Bhutan is a small landlocked country nestled in the Himalayas in between two giants India and China. It has recently undergone a huge political change with the absolute monarchy paving way to a constitutional democracy in 2008. While the transition from monarchy to democracy was smooth, Bhutan still faces several serious economic and social issues. It has a very small population and even fewer resources of economic progress. Being an underdeveloped country is harsh, there are not many growth prospects and stiffer competition from large economies also pose big threats.
Bhutan has been trying to gain membership to the WTO, which will bring some unprecedented changes in its economy and trade. Most of Bhutan’s trade is with India and as its largest developmental partner; India has financed many projects in Bhutan. But for once, Bhutan is willing to break free of its shackles and enter the global market through accession to the WTO.
India would continue to be the largest developmental partner and a friend of Bhutan, but for a country whose developmental plans are almost entirely financed by the foreign grants and loans, this step would be monumental in determining its future. There are questions that arise though; What will be the benefits from joining the WTO? What are the disadvantages of such a huge step? Is the government ready to join the WTO or are there any apprehensions? Will there be any affect on the fantastic relation we have shared with India? Questions such as these come to every country, large or small, when trying to enter such a technical and complex environment as the WTO.
Then, there is an option of Foreign Direct Investment. This is an area where the government would want to tread very carefully. Not many developmental prospects are available in the country and the businesses within are quite young and venerable. Bringing competition through FDI’s might just prove detrimental to the whole local economy. It would also be of interest to the government to assess areas where the introduction of the FDI would not be a challenge to the local businesses. It should also consider the possibility of ecological threats for a country that has worked so hard to become an exotic tourist hotspot.
Whatever decisions the government takes it would still have to heed the noble concept of Gross National Happiness (GNH), which has been the guiding philosophy for developmental activities in the past. It is a development concept that includes economic, social, philosophical and human growth, towards becoming a happier society. Bhutan taught the concept to the world and it would want to show examples of how the GNH can really be achieved. However, considering that Bhutan yet to become a full member of WTO and freely invite FDI into the country, it might as well continue with the fantastic social and economic relations it has with its development partners.