Bhutan's Aspirations

Bhutan's broad-based growth has reduced poverty and inequality over the past decades. To respond to the COVID-19 pandemic and multiple global and domestic crises, the country adopted unorthodox policies such as using foreign reserves to invest in crypto-mining, which slashed reserves by half and exacerbated macroeconomic and financial vulnerabilities. External vulnerabilities combined with longstanding structural weaknesses have intensified the negative economic impact of a surge in outmigration. Private sector job opportunities are limited, especially for young people like Karma, who are now emigrating in large numbers. The lack of economic diversification and limited private-sector business activity poses risks to long-term growth and job creation. The hydropower sector contributes substantially to the economy but employs less than 1 percent of the labor force. And growth in other sectors has been intensive in capital and labor, with limited productivity improvements. There is a future for Bhutan in which young, talented people like Karma decide that they can achieve their dreams by staying in the country. Businesses like Dorji's can attract and retain skilled workers and find the financing needed to expand. Bhida receives a good education in her rural school from qualified teachers who set her up for higher education and a bright future in which Dechen and her parents can launch their handmade furniture industry and find wealthy foreign buyers, enabling them to live an independent, comfortable life. With careful planning and mindfulness, Bhutan can protect its culture and nature while providing good opportunities and infrastructure for its people