Thursday, March 13, 2014

The Missing Link

What’s missing in the Bhutanese economy?

Any economy consists of three sectors, the primary, the secondary and the tertiary sector. These three sectors evolved and developed since the beginning of commerce in ancient history through the division of labour.

The primary sector, which is ‘primarily’ agriculture, came first. During that rude early society, agriculture was the only occupation that most engaged in. it provided food, clothing and shelter, the three basic necessities.

When the society became more complex and human wants increased, a new sector came into being, the secondary sector. People wanted to shift towards a more advanced society than just cultivate, harvest and eat.

The secondary sector was a new era. People engaged in the secondary sector borrowed or bought agriculture produce from the primary sector to process them and manufacture something else out of it.

The secondary sector or the manufacturing sector later became more advanced, but it could not survive without the agriculture sector, since all the raw materials that it required manufacturing its produce belonged to the agriculture sector.

Not only that, the agriculture sector also provided them much needed labour to work on the factories. So the two sectors had to survive in a symbiotic fashion.

The primary sector provided the secondary sector with land, labour and raw materials and the secondary sector provided them with, processed, and finished quality products.

As society progressed and things became more complex and complicated, a new era dawned again, because of the need for services.

The tertiary sector was born mainly because someone had to provide services as consultants, guides, teachers, professors, doctors, engineers etc. to the people involved in primary and secondary sector.

Now, as its clear enough, the three sectors are clearly linked, more importantly, the primary and the secondary sector.

To get to the point now, in Bhutan, the link does not exist between the primary and the secondary sector. Our agriculture sector does not supply any raw materials or labour to the manufacturing sector.

This is the root cause of all the economic woes we are suffering today, for example, the shortage of rupee.

Without any supplies from the agriculture sector, the manufacturing sector then lands up buying both labour and raw material from India for which huge amounts of rupee are paid for.

The inability of the agriculture sector to provide labour and raw materials to our manufacturing sector not only forces manufacturers to import labour and raw materials, leading to outflow of rupees; it also does not encourage growth of the manufacturing sector.

How do you expect a manufacturing sector to grow when the primary sector cannot supply the raw materials? Ultimately, not just raw materials but all kinds of other finished products are also being imported, thus building more and more pressure on the rupee reserve.

The three sectors don’t connect, it’s like a broken link in a water pipe that no one else seems to see or even care.


  1. You have explained it in a simple terms, I could catch it vividly.