In 1960, Bhutan, one of the world’s most isolated countries, started its first development plan amidst widespread illiteracy, steep infant mortality, food insecurity, and natural disasters. But it has since made enormous strides, in recent years achieving human development indicators that put it on par with the rest of South Asia.

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Life expectancy has nearly doubled, reaching 66 years in 2003. By 2003 infant mortality, formerly among the world’s highest, had fallen to 61 per 1,000 live births. Today more than 90 percent of the population has access to primary health care, 77.8 percent of the households and 97.5 % of the urban households have access safe drinking water, 80 percent of school-age children are enrolled in primary school and adult literacy has jumped to 54 percent, up from just 10 percent in 1970. Economic progress has been similarly impressive, with GDP per capita reaching $755 in 2003 more than five times the level in 1980. Thus, despite serious challenges, Bhutan’s development policies have had far reaching, sustained effects.

The Secret to Bhutan’s Success

How has Bhutan achieved so much success in so short a period? Through good governance, the kingdom has made effective use of domestic and donor resources to rapidly expand health, education, and other services, even in remote and isolated communities. Moreover, development innovations have been mediated through traditional institutions by a strong, reform-minded leadership that has ensured policy stability and accountability for results. Other factors also help explain Bhutan’s rapid, sustained development:

  1. An absence of extreme poverty.
  2. A rich, largely renewable natural resource base (hydropower and forests).
  3. A well-functioning administrative infrastructure that delivers development services to cohesive community organizations capable of using them effectively.
  4. A home-grown development philosophy based on the concept of gross national happiness that stresses the primacy of economic growth, cultural preservation, environmental conservation and good governance and ensures that development approaches are adapted to local conditions and values.
  5. Long-term support from development partners willing to grant Bhutan considerable autonomy in recognition of its high standards for accountability, efficiency, transparency, and effectiveness in using donor resources.
  6. The Royal Government’s restructuring initiative of 1999 defined efficiency, accountability and transparency as the unpinning pillars of good governance. New institutions responding to emerging needs, some organizational restructuring and mechanisms for internal accountability have been established. Internal audit units in all ministries and an office of legal affairs have been set up. The Royal Audit Authority has been strengthened in terms of organizational reach and authority, and an Audit Act is due to be enacted soon. A Finance Act is under drafting. Several new ministries and departments have been created to meet the emerging public service needs.

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