Bhutan is a small Himalayan country in South Asia, landlocked between China in the north and India in the south. The country’s development policies and plans are guided by the concept of Gross National Happiness, which stresses the achievement of equitable and sustainable development over economic growth.
The national poverty rate of Bhutan is at 12 percent, as of 2012. However, the country is still challenged by its mountainous terrain and poor road access isolating rural populations from markets and social services and limiting their livelihood opportunities. With a majority of the population living as rural farmers in small villages scattered throughout the mountainous landscape, logistical challenges impede access to social services. Close to one-fourth of the population suffers from seasonal food insecurity, especially during the months before the harvest.
Bhutan relies upon India for more than 80 percent of its imports; 34 percent of the country’s cereals are imported, and limited exports earnings are not sufficient to finance all foreign exchange requirements. A booming construction industry, especially for hydropower projects, and increasing availability of credit facilities has led to rising domestic consumption. The Government has responded to these imbalances by imposing some austerity measures, including import controls on vegetables that can be grown locally.
The Royal Government of Bhutan considers education as the key to alleviate poverty and empower people, and as such, the sector receives the highest priority and emphasis: 16.7 percent of total government spending, 7.3 percent of the GDP.