Since the 2022 reopening of Bhutan’s borders in the wake of the COVID-19 pandemic, there has been a surge in migration out of the country. This emigration is overwhelmingly led by educated youth, with Australia emerging as a particularly prominent destination, now being home to the largest Bhutanese diaspora community. As a corollary to this outward movement, Bhutan is steadily urbanising, with people moving from rural areas into the cities, driven by economic, developmental and environmental pressures, including climate change. This migration is particularly interesting in light of Bhutan’s public commitment to “Gross National Happiness”.
Economic Situation in Bhutan
Migration patterns in Bhutan must be understood within the broader economic context the country finds itself in. The World Bank’s Development Update report for Spring 2025 is illustrative of the structural issues facing Bhutan’s economy. Bhutan’s recent economic growth has been built on a generally strong showing by the Tourism (and associated services, namely financing, insurance and real estate) and Mining sectors.1
Despite this relative growth, it should be noted that tourist numbers have yet to return to pre-COVID levels, less than half in fact.
Relevant to Bhutan’s migration patterns, despite laudable reductions made to extreme poverty rates during the 2010s, overall vulnerability to poverty remains high for “a large segment” of the population.2 The World Bank notes that “shocks”, including natural disasters or poor harvests exacerbated by climate change, could push many back below the poverty line.
Additionally, inequalities are heavily spatially concentrated into rural, agricultural areas, accounting for 87% of Bhutan’s poor.3 Unemployment meanwhile is more concentrated in urban zones, which see a rate of 5.5% compared to the national average of 3.1%. Young people are a substantial bloc here, with a Youth Unemployment Rate of 17.7%, declining from the pandemic peak of 28.6% in 2022.4
The unattractive labour market is identified as a key driver of emigration. The most capital-intensive sector, hydropower, employs less than 1% of the total workforce, and low-productivity agriculture as well as “micro-sized” firms predominate in much of the rest of the economy.5
Rural Precariousness
Despite relative reduction in national poverty rates, the rural society in Bhutan remains precarious. At anational level, agriculture is deeply unproductive despite involving 60% of the working population, some 50% of the country’s food needs must be met by imports.6 These imports are frequently substantially more competitive than locally grown options, which are ‘held back’ by the comparatively poor overall conditions of Bhutanese agriculture: little to no mechanisation within a rugged and limited growing space.7
Efforts towards reform or improvement of the agricultural sector have so far been oriented around cash crops, such as cardamom and ginger, backed by a marketing campaign centred on Bhutan’s “organically grown and chemical-free produce.”8 While showing some promise, these initiatives have not yet produced substantial growth or attracted workers back to the agricultural sector. In part, this is due to the economic promise of these crops failing to bear fruit, as climate change has reduced the needed rainfall and allowed the proliferation of pests.9 Ironically, the initial economic gains from cash crops like cardamom have greatly enabled rural depopulation, funding both the education and providing the liquid capital needed for the current generation to make a new life for themselves elsewhere.10
Compounding the limited economic opportunities and prospects is the comparative under- development of ruraldistricts (Dzongkhags), which places additional pressure on residents’ lives. Poorer quality transportation infrastructure makes accessing social, educational and healthcare services more difficult and costly, further incentivising migration to urban areas, especially the new industrial sites.11
“Human-wildlife conflicts” are also intensifying, as crops become increasingly important food sources to wild animals such as elephants, deer and monkeys, to the degree that farmers are having to abandon entire fields.12 The departure of young people from rural districts and villages is contributing to this, placing the burden of maintaining fields onto an ageing populace.13
These factors are contributing to a steady internal migration from rural districts, particularly from the poorer eastern towards the more urbanised areas, namely the capital city Thimphu.14 According to Gosai and Sulewski, outside of the capital, Dzongkhags like Chuukha, Paro and Sarpang attract migrants by hosting major infrastructure projects, the international airport and commercial centres on the border with India.15
Although Bhutan only conducts censuses infrequently, with the most recent in 2017, data shows that the rate of internal migration climbed from 7.3% between 2000-2005 to 45.2% between 2013-2017.16
International Migration
As populations shift towards urban centres, this itself places further pressure on jobs and services, contributing to the outward migration of already urban and educated Bhutanese.
This can be seen as, since 2022, Bhutanese have been leaving the country in record numbers. From a total population of not much more than 765,000, roughly 66,000, or 9%, are residing and/or working abroad.17 Australia has emerged as a major destination for Bhutanese migrants, Perth in particular now being home to over 20,000, out of more than 35,000 overall.18 It should be noted that these numbers principally reflectrecent movements, and a substantial diaspora of ethnic Lhotshampa Bhutanese refugees already existed.19
Amongst migrants, the principal issues spurring the decision to move include the residual effects of the COVID-19 pandemic upon unemployment, the prevalence of legal informality with regards to employment and comparatively poor pay rates.20 In addition to material economic drivers, political concerns such as perceived corruption and nepotism are also cited by surveyed migrants.21
The most direct effect from the growing Bhutanese diaspora can be seen in the dramatic spike in remittances. According to data from Bhutan’s Royal Monetary Authority, prior to September 2023, inflows hovered around $20-30 million USD per quarter, but have since risen to the $60-70 million band.22 More than half of this inbound flow originated from Australia, as would be expected given the size of the diaspora community there. Outbound flows, mostly heading to India, also rose during the same period, though not to the same degree.23
The accelerating rate of migration has been acknowledged by the Bhutanese Prime Minister, Tshering Tobgay,as an “existential crisis.” This concern reflects the potential demographic consequences for Bhutan, hardly alarge country, should migration persist at current rates or more.
A key threat is “brain drain”, that Bhutan will be deprived of its best trained professionals and most productive workers.24 The more Bhutan’s most educated youth prefer to live and work outside the country, the harder it will be to translate the work and resources put into their education into tangible material benefits at home.
The predominance of young people amongst migrants is also contributing to the rapid ageing of Bhutanese society. At current rates, the proportion of elderly Bhutanese within the population; defined as those over the age of 60, is set to rise from 9% in 2025 to 19.7% in 2047.25
Responses to Migration
The government’s general approach to the migration issue has been oriented towards adapting to and taking advantage of the migration.
Economists examining Bhutan’s migration issue, such as Rinchen Dorji and Nobuhiro Hosoe, argue that the government can mitigate if not take advantage of the current situation if remittance flows can be effectively reinvested into building a private sector economy capable of attracting diaspora talent back.26
To this end, since October 2023 the government has been creating policy to ease and formalise foreign capital flows from the diaspora, as well as to redirect remittance payments into the broader economy through Bhutan National Bank’s “Bhutanese Living Abroad Investment Initiative.”27 This enabled diaspora citizens to use money otherwise destined for family accounts to invest via the Bhutanese stock market and to realise profits from such.
The government has also placed great emphasis on large development projects to win back recent economic migrants, namely the much touted “Gelephu Mindfulness City.” This development, a ‘special economic zone’ situated close to the Indian border, is hoped to attract significant foreign investment and lay the basis for Bhutan’s entry into the modern tech-economy.28
Such moves are not without controversy, however. The opposition Bhutan Tendrel Party has criticised the Government for failing to identify the “structural constraints” of the economy and over-focusing on out-migration as a phenomenon rather than as an effect.29 According to this criticism, the Government is neglecting “growing inequality, increasing urban-rural gaps, and regional disparities” and lacks a vision for “targeted solutions” to labour market shortfalls and the weak private sector.30
Conclusion
Bhutan’s internal and external migrations are reflective of the deep structural factors at work within itseconomy. The increasing precariousness of the rural agricultural economy, on which it has traditionallyrelied, is compounded by the growing mismatch between the outcomes that the economy can provide and the modern material needs and wants of the population. Bhutan’s comparatively recent entry into the wider world economy has left it scrambling to adjust to volatile conditions, and the government is betting heavilyon a select few, ultra-modernist projects to carry it through this transition and support the development itneeds. Structurally though, Bhutan may find itself hampered by its already small population and limited opportunities, and if the needed investments for mega projects like Gelephu are ultimately not forthcoming, then it is unclear how the government will proceed.