Despite its small population and landarea, Bhutan is among the most rapidly urbanizing countriesin South Asia. While this urbanization parallels robusteconomic growth and the expansion of job and investmentopportunities in cities, there remain challenges to fullyleveraging the potential of urban areas. Bhutan has madeimpressive gains toward the convergence of access to basicservices across the country, but there are gaps in thequality of coverage, particularly for water and sanitation.Local governments will have an increased role in basicservice provision and capital investment, but it requiresenhanced capacity and resources to improve efficiency andresponsiveness to local needs. Urban growth has increaseddemand for quality housing, which has resulted in a scarcityof affordable units and has increased pressure for urbanexpansion. Finally, the concentration of people and propertyin growing cities also changes the hazard risk profile ofthese areas, which is not adequately understood due to alack of adequate data systems and poor integration intoplanning mechanisms. An integrated approach to urbanizationis essential; one that leverages the benefits ofagglomeration while also managing the diseconomies andnegative externalities of urban growth.
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