SPEAKING
FREELY Bhutan as a
model By David Matthew
Speaking Freely is an Asia Times
Online feature that allows guest writers to have
their say. Please
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Amid recent
criticism of Scotland's Environment Minister
Stewart Stevenson's unfavorable comparison of an
independent Scotland to "impoverished" Bhutan, an
argument about the unique nature and place of
Bhutan in the world gets lost.
Bhutan is
indeed impoverished and performs poorly by a whole
host of standards, ranking in the bottom quartile
on infant mortality for instance. In this light,
Stevenson's words about Bhutan and Scotland seem
willfully ignorant. Scotland aspires to
being part of an "arc of
prosperity" in northern Europe and Bhutan is a
country with 24% of the population living below
the poverty line.
Obviously Bhutan is not
a perfect or, in the minds of many, even a
reasonable place to want to copy. Yet, Stevenson's
points about Bhutan are not invalid - Bhutan is a
tiny kingdom of approximately 600,000 people, but
it is made much more influential than most
entities of its size by virtue of being a
sovereign state. It is also an energy exporter
through its green hydropower projects, such as the
joint Tala hydroelectric plant, which provides
energy to the country's southern neighbor, India.
While energy is the largest export of
Bhutan, perhaps its most famous export of is the
Gross National Happiness (GNH) index, a tool and
philosophy advocated by the government as a better
measure of national prosperity than more
conventional gauges such as gross national
product. While index has been derided as silly or
missing the point altogether, there is now a
growing body of academic and policy-related work
focusing on the idea of happiness as a valuable
societal measurement.
The April 2012
United Nations' World Happiness Report as well as
the recent Better Life Index, compiled by the
Organization for Economic Cooperation and
Development (OECD), are both testaments to the
underlying argument that a state is better
measured along multiple metrics that emphasize
culture and community alongside traditional ones.
In fact the OECD says as much on its website:
"There is more to life than the cold numbers of
GDP and economic statistics."
The United
Nations even went a step farther on June 29 by
creating an International Day of Happiness that
will annually be held on March 20, a diplomatic
victory for the Bhutanese government, which pushed
the UN to adopt this resolution. A cynical
argument could be made that the sudden focus on
happiness and other intangibles is the result of
governments worldwide responding to poor economic
performance and wishing to shift attention to
other aspects of societal well-being.
However, if Bhutan were to care about
things like GDP and growth, it would have plenty
to brag about. The country has averaged around 8%
GDP growth the past two years, a stabilized rate
after declining from excessively high growth
during the previous decade. The government is also
a cautious steward of investment, with more than
$700 million held in currency reserves.
Positive growth shouldn't mask deficiencies
and economic policy remains an area where the
government needs further development. The Royal
Monetary Authority, the central bank of Bhutan,
requires greater capacity to fulfill oversight
functions for the market competition it is
attempting to foster. Inflation is understandably
high in light of economic growth, but the
country's debt to GDP ratio is also high, above
the United States and Spain. Additionally, while
the government has taken admirable steps to
address problems with resource allocation equity
through block grants to districts, the Gini
Coefficient for wealth disparity for the country
is consistently in percent terms between high 30s
and low 40s (By comparison, Denmark and Sweden
score around 25%; the UK and New Zealand in the
mid-30s.)
Even with these weaknesses,
Bhutan is still a compelling case study in how a
young democracy, landlocked and with few natural
resources, attempts to better serve its citizens.
From this standpoint, the kingdom is almost a
laboratory of governance initiatives, regularly
promoting some of the most progressive policies in
not just Asia but the world.
Some recent
such policy initiatives have included putting in
place a weekly pedestrian day to alleviate traffic
congestion and pollution, and reaffirming that 40%
of the country's land will continue use as part of
a conservation-oriented national park system. The
government has also helped fund, through
advertisements and national tenders, a pluralistic
media, with 12 different newspapers (including
seven in English), two news channels, and online
news and social media sites for its tiny
population.
In line with recent trends in
New York, Denmark and other parts of Europe, the
government has instituted Pigovian taxes (designed
to apply, for example, where the social cost of a
market activity is not covered by the private cost
of the activity) and bans on imports as diverse as
junk food, automobiles, and tobacco (with public
smoking outlawed altogether). It has done this all
while providing free healthcare and education for
its citizens and within the larger framework of an
agenda built around ecological responsibility and
preserving the environment.
While the
observer might be tempted to write these
initiatives off as the eccentricities of a country
on the fringe of global affairs, its policies and
position are beginning to matter much more now
that Bhutan and China have started to formalize
relations. One of the key detriments to legitimacy
for the Kingdom of Bhutan has been its inability
to receive recognition by the majority of the
world's powers, including the five permanent
members of the United Nations Security Council.
Bhutan has largely toiled in the shadow of India,
its giant neighbor with whom it shares close
economic, military, and cultural ties. India has
actively discouraged closer relations between
Bhutan and China due in part to its own
complicated relationship with Beijing.
After meeting with China's Premier Wen
Jiabao, Bhutan's Prime Minister Jigmi Y Thinley
confirmed at the end of the Rio+20 summit on June
22 that the two countries were planning to move
forward to formalize relations "as soon as
possible". This is a decision that benefits both
parties - putting China in a position to further
promote itself as a good neighbor and Bhutan in a
position to better promote its message of holistic
prosperity. It will additionally help Bhutan to
diversify its external affairs away from the
influence of India, meaning potentially more
opportunities for cultural and economic trade
linkages with regional and global actors.
Bhutan is still a country with poor
infrastructure, a complicated business and
investment atmosphere, almost non-existent
industry, and an over-reliance on foreign
financial and technical aid. But it is much more
than simply a novelty anymore.
For
regional neighbors like Pakistan, Myanmar and
India, it is a democracy doing a lot of things
better in terms of developing and implementing
progressive policies. For the global community at
large, it is a model of conservation and creative
thinking. While Scotland may not aspire to a per
capita GDP of $6,000 [1], it could do much worse
than aspire to be a country on the forefront of
progressive thought and action.
Note: 1. Bhutan's 2010
per capital GDP on a purchasing power parity
basis was estimated at US$5,500.
David Matthew is an analyst for
Sino-NK and is a regular contributor for NK
News
(Copyright 2012 David Matthew)
Speaking Freely is an Asia Times Online
feature that allows guest writers to have their
say.Please
click hereif you are interested in
contributing. Articles submitted for this section
allow our readers to express their opinions and do
not necessarily meet the same editorial standards
of Asia Times Online's regular
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