Bhutan is located in the Asian region, many of countries of this region have had explosive economic growth over the past 20 years — such as China, South Korea, Singapore. However, this phenomenon is not observed in Bhutan, the economy of this country still lags far behind the world leaders. In this regard, the reason for the lack of growth is of interest for scientifi c study. Thus, using the Samuelson-Hicks model, we are faced with the task of fi nding out why there is no economic growth in a given country, as well as what factors exactly aff ect the growth of the economy of Bhutan.
Bhutan is an underdeveloped agrarian state. Bhutan’s economy, one of the least developed in the world, is based on agriculture and forestry, which provide the basic livelihoods of more than 60 % of the population. Thus, the largest share of the population’s needs are met exclusively on their own and only at the expense of available resources. The industrial sector is technologically backward, production is mostly homebased. Most of the development projects such as road construction depend on Indian migrants. Exemplary education, social and environmental programs are supported by multidisciplinary development organizations.
During 1970–2019, Bhutan’s GDP at current prices increased by $ 2.5 billion (41.5 times) to $ 2.6 billion; the change was $ 0.097 billion due to a population growth of 0.47 million, and $ 2.4 billion due to a per capita GDP growth of $ 3,153. Bhutan’s average annual GDP growth is $ 0.051 billion, or 7.9 % [1]. Bhutan’s average annual GDP growth at constant prices was 6.7 %. The share in the world increased by 0.0011 %. The share in Asia decreased by 0.0042 %. The minimum GDP was in 1970 (0.062 billion dollars). The maximum GDP was in 2019 ($ 2.6 billion).
Tight controls and uncertain policies in areas such as industrial licensing, trade, labor, and fi nance continue to discourage foreign investment.
Based on all of the above, we can conclude that Bhutan is the least developed country in the world, mainly agrarian, and has poorly developed foreign economic relations, international trade relations (economic interaction only with India).