Bhutan’s progress is frequently cited as a success story. A series of systemic hurdles and a lack of support for developing enterprises have stifled the country’s private sector growth. A few large corporations dominate the vast majority of the economy. This first-mover advantage enabled these companies to dominate important industries ranging from manufacturing and mining to services. Most entrepreneurs face the fact that starting a new firm is virtually impossible. The business ecosystem just does not support fresh, innovative ideas. The regulatory environment has become so complex as to stifle it.
There haven’t been many government programs to assist startups and small and medium-sized businesses. The majority of these programs don’t deal with the fundamental structural problems. One of the biggest obstacles facing fledgling firms is financing. Additionally, the banking institutions still charge outrageous interest rates, which makes it hard for small enterprises to get credit at reasonable prices. Entrepreneurs must choose between the high cost of borrowing money and their need for financing. Workers in the private sector receive little to no financial assistance, no housing subsidies, and no favorable loans.
