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The Economy State of The Economy (2005-2010) Robust Growth - 8.9% Inflation - 6% GDP per capita: - US$ 1,852 in 2009 up from US $ 1,290 in 2005 High.

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Presentation on theme: "The Economy State of The Economy (2005-2010) Robust Growth - 8.9% Inflation - 6% GDP per capita: - US$ 1,852 in 2009 up from US $ 1,290 in 2005 High."— Presentation transcript:


2 The Economy

3 State of The Economy (2005-2010) Robust Growth - 8.9% Inflation - 6% GDP per capita: - US$ 1,852 in 2009 up from US $ 1,290 in 2005 High rate of capital formation – hydropower investments Buoyant revenue growth Debt at Sustainable Levels Structural Change in the Economy

4 Assessment of Economic Performance IFI’s and External Agencies Excellent ratings for macroeconomic performance Tenth Plan Targets Growth Target of 9% within reach Maintain fiscal deficit <6% of GDP

5 Economic landscape transformed by hydropower 3,000 MW Hydropower Capacity by 2020 comfortably overachieved Increasing tourism revenues by 150% achieved (2008) Increasing horticulture exports by 300% achieved (2007) Economic Milestone Targets of Bhutan Vision 2020

6 9% Growth up to 2020 16.6 annual revenue growth to 2020 Macroeconomic Perspective up to 2020

7 Economic Vulnerability Bhutan an LDC due to economic vulnerability and weak human assets base Economic Vulnerability Index (EVI) in 2009 at 52.9% 24 th most economically vulnerable LDC EVI indicators of population, size, remoteness, export concentration, share of primary sector in economy impact of natural disasters, agricultural and export instability

8 LDCs by their Economic Vulnerability Index (EVI) CDP Triennial Review 2009

9 Economic Vulnerability Geographical Constraints High Development and Trading Costs MDGs unit cost US$ 354 per capita a year to 2015 Low Rank of 161 among 183 economies for Trading Across Borders Indicator Export costs: US$ 1,352 per container Import costs: US$ 2,665 per container

10 Natural disasters Climate Change Impact on Hydropower and Agriculture

11 Social Development

12 PROGRESS TOWARDS MDGS Bhutan likely early achiever for several targets Strong policy & institutional support, commitment & effective integration with national planning framework

13  National level progress on MDG Targets often mask significant disparities & gaps at local level  Other Challenges: - Last mile constraints and costs, - Capacity issues, - Women’s empowerment and - Resource needs MAJOR CHALLENGE: MEETING MDGS WITH GREATER EQUITY

14 MDG Success Stories and Areas Needing Attention

15 Goal 1: Reduce Extreme Poverty and Hunger Poverty scaled down from 36.3% in 2000 to 31.7% in 2003 and 23.2% in 2007 Tenth Plan MTR indicates high likelihood of reducing poverty to 15% by 2013 Reason for successful scaling back of poverty: - Growth, pro-poor expenditures and effective redistributive policies

16 Issues  Relatively weaker growth in sectors important for livelihoods of the poor (Agriculture)  Underdevelopment of the rural economy  Rural Accessibility still a major constraint  Increase in food poverty from 3.8% in 2003 to 5.9% 2007

17 Multi-dimensional Poverty in Bhutan Multidimensional Poverty Concept highly relevant within the GNH framework Multidimensional Poverty Index (MPI) calculated on basis of Bhutan specific indicators & appropriate weights MPI (2010): 25.8% of Bhutanese are deemed to be MPI poor and deprived in at least 4 of 13 indicators

18 National MPI based on Bhutan relevant indicators

19 Higher levels of MPI deprivation pertain to : access to improved sanitation cooking fuel (wood, charcoal or dung) schooling 5 yrs (proxy for literacy) electricity

20 Relatively Less MPI Deprivation in: School Enrollment Drinking Water Child Mortality Nutrition Assets Livestock House

21 Income Poverty and MPI across districts  Broad Correlation exists with a few notable deviations

22 GOAL 2: ACHIEVE UNIVERSAL PRIMARY EDUCATION On Track 94% Net Primary Enrollment 93.6% Primary School Completion Rate Concerns: Out of school children (11,565) Quality of education Withdrawal of school feeding programmes

23 GOAL 3: PROMOTE GENDER EQUALITY AND EMPOWERING WOMEN Complete Gender Parity in Primary and Secondary Education  102 girls for 100 boys in primary schools  103.5 girls for 100 boys in secondary schools Concerns:  Gender imbalance at tertiary education (60.8 to 100 and low female literacy levels  Low level of female representation in national parliament (13.8%) and local government (7%)

24 GOAL 4: REDUCE CHILD MORTALITY  On Track with a 48% reduction in IMR to 47 per 1,000 live births from 91 per 1000 live births  On Track with a 53% reduction in Under-5 MR to 69 per 1,00 live births from 148 per 1000 live births Concerns: While MDGs are on track, Tenth Plan Targets would be highly challenging

25 GOAL 5: IMPROVE MATERNAL HEALTH  On Track with a 64% reduction in MMR to 200 per 100,000 live births from 560 per 100,000 live births Concerns: Data issues: MMR still high and linked to low birth attendance (65%)

26 GOAL 6: COMBAT HIV/AIDS, MALARIA AND OTHER DISEASES  Successful rollback of Malaria and TB incidence  HIV/AIDS prevalence low but high risk factors and rising infection trends

27 Goal 7: Ensure Environmental Sustainability  High forest cover at 70.46% with protected area at 51.3%  On track for CO2 emissions – negative emissions  Pledge to maintain Carbon neutral economy and minimize carbon footprint

28  Access to Improved Sanitation at 96.4%. Early achiever  Access to Improved Drinking Water Source at 96%. Early achiever.

29 Goal 8: A Global Partnership for Development Decent Employment  Youth Unemployment still a major concern with about 9.2% unemployment among youths ICT  Teledensity: Fixed line increased from 2.4 telephones to 3.8 per 100 ppl  Mobile subscribers: Increased from 5.96 mobiles to 56.7 per 100 ppl  Internet: Increased from 0.008 to 13.6 per 100 ppl

30 Resource Challenges Resourcing MDGs and Other Development Activities MDG Needs Assessment and Costing US$ 1.5 Billion required between 2011-2015 Rising recurrent expenditures Recent Mckinsey Study on financing health care in Bhutan reflected that healthcare costs could go up by as much as 70% over next 5 years ODA Inflows will still continue to be vital


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