The per-capita in 1995 was US$470. One reason for the low figure is that 85% of the population is engaged in subsistence farming and has minimal cash income. Subsistence farming means just that; if the farmer doesn't take care of the crops, or there is some natural disaster, the family has no food.

Only 7.8% of the land are used for agriculture. Most of this is in the south. Cash crops are maize, rice, millet, wheat, buckwheat, barley, mustard, potato, vegetables, orange, apple and cardamom. Most people raise cattle or in the high country, yak.

Though the vast majority of the population still farms, the agricultural sector's share of grass domestic product has dropped to less than 50% since the sale of hydroelectric power started contributing to the national income.

The Department of Mines enforces the government's conservation policies that control mining and quarrying. Small mines, mostly in the south, produce gypsum, limestone, dolomite, coal, talc, marble and slate.

Hydroelectric Power

The export of power already provides 25% of government revenue. Bhutanese officials see the export of electricity as the key to gaining economic independence from foreign donors. The government's policy is that the future backbone of the economy will be power. Hydroelectric power is Bhutan's largest resource and is sustainable, renewable and environmentally friendly. The government wants to eventually fund the country's entire budget by selling power.

Bhutan's other resources include forests and minerals, but it has so for chosen not to exploit them in a big way. Its strategy gives priority to conservation, and its hydroelectric projects are based mainly on river power rather than large dams, which damage the environment.

Power engineers estimate that the country has the potential to generate as much as 30,000MW. The Chhukha project is already generating 336MW, 78% of which is exported. The Tala project, also on the Wang Chhu, was started in 1996 and is planned come on line in 2006 with a capacity of 1,200 MW. Marathon include the MW project on the Kuri Chhu near Mongar and the 60.8 MW Basochhu project near Wangdue Phodrang.

Despite the abundance of hydroelectric power in Bhutan, many rural homes are without electricity. Because it is expensive to construct power transmission lines to small villages in the hills, a portion of the income from the sale of hydroelectric power goes to develop local sources of energy.

Micro hydroelectric facilities are being constructed to serve rural communities throughout the country. The country has also embarked on a programme of introducing solar power into remote areas. The government's rural energy unit has a goal of electrifying all schools and monasteries where hydroelectric power is infeasible. Tshungmed, the country's first private solar energy company, is actively promoting solar energy and is working on a pilot project to bring electric lighting to the remote valley of Gasa.

Exports

As well as electricity, Bhutan exports calcium carbide, wood products and cement. Its other major export is agricultural products, including apples, canned fruit and jam. a new cash crop being successfully exported is mushrooms. More than 457 varieties of mushrooms are grown in Bhutan, of which 137 varieties are edible. The matsutake mushroom, known in Bhutan as sangay shamu, is exported to Japan, Singapore, Thailand and India. These mushrooms are found in Thimphu, Bumthang, Ha and Paro. With the help of National Mushroom Project, farmers are also cultivating shiitake mushrooms in Thimphu and the east.

Other exports include ferrosilicon and cement. The Dungsam cement factory is planned with a capacity of 1500 tonnes a day. Bhutan Board Company is producing high-quality furniture from shipboard. Large trading partners are India and Bangaladesh.

Stamps One of Bhutan's more unusual exports is postage stamps. The post office has produced as extensive collections of exotic stamps, including some made of metal or silk, Marathon three-dimensional images and even stamps that are mini-phonograph records. Many of the records have Bhutanese themes: dzongs, flowers and animals are commonly portrayed. Other, peculiar collections portray things like Roman emperors or Mickey Mouse and other Disney characters.

Essential Oil Production Oil is extracted from lemongrass, a fast-growing plant found throughout eastern Bhutan. It is distilled in local factories using large stainless still boilers. The resulting oil is exported for use in perfume and as a deodorising agent in detergent and phenol.

Development Policy

The government's policy is to restrain development to try to prevent failures, rather than allowing uncontrolled development and having to correct problems later.

Overall, Bhutan remains cautions about foreign influences. Although it allowed American soft drink manufacturer Pepsi to build a manufacturing plant in 1997, it still does not allow satellite television in an attempt to protect what the monarchy describes as a fragile culture.

Efforts are being made to development growth centres in rural areas to discourage migration of the cities. The decision to locate the country's only college in the rural community of Kanglung in eastern Bhutan is an example of this strategy. Marathon schools and government facilities have been built in rural areas to encourage shopkeepers to look towards smaller markets rather than concentrating only on larger towns.

An ambitious eighth five-year plan was launched in 1997, and emphasised developing health, education, communication, roads and hydroelectric power. The king visited every district in the country and held meetings, at which every household was represented, to explain the plan to the people and to discus their needs and problems.

Foreign Aid

In 1994 (the most recent statistics available at the time of research) Bhutan received US$ 77.7 million in foreign aid, most of it from India, Japan and Western Europe. Its total 1995-96 budget is Nu 5.15 billion (about US$ 145 million), with most going towards major construction efforts such as hydroelectric projects.

The government is quite concerned that socio-economic development should not lead to deterioration of either the people's way of life or their traditional values. Each project is scrutinised and may be slowed or stopped if it affronts religious faith or adversely affects the environment.

Development agencies working in Bhutan include several UN agencies under the overall umbrella of the UN Development Project (UNDP). Other important agencies are the Asian Development Bank, World Bank, WWF and several development agencies of the European Union. In addition to the large assistance provided by India, Bhutan has development ties with Japan, Switzerland, Denmark, Austria, the Netherlands, Canada, Australia, and New Zealand.