More Than Money
Issue #38
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Money and Happiness

Table of Contents

“A Wealth of Happiness”

Bhutan's Economy of Well Being

By Karen Mazurkewich, staff reporter of The Wall Street Journal *

THIMPHU, Bhutan - Five years ago, Tashi Wangyal had it all: a master's degree in philosophy from Cambridge University, a beautiful girlfriend, and an attractive job offer as a consultant in London. But the scholarship student, then 25 years of age, threw it all away for a $120-a-month job in Bhutan, the isolated Buddhist kingdom perched in the Himalayas.

The Bhutanese native's decision confounded his university friends, particularly classmates from neighboring India and Nepal who dreamed of working abroad in high-paying jobs. But Mr. Wangyal thought long and hard about a different commodity that preoccupies the minds of his fellow Bhutanese: happiness.

"The reason was fairly simple: the more I traveled and lived abroad, the more I learned to appreciate what we had at home," he says.

Despite Bhutan being among the poorest nations in the world, almost all of its scholarship students studying overseas return home after graduation. One reason they cite: The Bhutanese government has not only pushed forward with improvements in health care, education, and the environment, it has also actively pursued the more elusive goal of promoting its nation's happiness.

A few years ago, the government threw out the usual indicators measuring progress, replacing them instead with an innovative model-called "gross national happiness"-that now has researchers and think-tank agencies around the world taking note. While GNH isn't something that can be charted or ranked, Bhutan's concept embraces everything from protecting natural resources to promoting a strong national culture and ensuring democratic governance-goals that help create a foundation of happiness for citizens.

"Bhutan is a very rare example, probably the only example in the world, of a country that has built happiness into the center of its development strategy," says Ron Coleman, director of GPI Atlantic, a Canadian nonprofit research organization that studies the quality of life. "They are sacrificing short-term income for long-term social health."

It's not only Bhutan that is questioning the value of measuring material wealth without regard to a more comprehensive notion of fulfillment.

The World Values Survey, a group of international social scientists, released a report last year that ranked happiness by country. The study, which analyzes the impact of values and beliefs on political and social life through a series of questionnaires, concluded that the African country of Nigeria is the happiest in the world, perhaps a result of its residents' striking tendency to describe their emotional highs in extreme terms; the U.S. came in at 16.

At least one marketing firm in the U.S. is interested in tweaking the old GDP model to take into account wellbeing. And Ed Diener, a professor of psychology at the University of Illinois, has been asked by the Gallup Organization, the U.S.-based research and polling group, to create a national well-being index. Although the initiative has just begun, "the goal is to design something that could sit next to the Dow Jones average [stock index] in the corner of the TV screen," he says.

Mr. Diener has spent the past 18 years studying the link between happiness and prosperity. He's trying to debunk the notion that gross domestic product, a measure of a country's economic production, provides an accurate snapshot of national well-being.

Mr. Diener recently analyzed more than 150 studies on wealth and happiness, co-publishing a comprehensive report, "Beyond Money: Toward an Economy of Well-Being." His conclusion on global progress: "Although economic output has risen steeply over the past decades, there has been no rise in life satisfaction."

According to Mr. Diener's report, as societies attain a certain level of wealth, income becomes less of a factor in people's level of contentment. Emotional well-being is determined not necessarily by your bank account, but by the quality of social relationships, enjoyment at work, job stability, democratic institutions, and strong human rights.

Emotional well-being is something Bhutan's King Druk Gyalpo Jigme Singye Wangchuck has been pursuing for his subjects since he ascended the throne in 1972. Like Mr. Diener, the king sought an alternative to the GDP progress ranking. His philosophy was this: GDP reveals precious little about a nation's true wealth. Leaders shouldn't only strive for material wealth, they must also cultivate inner contentment.

Master Plan
The concept was formalized in 1998, with the prime minister of the time, Lyonpo Jigmi Thinley, charged with articulating the government's new master School children in Bhutan master plan, dubbed the Four Pillars of Happiness. These pillars-sustainable economic development, conservation of the environment, the promotion of national culture, and good governance -create conditions "in which every individual will be able to pursue happiness with reasonable success," says Mr. Thinley.

First and foremost, in the wake of globalization, the tiny kingdom of Bhutan-population 828,000-had to push reforms that would stimulate its economic development. But the key, as outlined in the first pillar, was "sustainable" economic development. This meant prioritizing long-term healthcare, education, and social economic services over other infrastructure needs. To this end, about a quarter of the country's annual budget was set aside for hospital services and schools.

The second pillar, conservation of the environment, was also given top priority in the country's new development scheme. Rather than throw open the country's doors to foreign investment and sell off its precious natural resources, the country kept investors at bay, banned the export of unprocessed timber, and restricted the number of tourists to about 6,000 per year.

The third pillar, the promotion of culture, was considered essential to maintain spiritual balance. Anchoring his subjects in religious practice was part of the king's master plan. And finally, the last goal was good governance. In 1998, the king accelerated the process of democratization by voluntarily divesting himself of some of his powers. The government's Council of Ministers is now elected and vested with full executive powers.

Not only was Mr. Thinley charged with helping to draft these policies to ensure happiness, but the king assigned him "the task of taking the concept of GNH beyond our borders." The graying statesman didn't relish the job: "I went, but with a great sense of hesitation because we had no idea how it would be received," he recalls.

But the world has been hungry for a little happiness. In the past few years Mr. Thinley has been talking about GNH on the international speakers circuit, including at a United Nations' conference in Seoul in 1998.

Bhutan may also generate its own quantifiable happiness index for use abroad. Mr. Coleman, of GPI Atlantic, is hoping to work with the Center for Bhutan Studies to calculate a well-being ranking that will factor in human values.

Social Improvements
Mr. Thinley is eager to prove that his country didn't sacrifice development for happiness, and social indices back this up. Since 1985, life expectancy has improved from 48 years to 66 years. Over that time, infant mortality has dropped from 142 deaths per thousand to 61. Education is also a success story: The literacy rate has climbed from 23% to 54% of the population, and the country's first university was inaugurated in 2003. In addition, the number of health facilities rose from 65 in 1985 to 155 today.

The country's economic prospects are also improving. Bhutan's GDP has risen about 45% in the past few years, moving from $445 million in 1999 to $645 million in 2003.

While its neighbor Nepal has a much higher GDP, it ranks lower than Bhutan on education and environmental fronts. In Bhutan, more than 90% of children reach grade five schooling, compared to 62% in Nepal.

Bhutan is no utopia. Its capital is looking less pristine these days, beset by traffic jams at rush hour and the strains of rapid growth from urbanization. Set in picturesque mountains, it's experiencing a mini-boom in building that is cluttering a once unspoiled landscape.

Five years ago, Bhutan hired its first psychologist, Chencho Dorji. "Among the youth, we are seeing more anxiety," Mr. Dorji says. He attributes this in part to job insecurity: "We have acquired a huge population boom since the 1960s because of increased health care."

The belated arrival of media and technology has also had an impact. Television was finally allowed into the country in 1998, and cell phones were introduced last year. "Suddenly it's dawned on us that ours is a growing materialistic society," says Mr. Dorji. Stress and alcoholism are also on the rise.

But ask any local if Bhutanese citizens are the happiest in the world, and the answer is most likely yes.

The secret to Bhutan's success is balance, says restaurant owner Sangay Penjor, 53, who runs the Yoddzer Hotel and Indian restaurant in Bhutan's capital of Thimphu. During peak tourist season he can make $2,000 a month profit; in the lean months, he just breaks even. "If you are too poor, you are fighting for your basic needs," he says. "But when there's an excess of ambition and goals you lose track of your human face. Once your basic needs are taken care of, you should know what is enough."

Religion provides the check, he adds. "It's human nature to want money and every comfort that the modern world offers you: electricity, cars, expensive things." Despite the arrival of secular influences such as television and mobile phones, spiritual life in Bhutan is stronger than ever, with enrollments at monasteries reaching an all-time high, and donations at record levels.

So, if religion is one of the keys to happiness, can Buddhist Bhutan serve as a template for other countries? "Other countries can learn from [Bhutan's] ability to take national planning to the grassroots level," says Enrique Pantoja, a World Bank country officer.

But there is a catch. "The evolution of Bhutan as a nation has been underlined by the articulation of a distinct Bhutanese identity. I think it would be difficult for any country without such a strong philosophy and development vision to emulate Bhutan's," he says.

Community Values
The indicators for happiness as defined by both Mr. Coleman and Mr. Diener of the University of Illinois mirror the reasons Tashi Wangyal gives for returning to the country. While it was important for Mr. Wangyal to provide comfortably for his family-he earns about the average wage for a government employee-it wasn't high on his list of aspirations. Having a voice and making a contribution to society gave him more pleasure. Mr. Wangyal, now a researcher at the Foreign Affairs Ministry, says good governance and political reforms made him confident about the future of his country, as did the free medical care and education.

But, most importantly: "Bhutan is one of the best places in the world to raise a child." Mr. Wangyal, who married his childhood sweetheart, Dechen Wangmo, and now has a two-and-ahalf- year-old daughter, says that he has a whole network of people to look after his family if he has to work late. "People in the West focus on career. It's fairly individualistic," he says. In Bhutan, "community values are prized and everyone helps each other out."

There are some downsides, he admits. It's too expensive to travel outside of Bhutan, and he still can't afford a car. Mr. Wangyal's biggest purchase since his return was a $300 mountain bike that he rides to work every day. And then there's his weakness for fresh coffee. "There's no Starbucks here. That's what I miss the most." .

* This story appeared in the Friday, October 8, 2004 online edition of The Wall Street Journal. It is reprinted here by permission of The Wall Street Journal, Copyright © 2004 Dow Jones Company, Inc. All Rights Reserved Worldwide. License number 1092690332489.

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