Bhutan, the small landlocked nation wedged between India and China, is probably finest identified for “Gross National Happiness,” the alternate measure that the nation claims offers a fuller understanding of financial growth than GDP.
However the nation needs to be identified for extra than simply religious 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 new alternatives.
“Geography is a challenge for us, demography is a challenge for us,” stated Ujjwal Deep Dahal, CEO of Druk Holdings and Investments (DHI), Bhutan’s sovereign wealth fund. Bhutan and DHI have to “learn to engage with the world as we move,” he added.
But Bhutan and its sovereign wealth fund–tiny by international 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’
Probably the most outstanding sovereign wealth funds—like these from Norway, Saudi Arabia or Singapore—are gigantic international traders. These funds transfer lots of of billions of {dollars} of funds, garnered from pensions, pure assets or international trade reserves, to hunt excessive returns and spend money on strategic industries.
DHI is smaller in comparison with these international giants. So much smaller.
Based in late 2007, DHI has round $3 billion in property below administration, and owns stakes in 24 completely different Bhutanese firms.
By comparability, Singapore’s Temasek has $300 billion in property below administration, with stakes within the nation’s most outstanding firms, like Singapore Airways and DBS.
However Dahal sees alternative in DHI’s small dimension. “Size does not matter,” he stated; as a substitute, DHI can deal with “efficiency and how we grow.” Nonetheless, he sees Temasek as a task mannequin for DHI.
“We look at Temasek to a large extent, in terms of governance, in terms of divestments. But having said that, Bhutan’s economy and Singapore’s are completely different,” Dahal stated. “We need to look at running DHI in a way that’s complementary to the challenges.”
Bhutan’s happiness and mind drain
Bhutan calculates Gross Nationwide Happiness by a survey of 300 questions administered each few years. The most up-to-date GNH index, launched in Might 2023, reported a rating of 0.781 for 2022, larger 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 in regards to the financial system has meant that the nation, with a inhabitants of lower than 800,000, is presently going by a mind drain. Round 13,500 Bhutanese, equal to 1.6% of the nation’s whole inhabitants, moved to Australia in 2023. The nation, which remains to be principally lined in forest, has battled declining revenue, an absence of job alternatives, and rising youth unemployment.
Tourism is certainly one of Bhutan’s predominant 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 combined view of the tourism trade, selling a “high-value, low-impact” tourism mannequin to keep away from stressing the nation’s infrastructure.
Large bets
DHI manages a number of companies 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 immediately’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 power companies can discover “interesting technologies,” like pump storage and hydrogen energy, and check their business viability.
“We can quickly test it out in Bhutan, solve the problem in Bhutan and take it global or regional,” Dahal argued.
He’s notably targeted on hydropower, now Bhutan’s main supply of electrical energy era. Bhutan presently has 2.5 gigawatts of present capability, and a further 3 gigawatts below development.
DHI’s additionally making some extra unconventional bets. Bhutan is without doubt 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 Might 7, 2025.
Bitcoin mining is often power intensive, however Dahal claims that Bhutan’s crypto mining, resulting from its use of hydropower and different inexperienced power, 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 method for various investments.
DHI, as Bhutan’s funding arm, can also 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 progress with sustainability and holistic dwelling, and affords area to companies like healthcare, know-how, and inexperienced power.
“We’re trying to bring an innovation strategy into DHI to build startups with global founders, academicians and innovators, and bring them together to build a startup culture and economy,” Dahal stated.
This story was initially featured on Fortune.com
