Background Of Bhutanese Public And Private Sector Economics Essay

Background Of Bhutanese Public And Private Sector Economics Essay Introduction. The Bhutanese economy is considerably underdeveloped. The mountainous terrain and the rugged topography makes development activities complex. With an estimated population of 684,000 (2010), the country lacks work force and professionals in different departments. The country experienced an average GDP growth rate at 9% in the 10th FYP. The livelihood of the majority of the population of Bhutan still depends on agriculture and its allied group. The government has and will continue to play a lead role as Bhutanese economy undergoes major structural reform. Public sectors form the part of the companies and corporations that are owned by the government. The private sector includes all profit businesses that are not owned or operated by the government. The private sector in Bhutan is hampered by the size of the market, lack of infrastructure and financial instability which is why the public sector plays a dominant role for major economic operations. The operation of the Bhut anese economy is divided into three sectors namely primary sector, secondary sector and tertiary sector. Initially public sector was held responsible for the operation of all the three sectors but with the advent of modern Bhutanese economy, private sector plays a significant role in enhancing production and profitability. This paper briefs on the background of the public and private sectors in Bhutan, their contribution towards GDP, employment and social welfare. With the process of modernization, privatization is given more attention and government aims to strengthen the privatization strategy to generate more revenue, employment opportunities and expand the country’s economic operations. Background of Public and private sector. Public Sector. Public sector in Bhutan is the part of the economy controlled by the nation and is concerned with providing basic government services. Akin to majority of the developing countries, public sector in Bhutan includes education, health ca re, police, military, public roads, communication, etc. The public sector can be defined as: â€Å"The public sector is that portion of society controlled by national, state or provincial, and local governments†. (Investors word.com 2011) The Bhutanese economy is based on the unique development philosophy of Gross National Happiness initiated by the Forth King Jigme Singye Wangchuck. The Royal Government has played a leading role in the modern sector of Bhutan’s economy. The government has direct involvement in every developmental activity due to the shortage of local entrepreneurs and capital from the private entities in the country. The public sector overlaps with the private sector in producing or providing certain goods and services. In Bhutan almost every large organizations are under the ministries of the Royal Government. For instance: Ministry of Health, Education, Trade and Industry, Communications etcà ¢Ã¢â€š ¬Ã‚ ¦ are all public owned. Since the first Five Year Plan in 1961, the government has addressed the need for basic education other than monastic education. Education programmes were given boost in 1990 when the Asian Development Bank granted a US$7.13 million loan. Bhutan’s modern health care development accelerated with the establishment of the Department of Public Health in the 1960’s and the opening of new hospitals and dispensaries throughout the country. Even today, Ministry of health is fully under public sector. Likewise, Agriculture sector, communications, major industries like Penden cement authority, Chhukha Hydro power corporations, Bhutan tourism Industry, Druk Air etcà ¢Ã¢â€š ¬Ã‚ ¦which forms the highest revenue in the country till date the public are under the public sector.