Gross National Happiness in Bhutan: A Policy in Making

Gross National Happiness (GNH), a concept largely identified with Brand Bhutan, is set to become a key referent point in shaping Bhutan’s economic and development policies. This became evident during a recent speech delivered by Prime Minister Thinley on February 10, 2012. The speech was on the relevance of GNH and in response to the publication of a new study titled “Initial Estimate of Value of Ecosystem Services in Bhutan”. The study concludes that the country’s ecosystem is worth Nu 700 billion (approximately US $14 billion) and that 53 per cent of the benefits of this ecosystem are actually enjoyed by the people living outside Bhutan. This is the first time that the national accounting system in Bhutan has evaluated natural, social, cultural and human wealth. Significantly, the emphasis is on consequent benefits. The report explicitly mentions benefits in terms of clean air, healthy soil, recreation etc. with an addendum that the benefit largely comes from climate regulation, protection of watersheds and carbon storage, which is estimated to be about Nu 171.5 billion ($3.4 billion).

Putting monetary value to the ecosystem is an idea that was initiated by The Economics of Ecosystem and Biodiversity (TEEB) Study. The TEEB study was commissioned by the G-8+5 and was launched in 2007 by Germany and the European Commission. TEEB was inspired by the Stern review on climate change, which emphasised upon an economic case for biodiversity with benefits being evaluated at the local, regional and global levels.

With mitigation being the central point, the rationale for the economics of ecosystem and biodiversity seems to be at work in Bhutan. This is not only reflected at national level initiatives where payment for ecosystem services has been applied in the hydrological and tourism sectors, but also at the international level where Bhutan has been taking an active lead on the Reducing Emissions from Deforestation and Forest Degradation plus (REDD+) mechanism.1 Bhutan became a member of the UN REDD programme with an observer status in April 2010. In December 2010, Bhutan initiated a scoping study, which showed that it was feasible to implement REDD-plus projects.

The REDD plus programme includes financial compensation for the role of conservation, sustainable management of forests and enhancement of carbon stock in developing countries. In consonance with its declared stand at the Copenhagen summit, 2009, that it would “remain carbon neutral for all times to come”, Bhutan’s National Environment Commission is presently involved in developing a carbon neutral policy at the national level.

Initiatives such as payment for eco-system services and REDD plus reveal how a small country can leverage its strengths when it comes to environmental issues. Also, by synchronising these developments within the broad parameters of GNH, the concept is well on its way to be institutionalised. This process of institutionalisation needs attention as it contains important policy pointers for understanding Bhutan. It is therefore important to understand what constitutes GNH, as it will have a long term impact in shaping Bhutan’s economic and development agendas.

The evolution of the concept of GNH in its present form has been a gradual one. The term was coined by the fourth King Jigme Singye Wangchuk in 1972 and was broadly understood through the four key pillars of sustainable and equitable socio-economic development, conservation of the environment, preservation and promotion of culture, and promotion of good governance. Taking the legacy forward, the fifth king, Jigme Khesar Namgyal Wangchuk, in his coronation address on November 7, 2008, announced that the essence of GNH needs to be maintained and one of the most important goals should be to secure the happiness of the people of Bhutan. The relevance of GNH is further underlined in the Constitution of Bhutan, particularly Article 9, which states that “the State shall strive to promote those conditions that will enable the pursuit of Gross National Happiness.”

Post 2008, institutionally, the concept has been mainstreamed through the Gross National Happiness Commission (GNHC). GNHC ensures that GNH is incorporated into the planning, policy making and implementation process by evaluating their relevance to the GNH framework. The methodology followed by GNHC has 26 indicators, based upon the nine domains identified by the Centre of Bhutan Studies. The nine domains are: health, education, living standards, environmental sustainability, good governance, psychological well being, community vitality, cultural diversity, and time use. GNH has also been identified as the main criterion in the Economic Development Policy, 2010, which stipulates that the broad vision is to promote a green and self reliant economy guided by the philosophy of GNH.

While national dialogues on Gross National Happiness have been taking place since 2008, the concept has recently gained visibility at the international level as well. In 2011 the United Nations passed a non-binding resolution on “Happiness: Towards a holistic approach to Development.” The resolution invites Bhutan to convene a panel discussion on the theme of happiness and well being. The resolution broadly aimed to highlight Bhutan’s model of GNH as a development indicator. Given the pace of its evolution and the attention it has received at the national and international levels, the concept will become relevant in all the important sectors of Bhutan. For the time being its most visible manifestation is in the environmental policies and its posture on mitigation measures under the United Nations Convention on Climate Change and the Kyoto Protocol.

Thus, these developments reveal that the philosophy of gross national happiness is in the making—not only at the ideational level, but also at the institutional level and as a tool of diplomatic engagement to construct a brand unique to Bhutan. While there are reservations regarding the intangibility of GNH indicators, Bhutan is set to overcome this impediment in the years to come. The National Accounting System is an example of translating the idea into operational reality. Components of the National Accounting System include: economic capital, cultural capital, social capital, human capital, ecological capital and economic capital.

As the idea of Gross National Happiness shapes up, it is important for Indian policy makers to engage with it in a pro-active manner. The understanding of GNH at present remains vague in India. Ideas do play an important role in informing policies. An engagement at the ideational level is important as India and Bhutan are major trade and development partners. Thus, India would be indirectly involved with the realisation of the GNH approach. While in the past India and Bhutan have held dialogues on GNH, India could adapt the GNH index in Indian states which share a similar eco-system as Bhutan—particularly the North Eastern states. Adopting the GNH prism (with local/state specific variations) to evaluate policies in ecologically fragile areas would prove beneficial to the region as a whole. Meghalaya for one has already expressed its willingness to develop GNH indicators for the state. India has an existing tradition of economically rewarding local community participation for preserving ecological services. Such practices could be included within the broader discourse of GNH, thus encouraging the sharing of best practices between the two countries. GNH has already been recognised as a new approach to development at the international level; a regional initiative, however, could prove useful in familiarising South Asian countries with the concept of GNH – an issue that becomes important given the pace of its institutionalisation in Bhutan.

At the international level, India has been supporting Bhutan on the REDD plus mechanism, an issue which benefits the debate on conservation credits and ecological good. The 11th meeting of the Conference of Parties to the Convention on Biological Diversity will be held in Hyderabad in October 2012. The platform could be used to discuss some of these measures. This discourse should also be taken to the regional and sub-regional levels, whereby other South Asian countries could give their country perspectives on GNH. India should thus take a regional lead to push Bhutan’s idea of ecological preservation forward, an action which will further generate goodwill and understanding between the two countries. Such activities could also contribute to a common posture regarding mitigation activities taken by South Asian countries.

• 1. As per the UN leaflet on REDD+, “Reducing Emissions from Deforestation and Forest Degradation (REDD+) is an endeavour to create an incentive for developing forested countries to protect, better manage and wisely use their forest resources, thus contributing to the global fight against climate change. It rests on the effort to create a financial value for the carbon stored in standing forests. “REDD+” goes beyond deforestation and forest degradation, and includes the role of conservation, sustainable management of forests and enhancement of forest carbon stocks.” available at http://www.unredd.net/ index.php?option=com_docman&task=doc_download&gid=4598&Itemid=53.