GDP – composition by sector: agriculture: 22.3%
industry: 37.9%
services: 39.8% (2006)

 Gross National Happiness (GNH) indicators in the national planning and M&E system – GAP

Bhutan has made impressive political and administrative reform progress over the last two years as part of its gradual transformation embracing core democratic principles. The democratization process has ushered further commitment to development processes and strengthened its approach to achieving Gross National Happiness (GNH), the country’s predominant development philosophy, by securing a harmonious balance between physical, social, spiritual, psychological and cultural well-being of the individual and society.

The concept of GNH initially expounded through the four pillars of 1) good governance, 2) equitable and balanced socio-economic development, 3) preservation of cultural heritage, and 4) conservation of the natural environment has been broadened into nine domains of 1) good governance, 2) psychological wellbeing, 3) time use, 4) community vitality, 5) health, 6) education, 7) culture, 8) living standards, and 9) ecological diversity and resilience for the construction of indicators for the GNH Index. Consideration of all nine domains into development process is crucial in promoting good governance and enhancing wellbeing of the Bhutanese people.

The project supports the integration of the GNH indicators into the national planning and monitoring mechanism (PLaMS) aligning the Royal Government’s 10th Five Year Plan (2008-2013) with the GNH and the MDGs in addition to providing a good governance framework for the country.

Project details

UNDAF Outcome 1: By 2012, opportunities for generation of income and employment increased in targeted poor areas. 4: By 2012, institutional capacity and people’s participation strengthened to ensure good governance.
CT Outcome 4.1 Strengthened capacity of local governments to plan, implement and monitor their development progress in pursuit of poverty reduction and MDGs.
CT Output 1.5. Enhanced capacity of public sector to implement results based policy, plan and programme development for MDGs, GNH and other national priorities; 4.1 Transparency, efficiency, effectiveness, participation and accountability strengthened at all levels 4.3 Capacity of key institutions to support parliamentary democracy strengthened
Project Duration January 2009 – June 2010
Budget Outlay US$ 300,000
Link to Workplan  Click on the icon to download



The Concept

Some countries in Asia and the Pacific have recognized the importance of an approach of development accounting for the progress in achieving the welfare of society.  For the last three decades, the Kingdom of Bhutan has followed the guiding principle enunciated by His Majesty King Jigme Singye Wangchuck, who stated, “Gross National Happiness is more important than Gross National Product.”  The principle describes development as a continuous process towards a balance between material and non-material needs of individuals and society.  The country’s philosophy of development, while recognizing the importance of economic growth as essential, to support and nurture the spiritual and social needs of the community, is not an end in itself, but one among many means of achieving holistic development.

The theory of Gross National Happiness (GNH) established by His Majesty the King of Bhutan in 1972, is the foundation for development in Bhutan.  GNH is based on the ideology that the pursuit of happiness is found in all people and is the strongest force of desires.  Included in GNH is a “middle path” approach in which spiritual and material pursuits are balanced.

GNH is a program for social and economic revisions toward implementation and institutionalization of the belief that development should promote happiness as its primary value.  Equal importance must be placed on socio-economic development, spiritual, cultural and emotional needs of the people.  Economic growth is just one aspect that improves the social requirements of society and is not seen as the dominating force in development.   GNH has become the philosophical foundation for the policy making process and implementation in Bhutan.  This is apparent in the 9th and 10th Five Year Plans of Bhutan, in which GNH is the overarching structure.

The Four Pillars of Gross National Happiness

Gross National Happiness contains four main pillars:

  • Sustainable and equitable socio-economic development
  • Conservation of environment
  • Preservation and promotion of culture
  • Promotion of good governance

Sustainable and equitable socio-economic development does not prohibit economic growth and development, but is implemented by placing a priority on health and education sectors.  It is estimated that over 30% of the national budget of Bhutan is placed on the social sector.  This financial dedication is tangible evidence of the government’s commitment to provide a secure livelihood for its citizens and one in which its population is healthy and educated.  Along these same terms, capacity building in the development of professional skills to manage development has been a common program implemented.  Other important social development facilities are widely available throughout the country such as schools, hospitals and agricultural centers.  Additionally, policymakers have introduced a personal income tax in order to redistribute wealth more evenly.

The Impact of Gross National Happiness

Largely because of GNH, Bhutan has seen improvement in many key development indicators, which include:

  • Per capita income
  • Life expectancy
  • Infant and maternal mortality rates
  • Health coverage
  • School enrollment
  • Literacy rates

Environmental conservation is also valued widely throughout Bhutanese society as many citizens’ sources of livelihood are dependent on their natural environment, especially those working agriculturally.  It is commonly believed that irresponsible activities in nature will lead to negative and therefore unhappy outcomes.  Most Bhutanese accept the fact that the environment should be preserved for others and the future generation, limiting severe environmental degradation.  Environmental benefits observed by GNH policies include:

  • Characterization of the country as a biodiversity hotspot
  • Increased preservation policies
  • 72% forest cover, 26% protected areas
  • Written policy that the country will keep a minimum of 60% forest cover

Bhutanese Preservation of Culture and Good Governance

The preservation and promotion of Bhutanese culture is another factor in development and GNH strategy, as Buddhist cultural pureness ideology is widespread.  It is widely believed that a decline in traditional heritage and culture will lead to a general dissatisfaction of society and has therefore preservation of culture is a high government priority.  This is observed in the school system as all children are taught Bhutanese cultural values.

Good governance is apparent through the government’s dedication of promoting happiness and well-being of its citizens foremost.  His Majesty the King withdrew from the executive function of government in 1998 and universal voting rights were introduced in 2002.  Civil society has had the opportunity to provide input in legislative matters and a goal is in place to have a multi-party system by 2008.