Bhutan is in for a bit of all or nothing. This country of about 800,000 sandwiched between an increasingly aggressive China and an increasingly defensive India, is experiencing a steady leaching of its citizens to destinations like the Bhutanese gold-rush favourite, Australia. Tens of thousands of citizens a year. The reason: Lack of opportunity in Bhutan’s limited tourism- and agriculture-based economy and quite stratified society.
Bhutan’s response has been an audacious play. Driven by the country’s king, Jigme Khesar Namgyel Wangchuk, and assisted by a core team of advisors, the country has bet massively on the Gelephu Mindfulness City, or GMC, a 1,000sq-km-plus special zone of research, education, and green technologies to the country’s south, bordering the Indian state of Assam. A state-of-the-art international airport, linking to India’s boosted road and railways connectivity in the region, and a hydroelectric dam are a part of the plan.
Bhutan is also ramping up generation of electricity as a sub-regional revenue earner; and, as a corollary, bulking up its reserves -- with cryptocurrency.
This tiny country has seen a blur of existentialist activity for the past two years.
The king and his office have been hard-selling GMC to the world since he formally announced it to Bhutan’s citizens during the national day in December 2023. The king and GMC’s core team have talked up the project in South Asia, Southeast Asia, Europe, the Americas -- and, significantly, Australia, during an official visit there by the king and his family in October 2024. He addressed large gatherings of expatriate Bhutanese in Sydney, Perth, and Canberra, pitching his vision for Bhutan and GMC and urging his audience to remain engaged with their homeland and contribute to building its future. He assured them a piece of the country’s prosperity pie.
Jigme Khesar has taken things up a notch since.
I have written about the king’s visit to Gelephu in March 2024 and, for both practical purpose as well as planned publicity, how he spread out the GMC blueprint and studied it with Bhutan’s prime minister. The king then walked for a considerable distance on a pathway along one of the area’s thirty-five rivers and streams dressed in a utilitarian gho, Bhutan’s national garment for men, and hiking boots.
King Jigme Khesar has made his family a part of that futuristic opera and placed themselves at stage-centre. On July 8 this year, after a formal ceremony to mark the construction for Gelephu’s new international airport, the king, the queen, Jetsun Pema, and their two young sons rolled up their sleeves to help clear the area, alongside construction crew and a team from the remarkable De-suung, or Guardian of Peace, an organization the king raised in 2011. This agency runs Bhutan’s volunteer force, easily identified by their ubiquitous orange overalls, and undertakes all manner of community service from rescue and relief to planting trees. Such volunteers drop whatever they are doing and step up for the greater good at the alert of a phone message or call.
Beyond symbolism and optics there is practicality. Bhutan’s ambassador to Bangladesh has visited Kurigram in northern Bangladesh, by the Brahmaputra, to explore the possibility of investing in a Special Economic Zone. The location is opportune: Directly to the north, via West Bengal in India, lies Phuentsholing, a major gateway and trading town in southwest Bhutan. Kurigram could also offer a waterway route up the Brahmaputra into Assam, and then road and rail links to Gelephu.
This past April, Bhutan’s king choppered down to Jogighopa, a work-in-progress sub-regional logistics hub -- billed as India’s first international MMLP (or multi-modal logistics park) -- on the Brahmaputra. Jogighopa, on the northern bank of the Brahmaputra is due south of Gelephu. Jigme Khesar also visited an inland water transport facility during this familiarisation tour. The 317-acre facility in Jogighopa is planned as a road-rail-waterways hub that can service all of Assam, parts of northeastern India, eastern India, and of course Bhutan and Bangladesh -- which the Brahmaputra enters less than a hundred kilometres downstream.
In November 2024, Bhutan made a splash with news that Tata Power, a part of India’s transnational Tata conglomerate had signed a strategic partnership with Druk Green Power Corporation Limited to develop “at least” 5,000MW of clean energy generation capacity in Bhutan. This would contribute to Bhutan’s plans to ramp up its electricity generation capacity more than ten-fold by 2040. The Indian corporate and market tracker Moneycontrol quoted an exchange filing by Tata Power to detail Bhutan’s plan of diversifying beyond “traditional” hydropower to solar and geothermal energy. Financing for such projects will also, evidently, explore newer options beyond the “traditional” financing of power projects in Bhutan by easy-paced Indian loans, and grants.
Then there is Bhutan’s cryptocurrency play. Bhutan made the cut in The Wall Street Journal this past June, with an article highlighting Bhutan’s recent reputation as a “crypto pioneer,” and how it boasts a “stash” of $1.3 billion in bitcoin; Bhutan’s foreign exchange reserves are in the $800 million to $850 million range. The crypto reserve is entirely mined by Bhutan, using its ingenuity and surplus electricity -- it plans to have plenty of surplus even after its own future infrastructure needs, current and future exports to India, and future exports to, say, Bangladesh.
According to crypto trackers, Bhutan has divested cryptocurrency worth several hundred million dollars in recent months. Industry sources point to clarifications by Bhutan’s Prime Minister Tshering Tobgay, that the sale was to boost the country’s healthcare programs and pay for increases in public sector wages.
Bhutan’s future welfare is predicated on this multi-sector big bang of investment, and financial and welfare returns on that investment. For that, all of Bhutan’s plans need to work out, including the matter of keeping things calm with its northern neighbour China -- even as Bhutan has for long bet on India to secure its defence and strategic interests.
Take the matter in Doklam in western Bhutan. Unlike the India-China border along Ladakh far to the northwest, or along eastern Arunachal Pradesh with Bhutan shares a border, China’s dispute here is not directly with India. It is between China and Bhutan. China claims a little less than 300sq-km of Bhutan’s territory.
But the location is strategic from India’s perspective—and, of course, China’s. Any ceding of territory here by Bhutan to China would bring China closer to the crucial Chicken’s Neck or the Siliguri Corridor, an approximately 60km long and 20-odd-kilometre-wide strip that links India’s mainland to its far-east. A crisis here could snip nearly a seventh of India’s landmass.
Doklam blew up not too long ago. In 2017 India sent several hundred troops, and bulldozers, across the border into Doklam to prevent Chinese troops from constructing a road there. A mutual retreat occurred after some weeks of tense standoff.
As I have written earlier, India also keeps a wary eye on another region, in Bhutan’s northern border with China and not too far from Doklam: A near-500sq-km patch in Jakarlung and Pasamlung. As with India’s border disputes with China, Bhutan’s border disputes can be traced to China’s move into Tibet from 1950 onwards, and the effective negation of several border markers decided upon decades earlier by treaty, for instance, with Tibet and British India.
Even with the visit of China’s foreign minister Wang Yi to New Delhi earlier this week and talk of dialling down temperatures along the border -- a situation in which the two giant foes and competitors find some common cause against the undiplomatic deluge that is the current US administration -- Bhutan and India’s border squabbles with China will not end. While public gaze will be distracted for a time, the intense private gaze will remain fixed -- indeed, fixated -- on the chessboard of territories disputed, lost, or gained.
Bhutan’s energetic king and his photogenic family, and the entire country, will need all the smarts they can muster to continue to sustain the nine “domains” of Gross National Happiness by which this eastern Himalayan country sets so much store. These are: Psychological wellbeing, health, education, living standards, “time-use,” ecological diversity and resilience, good governance, cultural diversity and resilience, and community vitality.
Add to this an evolving index of Net National Survival.
Sudeep Chakravarti works in the policy-and-practice space in South Asia and the Indian Ocean Region.
