Bhutan

Since transitioning from an absolute monarchy to a democratic constitutional monarchy in 2008, Bhutan has embraced a development trajectory anchored in the principle of Gross National Happiness. This approach prioritizes cultural preservation and environmental sustainability, effective governance and inclusive socio-economic advancement.

As a lower-middle-income country, the landlocked Bhutan has witnessed on average an annual real GDP growth of 7.5% since the 1980s, leading to significant poverty reduction. Such growth has been principally driven by Bhutan’s abundant water resources, which have provided nearly universal access to low-cost electricity and revenue from surplus hydropower exports. Bhutan is now prioritizing private-sector development and economic diversification. The investment climate, however, remains challenging due to hurdles including a lack of a fully developed modern regulatory framework, high trade costs and a small domestic market.