COUNTRY BACKGROUND - Gross National Happiness Commission

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Manufacturing and Trade II. Review of Past PerformanceII. Review of Past Performance A. Objectives of the 6FYPA. Objectives of the 6FYP 18.26 The main objectives in the manufacturing and trade sector were to: 6 · increase the share of industry GDP through industrial development · improve trade balance and promote internal trade · substitute imports through domestic production · increase exports of manufactured and processed goods to international markets in order to earn hard currency · promote regional balance · generate foreign exchange revenue from tourism while protecting the environment and culture from possible adverse consequences of tourism. B. Achievement of ObjectivesB. Achievement of Objectives Manufacturing sectorManufacturing sector TradeTrade 18.27 The share of manufacturing sector of total GDP remained small, although its contribution to GDP has increased from about 3.2% in 1980 to 7.1% in 1989. The real rate of growth of the manufacturing sector was 15% in the 1980s. 18.28 Foreign trade as a proportion of GDP increased over the period 1982-1988 from 53% in 1982 to 75% in 1988. The ratio of trade with India to GDP increased from 47% in 1982 to 56% in 1988; whilst the share of third country trade rose from 6% in 1980 to 19% in 1988. 18.29 Imports from both India and third countries are mainly manufactured foods and machinery and transport equipment. In terms of third country exports, the food and allied sectors accounts for the largest share, mainly because of the recent increase in the export of fresh fruits (apples and oranges) to Bangladesh. Other important exports to third countries are cardamum (mainly to Singapore), broom handles (mainly to The Netherlands), and philatelic stamps and handicraft goods to various countries. The main exports to India are electric power, crude materials (agro, forestry and mineral) and some wood and mineral products. 18.30 The current account balance with India has improved as a result of the export of electricity and increases in the export of raw materials, including wood and mineral products. The share of export (in the total trade with India) increased from 32% in 1985 to 89% in 1988. The manufacturing trade balance with third countries worsened as a result of the combined increase in the import of capital goods and transport equipment and the slow growth of exports to these countries. The share of manufactured exports in the total trade with third countries increased from 7% in 1985 to 9% in 1988. The proportion of third country exports in GDP was less than 1% in 1988, implying that the export trade has been overwhelmingly with India. Also evident from the above is the fact that there is high dependency of the export sector on Indian market and a consequent need for diversification. 18.31 New trade routes and transit points between India and Bhutan, and Bangladesh and Bhutan were opened in the 6FYP to facilitate increased trade. 18.32 The 6FYP envisaged the establishment of the Dungsum Cement Project in Nanglam at an estimated cost of Nu 848 m or 33.15% of 6FYP allocation for the Department of Trade and Industry. Funds were used for site development and pre-investment studies for the project. However, the Project will only be started in the 7FYP. Industrial Activities in the 6FYPIndustrial Activities in the 6FYP 18.33 Despite the delays in the implementation of the Dungsum Cement Project, which would have made significant difference to the manufacturing growth rate, other enterprises were initiated in the 6FYP in the manufacturing sector stepped up its activities in many other areas. Bhutan Calcium Carbide Limited, Bhutan
Manufacturing and Trade Polythene Pipe Company and Gedu Wood Manufacturing Centre started production during the 6FYP. Private sector and Government investment totalled Nu. 635 m in these three projects during the 6FYP. The Government also established a Furniture-cum-Training Unit in Thimphu at a cost of Nu. 40 m. Thimphu Agro-industry Project costing Nu 70 m will be completed in December 1992. 18.34 Industries were also established by the private sector during the 6FYP. The most significant one are : Yangzom Cement Plant at Bhalujhora, Dralha Flour Mill in Phuntsholing, Lhaki Cement Plant at Gomtu, the Ferro- Silicon Project at Pasakha (production will start in 1992/93), a Furniture Unit at Bhalujhora, Biscuit Manufacturing Unit at Phuntsholing, Marble Mining and Processing at Gida Kom and Integrated Wood Complex at Lobesa. 18.35 Several comprehensive sub-sectoral and project specific feasibility studies pertaining to the manufacturing and trade sector were carried out. Project specific studies were conducted for 12 medium and large scale projects in addition to assistance provided to private sector entrepreneurs in financing 17 project studies in cottage and small scale industries. Tourism performance in the 6FYPTourism performance in the 6FYP 18.36 The number of tourist arrivals had stagnated since 1987. However, the Bhutan Tourism Corporation has been able to maintain the revenue earnings at a steady level because of the increase in night halts in Bhutan. The flow of tourist is not expected to increase unless the necessary infrastructure is expanded and improved, and a vigorous marketing and publicity is undertaken. III. Objectives and Strategy for the 7FYPIII. Objectives and Strategy for the 7FYP 18.37 The objectives in the manufacturing and trade sector relates to the national objectives of · sustainability and self-reliance particularly internal resource mobilization. · efficiency · development of human resources including women · privatisation and private sector development · promote regional balance A. Objectives for the 7FYPA. Objectives for the 7FYP 18.38 The objectives in the 7FYP for the manufacturing and trading sector are to: · increase in revenue generation · increase the share of the manufacturing sector in GDP from 7% in 1989 to 13% by 1997 (at an average growth rate of 13.4% per year) · increase the output of retail and wholesale trade, hotels and restaurant in GDP from Nu 268.8 m in 1989 Nu 325 m in 1997 (average annual growth rate of not less than 2.4%) · improve the trade balance by increasing exports both to India and third countries · substitute imports through domestic manufacturing · increase foreign currency earning through tourism B. Strategies for Achieving ObjectivesB. Strategies for Achieving Objectives Reliance on market-based mechanismsReliance on market-based mechanisms 18.39 To achieve greater economic efficiency in the manufacturing and trading sector, a greater role will be given to market mechanisms. This will be accomplished through the further privatisation of public enterprises and contracting out of many of the departmental activities to the private sector, as discussed in Chapter 6 on Privatization and Public Enterprise Management. 18.40 The procedures of obtaining licenses to establish manufacturing and trading activities will be relaxed and simplified. Public awareness of the rules and regulations on licensing will be increased. Price control on goods and wage control will be avoided as much as possible, so that prices and wages reflect their economic values. Replacement of quantitative restrictions by tariffsReplacement of quantitative restrictions by tariffs 7
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COUNTRY BACKGROUND I. Physical Char
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COUNTRY BACKGROUND Minerals The exa
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COUNTRY BACKGROUND Bhutan is the le
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COUNTRY BACKGROUND personnel polici
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CHAPTER 2 ECONOMIC PERFORMANCEECONO
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2: Gross Domestic Product 1980 —
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Figure 2.2 Economic Performance IV.
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Table 2.4 Government Expenditures 1
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Table 2.5 Summary of RGOB Budgetary
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Figure 2.5 Economic Performance 2.2
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Economic Performance of Infant Mort
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Approach to Development · sustaina
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Approach to Development 3.19 The fo
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Environment and Sustainable Develop
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Environment and Sustainable Develop
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Women's Involvement in Development
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CHAPTER 6 PRIVATISATION AND PUBLIC
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unacceptably high inequalities of i
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CHAPTER 7 ECONOMIC OUTLOOKECONOMIC
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Economic Outlook 7.9 This section e
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Table 7.2 Seventh Plan Outlay and S
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Figure 7.2 Figure 7.3 Capital Expen
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Economic Outlook economic sector wi
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Economic Outlook recurrent expendit
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Financing GapFinancing Gap Table 7.
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Fiscal and Monetary Policy Table 8.
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Fiscal and Monetary Policy Strategy
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Fiscal and Monetary Policy Table 8.
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Fiscal and Monetary Policy TABLE 8.
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I. IntroductionI. Introduction CHAP
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Aid Policy 9.9 Sectoral Allocation
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Aid Policy 9.20 Sector Ministries,
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Aid Policy Aid and the Private Sect
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Culture and Religion Dratshangs and
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Culture and Religion and documented
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Culture and Religion V. Financial a
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Education Table 11.1 Educational In
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Education Higher EducationHigher Ed
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Education 11.24 In 1986, the enrolm
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Education Table 11.3 Enrolment Targ
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Education particularly of the natio
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Education writing and numeracy and
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CHAPTER 12 Human Resource Developme
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of Bhutan + Corporation Planning Co
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Joint and Public Sector IndustriesJ
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Table 12.5 Sectoral Training Funded
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Human Resource Development IV. Manp
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CHAPTER 13 HEALTH SERVICESHEALTH SE
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Table 13.2 Health Institutions July
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A. Objectives and Strategies in the
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Table 13.5 Goals for Children and W
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Health Services IV. Health Sector P
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Mother and Child Health (MCH)Mother
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TOTALS FOR Health 1992/93 1993/94 1
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Human Settlements Chhukha. Certifie
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Page 175 and 176: CHAPTER 20 ENERGY SECTORENERGY SECT
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COUNTRY BACKGROUND - Gross National Happiness Commission

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