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Comprehensive Country Overview

Explore the geography, history, and socio-economic factors shaping Bhutan

Country description

Bhutan is a landlocked nation nestled in the eastern Himalayas, bordered by China to the north and India to the south, east, and west. The country spans approximately 38,394 square kilometers and is known for its rugged and mountainous terrain. The topography ranges from subtropical plains and foothills in the south to the snow-capped peaks of the Great Himalayas in the north. Bhutan's diverse climate zones and vast elevation variance support an incredible biodiversity and rich ecosystems, making it one of the world's ten biodiversity hotspots.

Historically, human settlements in Bhutan date back to as early as 2000 BCE. Buddhism arrived around the 7th century CE, and Tibetan influence permeated the development of Bhutanese history and culture. In the 1600s, Shabdrung Ngawang Namgyal unified Bhutan and instituted a dual system of governance known as the "Chhoesi". Conflicts with British India led to wars, culminating in the Treaty of Punakha (1910) in which Bhutan maintained internal sovereignty while ceding control of foreign relations to Britain. In 1907, Ugyen Wangchuck was established as the first hereditary king, founding the Wangchuck Dynasty which still rules Bhutan.

Bhutan is internationally recognized for its development philosophy of Gross National Happiness (GNH). This holistic approach prioritizes sustainable development, environmental conservation, cultural preservation, and good governance over traditional economic metrics alone. Bhutan's economy is heavily reliant on hydropower, generating substantial revenue from electricity export to India. Agriculture, forestry, and tourism also play crucial roles. Bhutan has made significant strides in poverty reduction in recent decades.

Bhutan possesses a rich and unique cultural heritage deeply intertwined with Tibetan Buddhism – the state religion. Traditional dress, arts, dance forms, and architecture are highly valued. The majority of Bhutan's population falls within several main ethnic groups, including the Sharchops, Ngalops, and Lhotshampas, living primarily in rural areas. Bhutan has made impressive progress in education, raising literacy rates and expanding access. The government prioritizes providing free basic education and healthcare to its citizens.

Workforce description

Bhutan's workforce is predominantly youthful, with around 68% of the total population falling within the working-age bracket (15 years and above), according to the 2020 Labour Force Survey Report by the National Statistics Bureau of Bhutan. A significant majority of the economically active population, approximately 68%, resides in rural areas. However, there is a noticeable gender disparity in workforce participation, with the Labour Force Participation Rate (LFPR) being higher for males (72.5%) than females (63.5%).

In terms of skill levels, Bhutan has made considerable progress in education, but challenges persist. While primary education enrollment is high, secondary and tertiary education levels could be improved. This situation impacts the overall skill level of the workforce. There is also a mismatch between the skills possessed by the workforce and those demanded by the labor market. To bridge this skills gap and prepare the workforce for evolving economic needs, the government prioritizes technical and vocational education and training (TVET).

Regarding sectoral distribution, agriculture remains the largest employer in Bhutan, absorbing 53.4% of the employed population in 2020, although its share is gradually declining. The industry and services sectors are on the rise, indicating potential for increased employment opportunities.

Cultural norms impacting employment

In Bhutan, the unique focus on Gross National Happiness (GNH) emphasizes well-being and contentment over pure economic growth. This translates to a work culture that avoids excessive overtime and respects employees' time for family, community, and personal development. Family and community bonds are deeply valued in Bhutanese culture. Employment practices may allow flexibility for employees to attend to important family events or community responsibilities. Buddhist principles influence Bhutan's work approach, with an emphasis on mindfulness and the interconnectedness of all things. This may encourage employers to provide opportunities for meditation or reflection during workdays.

Communication Styles

Bhutanese culture values politeness and harmony. Communication tends to be indirect to avoid confrontation or causing someone to lose face. Employees may express opinions or disagreement subtly. Hierarchy is respected in Bhutan. Communication with superiors is often marked by formality and deference, particularly in traditional workplaces. Body language and gestures often hold more meaning than just spoken words. A smile, for instance, could convey agreement or hide discomfort.

Organizational Hierarchies

Decision-making often involves consultation and consensus-building. Senior members of a team are respected for their experience and wisdom, and their input holds significant weight. Bhutanese culture emphasizes the collective good over individual goals. Teamwork and collaboration are highly valued in the workplace, with success attributed to group efforts rather than individual achievement. In some organizations, a sense of paternalism might exist where leaders take a more protective, guiding role towards employees, mirroring aspects of family dynamics.

It is crucial to remember that Bhutan is modernizing, and employment practices are evolving. These cultural norms provide a framework, but workplaces, particularly in urban centers, might blend modern practices with traditional values.

Key industries and employment sectors

Agriculture continues to be a vital part of Bhutan's economy, despite a declining trend. It provides livelihood for approximately 56% of its population. The primary agricultural activities include:


Bhutan has capitalized on its mountainous terrain and river systems to become a significant hydropower generator. Hydropower is its most crucial export, primarily to India. According to the Asian Development Bank, the hydropower sector generates about 44% of Bhutan's government revenue.


Bhutan's unique "High Value, Low Volume" tourism policy, aimed at sustainable development, has made it a desirable destination. The tourism industry significantly contributes to the Gross National Happiness philosophy. The sector accounts for a significant portion of foreign exchange earnings and employment.

Cottage and Small Industries (CSI)

The CSI sector plays a crucial role in Bhutan's economy, promoting traditional crafts, skills, and income generation. The production of handwoven textiles is an important source of livelihoods, especially for women. Products like wooden crafts, paper crafts, and more contribute to export revenue.

Emerging Sectors

Information and Communications Technology (ICT)

Bhutan is striving to develop a knowledge-based economy, and advancements in ICT are gaining importance. Investments in technology parks and infrastructure support this growth.

Renewable Energy

Beyond hydropower, Bhutan has the potential to leverage solar and wind energy for a greener energy mix that can both meet domestic needs and support exports.

Green and Sustainable Industries

With its focus on Gross National Happiness and environmental preservation, Bhutan can promote eco-friendly manufacturing, organic agriculture, and sustainable ventures.

Significant Employment Sectors

While agriculture employs a majority of Bhutan's workforce, these sectors offer substantial employment opportunities:


Driven by infrastructure development, hydropower projects, and urban growth, the construction industry is a major employer.

Public Service

The government remains a significant employer in the Bhutanese economy.

Services Sector

Hotels, restaurants, and industries supporting the tourism sector create employment.

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