1. Bhutan: Notes Concerning the Political Role of Kidu by Brian C. Shaw

The original Tibetan concept of kidu (skyid sdug1 or more informally kidu) has been variously considered as welfare, self-help and assistance. In the context of Bhutan, the concept has closely linked the moral authority of the monarch with the economic needs of the public.

The paper considers both the politicisation of kidu (the competition for political space and authority by politicians of the First Parliament, against the received authority of the monarchs) and the de-politicisation of kidu (by the monarchs, notably through land-grant authority reaffirmed in the 2008 Constitution, the establishment of the Kidu Foundation and in other practical ways). Kidu rights and the authority of the monarch is reviewed, with especial attention to the future prospects of either diminution or extension of these rights in the future, as the kingdom endeavours to establish “Democracy with Bhutan Characteristics.”



2. Trend of Bhutan’s Trade during 1907-26: Import by Ratna Sarkar and Indrajit Ray

It is logical to expect that quantitative and qualitative changes in Bhutan’s export during the period of Ugyen Wangchuck should be corresponded by similar changes in her imports. For one thing, when a country’s export grows over a longer period, the accumulation of foreign exchange in that country enables her to import more. Indeed, since both exports and imports, especially their growth and diversification, depend on the changes in the domestic economy (along with changes in the rest-of-the-world), in most cases do we observe simultaneous changes in both these fronts. The present article seeks to assess to what extent Bhutan’s import changed during the years of the First Monarch.



3. Terms of Trade and Balance of Trade of Bhutan during 1907-26 by Ratna Sarkar and Indrajit Ray

Though exports and imports are important constituents of the aggregate demand of an economy, and hence the determinants of growth, welfare implication of foreign trade follows to a good extent from the terms of trade. In the trade literature, the concept of terms of trade is defined in many ways such as the quantity definition, the price definition and the income definition. In this study we adopt its price definition, i.e. the terms of trade of a country equals the ratio of her export and import price indices. Since such price indices are not readily available, those are calculated from estimated prices of individual export-import commodities. Before analyzing the terms of trade, therefore, we review the movements of import and export prices. Also important for an economy is the balance of trade that determines under the silver standard of currency (as practised in contemporary Bhutan) the flow of silver to and from the domestic economy, and hence the supply of money. This chapter, therefore, reviews also the balance of trade in Bhutan and along with it the change in the exchange value of Bhutan’s currency in the contemporary period under the presumption that the balance of trade is functionally determined by devaluation/revaluation of domestic currency.



4. Assessment of Yam (Dioscorea spp.) Diversity at Community Level in Nangkor Gewog under Zhemgang Dzongkhag by Jambay Ugyen and Dr. Tulsi Gurung

Yam (Dioscorea spp.) is an annual or perennial climbing plant with edible underground tuber. It includes 600 species of which 50 to 60 are cultivated, or at least gathered, for food or pharmaceutical purposes. There are however only 10 species for human consumption and economically significant. In Bhutan, yam plays an integral part in socio-economic and cultural aspects. However, there is limited information on yam diversity in Bhutan. Therefore, this study aimed to assess domestic and wild yam species diversity, its socio-cultural importance to the communities and its contribution towards food security.



5. Macroeconomic Trends and Policy Implications: Evidence from Bhutan by Mashrur Khan and Matthew Robson

Bhutan has performed remarkably well with an average growth rate of 7.72 percent from 2004-2014. This growth is heavily fuelled by its strong hydropower sector, particularly the exports of hydropower, which have grown at an average rate of 18.1 percent over the same period. In recent years, hydropower capacity has been increased substantially, leading to higher exports and electricity generation in the country. In addition, the tourism sector has grown rapidly over the last decade, which largely contributed to the generation of revenue for the country.

Despite these successes, the country has experienced some setbacks, particularly in recent years. The current account deficit has been on the rise, which was mainly due to increasing hydropower-related imports to facilitate the installation of new hydropower plants. In addition, rapid credit growth has led to a consumption and housing boom, which contributed to large non-hydropower related imports. Consequently, the total reserves for the country as a percentage of total external debt has declined – reducing their ability to service debt – which is concerning since their external debt as a ratio of GDP has risen to over 80 percent in 2013-14 from around 55 percent in 2007- 08.

This paper focuses on the macroeconomic trends that Bhutan has experienced since the 1990s. The paper provides detailed graphs and tables on selected economic indicators, particularly on the budget, inflation and balance of payment estimates for the country.