Landlocked Bhutan faces uniquechallenges, and opportunities as it pursues the developmentof its transport sector into the 21st century. Bhutan'spopulation growth rate is high, rural-urban migration isaccelerating, and, fueled by sustained economic growth, thecountry is urbanizing rapidly, giving rise to an expandingurban middle class, with rising expectations of well-paidemployment, accessible services, and consumption potential.However, accessibility to a large measure depends onavailability of reliable, and affordable transportation.Poor rural access is synonymous with rural isolation, andpoverty, while high external and domestic transport costsconstrain the country's economic and socialdevelopment. Transportation poses a considerable costdisadvantage to business andcommercial undertakings; roadtransport is slow and regularly disrupted by landslides andflooding; air transport is costly and erratic. Costlytransport is a major factor constraining the development oftourism, horticultural exports, and agro-processing andwood-based industries. Sector issues discussed in thisreport emerge from a detailed assessment of the transportsystem, and an analysis of public expenditures. It discussesthe strategy for improving rural accessibility, and thecentral role of roads, and motorized transport forintegrating remote regions and communities into the nationaleconomy; access to regional and global markets, to includetechnical support for development, operation, and managementof transport logistics, establishment of a dry port inPhuentsholing with reefer storage facilities, and,internationally competitive Druk air cargo rates, especiallyfor exports of perishable, and high value agriculturalproducts; transport sector planning and coordination, whichincludes specific policy, planning, and investmentrecommendations for roads, air transport, urban transport,and road transport services. It is recommended to considerrecasting the proposed Transport Master Plan as a NationalTransport Strategy and Policy Review to identify and analyzeemerging challenges, and constraints in the transportsector; recommend appropriate strategies, and policies toaddress these concerns; and, prepare an implementation planfor sector modernization, including policy and institutional reforms.
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