Three factors have exerted great influence on the course of Bhutan’s development. The first being the culture. As Bhutan was never conquered or colonized, the country developed a culture relatively free from outside influence, the institution of monarchy, and a deep sense of nationhood. The second factor is the environment, which is protected by mountainous, often difficult terrain. Thirdly, Vajrayana Buddhism has given the country a view of the world on which the 3rd and 4th Kings based their policies of developing Bhutan’s potential in every field. This continuing development of Bhutan has been crystallized in a philosophy crafted by His Majesty King Jigme Singye Wangchuk, known as Gross National Happiness (GNH) in the late 1980s. The concept of GNH defines Bhutan’s developmental objective as improvement in the happiness and satisfaction of the people rather than growth of Gross National Product (GNP). GNH has been the overreaching development philosophy of Bhutan as the concept has guided the country’s development policies and programmes. GNH suggests that happiness is the ultimate objective of development. It recognizes that there are many dimensions to development other than those associated with Gross National Product (GNP) and that development needs to be understood as a process that seeks to maximize happiness rather than purely economic growth.

The country believes that for holistic development of the individual and society, it is essential that development achieve a sustainable balance between the economic, social, emotional, spiritual, and cultural needs of the people. This has led to the declared objective of viewing development as a continuous process towards achieving a balance between the material and intangible needs of individuals and society.

The concept reminds the country that the means must always be considered in terms of the end and, therefore, every step in material development and change must be measured and evaluated to ensure that it will lead to happiness, not just more development. Having accepted that the maximization of Gross National Happiness is a philosophy and objective of the country’s development, it was felt necessary to more clearly identify the main areas, and create the condition to enable the people to attain greater happiness. Recognizing that the large range of factors contributes to human well-being and happiness and that it may not be possible to exhaustively define or list everything for the purpose of its development planning, Bhutan has identified four major areas as the main pillars of GNH. These are

  • Economic growth and development.
  • Preservation and promotion of culture heritage.
  • Preservation and sustainable use of the environment.
  • Good governance

Guided by the ideas of Gross National Happiness (GNH), Bhutan has been making steady progress in every sector towards the goal of modernization. Hydroelectric power, economically the most significant sector for Bhutan’s goal of self-sustaining development, has grown impressively. The education, social services, and health sector have made great strides forward and continue to be the most important social components of the country’s development programme. The government’s fiscal situation has been improving steadily. Progress has been made in the development of human resources and legal infrastructure.