Bhutan leverages Gross National Happiness—and vaccines— in response to the pandemic

Bhutan’s success in containing COVID-19 has been aided by international support and what UNICEF considers “arguably the fastest vaccination campaign to be executed during a pandemic.” The Bhutanese government has also put in place fiscal and monetary measures to provide economic stability and protect the vulnerable during the pandemic.

These efforts have been underpinned by Bhutan’s unique Gross National Happiness (GNH) principles, in place since the 1970s and later codified, aimed at balancing development with cultural, social, and environmental priorities. The four pillars of GNH are good governance, sustainable socioeconomic development, preservation and promotion of culture, and environmental conservation.

Lyonpo Namgay Tshering, Bhutan’s finance minister since 2018, has a background in public health as well as economics. In this interview with F&D, Tshering discusses some of the pandemic challenges facing Bhutan and how the finance ministry incorporates happiness into planning, budgeting, and prudent public financial management.

F&D: Bhutan was hailed by the international community this year for vaccinating against COVID-19 in record time. How important was this campaign to Bhutan’s economy, and what were some of its keys to success?

NT: His Majesty the King’s leadership and guidance have been key to the vaccination program’s success. Earlier this year, Bhutan was able to inoculate more than 80 percent of the total population (12 years old and above), with timely and generous support from countries in the region, Europe, and the United States. And currently, Bhutan is preparing for a nationwide third, booster, dose. Despite being a resource-constrained economy, Bhutan did not compromise on the quality and standards of COVID-19 measures.

With strict containment measures and successful vaccination programs, Bhutan did not have any positive cases from the community as of mid-December 2021 and was also able to open the economy for business. The good news is that the economy is estimated to achieve 3 percent GDP growth in 2021 from –10.8 percent in 2020.

F&D: In speaking to the UN General Assembly this fall, Prime Minister Dr. Lotay Tshering, a practicing physician, said the pandemic “brought out the very essence of Gross National Happiness" for Bhutan. Could you elaborate on what he meant by this? 

NT: The pandemic made us realize what it means to live in a Gross National Happiness society. His Majesty the King, through the Druk Gyalpo’s Relief Kidu (National Resilience Fund), has provided relief during COVID-19 in the form of interest deferment on loans and income support to individuals directly affected by the pandemic. The various fiscal and monetary measures have also protected the old and vulnerable during the pandemic. His Majesty traveled tirelessly the length and breadth of the country, uplifting the spirits of the front-liners and working alongside the people to protect everyone.

These efforts brought the country’s people together to fight this pandemic successfully, which exemplifies the core values and ethos of GNH.

One example: an extensive program to engage citizens for a greater role in nation building was established under His Majesty’s leadership in 2011. This program, De-Suung— Guardians of Peace, recharged the spirit of volunteerism. During the pandemic, thousands of young people have helped guard the borders, sometimes working as paramedics. This had a huge impact in the efficient management of COVID-19. Currently, the De-Suung program is engaged in transformative training and re-skilling programs to steer the nation along the path of a 21st century economy.

F&D: How important have culture and social cohesion been in fighting the pandemic?  

NT: The various initiatives, such as the Druk Gyalpo’s Relief Kidu and the various fiscal and monetary measures, alongside the De-Suung program, brought all sections of society together, including the weak, vulnerable, and disadvantaged. In this respect, culture and social cohesion have played a vital role in fighting the pandemic. In fact, the pandemic has strengthened cultural and social cohesion in Bhutanese society for fighting the pandemic collectively and successfully.

F&D: What are the biggest day-to-day economic challenges facing Bhutanese people right now?

NT: The implementation of the Druk Gyalpo’s Relief Kidu and the various fiscal and monetary measures have eased a lot of hardship for the Bhutanese people. However, the southern part of the country that borders India had to implement even stricter containment measures and undergo longer lockdowns. The strict regulation of international trade entry and exit points in the South have caused inflation. The main economic challenge is to normalize international trade points, which is dependent on how the pandemic evolves in other countries.

F&D: The concept of GNH has been around for decades in your country. What do people outside Bhutan sometimes get wrong about it?

NT: Although the concept of Gross National Happiness is becoming popular in the age of materialism, some people think that the concept is abstract and not scientific, when in fact it is a highly regimented index that—within the four main GNH pillars—measure nine domains related to well-being: living standards, health, education, ecological diversity and resilience, community vitality, time use, psychological well-being, good governance, and cultural diversity and resilience.

For Bhutan, when we pursue development, while recognizing the importance of the economy, we also ensure that the essence of GNH—such as community vitality and protection of our environment—are taken onboard. GNH is best articulated as “development with values.”

F&D: How does GNH guide what you do at the finance ministry?

NT: In Bhutan, all the plans and programs are based on the four pillars and nine domains of GNH. As the United Nations Sustainable Development Goals are similar to the concept of GNH, the SDGs are also mainstreamed into our plans and programs. Only plans, programs, and policies approved through a GNH screening tool are eligible for the annual budget.

Recently, His Majesty issued a royal charter for an innovative financing mechanism called Bhutan for Life to safeguard protected areas and people’s livelihoods. This is how GNH guides the financing mechanism of the Ministry of Finance and the government.

F&D: The environment is one of the pillars of Bhutan’s GNH Index, and Bhutan aims to be not just carbon-neutral, but “carbon-negative.” How do the finance ministry’s priorities connect to this goal?  

NT: Even as we collectively battle the pandemic and focus on economic recovery, environmental conservation and combating climate change remain foremost commitments for Bhutan. Our Constitution mandates 60 percent of forest coverage at all times to maintain intergenerational equity of our natural resources. Environmental conservation is also one of the four pillars of GNH.

In addition to the financing mechanism Bhutan for Life, mentioned earlier, the ministry and the government, as part of a sustainable financing mechanism, are exploring climate change financing and innovative financing such as floating green bonds and GNH bonds.

Opinions expressed in articles and other materials are those of the authors; they do not necessarily reflect IMF policy.