Although Bhutan has maintained impressive economic growth and made commendable progress toward the Millennium Development Goals, it is still challenged by a narrow economic base, low employment elasticity in the hydropower sector, inadequate involvement of the private sector in economic development, administrative limitations on the expansion of the private sector, and a rapidly growing number of educated but unemployed youth.

The country partnership strategy, which guides ADB’s operations in Bhutan, focuses on four key sectors: energy; transport and information and communication technology; water supply and other municipal infrastructure and services; and finance.