Five-Year Plans of Bhutan
Encyclopedia
The Five Year Plans of Bhutan are a series of national economic development
plans created by the government of Bhutan
since 1961.
The government of Bhutan has played a pervasive role in its economy and development. Since 1961 the economy has been guided through development plans, which the Development Secretariat and later the Planning Commission directed, subject to the National Assembly
's approval. In the World Bank
's 1989 appraisal, "Coming late to the development scene, Bhutan was eager to avoid mistakes committed elsewhere. Although strongly dependent on foreign aid, it was determined to follow its own set of priorities, keep public finance
on an even keel, build up a well trained but lean bureaucracy
, and prevent environmental damage from overexploitation of the forests or uncontrolled growth of tourism." To help avoid further mistakes, the government used traditional social institutions and involved people at the local level in planning and implementation for their own district
, subdistrict
, or village. "As a result of these factors," said the World Bank, "development in Bhutan has been remarkably free from seeing economic, social, or cultural disruption."
fully funded the First Development Plan (1961–66). The first plan, for which Nu
107.2 million was allocated, and the Second Development Plan (1966–71), for which Nu202.2 million was allocated, focused primarily on developing modern budgeting techniques. According to some foreign observers, the first two plans failed to set priorities and achieve economic-sector integration as might be expected of genuine development planning. The major economic-planning emphasis was on public works, primarily roads
; forestry
; health care
; and education
.
To make planning more effective, the Planning Commission was established to formulate the Third Development Plan (1971–76), and the Druk Gyalpo served as its chairman until 1991. Under the third plan, public works, still primarily roads
, continued to take a significant share of the Nu
475.2 million development budget (17.8 percent) but had decreased from its 58.7 percent share in the first plan and its 34.9 percent share in the second plan. Education gradually increased (from 8.8 to 18.9 percent) in the first three plans. The second and third plans were paid for primarily by India
, although about 3 percent of total funding became available through the United Nations
, starting with the Third Plan. Despite amounts budgeted for planned development, there were additional capital expenditures outside the formal development plan, including public works (mostly road construction) and hydroelectric plants.
One of the major achievements of the Fourth Development Plan (1976–81) was the establishment of district
(or dzongkhag
) planning committees to stimulate greater local involvement, awareness of government development policies, and local development proposals. The committees, however, had no decision-making powers. Nevertheless, agricultural and animal husbandry
came to the fore, taking 29 percent of the Nu
1.106 billion allocated for the fourth plan. It was during the fourth plan that Bhutan made its first effort to establish the value of the GDP, which in 1977 amounted to Nu1.0 billion. In that year, GDP was distributed among agricultural and related activities, 63.2 percent; services, 13.1 percent; government administration, 10.4 percent; rental income, 8.1 percent; and manufacturing and mining, 5.2 percent. Per capita GDP was estimated at US$105.
The Fifth Development Plan (1981–87) sought the expansion of farmland to increase the production of staple crops, such as rice
, corn
, wheat
, barley
, buckwheat
, and millet
. The plan also emphasized improvements in livestock, soil fertility, plant protection, and farm mechanization. Its total planned allocation was Nu
4.3 billion, but the actual outlay came to Nu4.7 billion. Financing the planning process grew increasingly complex, as indicated by the fifth plan's multilateral funding sources. However, domestic revenue sources for development planning had increased significantly, and the fifth plan included development projects that would further decrease dependence on external assistance. Such concepts as self-reliance in each district, decentralization
of the development administration, greater public input in decision making, better control of maintenance expenditures, and more efficient and effective use of internal resources became increasingly important.
The Sixth Development Plan (1987–92) focused on industry, mining, trade, and commerce (13.3 percent) and power generation projects (13.1 percent), with education's allocation decreasing slightly to 8.1 percent from 11.2 percent during the fifth plan. At Nu
9.5 billion, the sixth plan was considerably more expensive than its predecessor. It included programs that, if successfully implemented, would mean far-reaching reforms. The goals included strengthening government administration, promoting the national identity, mobilizing internal resources, enhancing rural incomes, improving rural housing and resettlement, consolidating and improving services, developing human resources, promoting public involvement in development plans and strategies, and promoting national self-reliance. Perhaps the key ingredient, self-reliance, promised to provide for more popular participation in the development process and to result in improved rural conditions and services as well as better government administration and human resource development. With greater self-reliance, it was hoped that Bhutan would begin exploiting markets in neighboring countries with manufacturing, mining, and hydroelectric projects in the 1990s. Faced with rising costs, Bhutan postponed some projects requiring large inputs of capital until the Seventh Development Plan (1992–96).
No major changes were expected in overall sectoral development in the seventh plan. Preliminary planning indicated emphasis on "consolidation and rehabilitation" of developments achieved under previous plans, more attention to environmental concerns, and enhancement of women
's roles in economic and social development.
From their inception, the development plans have been aimed at energizing the rest of the economy and promoting economic self-reliance. Windfall revenues from export receipts normally were used to reduce foreign debt and dependence on foreign aid. Planners also sought to involve the immediate beneficiaries of economic development. Representatives in the National Assembly
and district
officials were encouraged to become involved in projects, such as roads and bridges, schools, health care facilities, and irrigation works, in their district. Some costs for the projects were borne through self-help, such as households providing labor. Government planners also have endeavored to increase rural income through initiatives in the farming sector, such as stock-breeding programs, promotion of cash crops, and advanced agro-technology. Central government efforts also were aimed at increasing the quality of life by providing electrification, modern water and sanitation systems, better cooking equipment, and insulation for houses.
Economic development
Economic development generally refers to the sustained, concerted actions of policymakers and communities that promote the standard of living and economic health of a specific area...
plans created by the government of Bhutan
Bhutan
Bhutan , officially the Kingdom of Bhutan, is a landlocked state in South Asia, located at the eastern end of the Himalayas and bordered to the south, east and west by the Republic of India and to the north by the People's Republic of China...
since 1961.
The government of Bhutan has played a pervasive role in its economy and development. Since 1961 the economy has been guided through development plans, which the Development Secretariat and later the Planning Commission directed, subject to the National Assembly
National Assembly of Bhutan
The National Assembly is the elected lower house of Bhutan's new bicameral Parliament which also comprises the Druk Gyalpo and the National Council. It is the more powerful house.- Current National Assembly :...
's approval. In the World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
's 1989 appraisal, "Coming late to the development scene, Bhutan was eager to avoid mistakes committed elsewhere. Although strongly dependent on foreign aid, it was determined to follow its own set of priorities, keep public finance
Public finance
Public finance is the revenue and expenditure of public authoritiesThe purview of public finance is considered to be threefold: governmental effects on efficient allocation of resources, distribution of income, and macroeconomic stabilization.-Overview:The proper role of government provides a...
on an even keel, build up a well trained but lean bureaucracy
Bureaucracy
A bureaucracy is an organization of non-elected officials of a governmental or organization who implement the rules, laws, and functions of their institution, and are occasionally characterized by officialism and red tape.-Weberian bureaucracy:...
, and prevent environmental damage from overexploitation of the forests or uncontrolled growth of tourism." To help avoid further mistakes, the government used traditional social institutions and involved people at the local level in planning and implementation for their own district
Dzongkhag
A dzongkhag is an administrative and judicial district of Bhutan. The twenty dzongkhags of Bhutan are further divided into 205 gewogs. Some larger dzongkhags have one or more of an intermediate judicial division, known as dungkhags , which themselves comprise two or more gewogs...
, subdistrict
Dungkhag
A dungkhag is a sub-district of a dzongkhag of Bhutan. The head of a dungkhag is a Dungpa...
, or village. "As a result of these factors," said the World Bank, "development in Bhutan has been remarkably free from seeing economic, social, or cultural disruption."
History
IndiaIndia
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
fully funded the First Development Plan (1961–66). The first plan, for which Nu
Bhutanese ngultrum
The ngultrum has been the currency of Bhutan since 1974. It is subdivided into 100 chhertum .-History:In 1974, the ngultrum was introduced, replacing the rupee at par...
107.2 million was allocated, and the Second Development Plan (1966–71), for which Nu202.2 million was allocated, focused primarily on developing modern budgeting techniques. According to some foreign observers, the first two plans failed to set priorities and achieve economic-sector integration as might be expected of genuine development planning. The major economic-planning emphasis was on public works, primarily roads
Transport in Bhutan
Transport in Bhutan comprises approximately of roads and two airports, Yongphulla Airport and Paro Airport, the latter of which serves international flights...
; forestry
Forestry in Bhutan
One of Bhutan's significant natural resources in the late twentieth century was its rich forests and natural vegetation. Bhutan's location in the eastern Himalayas, with its subtropical plains and alpine terrain, gives it more rainfall than its neighbors to the west, a factor greatly facilitating...
; health care
Health in Bhutan
Health in Bhutan is one of the government's highest priorities in its scheme of development and modernization. Health and related issues are overseen by the Ministry of Health, itself represented on the executive Lhengye Zhungtshog by the Minister of Health...
; and education
Education in Bhutan
Western-style education was introduced to Bhutan during the reign of Ugyen Wangchuck . Until the 1950s, the only formal education available to Bhutanese students, except for private schools in Ha and Bumthang, was through Buddhist monasteries...
.
To make planning more effective, the Planning Commission was established to formulate the Third Development Plan (1971–76), and the Druk Gyalpo served as its chairman until 1991. Under the third plan, public works, still primarily roads
Transport in Bhutan
Transport in Bhutan comprises approximately of roads and two airports, Yongphulla Airport and Paro Airport, the latter of which serves international flights...
, continued to take a significant share of the Nu
Bhutanese ngultrum
The ngultrum has been the currency of Bhutan since 1974. It is subdivided into 100 chhertum .-History:In 1974, the ngultrum was introduced, replacing the rupee at par...
475.2 million development budget (17.8 percent) but had decreased from its 58.7 percent share in the first plan and its 34.9 percent share in the second plan. Education gradually increased (from 8.8 to 18.9 percent) in the first three plans. The second and third plans were paid for primarily by India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
, although about 3 percent of total funding became available through the United Nations
United Nations
The United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...
, starting with the Third Plan. Despite amounts budgeted for planned development, there were additional capital expenditures outside the formal development plan, including public works (mostly road construction) and hydroelectric plants.
One of the major achievements of the Fourth Development Plan (1976–81) was the establishment of district
Districts of Bhutan
Bhutan comprises twenty districts .-Districts:-District Statistics:The results of the 2005 census appear below:...
(or dzongkhag
Dzongkhag
A dzongkhag is an administrative and judicial district of Bhutan. The twenty dzongkhags of Bhutan are further divided into 205 gewogs. Some larger dzongkhags have one or more of an intermediate judicial division, known as dungkhags , which themselves comprise two or more gewogs...
) planning committees to stimulate greater local involvement, awareness of government development policies, and local development proposals. The committees, however, had no decision-making powers. Nevertheless, agricultural and animal husbandry
Agriculture in Bhutan
Agriculture in Bhutan has a dominant role in the economy of the country. In 2000, agriculture accounted for 35.9% of GDP of the nation. The share of the agricultural sector in GDP declined from approximately 55% in 1985 to 33% in 2003. Despite this, agriculture remains the primary source of...
came to the fore, taking 29 percent of the Nu
Bhutanese ngultrum
The ngultrum has been the currency of Bhutan since 1974. It is subdivided into 100 chhertum .-History:In 1974, the ngultrum was introduced, replacing the rupee at par...
1.106 billion allocated for the fourth plan. It was during the fourth plan that Bhutan made its first effort to establish the value of the GDP, which in 1977 amounted to Nu1.0 billion. In that year, GDP was distributed among agricultural and related activities, 63.2 percent; services, 13.1 percent; government administration, 10.4 percent; rental income, 8.1 percent; and manufacturing and mining, 5.2 percent. Per capita GDP was estimated at US$105.
The Fifth Development Plan (1981–87) sought the expansion of farmland to increase the production of staple crops, such as rice
Rice
Rice is the seed of the monocot plants Oryza sativa or Oryza glaberrima . As a cereal grain, it is the most important staple food for a large part of the world's human population, especially in East Asia, Southeast Asia, South Asia, the Middle East, and the West Indies...
, corn
Corn
Corn is the name used in the United States, Canada, and Australia for the grain maize.In much of the English-speaking world, the term "corn" is a generic term for cereal crops, such as* Barley* Oats* Wheat* Rye- Places :...
, wheat
Wheat
Wheat is a cereal grain, originally from the Levant region of the Near East, but now cultivated worldwide. In 2007 world production of wheat was 607 million tons, making it the third most-produced cereal after maize and rice...
, barley
Barley
Barley is a major cereal grain, a member of the grass family. It serves as a major animal fodder, as a base malt for beer and certain distilled beverages, and as a component of various health foods...
, buckwheat
Buckwheat
Buckwheat refers to a variety of plants in the dicot family Polygonaceae: the Eurasian genus Fagopyrum, the North American genus Eriogonum, and the Northern Hemisphere genus Fallopia. Either of the latter two may be referred to as "wild buckwheat"...
, and millet
Millet
The millets are a group of small-seeded species of cereal crops or grains, widely grown around the world for food and fodder. They do not form a taxonomic group, but rather a functional or agronomic one. Their essential similarities are that they are small-seeded grasses grown in difficult...
. The plan also emphasized improvements in livestock, soil fertility, plant protection, and farm mechanization. Its total planned allocation was Nu
Bhutanese ngultrum
The ngultrum has been the currency of Bhutan since 1974. It is subdivided into 100 chhertum .-History:In 1974, the ngultrum was introduced, replacing the rupee at par...
4.3 billion, but the actual outlay came to Nu4.7 billion. Financing the planning process grew increasingly complex, as indicated by the fifth plan's multilateral funding sources. However, domestic revenue sources for development planning had increased significantly, and the fifth plan included development projects that would further decrease dependence on external assistance. Such concepts as self-reliance in each district, decentralization
Decentralization
__FORCETOC__Decentralization or decentralisation is the process of dispersing decision-making governance closer to the people and/or citizens. It includes the dispersal of administration or governance in sectors or areas like engineering, management science, political science, political economy,...
of the development administration, greater public input in decision making, better control of maintenance expenditures, and more efficient and effective use of internal resources became increasingly important.
The Sixth Development Plan (1987–92) focused on industry, mining, trade, and commerce (13.3 percent) and power generation projects (13.1 percent), with education's allocation decreasing slightly to 8.1 percent from 11.2 percent during the fifth plan. At Nu
Bhutanese ngultrum
The ngultrum has been the currency of Bhutan since 1974. It is subdivided into 100 chhertum .-History:In 1974, the ngultrum was introduced, replacing the rupee at par...
9.5 billion, the sixth plan was considerably more expensive than its predecessor. It included programs that, if successfully implemented, would mean far-reaching reforms. The goals included strengthening government administration, promoting the national identity, mobilizing internal resources, enhancing rural incomes, improving rural housing and resettlement, consolidating and improving services, developing human resources, promoting public involvement in development plans and strategies, and promoting national self-reliance. Perhaps the key ingredient, self-reliance, promised to provide for more popular participation in the development process and to result in improved rural conditions and services as well as better government administration and human resource development. With greater self-reliance, it was hoped that Bhutan would begin exploiting markets in neighboring countries with manufacturing, mining, and hydroelectric projects in the 1990s. Faced with rising costs, Bhutan postponed some projects requiring large inputs of capital until the Seventh Development Plan (1992–96).
No major changes were expected in overall sectoral development in the seventh plan. Preliminary planning indicated emphasis on "consolidation and rehabilitation" of developments achieved under previous plans, more attention to environmental concerns, and enhancement of women
Women in Bhutan
Although officially the government of Bhutan has encouraged greater participation by the women in Bhutan in political and administrative life, male members of the traditional aristocracy dominate the social system. Economic development has increased opportunities for women to participate in fields...
's roles in economic and social development.
From their inception, the development plans have been aimed at energizing the rest of the economy and promoting economic self-reliance. Windfall revenues from export receipts normally were used to reduce foreign debt and dependence on foreign aid. Planners also sought to involve the immediate beneficiaries of economic development. Representatives in the National Assembly
National Assembly of Bhutan
The National Assembly is the elected lower house of Bhutan's new bicameral Parliament which also comprises the Druk Gyalpo and the National Council. It is the more powerful house.- Current National Assembly :...
and district
Dzongkhag
A dzongkhag is an administrative and judicial district of Bhutan. The twenty dzongkhags of Bhutan are further divided into 205 gewogs. Some larger dzongkhags have one or more of an intermediate judicial division, known as dungkhags , which themselves comprise two or more gewogs...
officials were encouraged to become involved in projects, such as roads and bridges, schools, health care facilities, and irrigation works, in their district. Some costs for the projects were borne through self-help, such as households providing labor. Government planners also have endeavored to increase rural income through initiatives in the farming sector, such as stock-breeding programs, promotion of cash crops, and advanced agro-technology. Central government efforts also were aimed at increasing the quality of life by providing electrification, modern water and sanitation systems, better cooking equipment, and insulation for houses.
External links
Five-Year Plans- 10th Five Year Plan: Volume I and Volume II (2008-2013)
- 9th Five Year Plan (2002-2007)
- 8th Five Year Plan (1997-2002)
- 7th Five Year Plan (1992-1997)
- 6th Five Year Plan (1987-1992)
- 5th Five Year Plan (1981-1986)
- 4th Five Year Plan (1976-1981)
- 3rd Five Year Plan (1971-1976)
- 2nd Five Year Plan (1966-1971)
- 1st Five Year Plan (1961-1966)