Bhutan, the small landlocked nation wedged between India and China, is probably finest identified for “Gross Nationwide 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 economic system.
It’s a steep hill to climb for the remoted Himalayan nation, which has just lately grappled with a mind drain downside as younger Bhutanese journey overseas for brand 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 “study to interact 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.
‘Measurement doesn’t matter’
Essentially the most outstanding sovereign wealth funds—like these from Norway, Saudi Arabia or Singapore—are gigantic world traders. These funds transfer a whole lot of billions of {dollars} of funds, garnered from pensions, pure assets or international change reserves, to hunt excessive returns and put money into strategic industries.
DHI is smaller in comparison with these world giants. Quite a bit smaller.
Based in late 2007, DHI has round $3 billion in property beneath administration, and owns stakes in 24 completely different Bhutanese firms.
By comparability, Singapore’s Temasek has $300 billion in property beneath administration, with stakes within the nation’s most outstanding firms, like Singapore Airways and DBS.
However Dahal sees alternative in DHI’s small dimension. “Measurement 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, when it comes to governance, when it comes to divestments. However having stated that, Bhutan’s economic system and Singapore’s are utterly completely different,” Dahal stated. “We have to take a look at working DHI in a method that’s complementary to the challenges.”
Bhutan’s happiness and mind drain
Bhutan calculates Gross Nationwide Happiness via 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, greater 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 economic system has meant that the nation, with a inhabitants of lower than 800,000, is at the moment going via a mind drain. Round 13,500 Bhutanese, equal to 1.6% of the nation’s complete inhabitants, moved to Australia in 2023. The nation, which continues to be principally coated in forest, has battled declining revenue, a scarcity of job alternatives, and rising youth unemployment.
Tourism is one in every of Bhutan’s foremost sources of revenue, however has but to get well 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 companies which can be key to the nation’s economic system, like Bhutan Energy Company, Financial institution of Bhutan, and Bhutan Telecom. And Dahal thinks DHI is usually a platform to carve out a distinct segment for Bhutan in at the moment’s AI and web economic system.
For instance, Dahal, who has a background in engineering and hydropower, hopes that Bhutan is usually a place the place inexperienced vitality companies can discover “fascinating applied sciences,” like pump storage and hydrogen energy, and check their industrial viability.
“We will shortly check it out in Bhutan, clear up the issue in Bhutan and take it world or regional,” Dahal argued.
He’s significantly centered on hydropower, now Bhutan’s main supply of electrical energy technology. Bhutan at the moment has 2.5 gigawatts of present capability, and an extra 3 gigawatts beneath building.
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 value slightly below $10,000. It’s now value round $97,000 as of Might 7, 2025.
Bitcoin mining is often vitality intensive, however Dahal claims that Bhutan’s crypto mining, on account of 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 method 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 progress with sustainability and holistic residing, and provides area to companies like healthcare, expertise, and inexperienced vitality.
“We’re attempting to deliver an innovation technique into DHI to construct startups with world founders, academicians and innovators, and produce them collectively to construct a startup tradition and economic system,” Dahal stated.
This story was initially featured on Fortune.com
