The latest GDP data from the NSB shows that the Bhutanese economy has not only fully recovered from the 2012-13 rupee and economic crisis, but is also booming. This boom importantly is from sectors like agriculture, services, construction etc.
The strong performance of the agricultural sector, which is growing in a big way in the last two years is notable, especially after a long period of stagnation. This will mean more income for our farmers who form the bulk of our population and hence more rural prosperity and a more equal creation of wealth.
This will also have a positive knock on effect on other aspects of the economy as farmers form the biggest portion of the Bhutanese population.
Bhutan in 2013 saw the worst of the rupee crisis with growth slowing to 2.14 percent, a historic low for Bhutan. The state of the economy was one of the major factors that also determined the 2013 election outcome.
The government must be given credit from day one on focusing on the economy and staying focused on it.
The first move was to work with the Central Bank to improve important cross cutting economic issues like solving the rupee crisis and the non-availability of loans.
On the fiscal side the government lifted the import ban while at the same time keeping government expenses within check.
Huge investments were poured into neglected but productive sectors like Agriculture and rural credit which immediately started seeing improvement from 2014 and started doing really well from 2015 onwards.
The government at the same time maintained a good fiscal balance and actually brought down the non-hydro debt, reducing debt taken for government activities.
The ability of the government to not only raise the funds for the 11th plan but also get timely disbursements along with the availability of loans meant that Bhutan’s construction sector also recovered and is thriving.
Wiser from the 2012 crisis and focused on ground realities the government has not only avoided any major mistakes but it has also solved the big crises of 2012-13 and given new direction and hope.
There is still a lot to be done but the signal should be clear to any future government that it is the economy that matters in the end.
Our twenty-first century economy may focus on agriculture, not information.
James Howard Kunstler