A policy beyond formalities: Fuelling privet sector investment in Bhutanese economy

Abstract

Introduction

Investment is a process of adding more value to the already existing stock of capital. In Bhutan, investment has been playing a vital role in building up the private sectors through making profitable investment. But the private sector investment in Bhutan is still in limited number though the country has stepped through 50 years of development. As a result private sector investment has been an overwhelmed issue ever since and Pokhrel (2014) has mentioned the importance of doing business in Bhutan and describe the situation that the private sectors are facing regarding the investment.

Ease of doing business for Bhutan is important where people who are interested to take up the business and people who have already taken interest must find it easy to do business in particular economy. Five indicators are used by the Ease of Doing Business Index (EDBI) to measure how easy it is to do business from a regulatory and bureaucracy perspective. According to the Doing Business Report (2015) Bhutan rank highest on getting credit (71th) while at the other end, it ranks lowest on resolving insolvency (189th). Therefore, this study has perform a bottom to top analysis on 5 EDBI indicators to identify whether there is a relationship between limited private sector investments and bureaucratic formalities in the Bhutanese economy.