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Bhutan’s Paradoxical Development

Submitted by on May 13, 2013 – 2:40 pm 18 Comments |  
Himalayan GDP Per Capita MapThe southern rim of the Himalayas is rarely mapped as a region, as it encompasses two independent countries (Nepal and Bhutan) and five Indian states.* As a result, maps depicting economic and social development of the area can be misleading, as they typically contrast the two Himalayan countries with India as a whole. To address this situation, I have made a per capita GDP map of the seven relevant states as if they were equivalent geopolitical entities. As can be seen, politically troubled Nepal lags behind the rest of the region on conventional economic grounds. The comparison between Nepal and both Uttarakhand and Himachal Pradesh is striking, as the three states have much in common in regard to both physical and human geography. If one were to map a variety of social indicators, the contrast would be even starker.

As can also be seen, Bhutan has by far the highest per capita GDP figures in the region. The Bhutanese economy has also been growing at a rapid pace in recent years. In 2007, it posted the world’s second highest rate of economic expansion: 22.4 percent. Such figures may seem odd, as the government of Bhutan has long been suspicious of conventional economic development, stressing “gross national happiness” instead of “gross national product.” The country has also been noted for its subsistence-oriented economy and its relative separation from the global market. As framed by the Wikipedia:

The economy of Bhutan, one of the world’s smallest and least developed, is based on agriculture and forestry, which provide the main livelihood for more than 60% of the population. Agriculture consists largely of subsistence farming and animal husbandry. Rugged mountains dominate the terrain and make the building of roads and other infrastructure difficult and expensive.

Bhutan has been lauded by many critics of the global economic order for its heterodox position on development. The Bhutanese government’s recent decision to convert all agriculture to organic methods has received an especially favorable response from the environmental press. As one recent article put it:

“Bhutan has decided to go for a green economy in light of the tremendous pressure we are exerting on the planet,” Agriculture Minister Pema Gyamtsho told Adam Plowright of L’Agence France-Presse in an interview by telephone from the capital Thimphu. “Intensive agriculture requires the use of so many chemicals, which is not in keeping with our belief in Buddhism. We must live in harmony with nature.”

In light of such policies, Bhutan’s rapid economic growth and its relatively high level of per capita GDP do seem unusual. The answer, however, is relatively simple: dam building followed by the export of electricity to India. As it turns out, Bhutan’s 22.4 percent GDP expansion in 2007 “was mainly due to the commissioning of the gigantic Tala Hydroelectricity project.  Hydroelectricity and infrastructure-based construction continue to be the two major industries of growth for Bhutan despite natural constraints posed by the country’s extremely rugged terrain.”   And as emphasized by the CIA World Factbook, “The import of equipment and fuel to build hydropower plants [in Bhutan] is leading to large trade and current account deficits, though new hydropower projects and electricity exports to India are creating employment and will probably sustain growth in the coming years.”

Hydroelectricity is in many respects an environmentally benign form of economic development, as it generates power in a renewable manner, with little release of greenhouse gasses.** Environmentalists, however, typically oppose hydropower due to its corrosive effects on local ecosystems and indigenous peoples.

The disconnection between environmental and developmental rhetoric in Bhutan, both by the Bhutanese government and by outside supporters, has led to some pointed revisionism that emphasizes the country’s problems. A 2009 article from India’s Economic Times is especially pointed:

Large dams are not usually regarded as recipes for happiness. Environmentalists usually condemn them for displacing people and submerging forests. Bhutan’s neat ploy has been to adopt a green name (Druk Green Power Corporation) for its hydropower producer. It gets away with this since environmentalists don’t want to attack a much ballyhooed Shangri-La of happiness.

… A nasty ethnic struggle has led Bhutan to expel 100,000 people of Nepali origin, who now languish in refugee camps in Nepal. Ethnic Bhutias constitute 50% of Bhutan’s population, and ethnic Nepalese 35%. Nepalese migrants have swamped original ethnic groups in neighbouring parts of India like Sikkim and Darjeeling. The Bhutias of Bhutan are determined not to be swamped too. Those expelled say they are regular citizens who have been ethnically cleansed, while the government claims they are illegal immigrants. Such ethnic strife does not look like a recipe for happiness.

In most countries women outnumber men. But Bhutan has only 89.2 females per 100 males. This is worse even than India (93.3 females per 100 males) where female foeticide and infanticide are common. Bhutan’s gender ratio suggests strong discrimination against female children in access to health and food.

The CIA World Factbook estimates literacy in Bhutan at 47%, while a recent Bhutanese publication puts it at 59.5%. The country banned TV for decades to protect its people from pernicious modern influences, but finally allowed TV in 1999. Low literacy and media bans are not usually associated with happiness, but some will say that ignorance is bliss.

Bhutan Gender statisticsSuch harsh assessments seem unfair, as Bhutan has made significant progress in social development in recent years. As the graph posted here shows, most young people in the country are being educated, and the gap between male and female literacy levels is decreasing. And while it is undeniable that the country’s sex ratio is highly male biased, that may be changing as well. According to a Wikipedia table on the issue (derived from CIA data), Bhutan has one of the world’s most male-heavy populations in the 15-65 and over-65 age ranges, but its ratio in the 0-15 bracket is actually slightly less male-biased than the global average.

Himalayas Map*Parts of Pakistan and even Afghanistan are often included in the region as well, as can be see on the Wikipedia map posted here.

**Not all hydropower project, however, are climatically friendly. Dams in low-elevation areas covered with dense vegetation can actually produce more greenhouses gases—methane in this case—than coal-burning plants. The prime example is Brazil’s Balbina Dam.


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