Bhutan is not Shangri La, and gross national happiness is not the panacea of human development. I'm not looking to burst the bubble of mysticism around this magical country, but at least I can blow away some of the mountain mist that clouds its reputation. Bhutan is a country that is grappling with modernity and development.
Shangri La, as described by James Hilton in his 1933 novel, is an isolated mountain idyll where people age slowly and live in happiness and harmony. In many respects, Bhutan is not far off this description. The problem with Shangri La is that it is a figment of our imagination rooted in a bygone era – Shangri La has no toilets, no roads, no hospitals and no schools.
This may have been the case 50 years ago, when Bhutan was almost completely isolated. Its first paved road came in 1961, its first bank in 1968. At that time, there were only a few hundred students in a handful of schools and life expectancy in 1960 was just 37 years.
Much has however changed in recent years as Bhutan has opened its doors to the outside world. Thimphu, the country's capital since 1961 is a city of 100,000 and plays host to around 16% of country's population, one third of registered companies and more than 50% of the country's 68,000 cars.
My experience living here has been magical in its own way. The day I arrived, my bags shared the luggage carousel at the country's only international airport with a dozen flat screen televisions. I live in an apartment with wifi, wear a sashed gho to work and walk to an office where I can hear the drone of chanting monks. On weekends I visit the Centennial Market for my vegetables and local red rice, run through the rustic camps of yak herders, and enjoy views of mountains carpeted by untouched forests.
By carefully pursuing a balanced approached to economic development with its gross national happiness philosophy, Bhutan has successfully preserved its culture and important natural resources, while embracing modernity and improving the livelihoods of its people.
Bhutan's population still faces many challenges, in particular in relation to the development of robust private sector to support an autonomous economy. The newly elected prime minister, Tshering Tobgay was recently quoted as saying, "Rather than talking about happiness, we want to work on reducing the obstacles to happiness". Indeed, it is hard to be happy without a job, without a school, a road to your village or a toilet for your home. "We need to grow our own food, build our own homes," said Tobgay in the same interview.
This is where the private sector comes in. The International Finance Corporation estimates that some 90% of jobs in developing countries will come from the private sector. Increasingly, the government in Bhutan acknowledges this fact, recognising that achieving its development goals and economic independence will require the nurturing of a robust and entrepreneurial private sector.
Already, there are many factors that play in Bhutan's favour to support this future. It ranks 31 out of 177 countries on Transparency International's corruption perception index, ahead of Spain and far above its neighbour India. In addition, its education rates are among the highest in the region, it has universal healthcare, mobile coverage for 99% of its people and is in the process of bringing electricity to the last of the high Himalayan villages.
These factors, alongside a stable and proactive democratic government, make Bhutan a prime candidate for private sector growth. The country has been open to foreign investment for only 10 years, with investments mainly in luxury hotels and a few industrial processes that take advantage of the country's abundant and low-carbon hydropower.
The opportunities have barely been tapped. Only 30% of the country has been prospected for mineral development and 10,000 MW of hydropower will be coming online over the next decade. As mindsets shift from the middle ages to the 21st century, the country is opening for business.
The government has committed to creating a better enabling environment for both local and foreign businesses to flourish. In this spirit, it is supporting the organisation of the first Better Business Summit which will take place in Thimphu at the end of this month. This will be the first multi-stakeholder event designed to bring together cabinet level government officials with local and international business leaders to explore how Bhutan can be more business friendly.
Catalysing an entrepreneurial private sector will require public and private collaboration. The stakeholder event is being hosted by government partnership, the Bhutan Chamber of Commerce and Industry and Druk Holding & Investments, my employer and overseer of the state owned enterprises.
While conversations at the summit will focus on economic growth, regional cooperation and youth unemployment, participants will also be thinking about the balance of preserving its culture, environment and the spirit of gross national happiness.
If you want Shangri La, go to Disneyland, but if you want magic you can live and a development philosophy you can bank on, come to Bhutan.
Randall Krantz is currently in Bhutan advising the sovereign holding company on sustainable competitiveness. You can read more about his experiences in Bhutan at www.bhutanchronicles.com
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