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Bhutan Bhutan

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Bhutan

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EconomicPoliticalStructural

Bhutan – Quick View
ECR score20.55 (Mar 2011)
ECR rank158 (Mar 2011)
Economic
GDP 2009USD 1.26 billion
GNI, PPP 2009USD 3,691.75 million
FDI inflow 2009USD 814.20 million
Inflation (Q2) 20106.41%.
Central bank assets 2009USD 1188.13 million
Unemployment rate 20103.3%
Government deficit 2009USD 22.60 million
Tax revenue 2009USD 134.12 million
Political
Government typeConstitutional monarchy
Recent political crisisNA
Economic freedom score103rd
Freedom of information score64th
Corruption perception index36th
Structural
Birth rate21 per ‘000
Population balance (2010)Under 14 - 30.62%
Population balance (2010)Over 65 - 4.77%
Life expectancy years66.8 years
Mortality rate7 per ‘000
Literacy rate54.3%
Internet access7.1 %

[Top] Economic Overview

The economy of Bhutan is primarily dependent on Agriculture, with about 70% of the population relying on the agriculture sector for employment and livelihood. The sector also contributes about 33% towards GDP.

(Source: bhutan.gov.bt

Gross Domestic Product (GDP) and GDP Growth Rate

The GDP for 2009 registered at BTN 61.22 billion compared to BTN 54.71 in 2008. In 2009, the GDP growth rate was recorded at 11.9% compared to 10.6% in 2008.

                                 Bhutan GDP and GDP Growth Rate

(Source: national statistics page 233 & page 236)

Gross National Income (GNI) per capita at PPP

The country’s GNI per capita, PPP for 2010 amounted to USD 5,607 compared to USD 3,574 in 2005.

                                                  Bhutan GNI per capita

(Source: UNDP)

Tax Rates

Tax rates in Bhutan are levied in the following ways:

Direct Tax Structure

Type of Tax

Tax Rate

Business Income Tax (BIT)

30% on Net Profit

Corporate Income Tax (CIT)

30% on Net Profit

Personal Income Tax (PIT)

Income Slabs

Rate (%)

0 - Nu.100,000

0

BTN 100,001 - Nu. 250,000

10

BTN 250,001 - Nu. 500,000

15

BTN 500,001 - Nu.1,000,000

20

BTN 1,000,001 & above

25

(Source: mof.gov.bt)

Corporate Tax

The Corporate Income Tax rate in the country is 30% on net profit.

Tax contribution

Total tax rate (% profit)

Corporate income tax

35

Property tax

2.9

Health insurance contribution

1.1

Vehicle tax

0.5

Tax on interest

0.1

(Source: doingbusiness.org)

Inflation

The Inflation rate of Bhutan increased steadily from Q2 2009 to Q4 2010 from 2.96% to 9.1%.

                                                         Bhutan Inflation Rate

 

(Source: national statistics, page 245)

Foreign Direct Investment (FDI)

In 2009, Foreign Direct Investment (FDI) registered at BTN 814.20 million compared to BTN 1,198.3 million.

 

                                                               Bhutan FDI

 (Source: national statistics, page 194)

Central Bank Assets

Total Assets for 2009 registered at BTN 57,425.00 million compared to BTN 46,906.3 million in 2008.

                                                             Bhutan Total Assets

 (Source: national statisticspage 199)

[Top] Financial Indicators & Government Financial

Consumer Price Index

The Consumer Price Index of the country was 151.92 in Q4 2010 compared to 139.25 in the corresponding period of the previous year.

                                     Bhutan Consumer Price Index

Base Year 2003 = 100

(Source: national statistics)

Interest Rate

Interest rates offered on the deposits in financial institutions:

Interest Rates (%)

 

2005

2006

2007

2008

2009

Savings

4.5

4.5

4.5

4.5

4.5

Fixed deposit

 

 

 

 

 

3 months to less than 1year

4.5

4.5

4.5

4.5

4.5

1 year to less than 3 years

6.0

6.0

6.0

6.0

6.0

More than 3 years

7.0

7.0

7.0

7.0

7.0

(Source: national statistics page 208)

Money Supply

According to the Central Bank of Bhutan, M2 in 2010 was recorded at BTN 41,778.7 million and M1 at BTN 22,537.7 million.

                                        Bhutan Money Supply

 

(Source:central bank page 25)

Public debt levels

 

The external debt of Bhutan in 2010 was recorded at USD 840.70 million compared to USD 794.3 million in 2009.

                                                 Bhutan External Debt

 

(Source:central bank page 51)

Government Expenditure

In 2009, total expenditure was recorded at BTN 20,890.58 million compared to BTN 19,693.03 million in 2008.

                                             Bhutan Government Expenditure

 

(Source: national statisticspage 222)

Exchange Rate

USD per BTN for 2010 was registered at 46.7. From 2006 to 2008 the exchange rate decreased from 44.7 to 40.4, it further increased to USD 47.8 per Ngultrum in 2009.

                                                Bhutan Exchange Rate

 

(Source:central bank page 68)

Government finances

 

Fiscal Balance

The fiscal balance improved from a fiscal deficit of BTN 2,392.60 million in 2005 to a fiscal surplus of BTN 1,092.46 million in 2009.

                                              Bhutan Fiscal Balance

 

(Source: national statisticspage 222)

Total Revenue

The country’s total revenue for 2009 registered at BTN 14,049.04 million compared to BTN 12,345.98 million.

Total Revenue and Grants (BTN million)

 

2009

2008

2007

2006

2005

Total Revenue and Grants

20,624.11

18,281.41

10,267.84

13,327.5

10,439.2

Revenue

14,049.04

12,345.98

12,782.16

6,902.91

6,066.1

Tax Revenue

6,482.41

5,238.36

4,266.91

4,124.68

3,382.4

Non-Tax Revenue

7,566.63

7,107.63

8,515.25

2,778.23

2,683.7

Grants

6,575.07

5,935.42

6,000.93

6,424.59

4,373.1

(Source: national statisticspage 222)

Current Account Balance

 

The Current Account Balance shows an improvement from the deficit of BTN 10,487.4 million in 2005 to a surplus of BTN 6,417.2 million in 2007. From 2007 to 2009, the current account balance declined from a surplus to a deficit of BTN 5,400.5 million.

                                                          Bhutan Current Account Balance

(Source: national statisticspage 194)

Balance of Payments

Balance of Payments (BTN million)

 

2009

2008

2007

2006

2005

Current Account

-5,400.5

-1,080.2

6,417.2

-1,695.7

-10,487.4

Capital and Financial Account

4,372.7

4,118.4

5,095.5

5,847.1

8,016.5

Net Errors and Omissions

6,085.6

-1,081.1

-6,091.4

1,057.7

1,552.4

Overall balance

5,057.8

1,957

5,421.2

5,209.1

-918.6


(Source:
national statisticspage 194)

[Top] Labour Force and Employment Overview

Labour force

The total labour force in the country was 331,900 in the year 2010. Of the total labour force females accounted for 51.37% and the male population accounted for 48.63%.

(Source: national statistics)

Labour Force Participation Rate

The labour force participation rate was 68.6% in the year 2010 compared to 68.5% in the year 2009.

(Source: MOLHR)

Employment in Agriculture

Of the total labour force, 62.77% of people were employed in agricultural activity in the year 2009.

(Source: ADB)

Employment in Industry

Of the total labour force, 6.17% of the people were employed in the industry sector in the year 2009.

(Source: ADB)

Unemployment Rate

The unemployment rate for 2010 was recorded at 3.3% compared to 4% in 2009.

                                      Bhutan Unemployment Rate

(Source: national statistics page 84)

Minimum Wage

In 2011, Bhutan’s minimum wage was recorded at BTN 100 per day.

(Sources: Minimum Wage)

Level of Unionisation

The Federation of Bhutanese Trade Unions is a national trade union federation of Bhutan.

(Source: fobtu)

[Top] Political Stability

Government of Bhutan is a Constitutional Monarchy. Government is headed by the Prime Minister, who represents the majority party in the National Assembly or the Head of the Coalition. Members of cabinet are elected for the term of five years by the King and accepted by the National Assembly.

The State of Bhutan is ruled by the King. Current King of Bhutan is Jigme Khesar Namgyel Wangchuck and Prime Minister is Jigme Y Thinley.  Parliament has right to elect the government or prime minister for a five-year term.

Parliament in the country is bicameral and consists of non-partisan national council and the national assembly. National council of the country consists of 25 seats of which 20 are chosen for a term of four years by each of the 20 electoral districts and the remaining five are elected by the King. National Assembly is made up of 47 seats and all the members are elected for a term of five years by popular vote method.

(Source: estandardsforum.org,bhutan.gov.bt)

Regulatory Environment

Bhutan stands 103rd on the 2011 Economic Freedom Index with a score of 57.6. The country is ranked 18th amongst 41 countries of the Asia–Pacific region and overall it score slightly lower than the global average.

 

                                          

(Source:heritage.org)

Corruption perception

 

The Corruption Perceptions Index (CPI) is a survey that measures the perceived level of corruption across countries worldwide. Bhutan is ranked 36th out of 178 countries in the 2010 Corruption Perceptions index with score of 5.7, indicating that it has low rate of corruption.

(Sources: Transparency.org)

Freedom of Information

The media in Bhutan is restricted. The country has radio broadcasters and television broadcasters.

(Source: BBC)

 

In 2010, Bhutan is ranked 64th on the Press Freedom Index. The index contains countries with scores ranging from zero, implying most freedom, to about 105. Bhutan scores 17.75 points on this index indicating moderate regulations on the media.

 

(Source: rsf.org)

 

News Papers

 

·         Bhutan Today

·         Kuensel

·         The Bhutan Times

·         Bhutan Observer  

 

 (Source: BBC)

 

Judicial service Act has established an autonomous Judicial Service Council to regulate the appointments and promotions and to build a free judiciary.

The National Judicial Commission (NJC) administers the judiciary, elects high court judges and 20 district court judges. King of Bhutan has complete power to remove, suspend or censure judges if the NJC suggests.

The judiciary in Bhutan consists of

·         The Supreme Court

·         The High Court

·         The Dzongkhag Court

·         The Dungkhag Court

·         Appellate Authority

·         Advisory Jurisdiction

The Supreme Court expanded to the whole of Bhutan, all persons therein, and all persons belong with in established legal relationship to Bhutan. The Supreme Court/High Court are powered to review any official acts which is contrary to the provisions of the Constitution.

Dzongkhag and Dungkhag have its own court i.e. The Dzongkhag Court and The Dungkhag Court respectively.

Trials in the country are not conducted by the jury and defendant has the rights to appeal to the high court and can make the final appeal to the King. Defendant cannot question the witnesses. Trials are public except foe the cases which involves family law and juveniles.

 (Source: judiciary.gov.bt,estandardsforum.org)

[Top] Demographic Overview

Population

The country’s total population for 2010 was estimated at 695,822, at an increasing rate of 1.81% compared to the previous year.

 (Source: national statistics page 2)


                                                                                                         Bhutan Population by Gender

Gender Balance

As of 2011, Bhutan’s total population consists of 52.2% males and 47.8% females.

(Source: national statistics page 2)

Gender Ratio

The gender ratio in the country is imbalanced as the country recorded 111.5 men per 100 women in the year 2009.

(Source: UN)

Of the total population 64.59% of the population lies under the age group of 15 to 64 years, followed by 30.62% under the age group of below 14 years and 4.77% of the population lies under the age group of above 65 years.

Population by Age

No of People

0 -14

213,072

15 - 64

449,431

65+

33,219

(Source: national statistics)

In 2010, the estimated median age of Bhutan was 23.4 years.
(Source: national statistics page 2)

In 2010, the total dependency ratio was estimated at 54.8%. Out of which the child dependency ratio was 47.4% and the old age dependency ratio was 7.4%

(Source: national statistics page 2)

The life expectancy in the period 2005-2010 for males and females was recorded at 67.7 years and 64.1 years respectively.

(Source: UN)

In 2009, the mortality rate (per 1,000 people) was registered at 7.

(Source: World Bank)

The crude birth rate (per 1,000 people) was registered at 21.   

(Source: World Bank)

[Top] Soft Infrastructure

Education

 

The country’s literacy rate in 2009 was 54.3%

(Source: guardian.co.uk: spreadsheet data)

The education system in Bhutan is well established with a good network of educational institutions and schools across the country. The country follows a monastic education system throughout the country. The formal education consists of:

 

Schooling

Number of Years

Pre Primary (PP)

1

Primary School

6

Lower Secondary School (LSS)

2

Middle Secondary School (MSS)

2

Higher Secondary School (HSS)

2

Tertiary (or College) Education

3


The education system functions in two phases:

  •          Formal Education- which starts at the age of six with the admissions in pre primary school. The languages used to communicate in schools are Dzongkha (national language) and English. Under the Ministry of Education there are traditional institutions across the country offering education to children in Monasteries, Drupdas and Shedras.

 

  •          Non- Formal Education- established in 1992 is primarily focused on providing basic education to individuals who are unable to avail the formal education facilities. This system facilitates basic literacy skills, reading, writing and understanding of numeric skills.

 

In 2009, there were 541 schools in the country with 6,668 teaching staff and 164,262 students of which 82,794 were males and 81,468 were females.  

 

(Source: national statisticspage 68)

Health

The Ministry of Health has facilitated a well developed healthcare system providing medical facilities to about 90% of the population across the country.

The Ministry of Health administer the following health programs in the country:

  •          Acute Respiratory Infection (ARI) Program
  •          Child Health and Immunization Program
  •          Mental Health Program
  •          National Control of Diarrhoeal Disease Program (NCDDP)
  •          National Leprosy Program
  •          Village Health Workers Program (VHW)
  •          National Malaria Control Program (NMCP)
  •          National STD/AIDS Control Program
  •          Reproductive Health Program
  •          Rural Water Supply & Sanitation Program (RWSS)

In 2009 there were 31 hospitals with 1,186 hospital beds, 181 basic health units and 518 dispensaries across the country providing primary healthcare services.

According to the World Health Organisation, in 2009, Bhutan spent about 4% of its GDP on healthcare.

(Source:national statistics page 40, southasia.oneworld.net )

[Top] Hard Infrastructure

Roads

In 2009, the country’s total road network was measured at 5,982.3 km.

Year

Road Length (km.)

2009

5,982.3

2008

5,363

2007

4,947

(Source: national statisticspage 2)

Airports

In Bhutan there is only one airport i.e. Paro located in Paro town and Its runway length is 6500 ft.

(Source: Aircraft World Charter)

Telecommunication

Telephone connections in Bhutan has declined from 29,857 in 2007 to 26,384 in 2009 at a rate of 6%.

                                           Bhutan Telephone Connections

(Source: national statisticspage 2)

Mobile Subscriber

Mobile subscriptions have increased from 36,000 in 2005 to 338,938 in 2009 growing at a CAGR of about 75.17% in five years.

                                                Bhutan Mobile Subscribers

 

(Source: itu.int)

Approximately 50,000 out of 699,847 people, i.e. 7.1 % of the population were Internet subscribers in 2010. From 2000 to 2010, Internet users grew by 9,900.0%.

(Source: Internet World Stats)

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