Bhutan, the small country without coastline stuck between India and China, is perhaps better known for “gross national happiness”, the alternative measure That the country claims gives a more complete understanding of economic development than GDP.
But the country wants to be known for more than spiritual tourism and the Himalayan mountains. Bhutan now hopes to attract foreign investments, promote new industries and enter the world economy.
It is a steep hill to climb for the isolated country of the Himalayas, which recently faced a brain drain Problem as a young Bhutanese travel abroad for new opportunities.
“Geography is a challenge for us, demography is a challenge for us,” said Ujjwal Deep Dahal, CEO of Druk Holdings and Investments (DHI), Bhoutan’s Sovereign Wealth Fund. Bhutan and DHI must “learn to engage with the world as you go,” he added.
However, Bhutan and its sovereign fund – Tiny according to global standards – the hope of taking advantage of the country’s forces, including cheap and widespread hydroelectricity, which can in turn feed investments in data centers and bitcoin extraction. Country key plan is the Gelephu Mindfulness City, a new area to connect Bhutan to companies in South and Southeast Asia.
‘The size does not matter’
The most eminent sovereign funds – such as those in Norway, Saudi Arabia or Singapore – are gigantic of global investors. These funds move hundreds of billions of dollars in funds, obtained pensions, natural resources or exchange reserves, to seek high yields and invest in strategic industries.
DHI is smaller compared to these global giants. Much smaller.
Founded at the end of 2007, DHI has around 3 billion dollars of assets under management and has participations in 24 different Bhoutani companies.
In comparison, Singapore Temasek has 300 billion dollars in management under management, with issues in the most eminent companies in the country, such as Singapore Airlines and DBS.
But Dahal sees the opportunity in the small size of DHI. “Size does not matter,” he said; Instead, DHI can focus on “efficiency and how we grow”. However, he considers Temasek as a role model for DHI.
“We look at TEMASEK to a large extent, in terms of governance, in terms of divestment. But that said, the economy of Bhutan and that of Singapore are completely different,” said Dahal. “We must consider operating DHI in a way that is complementary to the challenges.”
The happiness and the leakage of the brains of Bhutan
Bhoutan calculated Gross national happiness thanks to a survey on 300 questions administered every few years. THE most recent The GNH index, released in May 2023, reported a score of 0.781 for 2022, greater than 0.743 reported in 2010.
The country’s per capita GDP increased from $ 2,435 to $ 3,711 during the same period – but experienced a sharp drop in 2020, the height of the pandemic.
Pessimism about the economy has indicated that the country, with a population of less than 800,000 people, is currently going through a brain escape. About 13,500 bhoutani, equal to 1.6% of the country’s entire population, moved to Australia in 2023. The country, which is still mainly covered in forest, has fought against the drop in income, the lack of employment possibilities and the growing unemployment of young people.
Tourism is one of the main sources of income in Bhutan, but has not yet recovered from the cocovio pandemic. The country reported 145,000 tourist arrivals last year, less than half of the 315,599 arrivals registered in 2019. The country also has a mixed view of the tourism industry, promoting a tourist model “with high value and low impact” to avoid emphasizing the country’s infrastructure.
Big bet
DHI manages several companies essential to the country’s economy, such as Bhoutan Power Corporation, Bhutan Bank and Bhutan telecommunications. And Dahal thinks that DHI can be a platform to carve out a niche for Bhutan in the economy of AI and the Internet today.
For example, Dahal, who has engineering and hydroelectric training, hopes that Bhutan can be a place where green energy companies can explore “interesting technologies”, such as pump storage and hydrogen power, and test their commercial viability.
“We can test it quickly in Bhutan, solve the problem in Bhutan and take it global or regional,” said Dahal.
It is particularly concentrated on hydroelectricityNow the main source of electricity production in Bhutan. Bhoutan Currently At 2.5 Gigawatts of current capacity and 3 additional Gigawatts under construction.
DHI also makes unconventional bets more. Bhutan is one of the greatest sovereign holders in the world of Bitcoin. The country began to exploit cryptocurrency in 2019, while it was worth a little less than $ 10,000. This is now worth around $ 97,000 in May 7, 2025.
Bitcoin extraction is normally at high energy intensity, but Dahal affirms that the cryptographic exploitation of Bhutan, due to its use of hydroelectricity and other green energies, helps to compensate for carbon emissions elsewhere.
“Bitcoin is a parallel to digital gold,” said Dahal, noting that the country’s cryptocurrency strategy is part of a diverse approach for alternative investments.
DHI, as Bhutan’s investment arms, also supports the development of Gelephu Mindfulness City, a special administrative region that hopes to be an economic corridor for South and Southeast Asia. The city, which extends over around 2,500 square kilometers, is trying to combine economic growth with sustainability and holistic life, and offers space to companies such as health care, technology and green energy.
“We are trying to bring an innovation strategy to DHI to build startups with founders, academicians and global innovators, and bring them together to build a culture and a startup economy,” said Dahal.
This story was initially presented on Fortune.com
