Bhutan introduces Gross National Happiness 2.0 to assist economic crisis

Bhutan's government philosophy of “Gross National Happiness” is praised world wide for striking a balance between economic growth and the well-being of its residents.

But recent discussions about “Gross National Happiness 2.0” by its newly elected Prime Minister Tshering Tobgay suggest that change is afoot at some level as the country grapples with an economic crisis that has left it, as Tobgay said: “on the verge of collapse.”

The so-called GNH has been Bhutan's guiding principle since it was introduced by former King Jigme Singye Wangchuck in the early 1970s.

But with youth unemployment at almost 30% and About one in eight people lives in povertyHas Bhutan reached a point where its pursuit of national happiness must change?

“Yes and no,” Tobgay said in an interview with CNBC on May 10. “Yes, because we need to grow our economy.”

However, the principles of gross national happiness would not be abandoned, he added.

“Should we throw caution to the wind? No. We can grow, and we will grow in a balanced way.”

Bhutan will continue to strengthen its economy in a way that is sustainable, equitable and “balanced with social progress, environmental protection, cultural protection and good governance,” he said.

“We have been more successful in these areas than anyone could have imagined,” he said.

However, he also made it clear that the previous principle may have been too one-sided.

“We were extremely cautious, very conservative, and that's why we fell behind,” he said. “From one perspective, we didn't really fail. But should you take a look at the successes in the realm of ​​social progress, we failed economically.”

Tobgay also said that Bhutan was similarly cautious in its approach to tourism.

“We have been extremely cautious about opening as much as the remaining of the world by way of tourism,” Tobgay told CNBC. “We have been very conservative, very cautious.”

If Bhutan has made a mistake, it is on the side of sustainability and conservation, he added.

“We are currently paying for caution.”

Bhutan's tourism industry is recovering more slowly than other Asian countries. In 2023, international arrivals in the country will be one-third of 2019 levels.

The country has changed its controversial “sustainable development fee” three times since reopening in September 2022 – first raising it to $200 per adult per day, and then lower twice.

These changes have caused “a number of confusion,” Tobgay said. “As we speak, tourism is picking up again, but not at pre-pandemic levels.”

But despite the economic boost that mass tourism can bring, Bhutan is not deviating from its approach of high-quality, low-volume tourism, Tobgay told CNBC.

Today, the sustainable development fee is $100 per adult per day. However, Tobgay said, “To inform you the reality, I imagine many tourists are willing to pay $200 per day as a sustainable development fee.”

He said Bhutan continues to strive to boost tourism “while controlling the numbers.”

The country's emerging tourism industry is an opportunity to “create the sort of jobs that our capable, our very capable young people aspire to,” he said.

Thousands of young Bhutanese workers have left the country in search of employment opportunities abroad. according to ReutersIn the 11 months leading up to May 2023, about 1.5% of Bhutan's population migrated to Australia for work and vocational training alone, the report said.

“We hope that is a brief development … and provides us time to strengthen our economy through tourism, but additionally through other measures,” Tobgay said. “Then our youngsters will stay here, and those that work outside and have gained precious experience will return home.”