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Bhutan Is the Fastest Growing Economy in Asia
April 16, 2017
Until the 1960s, the South Asian nation of Bhutan, did not have phones, an airport, hospitals, a postal service or a national currency. Today, it is the fastest growing economy in Asia, according to a new report from the Philippines-based Asian Development Bank.
Images of Bhutan. (Source: Asia Development Bank)
Bhutan’s economy is expected to grow 8.2% in 2017 and surge to a blistering 9.9% in 2018, according to the Asian Development Outlook 2017 report. To top it off, Bhutan has built its economy by focusing on clean energy that helps counter the impacts of climate change.
Power of water
The kingdom is one of the world’s largest exporters of hydropower and it is only getting started in the business of selling clean energy to its neighbors. It has untapped hydropower resources estimated at 30,000 megawatts but only about 5% of that has been developed.
Economic growth in 2017 will be based on stepped-up hydropower plant construction that in 2018 will be complemented by increased electricity-generating capacity, according to the Asian Development Outlook 2017.
The path to a booming economy was an unlikely one for Bhutan. Romanticized by some as the “real Shangri-la” – the mythical paradise described in the 1933 James Hilton novel Lost Horizon – the Kingdom of Bhutan has emphasized individual happiness over economic prosperity for centuries.
Happiness of the people, by the people, for the people
The 1729 legal code of Bhutan states: “The purpose of the government is to provide happiness to its people. If it cannot provide happiness, there is no reason for the government to exist.”
Over the years, the government of Bhutan refined that philosophy to develop government policies that aim to provide enabling conditions for happiness, rather than simply drive economic growth. As part of this effort, it has undertaken a bold experiment to measure development progress by an indicator called gross national happiness.
The pursuit of gross national happiness continues today in Bhutan, and is complemented by robust programs to grow the economy and spread its benefits widely across society. For example, large hydropower plants built for electricity export in recent years were bundled with programs to bring power to surrounding remote communities.
Developing Asia, backbone of global economic growth
Bhutan is just one of the emerging economies in Asia that is driving global growth, according to the Asian Development Outlook 2017. Developing countries in Asia are currently contributing 60% of all economic growth generated worldwide, according to the report.
Developing countries in Asia have performed well even as recovery in the major industrial economies remained weak. The report forecasts 5.7% growth for developing countries in Asia in 2017 and 2018.
Asia’s powerhouse economies are leading the way. In 2017, the People’s Republic of China is expected to grow 6.5% and India 7.4% with expansion being driven by external demand, rebounding commodity prices, and domestic reforms.
Most of Southeast Asia’s economies can also expect buoyant growth. With favorable weather benefiting agriculture and exports rising at major industrial economies, average growth in this subregion will accelerate to 4.8% in 2017 and 5.0% in 2018.
This article was originally published by the Asian Development Bank (www.adb.org).