Module Code and Title:        DEV202 Bhutanese Economy

Programme:                           BA in Development Economics

Credit Value:                          12

Module Tutor:                        Sanjeev Mehta

General objective: This module aims to provide an overview of the overall development philosophy, pattern of economic growth, and broader macroeconomic condition of the Bhutanese economy since 1961. The module will enable students to critically evaluate the macroeconomic policy framework, sector-specific development polices, and achievements during planned economic development in Bhutan. 

Learning outcomes – On completion of the module, students will be able to: 

1. Examine Bhutan’s development policy framework and strategy. 
2. Analyse the changing pattern of financing of the development plans in Bhutan. 
3. Examine major demographic trends for their influence of economic growth 
4. Evaluate the methodological issues in poverty estimation. 
5. Analyse the impacts of the patterns of international trade. 
6. Examine the regulatory and policy framework governing the Bhutanese economy. 
7. Review the sectoral performance and related policies. 
8. Describe the role of social and physical infrastructure. 
9. Assess major opportunities and challenges for development in Bhutan

Learning and Teaching Approach: 

Assessment Approach: 

Students will take 2 Class tests (worth 5 marks each) of 30 minutes duration, covering units I and II before the midterm, and units VI and VII after midterm. 

Students will be divided into groups of 4-6 to debate on varied themes covering current issues from units III, IV, and V. Each group is expected to turn in a short-written report (200-300 words) detailing their research preparation (individual write ups should be attached as appendix) for the debate a week before their debate is scheduled. 

Marks on the report 

2    Adequate coverage of the report on debate preparation (Group mark) 

2    Organization and clarity of the report (Group mark) 

Marks on the debate

3    Quality of arguments (Including examples provided; Individual mark)

2    Rebuttal (Group mark)

1    Presentation Style (Individual mark) 

Each student will analyse an existing economic policy (1000-1200 words). 

1    Introduction 

3    Problem statement 

5    Identify the strategies for the policy

4    Recommendations

1    Language and grammar

1    References and style

Each student will write an essay on any relevant topic from units VIII, IX and X. Each essay should have a limit of 1000-1200 words. 

1    Logical flow of thoughts

5    Ability to comprehend relevant issues in the debate 

2    Evidence based arguments

1    Language skills

1    Subtleness of conclusion

Students will take a written exam of 1.5-hr duration covering topics up to the mid-point of the semester. The exam will comprise structured questions like MCQ, fill-in-the-blanks, matching, definition, as well as open-ended essay questions.

Students will take a written exam of 2.5-hr duration encompassing all the subject matter covered in the semester. This assessment is comprehensive and summative in nature, and will comprise structured questions like MCQ, fill-in-the-blanks, matching, definition, as well as open-ended essay questions.

Overview of assessment approaches and marks

Pre-requisites: None

Subject matter: 

1. Unit I: Planned development 
   1. Overview of the Bhutanese economy, comparison of the Bhutanese economy before and after 2008, conceptual underpinning of GNH
   2. Operationalizing GNH 
   3. Review of the five-year plans, with major focus on the current five-year plan 
2. Unit II: Financing of plans 
   1. Changes in the pattern of financing of the five-year plans 
   2. Role of internal and external resources 
   3. Rates and composition of saving and investment 
   4. Role of international aid and assistance 
3. Unit III: Demographic changes 
   1. Major demographic trends, review of draft population policy 2016
   2. Major issues and progress pertaining to quality of life of the population: health, education and malnutrition; rural urban migration 
4. Unit IV: Poverty, inequality and unemployment 
   1. Measurement of poverty: income and multi-dimensional poverty 
   2. Trends in inequality, poverty and unemployment in Bhutan 
   3. Poverty alleviation and employment generation strategy 
   4. Vulnerability and social protection practices 
   5. Emerging role of civil society in addressing poverty and employment generation 
5. Unit V: International Trade 
   1. Composition and direction of international trade 
   2. Balance of trade and balance of payment- intertemporal analysis, impact assessment
   3. Trade challenges and issues 
   4. External debt- size, growth and composition, sustainability 
   5. FDI policy 2008, 2019, analysis of FDI inflows to Bhutan
6. Unit VI: Agriculture 
   1. Agricultural growth and productivity since 1991, cropping pattern, yield gaps in major food crops, changes in the structure of agriculture sector 
   2. Agricultural finance and capital formation: pattern of public investment, share in bank loans, and MFIs
   3. Infrastructure: RNR centres, rural electrification, irrigation, farm roads
   4. Agricultural marketing- role of FCB, middleman, cooperatives 
7. Unit VII: Industry 
   1. Review of industrial policy framework- EDP 2008, 2016, 2019 
   2. Problems and prospects of industrialization- spatial distribution, industrial health and supply chains. 
   3. Industrial estate: Importance and impact, scope for SEZs
   4. Roles of public and private sector, Public Private Partnership 
   5. Cottage and small-scale industry- CSMI policy, growth of CSMI sector, and challenges 
8. Unit VIII: Social and physical Infrastructure
   1. Health and education: infrastructure, budget and institutions
   2. Roads and Transportation 
   3. Energy Sector: Role of hydroelectric sector, scope of alternative sources 
9. Unit IX: Key Services
   1.  Tourism: Tourism policy, contribution to the economy 
   2.  Telecommunication and ICT: Growth, market structure, and digitalisation of the economy 
10. Unit X: Way Forward 
    1. Major opportunities for development 
    2. Major challenges for development
    3. Economic roadmap for the 21^st century 

Reading List: 

Essential Reading 

IMF (2019). Bhutan: Country Report. 

Mehta, S. (2022). The Dragon Economy: An Experiment with Happiness. Kuensel Corp. Ltd. Thimphu. 

Mehta, S. (2009). Nature and Structure of Bhutanese Economy. Thimphu: KMT Press. 

RGoB. Mid-Term Review of 11^th or 12^th Five-Year Plan. GNHC. 

UNICEF (2018). Bhutan Common Country Programme Document 2019-2023.

Additional Reading 

RGoB. Five Year Plan documents. GHNC. 

RGoB (1999); Bhutan 2020: vision for peace prosperity and happiness. Ministry of Planning. 

RGoB (Latest). Annual Report. Royal Monetary Authority. 

RGoB (Latest). Poverty Analysis Report. National Statistical Bureau. 

RGoB (2000). National Account Statistics 1980-2000. CSO, Planning Commission 

RGoB (2001). Household Income and Expenditure Survey 2000(Pilot): Report on Income and Expenditure, Poverty Measurement, and Socioeconomic Profile of the Households. CSO, Planning Commission, Thimphu. 

RGoB (2010). Bhutan Population and Development Situation Analysis. GNHC. 

RGoB (2018). Draft National Population Policy. GNHC. 

RGoB (2013). Draft Social Protection Policy for Workers in Bhutan. MoLHR.

RGoB (2016). Draft Population Policy of Bhutan.

RGoB (2014). Technical Evaluation Report: Rural Economy Advancement Programme Phase 1. GNHC. 

World Bank (1996). Bhutan country economic memorandum, report no. 16113- BHU.

GNHC (2011). Turning Vision into Reality: The Development Challenges Confronting Bhutan.

Ura, K., Alkaire, S., Zangmo, T., Wangdi, K. (2012). A Short Guide to Gross National Happiness Index. CBS. 

Date: June 2022