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"For a happier, more stable and civilized future, each of us must develop a sincere, warm-hearted feeling of brotherhood and sisterhood."

Growth in a Buddhist Economy

August 27, 2010

Jeffrey D. Sachs
August 25, 2010

NEW YORK -- I have just returned from Bhutan, the
Himalayan kingdom of unmatched natural beauty,
cultural richness, and inspiring self-reflection.
 From the kingdom’s uniqueness now arises a set
of economic and social questions that are of
pressing interest for the entire world.

Bhutan’s rugged geography fostered the rise of a
hardy population of farmers and herdsmen, and
helped to foster a strong Buddhist culture,
closely connected in history with Tibet. The
population is sparse -- roughly 700,000 people on
territory the size of France – with agricultural
communities nestled in deep valleys and a few
herdsmen in the high mountains. Each valley is
guarded by a dzong (fortress), which includes
monasteries and temples, all dating back
centuries and exhibiting a masterful combination
of sophisticated architecture and fine arts.

Bhutan’s economy of agriculture and monastic life
remained self-sufficient, poor, and isolated
until recent decades, when a series of remarkable
monarchs began to guide the country toward
technological modernization (roads, power, modern
health care, and education), international trade
(notably with neighboring India), and political
democracy.  What is incredible is the
thoughtfulness with which Bhutan is approaching
this process of change, and how Buddhist thinking
guides that thoughtfulness. Bhutan is asking
itself the question that everyone must ask: how
can economic modernization be combined with
cultural robustness and social well-being?

In Bhutan, the economic challenge is not growth
in gross national product, but in gross national
happiness (GNH). I went to Bhutan to understand
better how GNH is being applied. There is no
formula, but, befitting the seriousness of the
challenge and Bhutan’s deep tradition of Buddhist
reflection, there is an active and important
process of national deliberation. Therein lies the inspiration for all of us.

Part of Bhutan’s GNH revolves, of course, around
meeting basic needs -- improved health care,
reduced maternal and child mortality, greater
educational attainment, and better
infrastructure, especially electricity, water,
and sanitation. This focus on material
improvement aimed at meeting basic needs makes
sense for a country at Bhutan’s relatively low income level.

Yet GNH goes well beyond broad-based, pro-poor
growth. Bhutan is also asking how economic growth
can be combined with environmental sustainability
-- a question that it has answered in part
through a massive effort to protect the country’s
vast forest cover and its unique biodiversity. It
is asking how it can preserve its traditional
equality and foster its unique cultural heritage.
And it is asking how individuals can maintain
their psychological stability in an era of rapid
change, marked by urbanization and an onslaught
of global communication in a society that had no
televisions until a decade ago.

I came to Bhutan after hearing an inspiring
speech by Prime Minister Jigme Thinley at the
2010 Delhi Summit on Sustainable Development.
Thinley had made two compelling points. The first
concerned the environmental devastation that he
could observe – including the retreat of glaciers
and the loss of land cover – as he flew from
Bhutan to India. The second was about the
individual and the meaning of happiness. Thinley
put it simply: We are each finite and fragile
physical beings. How much "stuff" -- fast foods,
TV commercials, large cars, new gadgets, and
latest fashions – can we stuff into ourselves
without deranging our own psychological well-being?

For the world’s poorest countries, such questions
are not the most pressing. Their biggest and most
compelling challenge is to meet citizens’ basic
needs. But, for more and more countries,
Thinley’s reflection on the ultimate sources of
well-being is not only timely, but urgent.

Everybody knows how American-style
hyper-consumerism can destabilize social
relations and lead to aggressiveness, loneliness,
greed, and over-work to the point of exhaustion.
What is perhaps less recognized is how those
trends have accelerated in the United States
itself in recent decades. This may be the result
of, among other things, the increasing and now
relentless onslaught of advertising and public
relations. The question of how to guide an
economy to produce sustainable happiness --
combining material well-being with human health,
environmental conservation, and psychological and
cultural resiliency – is one that needs addressing everywhere.

Bhutan has many things going its way. It will be
able to increase exports of clean,
run-of-the-river hydropower to India, thereby
earning foreign exchange in a manner that is
sustainable and that can fill government coffers
to fund education, health care, and
infrastructure. The country is also intent on
ensuring that the benefits of growth reach all of
the population, regardless of region or income level.

There are serious risks. Global climate change
threatens Bhutan’s ecology and economy.
Incautious and expensive advice from McKinsey and
other private consulting firms could help turn
Bhutan into a degraded tourist zone. One must
hope that the quest for GNH will help steer the
country away from such temptations.

The key for Bhutan is to regard GNH as an
enduring quest, rather than as a simple
checklist. Bhutan’s Buddhist tradition
understands happiness not as attachment to goods
and services, but as the result of the serious
work of inner reflection and compassion toward others.

Bhutan has embarked on such a serious journey.
The rest of the world’s economies should do the same.

Jeffrey D. Sachs is Professor of Economics and
Director of the Earth Institute at Columbia
University. He is also Special Adviser to United
Nations Secretary-General on the Millennium Development Goals.
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