Bhutan's economy is based mainly on agriculture, and forestry which provide the main livelihood for 80% of the population and account for about 40% of GDP. Although the living condition of most of the people in Bhutan do not seem as dire as that of the poor peoples of other third world countries mainly owing to our small population, Bhutan is without doubt, one of the least developed countries in the world.
The Government of Bhutan gets most of its revenue from selling hydroelectric power to India. Chhukha Hydroelectric Power Corporation supplies elecricity to the northern states of India. Thus we get money from them. There are two more huge hydro-electric power projects, Tala and Kurichhu, under construction at this time. After their completion, it is hoped that our revenues will be further increased. Other sources of revenue include tourism and minerals like coal, gypsum, cement production and ferro-chemicals.
Agriculture consists largely of subsistence farming and animal husbandry. Rugged mountains dominate the terrain and make the building of roads and other infrastructure difficult and expensive. The economy is closely aligned with India's through strong trade and monetary links.
The industrial sector is technologically backward with most production of the cottage industry type. Most development projects such as road construction rely on Indian migrant labor.
Bhutan's hydropower potential and its attraction for tourists are key resources. The Bhutanese Government has made some progress in expanding the nation's productive base and improving social welfare. Model education social and environment programs in Bhutan are underway with support from multilateral development organizations. Each economic program takes into account the government's desire to protect the country's environment and cultural traditions.
GDP growth averaged 5% per year in 1991-95 with information not yet available for 1996-97. Detailed controls and uncertain policies in areas like industrial licensing trade labor and finance continue to hamper foreign investment.
GDP: purchasing power parity—$1.3 billion (1995 est.)
GDP—real growth rate: 21.4% (2008 est.)
GDP—per capita: purchasing power parity—$730 (1995 est.)