Bhutan targets to be self reliant by 2020

The much awaited 11th five-year plan (2013-2018) got approved in the Parliament yesterday. The main objective of the plan is to become self-reliant by 2020, whereby all the national development needs shall be met from the domestic revenues. This ambitious target is heavily dependent on the timely completion of ongoing mega hydro-power projects, which targets to achieve 10,000 mega watts by 2020.

New Government, New Five-Year Plan and New Focus

New government will be focusing on stimulating economic growth, addressing rupee shortage and generating employment for the first year (2013-14) of 11th Five Year Plan. A whopping budget of Nu. 54 billion is kept for the year.

March 20 International Happiness Day

United Nations have declared March 20 to be observed as International Happiness Day and asked all nations to join in the fun.

For Bhutan,  it is not just the mere fun but a biggest achievement in being able to convince international community on the importance of other aspects of life. In recognition to that and in exemplifying the importance of the day, National Assembly this July has proposed the day to be declared as national holiday.

Rather than declaring it as a national holiday, my recommendation would be to dedicate the day to come up with innovative ideas and programmes contributing towards sustainable happiness. Government agencies, NGOs, private sector, and other institutions could come up with something very simple and concrete programs for the day such as tree plantation, volunteering, traditional games,pilgrimage or even family picnics.

Japan to adopt GNH Index

According to various media sources, Japanese Government is working towards developing GNH index to measure the standard of living. Japanese GNH Index is expected to have three areas, which being economic and social conditions, mental and physical wellbeing, and family and social connections. The survey is expected to be carried out in 2012.

Special Edition: Royal Wedding

His Majesty the Fifth Druk Gyalpo (Dragon King) Jigme Khesar Namgyel Wanchuck will wed Jetsun Pema on 13 October 2011 coinciding with 16th day of 8th Month of Iron Female Rabbit Year under Bhutanese Lunar Calendar.

Every Bhutanese is excited about it and in festive mood. That day will no doubtedly bring happiness to every Bhutanese. I will be posting some pictures later from both preparation and from the actual wedding celebration.

Wish them happy wedding and may continue to be gaurdians of peace and happiness in Bhutan.

Olson's theory applied to Bhutan's accession to WTO

The following article that I wrote was published by KUENSEL on 7th August 2010.


It is a common view among both decision makers and general public, at least at the back of their mind, that the reason why Bhutan hasn’t yet joined World Trade Organization (WTO) is because of ideological differences between social scientists and the capitalist economists. It is perceived that while most economists advise Bhutan to join WTO, social scientists do not favour the idea of Bhutan joining WTO. However, it can be argued that if we go by the truest concepts of economics, even the economists would rather advocate against joining WTO without necessarily agreeing to the ideologies of social scientists.

The argument here is solely based on Mancur Olson’s theory of collective action from his first book titled ‘The Logic of Collective Action: Public Goods and the Theory of Groups’ written in 1965. Mancur Olson (1932-1998) was a leading American economist and social scientist. His theory of collective action is based on the economists’ core assumption of rational choice, wherein an activity is determined by cost-benefit analysis.

His theory challenges the common assumption that when interests existed in a society, groups with special concerns or interests would naturally form organizations to represent those interests. Based on the rational choice assumption, Olson reasons that participation in a group to represent an interest is neither rational nor natural unless the desired objective is maximized with a minimal cost of achieving it. Therefore, if the cost far surpasses benefit, and the organization exists, the rational thing an individual or a group ought to be doing in this case is to be a free-rider. He explains that, however, those individual or a group with higher stake in the common interests will join an organization even if the cost is higher because without their participation, the organization to represent their interests will not come into existence.

WTO was formed by a group of countries in achieving their common interest of accessing global market, which is being moderately achieved. However, the major players or beneficiaries of WTO are the developed countries and the common interest has never been fairly distributed. Therefore, it is in the interest of those countries with high stake to keep the organization functioning and keep persuading non-member countries to join them.

Nevertheless, we have benefited a lot from the fierce global market competition among WTO members. The prices of goods and services have become cheaper, especially in the area of information and communication technology, which helped Bhutan’s socio-economic development by many folds.

Having said that, should Bhutan join WTO? The answer is straight NO going by Olson’s logic of collective action. Joining the league of WTO involves costs. Apart from financial costs, other important costs include losing control over regulations of important areas such as environment, markets, immigration, agriculture, etc. Most importantly, it can have political costs too. Therefore, following Olson’s theory of collective action based on rational choice and self-interest, it would not be rational for Bhutan to join WTO. It makes little sense for Bhutan to accept the costs when we have the choice of not bearing the costs and availing the benefits of cheaper goods and services without being a WTO member. The rational choice for Bhutan in this situation is to be a free-rider by not joining WTO, reaping the benefits of global competition without having to abide by WTO rules.

The above argument is solely based on one theory. There could be many other theories, cases, logics, evidences which could feed into our policy decisions. This can help decision makers to look at one issue from various perspectives. Bhutanese public policies and decisions should gradually move away from normative reasoning.

-Sonam Tobgyal

Cutting down working hours for happiness

How one uses time is an important factor for both collective and individual happiness. In general, one works for long hours either to accomplish his/her basic needs or to fulfill the requirements of employment rules.

While former one pertains to economic dimension, which calls for more complex economic interventions, the latter one can be directly addressed by government policy on time use as follows:

1. Office hours- Reduce office hours from 8 hours to 7 hours (9:30 am to 4:30 pm)

While we claim that our development approach is different from capitalist countries, we are still following their working hours of 8 hours. If we are serious about the time use (one of GNH dimensions) in relation to time spent with family and reducing work related stress, cutting down woking hours from 8 hours to 7 hours will have huge impact on relationship with family, stress level and other social aspects.

2. Maternity leave- Increase maternity leave from 3 months to 6 months

The most integral aspect of GNH concept is to put people at the center stage in the policy making process as opposed to that of capitalist world where financial cost-benefit analysis determines the decision making process.

We may not be able to afford social welfare system similar to Scandinavian countries, where paid maternity leave starts from 10 to 12 months. Nevertheless, our stress on balancing material wellbeing and social wellbeing justifies enough to increase the current system of maternity leave from 3 months to 6 months.

Costa Rica looks to Bhutan for happiness

Secretary of GNH Commission is in Costa Rica to give an address on GNH concept and to share Bhutan's experiences.

Please visit the link below for more details:
Costa Rica looks to Bhutan for happiness

Episode 91: Within Our Reach: Tim Costello on International Aid

Episode 91: Within Our Reach: Tim Costello on International Aid

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Episode 90: The Cost of A Life: Peter Singer on Ending World Poverty

Episode 90: The Cost of A Life: Peter Singer on Ending World Poverty

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France to use Happiness as Economic Indicator

Many years ago, when someone told great philosophers that earth was round, every one made a mockery of him. It was a myth for a metal-piece to fly until an aeroplane was invented. Not long ago, when Bhutan embarked on it's unique philosophy of Gross National Happiness, many critics especially neo-liberal economists condemned it to be an Utopian idea. With recent global financial and economic recessions, capitalism is giving way to other way of happier living.

It is indeed heartening to learn that more and more capitalist countries are now giving happiness a 'Fair-Go'. I have copied the story below for you to read or you can follow the link below.

http://www.huffingtonpost.com/2009/09/14/france-to-use-happiness-a_n_285600.html


EMMA VANDORE 09/14/09 12:08 PM

PARIS — French President Nicolas Sarkozy asked world leaders to join a "revolution" in the measurement of economic progress by dropping their obsession with gross domestic product to account for factors such as health-care availability and leisure time.

In a speech on the first anniversary of the collapse of Lehman Brothers, Sarkozy said the financial crisis has shown the need for a better way of calculating a country's economic health.
His own country, known for its leisurely meals, long vacations and labor protections, could outshine more profit-focused economies if nations act on new recommendations in a report headed by two Nobel economists commissioned 18 months ago.

The report, presented to Sarkozy on Monday, offers a raft of factors that governments should take into account when making policy, such as environmental sustainability. But it doesn't specifically suggest a new statistical index.

Despite the lack of detail Monday, Sarkozy said the French statistics office to change the way it measures progress. But any worldwide shift would require other nations to get on board, and some economists questioned whether rethinking GDP would work.

Sarkozy will nonetheless try to persuade other world leaders to sign up to the proposals at the G-20 summit in Pittsburgh, Henri Guaino, a special advisor to Sarkozy, told The Associated Press.

"A great revolution is waiting for us," Sarkozy said. "For years, people said that finance was a formidable creator of wealth, only to discover one day that it accumulated so many risks that the world almost plunged into chaos."

"The crisis doesn't only make us free to imagine other models, another future, another world. It obliges us to do so," he said.

Their report recommends looking at household income, consumption and wealth rather than national production for a better reflection of material living standards. Non-market activities such as house-cleaning should also be tracked, it says.

More prominence should be given to the distribution of income and wealth, as well as to access to education and health.
Attention should also be given to whether countries are over-consuming their economic wealth and damaging the environment, the report says.

Governments' addiction to inflating the GDP of their economies has endangered the planet by encouraging risky behavior and as overconsumption triggers environmental concerns, Sarkozy said.
U.S. economist Joseph Stiglitz, winner of the 2001 Nobel economics prize and a critic of free-market economists, co-authored the report.

"GDP is an attempt to measure one part of what is going on in our society which is market production. It is what I call GDP fetichism to think success in that part is success for the economy and for society," he said.

Advising Stiglitz was Armatya Sen of India, who won the 1998 Nobel prize for work on developing countries, and helped create the U.N. Human Development Index, a yearly welfare indicator designed to gear international policy decisions to take account of health and living standards.

Stiglitz said France's ranking would rise in comparison to the U.S. because of better access to health care and because it has a lower percentage of people in jail. Active prison business boosts GDP figures but isn't a sign of economic health, he said.
The new system would also credit leisure time – which France has a lot of, he said.

Simon Tilford, chief economist at the Center for European Reform in London, said that while broader measures of well-being already exist, they are hugely subjective and don't help governments make decisions on how to allocate resources.

"There has been growing interest in trying to measure human well-being in other ways" than GDP, he said. But for understanding an economy's prospects, he said, "GDP is still a far superior measure to a type of softer, happiness or well-being index. That's not to say they're not useful, but it's hard to see how they could replace GDP."

In terms of GDP, French growth has lagged behind the U.S. throughout most of the past 30 years, although recent turmoil in financial markets has hit the U.S. economy harder.

France appears to be weathering the worst economic downturn since the Great Depression better than most, recording a small level of growth – 0.3 percent – in the second quarter this year.
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Associated Press writer Rachel Kurowski in Paris contributed to this report.

Social Welfare Policy and Happiness Philosophy in Bhutan

Bhutan's socio-economic development policy is guided by its unique philosophy of maximizing Gross National Happiness (GNH), which emphasizes on striking the balance between material wellbeing and non-enonomic wellbeing. Simply put, GNH philosophy embraces other dimensions such as culture, environment, spiritual needs, etc. in addition to economic development.

Bhutan's GNH philosophy, in principle, does not deviate much from developed worlds' development philosophy of social welfare policy, where welfare states place social rights above the economic development. According to Esping Anderson (1990), he classifies developed world into three worlds of welfare capitalism, namely, liberal capitlalists, conservatist capitalists, and social democrats. These three types place super importance to social welfare of the people. Some of the areas of social welfare include unemployment benefits, old-age care, handicap care, retirement benefits, childcare, etc. States are responsible in ensuring people of social security and other welfare benefits. In some countries, states directly fund social security and others let market to deliver welfare services.

Bhutanese people enjoy free education and free health services, which has contributed a great deal to the welfare of Bhutanese people. Bhutan has infact championed in these areas among the developing world. All five-year developments since 1961 were all geared towards addressing the difficulties and hardships of the people. The ongoing 10th five-year development plan (2008-2013) with budget outlay of about Nu.140 billion is solely devoted towards alleviating poverty.

However, there are areas where Bhutan can still work on social welfare programmes given its strong commitment to the philosophy of GNH. We can do more justice to our commitment to GNH only if we place social welfare above economic development, wherein economic development will be sub-set of social welfare. For example, western welfare capitalists would spend any amount of money even in millions to save a single fellow citizen in times of war or disaster, which demonstrates their commitment to the welfare of the people and placing less importance to economic cost-benefit analysis.

Asian ideology of resting the responsibility of social welfare and social security to the family, I should say, is harsh to the bread-earners. If social security system is working in Asia, then it is so only at the cost of bread-earners' welfare. It is even more taxing when having to look after the welfare of the family and at times the welfare of extended family. Further more, with migration of younger population to the urban areas and dilution of cultural and family values, it could pose serious problems to the welfare of the old and to the handicaps.

Therefore, Bhutan can work more on social welfare policy in keeping with the guiding philosophy of Gross National Happiness. It calls for a paradigm shift in policy from economic development to social welfare. Let market take care of economic development and the State should focus on people's welfare. For market force to take care of economic development, the State should continue creating conducive environment for private sector development.