Economy

The Bhutanese economy is one of the smallest in the world. What limited resources do exist are not exploited recklessly as the government believes in sustainable and restrained development, as opposed to uncontrolled, problematic growth.

About three fourths of the population is involved in agriculture, mostly at a subsistence level. There are few manufacturing industries in Bhutan; and the majority of these are located along the southern belt of the country as they provide semi-finished products that are exported to larger industries in India. What Bhutan manufactures and exports in abundance is hydroelectric power, thanks to the many fast-flowing mountain rivers in the country. Hydroelectricity is therefore the mainstay of the Bhutanese economy, generating more than half of the government’s total revenue.

Foreign direct investment is limited to select sectors, the most prominent being the hotel and hospitality industry. Tourism, though not entirely liberalized, is one of Bhutan’s leading foreign currency earners.

The Bhutanese currency is called the ngultrum, valued at par with the Indian rupee. As India is Bhutan’s largest trade partner and market, Bhutanese banks, businesses and retailers readily
accept the rupee.