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Bhutan has an agrarian economy with more than 75% of the population living in the rural areas. Agriculture, livestock and forestry are the mainstay of the economy. Most of the farms and villages are located in the fertile river valleys. Mining and industries are situated in a few pockets, mostly in southern Bhutan. The service sector and the construction companies are more predominant in towns. It was only in the early 1960s that Bhutan came out from self-imposed isolation and opened its door to the outside world. Since then Bhutanese economy have undergone major transformation with the implementation of the Five Years Plans. In the last few decades Bhutan has become one of the fastest developing nations. Even though Bhutan has economic relations with many countries, majority of its trade is done with its closest neighbor India. The Bhutanese currency Ngultrum is valued at one to one parity with the Indian Rupee. The country’s development efforts are guided by the development philosophy of ‘Gross National Happiness’ [GNH]. His Majesty King Jigme Singye Wangchuck first enunciated the philosophy and objective of Gross National Happiness where he clearly stated that achieving GNH was more important than Gross National Product. GNH is supported by four important pillars of: a) economic growth and development, b) preservation and sustainable use of the environment, c) good governance and d) preservation and promotion of cultural heritage.
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