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The economy, one of the world's smallest and least developed, is based on agriculture, forestry, and hydroelectricity. Rugged terrain makes it difficult to develop roads and other infrastructure. Despite this constraint, hydroelectricity and construction continue to be the two major industries of growth for the country. As these two areas are increasing productivity, there continues to be a positive outlook for development throughout Bhutan. The economic program in the current 5-year-plan (2002-07) places a strong emphasis on improving education and infrastructure with a special emphasis on increasing activities in the sectors of information and communication technology, energy, and tourism. After the global slowdown within the travel industry, Bhutanís tourist industry is beginning to show signs of recovery. Bhutanís economy has been on an upturn due to recent subregional economic cooperation efforts. Already this plan has strengthened the current trade relations with India, as well as opened an avenue of trade with Bangladesh. In May 2003, the Bilateral Free Trade Agreement between Bangladesh and Bhutan was re-signed. Bangladesh is Bhutanís second largest trade partner, after India. In January 2004, as a member of the South Asian Association for Regional Cooperation (SAARC), Bhutan also joined the South Asian Free Trade Agreement (SAFTA). In February 2004 Bhutan joined the Bangladesh, Indian, Myanmar, Singapore, and Thailand Economic Cooperation Forum (BIMSTEC). Bhutan has applied for membership in the World Trade Organization and is in the process of developing clear legal and regulatory systems designed to promote business development |
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