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Asia continues to develop quickly, but especially clean, happy Bhutan

Hydropower is providing electricity for rural villages in Bhutan as well as propelling its economy to be the fastest growing in the world (Credit: Asian Development Bank / Flickr)

Developing Asia is the “single largest contributor to global growth,” according to a new report, and the Kingdom of Bhutan is the fastest growing economy of them all, built on the backbone of a large hydropower sector. But rather than measuring development by gross domestic product (GDP), Bhutan prefers to assess its “gross national happiness.”

According to the report, published this month by the Manila-based Asian Development Bank, growth is accelerating in 30 out of 45 economies in developing Asia, making the region responsible for 60 percent of global growth. South Asia is currently growing the fastest, but Southeast Asia is projected to overtake it as nearly all economies there are showing an “upward trend.”

But tucked away in the Himalayas, the tiny Kingdom of Bhutan is outpacing them all. According to Asian Development Bank’s forecasts, Bhutan is expected to grow 8.2 percent in 2017 and shoot up to 9.9 percent in 2018. The World Bank‘s estimates are even higher at 9.8 percent growth in 2017 and 11.6 percent growth in 2018 and 2019, making it the world’s fastest growing economy.

“To top it off, Bhutan has built its economy by focusing on clean energy that helps counter the impacts of climate change,” the bank wrote. “The kingdom is one of the world’s largest exporters of hydropower, and it is only getting started in the business of selling clean energy to its neighbors.”

Although there are concerns that hydropower – particularly the construction of plants – may not be as clean as people have been led to believe, Bhutan plans to charge ahead with plans to build, generate and export more. Already, hydropower exports account for 40 percent of the country’s national revenue and 25 percent of its GDP, while construction makes up another 25 percent of GDP.

But according to the Asian Development Bank’s previous energy outlook for the region, Bhutan has only developed about 5 percent of the estimated 30,000 megawatts of untapped hydropower resources. Forecasted growth in 2017 is largely based on “stepped-up” hydropower plant construction, followed by expanding electricity-generating capacity in 2018.

However, in the mid-1970s, King Jigme Singye Wangchuck declared in an interview, “We do not believe in gross national product, because gross national happiness is more important.”

As a teenage monarch, he inadvertently set Bhutan on an economic experiment of measuring not only the value of goods and services produced and provided, but nine ‘domains’: psychological well-being, health, education, time use, cultural diversity and resilience, good governance, community vitality, ecological diversity and resilience, and living standards.

The 1729 legal code of Bhutan actually stated that “the purpose of the government is to provide happiness to its people. If it cannot provide happiness, there is no reason for the government to exist.” But in the years after the king coined the term “gross national happiness” (GNH), Bhutan began to pursue policies that develop conditions for happiness – the nine domains – not just the personal pursuit of happiness.

Therefore, economy-boosting activities like hydropower have been coupled with programs to bring electricity to rural villages, for example. Although some critics say that measuring GNH is too subjective, Bhutan is proud that in its latest GNH survey in 2010, the national happiness average was 6.066 on a scale of zero to 10, indicating the people are very happy despite low per capita income.

Meanwhile, across the region, the Asian Development Bank forecasts growth to reach 5.7 percent in 2017 and 2018, a slight drop from 2016’s 5.8 percent. As most economies in the region either move into the middle-income bracket or try to break past it, they must improve productivity, the report warned.

“Developing Asia continues to drive the global economy even as the region adjusts to a more consumption-driven economy in the People’s Republic of China and looming global risks,” Yasuyuki Sawada, the Asian Development Bank’s chief economist, said in a press release. “While uncertain policy changes in advanced economies do pose a risk to the outlook, we feel that most economies are well-positioned to weather potential short-term shocks.”


About Author

Joanne Lu

Joanne Lu is a South Carolina-based writer and editor dedicated to global development, poverty alleviation and social justice. After a year in Rwanda, she now covers the Asia-Pacific and economics. Find her on Twitter @joannelu or email