BRIEF

Leveraging Urbanization in Bhutan

September 24, 2015

250 million more people are expected to live in cities in South Asia over the next 15 years. How can the region better manage its urbanization to create more livable and prosperous cities for all?

World Bank Group

Bhutan Highlights from the World Bank Report, Leveraging Urbanization in South Asia: Managing Spatial Transformation for Prosperity and Livability

COUNTRY FACT SHEET: BHUTAN

Although they have made progress, South Asian countries have struggled to make the most of the opportunity urbanization provides them to transform their economies to join the ranks of richer nations in both prosperity and livability, according to a new World Bank report – Leveraging Urbanization in South Asia: Managing Spatial Transformation for Prosperity and Livability.

Difficulty in dealing with the pressures that urban populations put on infrastructure, basic services, land, housing and the environment lie at the heart of the relative lack of livability of the region’s cities. That fosters what the report calls “messy and hidden” urbanization that constrains the concentration of economic activity that could bring about faster improvements in prosperity.

Here are some key findings for Bhutan made in the report:

  • The growth rate of Bhutan’s urban population was the highest among the eight South Asian countries, at 5.7 percent per year from 2000-2010.
  • The share of Bhutan’s population living in areas officially classified as urban was 3.2 percent per year over the same period – the second highest in the region after the Maldives.  Unlike much of the rest of South Asia, this suggests that rural-urban migration has played a key role in driving the growth of Bhutan’s towns and cities.
  • Like the seven other countries in South Asia, Bhutan shows a large discrepancy between estimates of the share of its population living in official urban areas and the Agglomeration Index, an alternative measure of urban concentration. However, Bhutan is the only country in the region for which the share of the population that lived in recognized urban settlements in 2010 (34.8 percent) is higher than the corresponding Agglomeration Index estimate (9 percent).  Unlike other South Asia countries, therefore, Bhutan does not suffer a problem of hidden urbanization.
  • An analysis of nighttime lights data in South Asia shows the fastest rates of expansion in urban area were in Afghanistan and Bhutan, which recorded annual growth rates higher than 13 percent and which showed rates of expansion faster relative to the urban population than for the region overall. 
  • Extreme urban poverty has been largely eradicated in Bhutan, where 1.8 percent of the urban population lived under the national poverty line in 2012, the lowest in South Asia.
  • Bhutan’s expanding urban population presents it with a considerable affordable housing challenge.  In the best-case scenario in which urban population density remains constant, meeting this challenge will require more than doubling the amount of developable urban land between 2010 and 2050.

For more information on the report go to: www.worldbank.org/southasiacities

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