Bhutan: Power Exports and Dutch Disease

Kojo, Naoko C.

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Bhutan has shown remarkable economic performance over the last two decades, supported by generous aid inflows and buoyant hydropower exports to India. However, the Bhutanese Ngultrum has appreciated over time, raising concerns if this is a sign of Dutch disease, shadowing the growth prospects of Bhutan. The author examines empirically the presence of Dutch disease in the Bhutanese economy. The analysis finds no evidence of a contraction or stagnation of the non-power tradable sector. While there is no imminent threat that requires urgent policy intervention, future expansion of power exports or aid inflows will likely put further downward pressure on the Ngultrum, and may eventually damage the non-power tradable sector. Bhutan's future economic prosperity depends crucially on the policy strategies for exchange rate management, fiscal policy and private sector development.

Document type: Book
Date: 2005
Version: Secondary publication
Date Deposited: 4 March 2009
Faculties / Institutes: Research Organisations / Academies > Centre for Bhutan Studies
DDC-classification: Economics
Controlled Subjects: Bhutan, Elektrizitätsexport, Wirtschaftsentwicklung, Strukturanpassungspolitik
Uncontrolled Keywords: Energieexport, Bhutan , Power Export , Economic Development , Structural Adjustment Policy
Subject (classification): Science and Technology
Countries/Regions: Bhutan
Series: Subjects > Monograph Series / Centre for Bhutan Studies
Volume: 16
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