Bhutan began to open up very slowly to outsiders in the 1970s. Bhutan has pursued a cautious policy of modernisation while retaining a significant agriculture-based economy. Agriculture employs about 64.2% of the workforce (2006) and accounted for 21.4% of GDP in 2006. Tourism is Bhutan largest hard-currency earner. There is very little heavy industry. Apart from a cement plant, chemical plant and a timber factory, most manufacturing is via small-scale local industries. The export of hydro-electric power to India is a growing industry and is the single most important source of revenue. Bhutan has an estimated hydropower potential of around 30,000 MW of which so far only about 2,500 MW is exploited. India is by far the largest market for Bhutan's exports and is still a significant source of development aid. A new Foreign Direct Investment (FDI) Policy is now in place which puts priority on FDI in the areas of tourism, educational facilities and hydropower.
Bhutan is divided into 20 districts or dzongkhags each headed by a district officer. Larger dzongkhags are further divided into subdistricts called dungkhags. A group of villages are grouped to form a constituency called gewog, administered by a locally elected leader entitled a gup. There are 201 elected gups. In 2002, the National Assembly created a new structure for local governance at the geog level. Each local area is responsible for creating and implementing its own development plan, in coordination with the district.