22 June 2024, NIICE Commentary 9285
Puloma Pal
The Himalayan nation of Bhutan is setting out on an incredible economic adventure. In its quest to establish itself as a major player, Bhutan has gained massive traction in the area inside South Asia. Utilising its distinct asset contrary to its economy, which has historically been agricultural, the country is experiencing a revolutionary change in favour of sustainable growth.
For decades, Bhutan has held an unwavering commitment to environmental preservation and the growth of a green economy. This has translated into the nation paving the way, in this rather evolving field. Moreover, Bhutan has been investing in cutting-edge infrastructure inclusive of sophisticated transport networks and renewable energy projects. These major investments have in turn, strengthened Bhutan’s ambitions for economic dominance vis-a-vis its wealth of natural resources, highly skilled labour force, and progressive legislation. Such resources have become imperative to the country, given that Bhutan has the potential to establish itself as a significant player in the South Asian economy. This can be achieved by becoming a hub for environmentally friendly technologies and sustainable economic growth.
Bhutan’s Approach to a Sustainable Future
Bhutan’s steadfast dedication to preserving the environment has made it a leader in the realm of the green economy. The growth of renewable energy, especially through the growth of its hydropower industry, has been at the core of its plan. Bhutan has made use of the abundance of this renewable resource, which has an estimated 30,000-megawatt hydropower potential, to lessen its dependency on fossil fuels and become the sole carbon-negative nation in the world. In addition to reducing the nation’s carbon footprint, this offers a dependable and sustainable electricity supply that drives economic expansion.
Bhutan has not only led the way in clean energy efforts but also in sustainable tourism, adopting the “high-value, low-volume” model. In this, it has been able to draw tourists who are prepared to fully immerse themselves in the nation’s unblemished natural environment and rich cultural heritage while minimising the negative effects of mass tourism by carefully controlling the influx of visitors and enacting a sustainable development Furthermore, Bhutan has been able to preserve its natural and cultural assets simultaneously capitalising on the economic benefits of tourism because of its strategic emphasis on quality over quantity.
Initiatives like Bhutan’s 1999 ban on plastic bags and its pledge to keep at least 60% of its land covered in forests are supporting the country’s green economy. Bhutan’s status as a global leader in sustainable development has been cemented by these concrete steps and the government’s unshakable commitment to the ideals of Gross National Happiness, setting it poised for economic domination in South Asia.
Infrastructural Development
The Himalayan nation of Bhutan is treading a revolutionary path to improve its infrastructure and establish itself as a regional leader in both connectivity and economic expansion. A deliberate focus on building strong transport networks—including a vast road network, bridges, and airports—to improve connections both domestically and internationally is at the core of this project.
Bhutan has long faced difficulties due to its landlocked location and rough terrain, but it has begun to rise to the challenge. The primary national highways, minor highways, and feeder roads totalling more than 12,000 km have been built. These highways and roads are built and maintained by the Department of Roads in partnership. This endeavour is a collaboration with India’s Border Roads Organisation or BRO. In addition, this facilitates the smooth flow of people and products. Additionally, the infrastructural frameworks have been upgraded to create economic possibilities for previously underserved populations.
Bhutan, under the leadership of Tshering Tobgay, prioritised the development of technological infrastructure. In addition to this, the government has been developing the transportation network. This rapid development would benefit the country’s economy and give it a competitive edge. The government of Bhutan has been working to grow and expand mobile and broadband internet access across the nation. Hence, it has now become the spearhead of state-owned firms such as Bhutan Telecom and TashiCell. This is bridging the technological gap and benefiting people in both rural and urban areas. The development in connectivity is essential for drawing in foreign capital, encouraging creativity, as well as facilitating the country’s shift to a knowledge-based economy.
The Thimphu-Tashichho Dzong highway is a classic example where we can observe Bhutan’s achievement in infrastructure. It is a tactical undertaking that has revolutionised the accessibility and mobility of the nation’s capital. This modern, dual-lane highway has improved travel times and eased traffic congestion, thereby making Thimphu a more liveable and vibrant city on the economic front.
Over and above, Bhutan prioritises environmentally sound approaches and the safeguarding of its natural heritage, which is evident in its infrastructure efforts, thereby demonstrating the country’s persistent dedication to sustainable development. In a nutshell, Bhutan is positioned to become a regional leader in the inclusive and resilient development of infrastructure by carefully balancing growth and preservation.
Bhutan: The Global Partnership and FDI initiatives
Targeted FDI efforts and strategic international partnerships serve as the foundation for Bhutan’s economic development. In order to get vital funding and technical assistance for its development initiatives, the nation has established solid alliances with international organisations like the World Bank and the Asian Development Bank. Through these partnerships, Bhutan has been able to improve social services, ramp up its infrastructural efforts and promote sustainable growth in a number of industries.
Aware of the potential of Foreign Direct Investment (FDI), Bhutan has enacted progressive laws to draw in this capital, especially for projects that support its goal of achieving gross national happiness and a green economy. The nation’s 2019 FDI Policy prioritises investments in knowledge-based businesses, sustainable industries, and cultural preservation while opening up the manufacturing and service sectors. Promises of foreign direct investment (FDI) initiatives, like the India-Bhutan Friendship Bridge, have greatly improved commerce and connectivity while also generating jobs for the local populace.
Moreover, Bhutan’s edge in competitiveness, economic diversification, and regional leadership in sustainable development have all been made possible by its strategic approach to foreign direct investment and collaboration. Thereafter, Bhutan has the potential to become the economic powerhouse of South Asia by utilising international alliances and carefully managing foreign investment, in addition to maintaining its distinct cultural and natural legacy.
Conclusion
Bhutan stands out as a ray of hope as far as the world’s urgent concerns about climate change and sustainable development are concerned, thereby proving that environmental preservation and economic growth are not mutually contradictory. The Himalayan monarchy is leading South Asia in a creative and ecologically conscious way, thanks to its unwavering support of green economy programmes and state-of-the-art infrastructure development.
On the whole, Bhutan has become more competitive due to its strategic investments in sustainable tourism, renewable energy, and digital connection. Other countries in the area may also follow this model of resilient and inclusive growth. On a holistic footing, Bhutan has carefully managed foreign direct investment and formed strategic alliances with international organisations to pursue its sustainable strategy while protecting its distinct cultural and natural legacy.
Given that Bhutan’s path is being watched with great interest by the globe, which is a tribute to the strength of vision, will, and unwavering devotion to sustainable ideals, it remains to be seen if the nation becomes a major economic centre in South Asia. However, one thing is for sure: Bhutan’s route to prosperity is paved with creativity, teamwork, and a profound respect for the environment, providing a model for sustainable growth that cuts across boundaries and motivates countries all over the world.
Puloma Pal is a Research Intern at the NIICE, AIDIA and IRF, pursuing a Master’s in International Relations.
