Vulnerability and Resilience: A Conceptual Framework for Bhutan

The last three decades of economic development have presented the world's economies with avenues for economic growth and development based on global integration and cooperation. Many economies in the Asian economies have leveraged the opportunity provided by an accommodating economic environment to obtain levels of growth thought to be inaccessible by preceding generations. However, these opportunities do not come without risks. As many Asian economies realized in the late 1990s, these risks can materialize in the form of economic crises. Indeed, the recurrence of crises, shocks and spillovers from within Asia and through interregional contagion over the past two decades has demonstrated to developing Asian economies that they need to be alert to the dangers of economic shocks in such an open environment. To economies that have made such hard-won gains, the importance of identifying their exposure to adverse economic shocks early on and building resilience to their vulnerabilities is recognized.Vulnerability does remain an issue that needs to be addressed. Both cross-country econometric studies and case studies have documented the impact of external, climatic, and political shocks on growth, development, and poverty reduction in various parts of the world. Although some progress has been made in addressing economic vulnerability, it remains limited. Moreover, the scope of vulnerability itself has been changing with the emergence of new social and environmental dimensions. In the present chapter, Bhutan and its vulnerability have been briefly introduced.