Poverty in Bhutan Over the last 14 years, poverty in Bhutan has substantially decreased. This is a result of the nation’s philosophy of Gross National Happiness and its developmental Five Year Plans. Support from other nations has also helped make Bhutan’s successes possible. With further support, the nation could eradicate poverty within its borders. 


Bhutan, officially named the “Kingdom of Bhutan,” is a small nation in South-Central Asia. Historically, poverty in Bhutan has been an ongoing struggle. In 2003, the poverty rate in Bhutan was well above 25%, and the proportion of the population in extreme poverty (living on less than $1.90 a day) was 17.6%. 

However, there have since been major successes in the fight against poverty in Bhutan. As of 2017, poverty in Bhutan was 8.2%, less than a third of what it was 14 years prior. More impressively, the proportion of Bhutan’s population living in extreme poverty dropped to 1.5%. 

Gross National Happiness

The key to success in fighting poverty in Bhutan can be attributed to the nation’s developmental philosophy. The nation does not believe in measuring its progress through the Gross Domestic Product (GDP) lens used by other countries. Rather, Bhutan evaluates its success through Gross National Happiness (GNH) indexing.

The GNH system directs Bhutan’s government to step in and present the country with the best path to maximize the happiness of its citizens. The nation places a high priority on taking the initiative to fight poverty and inequality for this reason. In the country’s 1629 legal code, it states: “If the government cannot create happiness for its people, there is no purpose for the government to exist.” This sentiment still stands today in Bhutan. The government continues to direct its focus on allowing more and more people to pursue happy and healthy lives. 

Five Year Plans

To combat poverty in Bhutan, the country began a series of five-year development plans in 1961. Fittingly named “Five Year Plans,” each successive half-decade strategy sets forward a targeted initiative to address the largest assessed proponent of poverty in Bhutan.

Part of the success of the Five Year Plans was derived from its flexibility. As Bhutan continued to develop and change, the development strategies were able to shift with it. Each new implementation of the Five Year Plans would involve recreating the successes of the previous plan. Thus, any practices that proved to be inefficient could be replaced.

Nevertheless, all of the Five Year Plans initiatives had some commonality that greatly boosted the fight against poverty in Bhutan. The strategies all pushed for increased sources of income generation, expanded social resources, and rural development.

Bhutan’s strategic development planning, in combination with its GNH philosophy, was crucial toward its successes against poverty. However, Bhutan’s vast success would not have been possible without assistance from foreign nations. Further global efforts will continue to play a large role in the fight to eradicate poverty in Bhutan. 

Asa Scott
Photo: Flickr

Bhutan’s Gross National Happiness
Over the last two decades, Bhutan has made remarkable progress towards reducing national rates of poverty. The key to its success? Happiness. At the core of its development philosophy is Bhutan’s Gross National Happiness (GNH) — the idea that sustainable development requires a holistic approach and needs to take into consideration all aspects of well-being.

The Origin of GNH

The phrase was first coined by King Jigme Singye Wangchuk, the fourth king of Bhutan, in 1972. He declared that “Gross National Happiness is more important than Gross Domestic Product.” Bhutan created the GNH Index, a measurement of well-being, to use in policymaking. The GNH Index does not measure happiness alone, but also the overall well-being of Bhutanese citizens. It includes nine domains:

  1. Psychological Well-being
  2. Health
  3. Education
  4. Time Use
  5. Cultural Diversity and Resilience
  6. Good Governance
  7. Community Vitality
  8. Ecological Diversity and Resilience
  9. Living Standards

Each domain falls under one of four pillars: (1) good governance, (2) sustainable socio-economic development, (3) cultural preservation and (4) environmental conservation. The United Nations’ Sustainable Development Goals, aimed to be accomplished by 2030, fit well together with the GNI. Out of the 17 Sustainable Development Goals, 16 of them fall under one of the GNH pillars.

Developments in the GNH

In 1990, Bhutan had roughly the same levels of poverty as other South Asian countries, with more than 50% of the population living in poverty. By 2010, Bhutan reduced its rate of poverty to just 4%, while poverty for South Asia, on the whole, dropped to 30%. Although people are falling back into poverty, Bhutan has made tremendous progress towards poverty reduction through its holistic developmental approach.

Reforms that helped to improve the standard of living through various five-year-plans and programs include the commercialization of agriculture, development of infrastructure and increased amount of hydropower projects. The commercialization of agriculture led to about 8% annual growth in crop production per hectare. Moreover, the creation of more roads and highways increased access to education. Notably, much of the poverty reduction has taken place in rural areas, while in urban areas there is a danger of poverty increases.

Hydropower and Carbon Emissions in Bhutan

The main driver of wealth in rural areas is hydropower projects. Almost all of Bhutan’s energy comes from hydropower and the country even sells hydro electricity to neighboring nations. This is a major reason why Bhutan is the only country in the world that is actually carbon negative. This means that it absorbs more greenhouse gases from the atmosphere than it produces. The small population size, larger forest cover, relative underdevelopment and use of clean energy make Bhutan a carbon sink rather than a source. This is a remarkable achievement; Luxembourg, which is even smaller than Bhutan, emits four times the amount of carbon. The nation’s (Bhutan’s) lack of carbon emissions falls under the environmental conservation pillar of Bhutan’s Gross National Happiness. Yet, it also contributes to economic prosperity and development through hydropower projects.

Bhutan takes a wholly unique approach to govern its citizens by focusing on their happiness. The 1629 legal code of Bhutan states that “If the government cannot create happiness for its people, there is no purpose for the government to exist.” For hundreds of years, concern for the well-being of its people has informed policymaking. It is the reason why poverty has been drastically reduced, why annual GDP growth is 7.5% and why the country is carbon negative. Countries around the world can draw significant conclusions from Bhutan’s focus on gross national happiness.

Fiona Price
Photo: Pixabay