Within the South Asia region, where about a third of the world’s poor live, Bhutan has had astonishing success in reducing poverty and boosting shared prosperity. Following the development philosophy of Gross National Happiness, Bhutan has increased its GDP per capita to US$3,398 in 2018, exceeding South Asia’s average of US$1,905 in the same year.¹
GDP per capita (current US$)
Bhutan’s economic growth has been driven by its public sector through hydropower development, with hydropower contributing as much as 30% of the GDP.² In comparison, Bhutan’s private sector is weak given its mountainous terrain, small domestic market, sparse population, high transportation costs, skill shortages, and other factors.³
Bhutan has invested in infrastructure, education, and health to tackle youth employment, which stood at 12.3% in 2017.²
To consider future evidence-based policies to diversify the economy and develop the private sector, collection of high-quality data about the country’s economy is critical. Although, Bhutan’s statistical capacity had a low score of 60 in 2018, while its South Asian neighbors averaged 76.⁴
Statistical Capacity score (Overall average)
For Bhutan’s National Statistics Bureau (NSB), enhancing the quality and timeliness of statistics is an important initiative to support the data needs for the country’s Twelfth Five-Year Plan. Among other components, conducting the Economic Census is a key activity included in this effort.⁵
An Economic Census is a complete enumeration of the economic establishments operating in a country.
On the road to stronger statistical capacity
From developing Bhutan’s first National Strategy for the Development of Statistics (NSDS) in 2009 to conducting the country’s first Economic Census in 2019 — the Trust Fund for Statistical Capacity Building (TFSCB) has been working with the NSB for over a decade to lay the foundations for stronger statistics and poverty analysis in Bhutan.⁶
Milestones from TFSCB’s work to strengthen Bhutan’s statistical capacity
For Bhutan’s inaugural Economic Census, TFSCB supported the NSB not just with funding of US$320,000, it also provided focused technical assistance.⁷ To help develop capacity, TFSCB supported stakeholder workshops with 25 departments and agencies, provided a two-week training for the enumerators, and helped conduct a working retreat for NSB officials on data cleaning and report writing. TFSCB’s operational flexibility also helped manage delays due to the Population Census in 2017 and the parliamentary elections in 2018.⁸
The data collection for the Economic Census was carried out during December 2018 to February 2019 by 80 enumerators supervised by the NSB and district-level officers. The young enumerators crisscrossed the country and reached even the remotest locations to collect data, some at a four-day walk from the nearest accessible road.⁹
The Economic Census of Bhutan (2018–2019) enumerated a total of 13,997 economic establishments.¹⁰
Learning from the inaugural Economic Census
Launched in July 2019, the Economic Census of Bhutan (2018–2019) provides statistics about the non-household-based economic activities carried out within Bhutan. Household-based businesses (such as operation of taxis and handicraft activities), household-based subsistence farming, religious institutions, general government offices, and defense services were not covered in the census.
The Economic Census Report includes rich details about the geographic distribution, economic sectors, employment size, business environment, and other characteristics of economic establishments across the country. Its results show, in many aspects, a skewed picture.¹⁰ Here are some examples:
1. Economic establishments are concentrated in urban areas
Out of the 20 administrative districts in Bhutan — called dzongkhags — just four dzongkhags have over 52% of all economic establishments: Thimphu (24.9 %), Chhukha (13.6%), Sarpang (8.1 %), and Paro (6.2 %). Highlighting the impacts of urbanization, Bhutan’s two major urban centers, Thimphu and Phuentshogling, account for over 4,300 establishments — which is about 30% of all economic establishments.
Establishments by administrative districts (dzongkhags), 2017
1 in every 5 economic establishments in Bhutan is located in the urban areas of Thimphu
2. A majority of establishments are in wholesale and retail trade
In Bhutan, ‘Manufacturing’ represents only 5.1% of all economic establishments. The economy is instead dominated by two sectors: ‘Wholesale and retail trade, repair of motor vehicles and motorcycles’ with 62.5% establishments, and ‘Accommodation and food service activities’ with 21% establishments. About 2.5% of establishments in ‘Agriculture, forestry, and fishing’ sector are concentrated in Bhutan’s southern region.
Establishments by main economic sector, 2017
3 of every 5 economic establishments in Bhutan are into wholesale and retail trade
3. Women own more establishments than men
From the 12,958 owners of single proprietorship and partnership establishments in Bhutan — about 7,200 (or 56%) are women. However, 2 in 5 of these women owners had no education at all, compared to about 1 in 5 men owners. The over representation of women owners in small-scale establishments — especially in retail trade — that require little education is part of the explanation for this unequal educational gender distribution.
Owners of single proprietorship and partnership establishments, by educational attainment, 2017
For single proprietorship and partnership establishments in Bhutan, there are 26% more women owners in than men.
4. A small number of establishments employ a majority of workers
Out of the 13,977 establishments in Bhutan, just 79 establishments employ over 100 people — moreover, these 79 provide 50% of the total employment. Gender distribution of employees is also related to employment size. In single-person establishments, 3 in 4 employees are women. Whereas only 1 in 4 employees are women in establishments with over 100 employees.
Persons employed, by employment size of establishment, 2017
Just 0.6% of economic establishments in Bhutan employ half of the 74,000 working people
5. Access to finance and rent are critical business challenges
For about 35% of economic establishments in Bhutan, the most common business obstacles are difficulties with access to finance, rent payment, competition from the informal sector, and electricity supply. The first three of these are not only the most frequently experienced but also the problems considered most severe.
Obstacles reported as actually affecting operations, 2017 (percentage)
2 of every 5 establishments in Bhutan face difficulties with access to finance and in paying rent
From stronger statistics to evidence-based policy
Through the inaugural Economic Census, Bhutan for the first time has access to high-quality data about its population of economic establishments and the sectors which form its economy.
Bhutan’s NSB not only developed its capacity through this exercise, it also has several immediate uses for the Economic Census data:
- Developing a new benchmark estimate of Bhutan’s GDP, which reflects the current structure of the economy
- Reforming the National Accounts using data points from the Economic Census
- Rebasing the constant price estimates, which currently have year 2000 as the base
- Validating the centralized business register, which offers a sampling framework for future Economic Surveys
“It is our sincere hope that the information published in the report will be useful for policy makers, planners, researchers, entrepreneurs, and development partners.” — Chhime Tshering, Director, National Statistics Bureau, Bhutan⁹
In addition, the Royal Government of Bhutan has requested the World Bank to jointly study the results of the Economic Census for evidence-based policy formulation that supports the private sector and creates an enabling business environment in Bhutan.
With the experiences and lessons learnt with TFSCB’s support — the next rounds of Economic Census, expected every 10 years, would enable the government to observe the changing pattern and structure of the Bhutanese economy in its pursuit for happiness.
- GDP per capita (Current US$), World Bank national accounts data, and OECD National Accounts data files.
- Twelfth Five Year Plan (2018–2023), Gross National Happiness Commission, Royal Government of Bhutan
- Bhutan Development Report (January 2019), World Bank
- Statistical Capacity score (Overall average), World Bank, Bulletin Board on Statistical Capacity
- 12th Five Year Plan: National Statistics Bureau, Royal Government of Bhutan
- Bhutan’s Data Ecosystem Mapping, National Statistical Bureau and Gross National Happiness Commission, Royal Government of Bhutan
- Project Paper (January 30, 2017), Bhutan BLSS Economic Census Project, World Bank
- Implementation Status & Results Report (July 9, 2019), Bhutan BLSS Economic Census Project, World Bank
- Bhutan launches its first economic census, Tenzin Lhaden, World Bank
- Economic Census of Bhutan (2018–2019), National Statistical Bureau, Royal Government of Bhutan