According to Trading Economics global macro models and analysts, Bhutan’s GDP is predicted to reach 2.20 USD billion by the end of 2021. Bhutan’s GDP is expected to trend at 2.50 billion dollars in 2022, according to our econometric models.
Which country is wealthier, India or Bhutan?
Bhutan stated in 1972 that Gross National Happiness (GNH) should be measured rather than Gross National Product (GDP). It’s been a poster child for happiness ever since. Many people have been impacted by its pursuit of pleasure, including Nobel Laureates Joseph Stiglitz and Amartya Sen, who collaborated on a recent UN report on “The Measurement of Economic Performance and Social Progress.”
According to the paper, GDP is a clumsy metric that ignores many of the factors that contribute to people’s happiness. As a result, countries should track indices of quality of life such as leisure, education, social interactions, political participation, and governance. The frequency of meditation and prayer is included in Bhutan’s own happiness score.
Everyone will now agree that happiness is far more important than GDP. Bhutan’s dirty secret, on the other hand, is that it leads the world in GDP growth.
The global recession slowed growth in many countries in 2008, yet according to the CIA World Factbook, Bhutan achieved the world’s fastest GDP growth rate of 21.4 percent. Bhutan was substantially poorer than India in the 1980s. Bhutan is nearly twice as wealthy as India today, thanks to two decades of rapid economic growth: its per capita income was $1,900 in 2008, compared to $1,070 in India.
Was the quest of happiness responsible for record GDP growth? It was actually sparked by India’s two-decade-long construction of massive hydroelectric dams in Bhutan. Bhutan’s current hydroelectric capacity is 1,480 MW, with new projects planned to create 10,000 MW of power by 2020, almost solely for sale to India, which is providing all of the funding.
Large dams aren’t usually associated with happiness. Environmentalists frequently criticize them for displacing people and flooding forests. Bhutan’s clever ruse has been to give its hydropower producer a green moniker (Druk Green Power Corporation). Because environmentalists don’t want to target a much-heralded Shangri-La of happiness, it gets away with it.
Its first large hydropower plant, Chuka, with a capacity of 336 MW, was completed in 1988. Kurichhu (60MW) was built in 2001, Basochho (40MW) in 2005, and the massive Tala project (1,020 MW) in 2007. Tala’s commissioning is partly responsible for the ensuing massive increase in GDP in 2008. In 2009, electricity revenue will account for at least 60% of the government’s total revenue. Despite this, just 66% of Bhutanese houses and 39% of communities are electrified.
Developing countries with abundant natural resources, such as oil, frequently suffer greatly (as in Africa). Economists refer to a “resource curse,” which allows a kleptocratic ruling elite to amass enormous wealth without exerting any constructive effort or ensuring decent governance. Natural resource revenues go straight to governments, bypassing citizens.
Bhutan’s largest natural resource is hydropower, which generates a lot of money for the government. Kleptocracy and misgovernance have been held at bay thus far, to its credit. However, if hydropower revenue continues to rise, so will the hazards.
Bhutan has accomplished a great deal to earn the Shangri-La moniker. It has a forest cover of 72 percent and has vowed to keep it above 60 percent indefinitely. It only allows a small number of high-end visitors, which helps to retain the traditional character of its charming towns. Tourists describe the inhabitants as nice, peaceful, and welcoming.
However, outward appearances might be deceiving. Bhutan has expelled 100,000 individuals of Nepali ancestry, who are currently living in refugee camps in Nepal, due to a severe ethnic conflict. Ethnic Bhutias make up half of Bhutan’s population, while ethnic Nepalese make up the other third. Nepalese immigration have displaced indigenous ethnic groups in India’s neighboring states of Sikkim and Darjeeling. Bhutan’s Bhutias are determined to avoid being flooded as well. Those who have been expelled argue that they are ordinary people who have been ethnically cleansed, while the government claims that they are illegal immigrants. Such ethnic conflict does not appear to be conducive to pleasure.
Women outweigh men in most countries. Bhutan, on the other hand, has only 89.2 females for every 100 males. This is worse than India (93.3 females for 100 males), which has a high rate of female foeticide and infanticide. The gender ratio in Bhutan implies that female children are discriminated against in terms of health and nourishment.
Bhutan’s literacy rate is estimated to be 47 percent by the CIA World Factbook, and 59.5 percent by a recent Bhutanese publication. For decades, the government prohibited television to protect its citizens from destructive contemporary influences, but it was ultimately authorized in 1999. Low literacy and media restrictions aren’t typically linked to happiness, yet others argue that ignorance is bliss.
I’m not sure if Bhutan is actually content. But, if that’s the case, Bhutan appears to have demonstrated that the happiness brought on by massive dams and rapid GDP growth outweighs the sadness brought on by ethnic warfare, gender discrimination, and low literacy.
Is Bhutan’s GDP impressive?
- Bhutan is well recognized for its Gross National Happiness (GNH) philosophy, which prioritizes happiness over GDP and productivity.
- Bhutan has made significant improvements in its economic, environmental, social, and governance conditions during the last four decades, guided by its Gross National Happiness.
- The country nevertheless faces serious obstacles, such as export concentration and a small local market.
- Bhutan’s unique techniques to keep building its economy can be learned by similar small countries that are about to graduate from the LDC group.
Is Bhutan a wealthy nation?
Bhutan is a small landlocked country hidden deep in the Himalayas between India and China, with high mountains and deep valleys that have resulted in dispersed human settlement patterns. Gross National Happiness (GNH) is the country’s distinctive ideology that informs its development plan. The valleys’ abundant water resources make it perfect to exploit renewable energy sources through hydropower development, which has boosted economic growth by providing nearly universal access to low-cost electricity. Revenues from the sale of surplus electricity to India and tourism have enabled the country to make significant investments in human capital development. As a result, service delivery, education, and health outcomes have all improved significantly.
Bhutan’s political and economic situation is stable.
It has achieved significant progress in eliminating severe poverty and increasing gender equality, with efforts to address social injustice and regional imbalances continuing.
Bhutan’s macroeconomic stability has remained stable for decades. Bhutan’s economy, like that of other countries throughout the world, has been hampered by the long-running COVID-19 pandemic.
Bhutan has beaten the COVID-19 pandemic because to strict containment measures and rapid vaccinations, with over 90% of the eligible population fully vaccinated by August 2021. The number of confirmed cases has remained low; as of September 23, 2021, there have been 2599 confirmed cases, with three fatalities.
However, it came at a tremendous financial cost. In fiscal year 2020/21, the border remained closed (July 2020 to June 2021). Tourism has been suspended since March 2020, and non-hydro industrial enterprises have been harmed by foreign labor shortages and trade issues with India, Bhutan’s most important trading partner. As a result, the unemployment rate increased to 5% in 2020, up from 2.7 percent in 2019, with job losses concentrated in urban areas and among young people.
For struggling businesses and individuals who have lost their jobs, the government has developed a large social program (Relief Kidu), which is akin to a stimulus package.
Until the epidemic, Bhutan’s political situation had been stable, and economic conditions had been improving. Bhutan has been pursuing a development strategy based on the premise of Gross National Happiness since it became a democratic constitutional monarchy in 2008. In 2018, the country had its third legislative elections, and the new administration approved the country’s 12th Five-Year Plan (FYP) for 2018-2023. Bhutan has extensive economic and geopolitical ties with India, which is its largest trading partner, a source of international aid, and a funder and buyer of surplus hydropower. Natural catastrophes and climate-related concerns threaten Bhutan.
Bhutan has progressed from a low-income country to a lower-middle-income country. The government has been able to cut the number of extremely poor people by two-thirds in the last decade. Based on the $3.20/day poverty threshold, the poverty rate declined from 36% to 12% between 2007 and 2017. Since the 1980s, annual real GDP growth has averaged 7.5 percent, thanks to a rapid increase of public sector-led hydropower output. Significant hydro rents have aided the country’s poverty reduction efforts. While hydropower has proven to be a stable source of growth, non-hydro sectors have remained less competitive due to the country’s difficult investment climate, which includes high trade costs and a tiny domestic market. As a result, job growth has been limited outside of the public sector and agriculture.
In FY20/21, the economy shrank by 1.2 percent. As a result of the tourism industry’s closure, output in the services sector declined by 3.6 percent. Construction and manufacturing were negatively impacted by labor shortages and high input prices, while the hydro sector supported industry growth. Private consumption shrank as a result of domestic COVID-19 control measures and decreasing salaries.
The average rate of inflation grew from 3.0% in FY19/20 to 8.2% in FY20/21. While food inflation fell to 10.1 percent in June 2021 from a high of 17.0 percent in February 2021, non-food inflation rose in FY20/21, owing to price increases in India and rising gasoline prices. Many rural poor people’s real wages were likely affected by high food inflation. The $3.20 poverty rate is predicted to rise slightly from 10.3 percent in FY18/19 to 11.0 percent in FY19/20 as a result of this.
Due to the continued closure of borders, the current account deficit shrank to 11.5 percent of GDP in FY20/21, resulting in a narrower trade deficit than in FY19/20. Exports of goods (as a percentage of GDP) were stable, thanks to an increase in hydro exports from Mangdechhu and trade liberalization measures for non-hydro items, primarily minerals and metals. Imports of goods fell even more in FY20/21 than in FY19/20. In May 2021, gross international reserves climbed by 16 percent year on year to US$1.6 billion, or 15.8 months of goods and services imports.
In FY20/21, the budget deficit increased to 8.1 percent of GDP. Despite a one-time rise in hydro profit transfers from the on-streaming of Mangdechhu, total revenues fell dramatically due to sluggish economic activity. Capital expenditures (mainly financed by external funds) and COVID-19 relief measures (projections include expenses from the Druk Gyalpo’s Relief Kidu program, which includes temporary income support and a partial interest rate waiver) drove up total expenditures. As of June 2021, the public debt was 124.7 percent of GDP (up from 119.9 percent in FY19/20). The majority of the debt is connected to hydropower project loans from India (to be paid off from future hydro profits), with low refinancing and exchange rate risks, therefore debt sustainability risks are moderate.
Continued COVID-19-related restrictions, as well as decreased hydro outputs owing to maintenance work and further delays in the Puna II hydro project, will limit growth in the short to medium term, affecting hydro exports and government income. In FY21/22, the economy is predicted to gradually recover, with real output reverting to pre-pandemic levels. With the increased availability of migrant workers from India and the expansion of public infrastructure projects, construction activity is likely to return to normal. Improved external demand from India will benefit non-hydro exporting sectors. With tourism forecast to gradually return, growth in the services sector is predicted to build up in FY22/23.
Inflation is expected to continue strong in the short term, as a result of price hikes in India and rising fuel costs. In comparison to pre-COVID levels, the current account deficit is likely to remain low. Non-hydro exports, such as tourism services, are expected to progressively recover, offsetting the temporary drop in hydro exports due to maintenance. Imports are likely to rise in FY21/22, owing to increasing capital imports for infrastructure and hydropower projects.
In FY21/22, the fiscal deficit is forecast to remain at 6.6 percent. The increase in tax collections will be more than offset by a decrease in hydro profit transfers from Mangdechhu, indicating the resurgence in non-hydro sectors. Spending pressures are especially significant, as the government plans to prioritize capital spending in the second part of the 12th Five-Year Plan in order to promote a strong economic recovery. As revenue from the tourism sector recovers, the deficit is forecast to reduce starting in FY22/23. Due to low economic growth and significant budget deficits, public debt is expected to remain higher as a percentage of GDP in FY21/22, and to rise even more in FY22/23 as investments in the power sector expand.
Given the continuous disruptions in economic activity, the $3.20 poverty rate is expected to climb to 11.6 percent in FY20/21.
What is Bhutan’s primary issue?
Bhutan, dubbed the “Land of Gross National Happiness,” is confronted with a number of socioeconomic issues. Poverty and youth unemployment remain high, the healthcare system is in disarray, climate change is threatening the ecological landscape, and there is a high rate of violence against women.
Bhutan’s religion is Buddhism.
The proof will stare you in the face as soon as you enter the nation, and the impression will be confirmed during your stay in Bhutan, where Buddhism is by far the most popular religion. Simply counting the astounding number of monasteries scattered around the land will persuade you. It’s hardly an exaggeration to claim that you’ll find one on almost every street corner. Even yet, this does not take into account the number of temples.
Buddhism is not only the most popular religion, but it is also the state religion. To be more specific, the Buddhism practiced in Bhutan is Mahayana Buddhism, commonly referred to as “Great Vehicle Buddhism.” It is Tibetan Buddhism in its tantric form that is being practiced. You may hear it referred to as Lamaism. Bhutan is the only country in the world where this sort of “Great Vehicle Buddhism” is practiced as a state religion. According to the most recent figures and the most recent official census in Bhutan, Lama Buddhism is practiced by 75 percent of the population.
What is Bhutan’s international ranking?
Bhutan is ranked 97th happiest country in the world out of 156 countries in the UN World Happiness Report (WHR) 2018.
Bhutan has slipped 13 places from its previous rank of 84 in the list of 157 countries in 2017, albeit remaining in the same position out of 155 countries.
The UN Sustainable Development Solutions Network prepared the report, which considers characteristics such as per capita GDP, social assistance, healthy life expectancy, social freedom, charity, and the absence of corruption.
Finland topped the list this year, moving up from fifth place last year to dethrone Norway from first place. In the happiness index, the country received a 7.632 rating.
Except for Finland, which jumped to the top in the WHR 2017, the top five countries remain the same as in 2017.
Norway is presently in second place, with Denmark, Iceland, and Switzerland in third, fourth, and fifth place, respectively. The Netherlands is ranked sixth, Canada is seventh, and New Zealand is eighth.
Australia, which was ninth last year, is now tenth, and Sweden, which was tenth last year, is now ninth.
Bhutan is ranked 75th among the SAARC countries, behind Pakistan. Bhutan, however, remains ahead of Nepal, which is ranked 101, Bangladesh, 115, Sri Lanka, 116, India, 133, and Afghanistan, which is ranked 145.
According to the survey, respondents were asked to rate their lives on a scale of 0 to 10, with 0 being the worst conceivable life and 10 representing the best possible life. “It’s critical to analyze not only the average level of happiness in a community or country, but also how happiness is distributed.”
The results are based on people’s own judgments of their subjective well-being, and they include every survey conducted since the Gallup World Poll began in 2005.
Since 2012, the WHR has been held six times. The report’s main goal is to examine the science of measuring and comprehending subjective well-being.
The 172-page paper focuses on migration in particular. Rural-urban movement within countries has been significantly greater than international migration, according to the report, especially in poorer countries.
“While rural-urban movement within countries is a long-standing phenomena, large-scale international migration has risen dramatically in recent years as a result of globalisation,” according to the research. “Migration within and between countries has shifted people from lower to better earnings and from less to more productive labor.”
The research was issued on March 14th, just in time for World Happiness Day (March 20).
Is Bhutan an Indian territory?
The Himalayan Kingdom of Bhutan and the Republic of India have always had close bilateral ties, and the two nations enjoy a “special relationship,” making Bhutan a protected state, rather than a protectorate, of India. Bhutan’s foreign policy, defense, and trade are all influenced by India.