Travel

Bhutan Country Brief

Political overview

System of government

The Kingdom of Bhutan’s first democratic elections were held on 24 March 2008. These followed elections in December 2007 for the National Council, Bhutan’s upper house.

The move toward democracy began in 2000, when the King decreed that day-to-day affairs would be handled by a council of ministers. In December 2006, the King abdicated power to his eldest son, Jigme Khesar Namgyel Wangchuck (who was crowned King on 6 November 2008), ahead of the implementation of major political reforms. A 39- member Constitution Drafting Committee was appointed by the King to draft the country’s first written Constitution. The Constitution was intended to transform the absolute monarchy into a two-party democratic system.

The 24 March 2008 Elections

Mock elections were held in April-May 2007 to educate the public on democratic processes. Elections for the National Council were held on 31 December 2007. Elections for the National Assembly, the lower house which determines the government, were held on 24 March 2008 and were contested by two major political parties, People's Democratic Party and Druk Phuensum Tshogpa (Bhutan Harmony Party-DPT). Voters delivered a landslide victory to the DPT, which took 45 out of the 47 seats in the National Assembly.

Economic overview

Bhutan has a history of fiscal prudence and good governance, very little debt and is assisted by the nominal anchor provided by the currency peg to the Indian rupee. Bhutanese products enjoy free access to the large Indian market and India is Bhutan’s main trade and development assistance partner.

Bhutan’s Tenth Five Year Plan (2008-2013), launched in February 2008, has a central focus of poverty reduction. The strategic priorities under this plan are:

  1. Encouraging industrial development;
  2. Promotion of balanced regional development;
  3. Integrated rural and urban development for poverty alleviation;
  4. Expanding strategic infrastructure;
  5. Investing in human capital; and
  6. Fostering good governance.

Bhutan’s transition to democracy and achievement of the Millennium Development Goals underpin the Tenth Five Year Plan. The Plan aims for an economic growth rate of eight to nine per cent per year throughout the plan. In order to achieve this, it targets an agricultural growth rate of over four per cent and a non-agricultural growth rate of over ten per cent. This growth should allow Bhutan to reduce the overall poverty rate to below 15 per cent, including a rural poverty rate of less than 20 per cent. Other important social targets include:

  1. achieving an 80 per cent national literacy rate;
  2. lowering the infant mortality rate of 20 per 1000;
  3. increasing the average life expectancy to over 70;
  4. providing access to safe drinking water and sanitation by 95 and 96 per cent of the population respectively;
  5. providing electricity to 84 per cent of the rural population; and
  6. achieving a 15 per cent penetration rate for telecommunications across all districts.

The United Nations Development Programme (UNDP) Human Development Report (2008) ranks Bhutan 131 out of 179 countries in terms of the human development index (HDI) (which measures countries’ relative standing in terms of life expectancy, educational attainment and adjusted real income).

Bhutan faces the challenge of matching gains from strong economic growth (6-8 per cent per annum since the mid 1980s) to rising expectations of expanding employment opportunities and welfare improvements, while preserving its environment and culture. Changed community expectations as a result of the introduction of television and the internet add to the challenge. Providing employment opportunities for an expanding and increasingly urban and educated labour force will not be easy.

Bilateral relationship

Australia and Bhutan traditionally have enjoyed warm and friendly relations, going back many years before the two countries established formal diplomatic relations on 14 September 2002. Mr John McCarthy is currently Ambassador to Bhutan (accredited from New Delhi). The then Foreign Minister of Bhutan, Lyonpo Jigme Y. Thinley, visited Australia from 1 to 6 June 2003. Ms Catherine Harris AO PSM, who is based in Sydney, is the Honorary Consul for Bhutan in Australia.

An Australia-Bhutan Friendship Association (ABFA) was launched on 3 March 2003 in Thimphu to promote information exchanges and networking between the people of the two countries.

Bilateral Aid Program

Australia has a long standing bilateral aid program in Bhutan, which was first established under the Colombo Plan. A large number of Bhutanese officials have received education or training in Australia. New areas of bilateral cooperation in 2008 included training for police officers and electoral assistance.

Australia will provide an estimated $3.23 million in total aid flows to Bhutan in 2008-09, almost all in the form of Australian Development Scholarships. For further information refer to the website of AusAID.

The Australian Centre for International Agricultural Research (ACIAR) is undertaking a project with Bhutan to improve mandarin production (Bhutan’s largest horticultural export). The project is being implemented in collaboration with the New South Wales Department of Primary Industries. The project focuses on the production of disease-free planting material, pest and disease control and best-practice production techniques.

 

Updated 15 May 2009