lower interest rates and “undesirable practices on credit sanctioning, product pricing and staff poaching.” Although there are qualms about the central bank’s decision, perhaps this regulation is keeping Bhutan economically afloat while other developing nations who proscribe to “free market fundamentalism” are drowning in the economic downfall.