Revisiting the Bhutanese Development Philosophy through the Conventional Development Models

Abstract

Bhutanese development philosophy is based on achieving Gross National Happiness (GNH) rather than putting a narrow focus on just the Gross National Product maximisation. Besides, economic growth, preservation of environment, and preservation of culture and tradition are considered in achieving sustainable development that promotes happiness of the present and future generation (a middle path of development). This paper employs standard economic theory on consumer behaviour in which a consumer is assumed rational and a rational consumer always prefers maximisation of economic well being. Within this concept, the environmental degradation and preservation of culture and traditional values are built in to show how the standard economic well being maximisation graph is modified to project Human Happiness or a Middle Path of Development. It also touches issues of measurability of human happiness. Further, the paper reviews very briefly as to how far the Bhutanese economic development has reached following the GNH or middle path concept of development. Finally, the paper points out some challenges that are ahead on the Middle Path of development approach.

I. Introduction

Located in the Himalayan Mountains, a Buddhist Kingdom – Bhutan with about 600,000 people composed of majority Buddhist followed by ethnic Nepalese Hindus, is one of the remote countries in our planets. Bhutan opened up very late for economic modernization and even today a lot of economic transactions in remote villages are based on barter system and in most parts of the country business still relies heavily upon rules, norms and traditions that stems from old bargain and barter like practices. These practices are primarily rooted in the Buddhist/Hindus religious traditions and local culture. From an economic sociology perspective this makes Bhutan a very interesting object for studying. Further, ‘Gross national Happiness (GNH)’ guides the unique development philosophy adopted by Bhutan rather than ‘Gross National Product (GNP)’, which makes the study even more interesting.

It is interesting to see how the concept of GNH is different from the conventional development models. This paper will show that the concept of GNH is not mutually exclusive either to the concept of GDP or to sustainable development. The GDP concept aims at maximisation of the production of economic goods and services. However, the concept of sustainable development adds a constraint to the GDP concept on natural resource utilisation and the choice of technology. The GNH concept adds further constraint to GDP maximisation model such that the knowledge of sustainable development is not only discussed but also put into practice through preservation and development of right set of values. Further, the paper employs standard economic theory on consumer behaviour in which a consumer is assumed rational and a rational consumer always prefers maximisation of economic well being. Within this concept the environmental degradation and preservation of culture and traditional values are built in. The paper then shows how the standard economic well being maximisation graph is modified to project Human Happiness or a Middle Path of Development upon incorporation of environmental and cultural variables. It also touches issues of measurability of human happiness. Further, the paper reviews Bhutanese economic development focus and achievements within the context of GNH. Finally, the paper points out some challenges that are ahead on the Middle Path development approach.

II. Conventional Economic Development Concepts

The traditional economic development concept is focused on what to produce, for whom to produce and how to produce. Basically the question of what to produce is answered by looking at the current market needs or the current customers’ need or the needs of the present generation. In a market economy the market forces (demand and supply) and in state run economy, the economic planners and politicians will decide on what to produce. In both the approaches, basically the requirement of the current generation is taken into consideration. However, the concept of sustainable development focuses at the needs of both the present and as well as the future generations. This is what probably is the major difference between the traditional economic development models and sustainable development model. The other problem of how to produce, that is the choice of technology and input mix that increases input productivity, minimises input wastage etc. are probably considered in the similar fashion by all the development models.

The conventional economic development models aim at generating higher and higher level of Gross Domestic Product. Perhaps the GDP and Gross National Product (GNP) are the earliest economic indicators of well being. Since this indicator does not incorporate distribution aspect, it was to be read along with measures of inequality. Yet it was thought that this indicator was not sufficiently indicating the well being of the people. The United Nations development Programme introduced Human Development Index (HDI) that inputs not only per capita income but also the basic social service variables such as life expectancy and educational attainment. Probably, HDI is the best available indicator of human well being or human development. Unlike conventional economic development model that emphasises on GDP, HDI concept takes into account the access to social services like educational attainment and life expectancy. However, the question of how long the well being could be sustained remains unanswered unless the principles of sustainability is embodied in it.

Sustainable Development concept emphasised by the World Commission on Environment and Development states that present development efforts should ensure and meet the needs of the present generation without compromising the ability of future generations to meet their needs and aspirations. The ultimate objective of the sustainable development is to achieve economic prosperity that continues for long period of time such that several generations in future do not curse us for using their share of resources. Besides, present well being through higher GDP or HDI, this model also puts strong emphasis on minimising environmental degradation in the choice of production technology, the question of how to produce, that ensures well being of the present and future generations.

III. Bhutanese Development Concept

Bhutanese economic development model is very much consistent with the concept of sustainable development. In addition to the principles of sustainable development, the Bhutanese development model incorporates cultural and spiritual variables very strongly since we believe that the economic variables alone are not sufficient in determining the well being of the people. Also, the religion, culture and tradition in Bhutan are the roots of Bhutanese respect for nature. If sustainable development concept has to become very practicable then the human attitudes towards nature and the demand for extraction of resources have to change. Pure economic model of development suggests that a rational consumer chooses more amount of all kinds of economic goods and services compared to less (refer any consumer theory in economics). In the journey of attaining higher level of goods and services, the resources to be extracted from the nature fall under human pressure. Hence human beings as their needs are unlimited, can be unjust to their future generation. It is true that the principles of sustainable development creates awareness, provides knowledge to the people about the consequence of over utilisation of natural resources; however, we need to translate the knowledge to behaviour and then to practice. Translating knowledge to practice requires right attitudes. A right set of attitudes in human being for the use of natural resources could be developed if they have positive values towards nature within their culture and tradition. Otherwise, a “rational” human being as stated in any standard economic text always prefers more and more of economic goods and services and his or her greed to maximise present economic prosperity would lead to unsustainable development.

Bhutanese economic development model described by the development philosophy of GNH considers that economic variables are very necessary conditions for peoples’ well being but not a sufficient condition. This model provides importance to economic development and increasing GDP within the context of sustainability for long period of time. Bhutanese development model has provided major emphasis on environmental preservation and the preservation of culture and tradition. Proper management of natural resources that leads to preservation of environment would mean sharing the economic prosperity with future generation. However, what constraints the present generation from lavish extraction of resources from the nature due to the greed for maximisation of production of economic goods and services? The answer to this probably is the human values. From where do human beings derive their value system? Bhutanese development model incorporates culture and tradition with a belief that our culture and tradition is the source of our value system that guides us in every walk of our lives. Obviously the beliefs, behavioural pattern, pattern of thinking, customs, music, literature, social institutions etc. that has been passed down by our ancestors have modelled Bhutanese methods of doing things. Bhutanese culture and tradition based on Buddhist Philosophy provides that value system which constraints the present generation from lavish extraction of resources at present. The Buddhist Philosophy provides us with a set of beliefs that there is a new life after death. It also teaches that what you will be in next life depends on your present action. Therefore, the economic development model that incorporates cultural and traditional values in it adds to our thinking for future generation or the next life.

The economic development that incorporates economic variables (contributors to GDP), environmental variables (contributors to environmental preservation) and the cultural variables (contributors to the preservation of culture and tradition) is believed to result in the happiness of the present and future generation. In other words the economic development that is sustainable and culturally valued brings happiness. To this end Sharrock (1999) has also stated that “linkage – between economic and environment domains in Bhutan – is precisely what is implied by the concept of GNH”. The next section uses standard economic consumer theory and makes an effort to explain human happiness upon addition of cultural variables into the standard consumer theory.

Graphical Analysis of Material well being Maximisation

Figure 1

In the standard micro-economic texts that explain consumers’ behaviour or consumers’ equilibrium, we find two-dimensional graph measuring one commodity on each axis. This assumes that if a consumer reaches equilibrium with two goods within his or her reachable means {budget lines: (1,1), (2,2) and (3,3)} then the same is true for any combination of commodities. Rather than using two commodities, I have used ‘economic goods’ and ‘economic services’ and term lines (1,1), (2,2) and (3,3) as resource lines simply because I want to emphasis on natural environmental resources and not on budget as constraints. Given the fact that environment is a source of resource supply, I think resource lines would be more appropriate in my effort to explain human behaviour towards attaining economic well being.

A “rational” consumer, as assumed by the consumer theory, prefers higher combination of economic goods and services. So he or she tries by all means to jump from curves aa to bb and then to cc (indicators of rational human beings’ preference). These curves assume that at any point on the same curve, a consumer derives same amount of material satisfaction; however, further away the curve from the origin higher the level of satisfaction. But how far can a consumer go and what is the level of satisfaction he or she is looking for. The journey towards the direction of “material well being” indicated by an arrow does not end except for the fact a consumer is constrained with resources. In his or her effort to maximize unlimited need for material well being, a consumer exerts higher and higher levels of pressure on resources (see the shift in resource lines from 1,1 to 2,2 and to 3,3 in figure 1. Such an economic greed makes so-called rational man and woman unreasonable users of resources at present and irresponsible ancestors of their future generation. So, what may help them is lessening their greed. I include religious, cultural and traditional variables that provide spiritual well being to mankind and combine this with material well being to show that human happiness does not necessarily depend only on material well being (see figure 2).

Figure 2: Graphical Analysis of Happiness Maximisation

The levels of material well-being curve marked aa, bb and cc in figure 1 are placed in the different fashion in figure 2 as Oa, Ob and Oc respectively. This change, however, does not alter the order of the levels of material satisfaction. Shift from line Oa to Ob and then to Oc would mean getting into higher and higher levels of material consumption. Here, line Oc represents the path followed by those who give more importance to material well being and less importance to the spiritual well being. For this group of people consumption of more and more of economic goods and services would mean higher level of satisfaction. In fact, if one follows line OY then he or she is hundred percent an “economic animal”.

On the other hand, line Oa represents the path followed by those who pay more importance to spiritual well being and consider that economic goods and services are required but they are not everything. Some one who is closer to Buddha-hood will lie closer to the line OX. However, even the most enlightened saint probably cannot lie on the line OX as it indicates only spiritual well being and no amount of even basic economic requirements. Curves c1, c2 and c3 represent different levels of human happiness in ascending order. Someone who goes more for material well being could attain c3 level of happiness at point N on line Oc.

However, someone who also believes on spiritual well being as a source of happiness could attain c3 level of happiness at point S on line Oa (any point on line c3 gives same amount of happiness). Line Oa represents lower level of economic goods and services compared to the line Oc. However, same level of happiness is achieved on two different levels of material well being. In Bhutan, the development policy, in my view, takes into account the fact that an average Bhutanese is neither a pure economic animal nor a highly enlightened saint. Therefore, to maximise the happiness of an average Bhutanese, development policy is targeted such that the progress falls on the middle path.

In my view, this is the kind of “middle path” that Namgyal (1999) has also raised. Namgyal expressed that there are “three complementary components of the matrix that forms the building blocks of GNH: the environment, societal values and individual responsibilities”. The middle path shown in figure 2, in my view, also takes in these three components. An average Bhutanese, probably prefers point M on line Ob rather than N that lies on a higher material well being or S on line Oa. Average Bhutanese or for that matter any human being can not totally substitute material well being for spiritual well being. This should explain why we choose M over S. On the other hand, material well being (GDP) is not the sole indicator of happiness; that is why M is preferred to point N. However, the criticism arises on how could one measure the spiritual portion of the well being and consequently the GNH.

IV. Problems of Measurement of Happiness:

Since GNH incorporates economic well being (which is measurable by ways of GDP, sustainable development indicators and HDI) and spiritual well being (cultural, traditional and religious variables that are not measurable), the measurability of GNH in quantitative term has not been possible as yet.

However, in my view, one should not look at only the direct quantifiable output of the development policy. Yes, GDP or HDI are measurable as the direct output of the conventional development policies and we are used to believing on what is measurable directly. We are used to believing on counting numbers because only the numbers can be counted. That is why when economists, development thinkers and practitioners define development objectives, one of the main characteristics they emphasis is that it has to be measurable. Our feelings, sentiments, beliefs and values etc. that originate from cultural, traditional, religious and political background, can not be directly counted using numbers, so we ignore them.

However, these non-quantifiable variables can be measured through the impact. Feelings of discontentment and depression are expressed in action by human beings and these actions can be seen and are measurable using either quantitative or qualitative methods. Such feelings and actions thereof are attributed mainly due to lack of spiritual well being; otherwise, there remains no reason why rich people are discontented and depressed in life if material well being was everything. Therefore, while talking of the development, may be, it is complete if we look at GDP, HDI and their sustenance plus index of discontentment expressed by the citizens in actions in the forms of suicide rate, broken families, drug abuse, street violence, juvenile delinquency, murder, theft etc. Since GNH takes into account the economic well being, sustainability and spiritual well being, it may be possible to adjust GDP or HDI with sustainable development index and discontentment index to arrive at GNH index which may be then compared country wise1 .
A society probably is happier if economic prosperity is accompanied with sustainability (lower degradation rate of natural and man-made capital) and a lower discontentment index. I believe a spiritually developed person will produce lower discontentment index and through contentment lower degradation of natural and man-made capital as compared to his or her counterpart who believes purely in material well being. If we could develop discontentment index as suggested above and put its reciprocal in X axis in figure 2 as a proxy for spiritual well being then we could see GNH curve produced by the combination of material well being and spiritual well being2 .

V. Review of the Bhutanese Economic Development Model

The concept of unique development model, the Gross National Happiness, was realised from the time the third monarch, the King Jigme Dorji Wangchuck expressed the views on development in making “the people prosperous and happy”. This concept of development became a prominent vision of development in Bhutan when His Majesty, the present King declared that “our country’s policy is to consolidate our sovereignty to achieve economic self-reliance, prosperity and happiness for our country and people”. Based on these statements and the development objectives laid down particularly in the seventh and the eighth five year plan documents, Priesner (1999) comes up with the development model in a network form. He mentions that both the economic prosperity and happiness are paid attention; however, he notes that happiness is considered more significant and quotes His Majesty the King, “ Gross National Happiness is more important than the Gross National Product”. The rationale behind putting more importance to GNH rather than GDP, in my view, is because the former is the end outcome that every Bhutanese aspires for and the latter is one of the very important means to take us towards the end.

The economic prosperity that results from higher GDP growth requires sound economic policies. Bhutan, as we have experienced, has been doing all her best in focusing on policies (within the development philosophy) that promotes economic efficiency since economic growth is very essential for GNH. Some of them are outlined below:

• Corporatization and privatization that ensures competitiveness,
• Administrative decentralisation and community participation that creates sense of belonging of the people to the main stream of development activities which in turn improves effectiveness of the development investment,
• Liberalisation of interest rates that provides enabling environment for privatisation and higher investment,
• More liberal with the foreign trade principles and exchange rate policies than before.

The economic policies such as above are aimed at enhancing our means towards our final goal of GNH. The network model that we present in this paper starts with the focus on GDP then on HDI and then on GNH through sustainable development approach. Bhutanese development model remains very much consistent with the GDP, HDI and sustainable development concepts. However, these are considered means towards achieving our “people centred” development goal of Gross National Happiness. Therefore, I would think that the lesson to be drawn from the statement, “Gross National Happiness is more important than the Gross National Product”, is to segregate between means and the ends of development goal. The model suggested below, in my view, separates the two.

Figure 3: Development Model

The review of the development plans of the past starting from the first five-year plan (1960 – 1965) up to the eighth plan (1997 – 2002), could be summarised by the model suggested above. As reviewed by Wangdi (1999), the development focuses were as follows:

• the first four five-year plans (1960 – 1981) were concentrated purely on economic growth and provision of social services,
• the fifth plan (1981 – 1985) focuses on decentralisation, equity and self reliance,
• the sixth plan (1987 – 1992) puts emphasis on national identity and rural development,
• the seventh plan (1992 – 1997) was focused on sustainable development, economic privatisation and regionally balanced development
• the eighth or the present plan (1997 – 2002) has emphasised on sustainability, national security, culture and tradition, decentralisation and community participation and quality of life.

The development focus of the last forty years suggests that the emphasis was given on the improvement of GDP growth, equitable development, social services and life quality, sustainable development and, preservation and promotion of culture and tradition. Attainment of all these objectives would mean GNH as indicated by the suggested model in figure 3 above.

If we review seventh or eighth five-year plan documents we find the major emphasises being placed on economic progress with sustainability. There is lot of importance attached on preservation of forest and prevention of environment from degradation. We also find that preservation and promotion of culture and tradition is clearly spelled out in the policy. There is also a strong link between nature preservation and culture preservation. As followers of Buddhist Philosophy, Bhutanese believe in interdependence relationship between human beings and the nature. I probably should not attempt to justify this relationship of interdependence as it falls beyond my understanding level. However, I do believe that culture and tradition is the source of human values and values guide our thoughts and actions. Beside other things, one of the strong reasons as to why Bhutan has been able to retain about seventy-two percent of land cover under forest and about twenty-six percent as reserved forest may be credited to Bhutanese value system. Although forest is our potential resource base but we have not exerted heavy pressure on it for our present economic gains. The statement made by Lyonpo Jigme Y. Thinley in his keynote speech at the Millennium Meeting in Seoul (1998), explains that Bhutanese policies on the environment and sustainable development in fact preceded considerably the current global awareness of the deterioration of eco-systems.

VI. Challenges ahead for GNH model of Development

One of the major challenges is on the operationalization of GNH concept for use by the decision-makers. If different people have different understanding of the concept, which could be possible, then implementation becomes a problem. Sherrock (1999) states “ My interest lies in considering how best this theoretical concept might be operationalized for use by the decision-makers within the government.

Facing the daily realities of setting economic policy and formulating development plans, such staff will require practical guidelines that enables them to establish economic environment within which development activity can thrive in accordance with the principles of GNH”. Priesner (1999) has also talked about the problems of GNH at the operational level. Stehlik (1999) states, “The achievement of GNH can not be sought through any of the existing economic concepts of development”. It might mean that the output of GNH is not measurable by the available economic concepts and this doubt of operationalizing the theoretical concept probably has been raised since there is no index being established to measure the outcome of the concept. Therefore, our search should be on for identifying essential constituents of GNH. This is what Lyonpo Jigmi Y. Thinley (1999) has emphasised.

The measurability concept introduced earlier in this paper may provide some thought for a starting point in the journey of finding indicators for happiness.

Secondly, although in Bhutan the population size is small but the growth rate of about three percent is one of the highest in the world and at this level of growth, the population of Bhutan is going to double in twenty years time. The growing population will put pressure through increased education expenses, health cost, food, housing and sanitation, environmental degradation, pension, gratuity, perks or benefit, unemployment problem, law and order, rural- urban migration so on and so forth. Conservation and sustainable development would mean the wise use of natural resources and the reduction of waste; but not only in a material sense. There is a moral dimension to it as well. Respect for nature is deeply rooted in the traditions, cultures and religions of Bhutan. However, a conflict occurs increasingly between people’s deeply rooted respect for nature, and the increasing immediate needs due to increasing population. The very future of Bhutan depends on how wisely this conflict is resolved. Besides having one of the highest growth rates, Bhutan also has very high dependency ratio (for instance eighty-six percent in 1997) which is detrimental to the economic growth and consequently to GNH.

Thirdly, the per capita availability of agricultural land is already one of the lowest in the world and will further deteriorate with the increase in population. With the current population growth rate, according to the findings of Ministry of Agriculture, the per capita availability of agricultural land will be reduced by fifty-four and half percent in twenty-three years. A nation wide survey conducted by the Ministry of Agriculture in 1994 – 95 shows the following facts at present:

1) Eighteen percent of the households own less than one hectare of land.
2) A total of 4093 farmhouse holds are found landless.
3) A total of 3056 farmhouse holds are found near landless.
4) There are 886 households dependent on tsheri (shifting) cultivation.

The shrinking land-man ratio will lead to the shortage of food supply, as more food will be required from the same or declining agricultural land. The Ministry of Agriculture finds that at the current rate of per capita consumption, Bhutan will need additional 37,597 and 22,000 metric tones of rice and wheat respectively in the year 20173 .

The pressure on the limited agricultural land will not only lead to food shortage but also to the fragmentation of land holding and increasing incidence of landlessness and marginal non-subsistence land holding. This could be one of the major attributes to rural-urban migration. The failure of agriculture to absorb the growing labour in rural areas will lead to rural urban migration in search of employment opportunities. The severe pressure caused on the urban services will result in developmental and environmental problems like air pollution, noise pollution, shortage of drinking water, pressure on health and education facilities, electricity, inadequate hygienic and sewerage facility, unemployment, and proliferation of the urban slum due to shortage of housing. The root cause for all these problems, however, is the higher rate of population growth.

The biggest threat to the process of economic development could be the rapid growth of population. The uncontrolled population that results in the reduction in man-land ratio, insufficiency in food and other basic needs, rural-urban migration etc. will in turn result in environmental degradation – an unsustainable approach to development which is contradictory to the concept of GNH. If people are not in a position to meet even the bare minimum of their basic needs then there will be discontentment that will disrupt the whole development path to GNH.

V. Conclusion

As Bhutan stresses on GNH, GDP is seen as one of the necessary components towards achieving GNH, however, GDP is not considered to be a sufficient condition for happiness. Besides, putting effort on increasing GDP, Bhutanese Development Policy focuses on sustaining economic growth with proper management of natural resources that promotes preservation of environment. Preservation and promotion of culture and tradition is seen as one of the very important means towards promoting sustainable development since Bhutanese culture and tradition provide the basis for Bhutanese value system that is friendly and interdependent with the nature.

This paper has shown that economic well being is a necessary condition for human happiness but not a sufficient condition. Besides, economic well being, spiritual well being which has its base on culture and tradition is additional requirement that provides happiness to mankind through human contentment.

On reviewing the progress of Bhutanese development, this paper identifies operationalization of GNH concept in practical terms, high rate of population growth, low per capita landholding, food shortage and rural-urban migration as some of the major challenges to sustainable economic development. The high population growth rate per year poses great threats for sustainable development and Gross National Happiness.

To see that the GNH model proves to be a better development model in Bhutan, the challenges should be addressed. Further, the Bhutanese society should strengthen their commitment to putting in practice the positive values derived from the rich culture and tradition towards maintaining the equitable balance between the material well being and spiritual well being. Every citizen should be enlightened on the concept of sustainable development and its compatibility to the concept of GNH; otherwise, as Prakke (1999) mentions, “...modern education makes the younger generation think in the new terms and concepts” - which in my view would be a more materialistic one. If we do not work towards enlightenment of younger generation on the concept of GNH and its compatibility with sustainable development, our development growth rate on the middle path will be slowed down.

References:

1. Namgyal, Pem (1999) ‘Gross National Happiness – The Middle path, Governance in Bhutan’, Insurance for Gross National Happiness in the New Millennium, Royal Institute of Management.
2. Prekke, Diederik (1999) ‘Development with sparks; Placing the hamburger in the Mandala’, Gross National Happiness, Centre for Bhutan Studies.
3. Priesner, Stefan (1999) ‘Gross National Happiness – Bhutan’s Vision of development and its Challenges’, Gross National Happiness, Centre for Bhutan Studies.
4. Sharrock, Guy (1999) ‘Gross National Happiness: Can Environmental Economics offer a way forward?’ Gross National Happiness, Centre for Bhutan Studies.
5. Stehlik, Vladimir (1999) ‘Gross National Happiness: A Respite from a Biblical economy of attaining Utopia?’ Gross National Happiness, Centre for Bhutan Studies.
6. Thinley, Jigmi Y. (1999) ‘Gross National Happiness and Human Development – Searching for Common Ground’, Gross National Happiness, Centre for Bhutan Studies.
7. Thinley, Jigmi Y. (1999) ‘Values and Development: Gross National Happiness’, Gross National Happiness, Centre for Bhutan Studies.
8. Wangdi, Kunzang (1999) ‘An Account of the History and development of Decentralized Administration in the Himalayan Kingdom of Bhutan, Governance in Bhutan’, Insurance for Gross National Happiness in the New Millennium, Royal Institute of Management.
9. Ministry of Planning (1996) ‘Eighth five-year Plan, Vol. I: Main Document’, Royal Government of Bhutan.

1. For sustainable development indicator see Sharrock, 1999, in which he points out, “Applied to Bhutan, the country’s national saving ratio (savings divided by some measure of income like Gross Domestic Product) must be at least as great as the depreciation on its natural capital and man-made capital stock,..”
2. the discontentment index. The result then could indicate human contentment, which could be considered as an impact of spiritual well being.
   
3. Information on Agriculture sector are obtained form the report of Rudra Mani Sharma (2000), a PGCFM student at the Royal Institute of Management, Bhutan.