Bhutan is one of the smallest and least developed economies in the entire world. The kingdom of Bhutan, which lies in the Himalayan foothills, is a landlocked country and has recently been through major innovations in the past few decades. Innovations such as new roads being developed and getting electricity throughout the kingdom. A couple of decades ago, having these in Bhutan was not the case and it was not possible to obtain for the people of Bhutan. This innovation has had a tremendous effect on their economy because of the effects it has had on tourists who come to Bhutan.
Because of these recent innovations of livelihood, this has made the economy poor and not well developed. Over 70% of the population do not have electricity in Bhutan and rely on firewood to produce energy and keep warm.
The main stimulant of income that keeps the Bhutan economy is alive is their tourism. People from all over the world come to see the rich history and uniqueness to this kingdom that lies in the Himalayas. What makes their tourism interesting is that you must earn your way into being able to visit the country. A tourist must pay $200 U.S dollars per day (driving, hotel, etc..) in order to stay in the country. This creates an exclusive group of people who can visit the country while keeping and preserving the rich culture of the kingdom intact.
There are two main currencies that are used in Bhutan, the Indian rupee and Bhutanese Ngultrum (Nu, BTN). The exchange rate between the Indian Rupee and the U.S dollar is 1 Indian Rupee for .014 United States Dollar. The ngultrum is tied to the rupee and thus they are traded at the same exchange rate upon entering Bhutan. One Ngultrum is divided into 100 Chetrum. There are different divisions of Ngultrum and anything under the Ngultrum 1 (Nu. 1) comes in coin form. The different Ngultrums are the Nu. 1, Nu. 5, Nu. 10, Nu. 20, Nu. 50, Nu. 100, and the Nu. 500. The Nu. 1 and above all come in bill paper form, while everything below the Nu. 1 comes in coins. The Nu. 500 is not commonly used and not many are circulated throughout the country. All the Ngultrums (Nu, BTN) have some sort of imprinting of Bhutanese culture on them. Usually the backside of a Nu has a dzong, a sort of architecture, that is imprinted.
The coins in Bhutan, the BTN 1, BTN .5, BTN .25, BTN .2, BTN are all available in Bhutan to use. All the coins, except the BTN .2, have the letter “Royal Government of Bhutan” inscribed on them. The BTN .2 has the statement “Food for All” written on it. (Garg, 2019)
The U.S dollar, the pound, Swiss Franc, Euro, Yen, Hong Kong Dollar, Canadian Dollar, Danish Kroner, Australian Dollar and Singapore Dollar are all available to be exchanged for the BTN. You can exchange your currencies at the Paro International Airport or if you can’t get it there then you can go to the Bank in Thimphu. It is advised that you do it at these two main banks since they are both the main center of Bhutan’s economic power. (Garg, 2019)
Credit cards in Bhutan can only be used at hotels and resorts. At most shops the only medium for exchange is cash. ATM services do not exist in the smaller towns of Bhutan and are very limited at the major economic centers of Paro and Thimphu. (Garg, 2019)
IMPORTS AND EXPORTS IN BHUTAN
Bhutan in 2017 exported $195 million worth of goods to other countries around the world. They are the 176th largest exporter in the world. (Hidalgo, Landry, & Simoes, 2017)The main export for Bhutan is ferroalloys, which are also known as steel products. They make up for 62% of Bhutan’s exports and account for $121 million. 86% of ferroalloys from Bhutan are exported to India, while the rest is exported to other major European countries and North America. Other exports in Bhutan are carbides, dolomite, gypsum, raw plastic sheeting, nutmeg, flavored water, and fruit juice.
In 2017, Bhutan imported $482 million worth of material. Refined Petroleum is the most imported good in Bhutan making up 24% of the goods imported, totaling a value of $118 million. They get this good mainly from India and from the United States. This good helps make a multitude of products such as gasoline, asphalt base, kerosene, heating oil, jet fuel, diesel, and plastic. Other major imports to Bhutan are Cars, Iron, and Coca-Cola. In comparison to the rest of the world, Bhutan in 2017 was the 181st largest importer in the world.
GROSS NATIONAL HAPINESS(GNH) OVER GDP
While overall GDP is measured in countries across the world to determine a country’s economic success, Bhutan uses a philosophy coined GNH. It was implemented into the Constitution of Bhutan in July of 2008. Bhutan wants to emphasize and be a role model to other countries in saying that Gross National Happiness is more important than Gross Domestic Product (GDP) because it values human well-being over the development of a country’s economy, which can sometimes harm people in the home-country or in neighboring countries.
DOMAINS AND PILLARS OF GNH
There are four pillars and nine domains to Gross National Happiness. The four pillars of GNH are Sustainable & Equitable Socio-Economic Development, Good Governance, Preservation & Promotion of Culture, and Environmental Conservation. Out of the 4 pillars the one that has the most to do with the economy is a Sustainable Socio-economic Development. To have an outstanding GNH Economy you need to value economic and social contributions that families and all people give to an economy. The 9 Domains of GNH are living standards, education, health, environment, community vitality, time use, good governance, and cultural resilience and promotion. They use these domains as a solid basis in order to measure Bhutan’s GNH.