Trade, Transport and Communication

Trade, Transport and Communication

Trade: Exchange of goods and services is known as trade.

Reason for trade

No individual person can produce all the goods and services he/she needs. So in order to obtain those goods and services which they themselves do not produce is necessary to trade.

Items exported from Bhutan to Tibet in the past: rice, wheat, barley flour, dried fruits and desho.

Items imported from Tibet by our traders are: Silk, brocades, Jewels and brown salt.

Difficult faced by Bhutanese people in the past.

i. Although trading in Bhutan was very limited in the past yet Bhutanese traders travelled to Tibet in the north and to India in the south. Lack of transport and communication system compelled our traders to use mule caravans and travelled on foot carrying goods on their back for many months. ii. The dense jungles in the south and permanent snowcapped mountains in the north had been the major hindrance to our trader in past.

Factors which must have helped to developed trade in Bhutan:

i. The great progress made with the transport and communication since the introduction of first five year plan in 1961.

ii. Liberalization of tariffs- the government imposed extremely low tax to encourage trade in the country

iii. Expansion of market

iv. There have been increasing amounts of government investment to develop trade in the country.      

• The communication network helps trader acquire information on the demands and availability of supply of certain goods. Thus, the communication will allow them to react immediately to the market situation.

Modern trade is normally dominated by advanced countries for following reasons-

i. Developed countries have already made advance/progress in manufacturing goods. Today, developed countries use sophisticated machines to produce goods at a low price.

ii. Advanced countries have efficient transport and communication system.

Different between traditional trade and modern trade

Traditional trade:

It involve exchange of goods with goods

Goods exchanged at small-scale

Lack of efficient transport and communication facilities

Modern trade:

Modern trade involves the exchange of goods with money

Goods exchanged at large-scale

Excellent transport and communication network for trading

List some of the modern facilities that help modern trades in Bhutan to carry out their work efficiently:

1. Good roads
2. Better transport facilities
3. Communication facilities such as telephone, fax etc
4. Internet accessibility
5. Electricity

International Trade

Exchange of goods and services between two or more countries is called international trade.

India is Bhutan’s major trading partner

Balance of Payment

Balance of payment is a systematic presentation and record of the payment side of economic transaction, i.e, the inflows and outflows of payments for a country with the rest of the world.

Trade Deficit

If the import of goods is greater than the export, it is called trade deficit.

In order to reduce trade deficit we need to increase our exports or reduce our imports.

Favourable Balance of Payments

When the export of goods is greater than the import of goods, it is called favourable balance of trade.

Mass Media: is a communicating system which reaches a very wide audience within a very short time.

The two important mass media in Bhutan are- Druknet and Kuensel

Some forms of communication such as B mobile, Druknet, BBS, Newspaper etc are known as mass media because these communication systems reach to large number of people within a very short time.

Role of mass media

1. Informs and advices people about new techniques in farming, raising livestock and health care
2. Provide upto-date news
3. Provides entertainment

Advantages of mass media over spread of information through conversation are:

1. The information provided through mass media reach the entire population at the same time
2. The information also covers a great distance within a very short time.

What would be the state of information flow if it is spread only from person to person?

1. The information will spread only within a short distance
2. The correctness of the information will be limited

Mode of Transport in Bhutan

Road Transport and Air Transport

Elements of transport network

1. Link
2. Node

i. Link- It is the line of transport. Settlements connected by the line of transport is called link

ii. Node- A point in a network where routes meet or intersect, such as settlement

We can calculate efficiency of road network by dividing number of links by number of nodes.

Accessibility Index

Accessibility Index is the sum of the number of links needed to connect a node in the network. Higher index shows less accessible road hence, few people will travel to it and vice versa.

Spatial Interaction

The exchange of goods and information between difference places is called spatial interaction.

Benefits for spatial interaction

1. People will be exposed to new food habits, dressing styles and ideas
2. People will get more opportunity to move from place to place for trade and carryout official business

Drawbacks for spatial interaction

1. Accessible to bad habits such as drugs, criminal act etc.
2. Disruption to one’s own cultural and traditional values.

Problems of road transport in Bhutan

i. High Transport Cost: The mountainous terrain makes the cost of transportation very high within the country. In 1993, a prominent industrialist noted that Bhutan the average cost of transporting one ton of materials per one kilometer was Nu. 4, whereas it cost only about Nu. 1 to transport the same amount in India.

ii. Monsoon Damage: Monsoon damage has become the annual and seasonal feature in road maintenance in Bhutan. Substantial lengths of road are damage due to heavy rainfall soil erosion and landslides etc., which incur heavy expenditure on road maintenance.

iii. Bridges: Many bridges on the highways and districts roads are temporary steel bailey bridges. These built long ago and have outlined their design life. Their repair and maintenance is important to avoid incident.

iv. Climate: Heavy snowfall in winter, dense foggy weather etc is another problem for road transport in Bhutan, which in turn constrains transport efficiency.

Benefits of road transport in Bhutan

i. Bhutan is a developing country, the requirement of materials for construction of buildings and other infrastructure is much more which need roads to transport these materials from Indian border to the interior part of country.

ii There is increasing emphasis on commercial farming such as plantation of cardamom, apple, potato etc. A well-knit road system will cope up with the ever-increasing export.

iii Many industries have sprang up and a quite a number of large-scale industries are also expected to step in. To transport raw materials and for the marketing of the finished products, road transport is necessary.

iii. Road system is also important from the defense point of view.

iv. It provides door to door services.

v. It is one of the cheapest mode of transport.