Bhutan, the small landlocked nation wedged between India and China, is maybe finest recognized for “Gross Nationwide Happiness,” the alternate measure that the nation claims offers a fuller understanding of financial growth than GDP.
However the nation desires to be recognized for extra than simply non secular tourism and Himalayan mountains. Bhutan now hopes to draw international funding, foster new industries, and enter the worldwide financial system.
It’s a steep hill to climb for the remoted Himalayan nation, which has not too long ago grappled with a mind drain drawback as younger Bhutanese journey overseas for brand spanking new alternatives.
“Geography is a problem for us, demography is a problem for us,” stated Ujjwal Deep Dahal, CEO of Druk Holdings and Investments (DHI), Bhutan’s sovereign wealth fund. Bhutan and DHI have to “be taught to have interaction with the world as we transfer,” he added.
But Bhutan and its sovereign wealth fund–tiny by world requirements–hope to leverage the nation’s strengths, together with low cost and widespread hydropower, which in flip can feed investments in information facilities and Bitcoin mining. Key to the nation’s plan is the Gelephu Mindfulness Metropolis, a brand new zone to attach Bhutan with companies in South and Southeast Asia.
‘Dimension doesn’t matter’
Essentially the most distinguished sovereign wealth funds—like these from Norway, Saudi Arabia or Singapore—are gigantic world buyers. These funds transfer a whole lot of billions of {dollars} of funds, garnered from pensions, pure assets or international trade reserves, to hunt excessive returns and put money into strategic industries.
DHI is smaller in comparison with these world giants. Rather a lot smaller.
Based in late 2007, DHI has round $3 billion in property beneath administration, and owns stakes in 24 totally different Bhutanese firms.
By comparability, Singapore’s Temasek has $300 billion in property beneath administration, with stakes within the nation’s most distinguished firms, like Singapore Airways and DBS.
However Dahal sees alternative in DHI’s small dimension. “Dimension doesn’t matter,” he stated; as a substitute, DHI can deal with “effectivity and the way we develop.” Nonetheless, he sees Temasek as a task mannequin for DHI.
“We take a look at Temasek to a big extent, by way of governance, by way of divestments. However having stated that, Bhutan’s financial system and Singapore’s are fully totally different,” Dahal stated. “We have to take a look at working DHI in a manner that’s complementary to the challenges.”
Bhutan’s happiness and mind drain
Bhutan calculates Gross Nationwide Happiness by means of a survey of 300 questions administered each few years. The most up-to-date GNH index, launched in Could 2023, reported a rating of 0.781 for 2022, increased than the 0.743 reported in 2010.
The nation’s GDP per capita grew from $2,435 to $3,711 over the identical interval—but skilled a steep decline in 2020, the peak of the pandemic.
Pessimism concerning the financial system has meant that the nation, with a inhabitants of lower than 800,000, is at present going by means of a mind drain. Round 13,500 Bhutanese, equal to 1.6% of the nation’s total inhabitants, moved to Australia in 2023. The nation, which continues to be principally coated in forest, has battled declining revenue, an absence of job alternatives, and rising youth unemployment.
Tourism is certainly one of Bhutan’s major sources of revenue, however has but to recuperate from the COVID pandemic. The nation reported 145,000 vacationer arrivals final yr, lower than half of the 315,599 arrivals recorded in 2019. The nation additionally has a blended view of the tourism trade, selling a “high-value, low-impact” tourism mannequin to keep away from stressing the nation’s infrastructure.
Massive bets
DHI manages a number of corporations which can be key to the nation’s financial system, like Bhutan Energy Company, Financial institution of Bhutan, and Bhutan Telecom. And Dahal thinks DHI could be a platform to carve out a distinct segment for Bhutan in as we speak’s AI and web financial system.
For instance, Dahal, who has a background in engineering and hydropower, hopes that Bhutan could be a place the place inexperienced vitality corporations can discover “attention-grabbing applied sciences,” like pump storage and hydrogen energy, and take a look at their industrial viability.
“We will shortly try it out in Bhutan, clear up the issue in Bhutan and take it world or regional,” Dahal argued.
He’s significantly targeted on hydropower, now Bhutan’s main supply of electrical energy technology. Bhutan at present has 2.5 gigawatts of present capability, and a further 3 gigawatts beneath development.
DHI’s additionally making some extra unconventional bets. Bhutan is likely one of the world’s largest sovereign holders of Bitcoin. The nation began mining the cryptocurrency again in 2019, when it was price just below $10,000. It’s now price round $97,000 as of Could 7, 2025.
Bitcoin mining is often vitality intensive, however Dahal claims that Bhutan’s crypto mining, resulting from its use of hydropower and different inexperienced vitality, helps offset carbon emissions elsewhere.
“Bitcoin is a parallel to digital gold,” Dahal stated, noting that the nation’s cryptocurrency technique is a part of a diversified strategy for various investments.
DHI, as Bhutan’s funding arm, can be supporting the event of Gelephu Mindfulness Metropolis, a particular administrative area that hopes to be an financial hall to South and Southeast Asia. The Metropolis, which spans about 2,500 sq. kilometers, tries to mix financial development with sustainability and holistic residing, and affords house to companies like healthcare, know-how, and inexperienced vitality.
“We’re making an attempt to carry an innovation technique into DHI to construct startups with world founders, academicians and innovators, and convey them collectively to construct a startup tradition and financial system,” Dahal stated.
This story was initially featured on Fortune.com
