Bhutan's first President, Jigaranda Yulungba, set up the first ever constitution for a country based on religion and guided by his values. Since then, the country has made great strides to move toward democracy. However, in terms of basic human rights and economic development, the country lags behind many other countries in South-east Asia. The small size of the country and its remoteness from the larger regional nations have meant that progress hasn't been as rapid or significant as one might expect.
The small size of the country means it has few natural resources to draw on in terms of exporting its products. The main export goods are textiles and other handicrafts, but these businesses face numerous barriers in accessing the global market. In addition, the country has yet to adopt an efficient and coherent open economy policy, meaning the rules are not effectively enforced and trade does not flow smoothly. Addressing some of these issues will help address the problem of limited economic growth.
Political stability and social harmony have been found lacking in the country's recent past. International terrorist attacks, ethnic conflicts and the rule of a corrupt and incompetent government have all combined to hinder development. The lack of political stability has deterred international businesses from investing in the country, though small entrepreneurs have also stopped doing business due to fears of insecurity. Economic growth will depend on resolving these issues.
A successful Bhutanese program to introduce free trade would boost bilateral trade by opening up its economy to foreign investors. This would encourage investment by foreign businesses, most of whom do not have a track record in producing goods to sell and service goods that don't necessarily involve their countries. By doing this, they can contribute to economic growth by promoting tourism, offsetting import duties and creating jobs.
There is no doubt that Bhutan's location is a competitive advantage in terms of accessing markets outside its borders. However, its government needs to take measures to ensure that its citizens benefit from this as much as possible. One way to do this is to ensure that local producers continue to have access to the markets beyond the country's borders. Free trade zones are one way to achieve this. A thriving agricultural sector offers a large number of job opportunities for the rural population as well as an alternative income stream after the rural communities become dependent on goods produced by larger-scale farming companies.
The people of Bhutan enjoy great respect and admiration for China. It also hopes to build better relations with India – another powerful trading partner in South Asia. With its large population of more than 5 million, this nation also offers the potential for a large influx of tourists. To encourage economic growth through tourism, the country is developing special zones that attract visitors interested in seeing some of the country's exotic attractions. Its extensive network of roads, railways and airports allow it to serve as an . . . . . . entry point for many tourists interested in visiting India, a large source of goods for Bhutan's farmers and a major provider of goods and services.
A key aspect of economic growth in Bhutan is the establishment of the Kingdom of Bhutan, a republic of South Asia in place of the present-day Republic of Bhutan. The purpose of the Kingdom was to guarantee the rights of the people living in Bhutan and to give them political and economic freedom. The economic model put forth by the Kisman Rwanda Commission for the Independence of Bhutan is meant to promote direct free trade between Bhutan and India – two nations with significant economic interests in the country. It is hoped that through the establishment of this republic, India can increase its investments in Bhutan and help the country improve its agriculture, strengthen its economy and encourage foreign direct investment. Direct foreign investment means more jobs for the people in Bhutan, more opportunity for development in the rural areas and a boost for the GNH as a whole.
However, to reach full development, such development strategies must be in place. For example, there should be proper consultation between the Bhutan government and civil society on policies aimed at enhancing rural development. Rural development includes creating micro-enterprise partnerships involving smallholders and tribal officials to conduct small-scale agriculture and increase income through marketing products. These developments should be coupled with policies encouraging greater participation by women in economic decision making and promoting gender equality.