A Competitive Economy Guided by GNH

The most common question I’ve been receiving since I started telling friends and colleagues that Antonia and I are moving to Bhutan for a year is, “What will you be doing there?”

In many ways it is impossible to predict the future and accurately describe the nature of my work over the coming year. However, I do have a four page “Terms of Reference” document which describes some lofty ambitions. Looking at it now, in the days before I fly, it really appears to be a remit for a crack team of strategy consultants to be undertaken over a three year period. However, it will be just me and I have one year, so it is with ambition and optimism that I set out to improve the state of Bhutan.

“Over a one year period, Randall Krantz will act as strategic advisor to the CEO and the board of Druk Holding and Investments of Bhutan to advance the national competitiveness of the private sector.”

So, who am I working for? Druk Holding and Investments (DHI) is the investment arm of the Bhutanese government, essentially a sovereign wealth management company that controls part or all of 17 companies. DHI was established in 2007 with the primary mandate “to hold and manage the existing and future investments of the Royal Government of Bhutan for the long term benefit of its shareholders, the people of Bhutan”. Its vision is to transform Bhutan into a globally competitive economy guided by the principles of Gross National Happiness.

As a “Strategic Advisor on Long-Term Competitiveness”, I will be focused on developing the systems necessary to increase Bhutan’s overall competitiveness. One short-term lever to increase Bhutan’s national competitiveness will be the inclusion and improved ranking in various competitive indices already trusted by business and foreign investors. Examples of these existing indices include the World Bank’s Ease of Doing Business Index, the World Economic Forum Global Competitiveness Report and the Transparency International Corruption Index.

These indices use various normative metrics to quantify competitiveness, but many of these standards may not reflect the GNH view of development taken in Bhutan. In addition to improving its ranking in these largely Western indices, it will be important to explore how Bhutan wants to be competitive: by exploiting natural and social capital, or by building on its long Buddhist history and recent progress on exporting the concept of GNH to the rest of the world.

Given Bhutan’s natural endowments (rivers, forests, minerals) and geographic situation, in is important that these resources are used for the benefit of the country’s people as well as for future generations. Bhutan has the potential to move beyond the exploitation of hydropower and unlock the full potential of its human capital. For this, it will need to grow a culture of innovation and entrepreneurship.

There are currently several projects seeking to leverage Bhutan’s human capital beyond the tourism industry, mostly focused on education and technology. These should be embraced, though there is much to be done to increase investment, particularly foreign investment in these areas. With increasing levels of education among the youth in Bhutan and a strong national identity of collaboration, this presents a real opportunity.

I am eagerly looking forward to contributing to Bhutan’s ongoing transformation as the country explores how to generate sustainable economic growth and enhance business competitiveness. Supporting elements such as entrepreneurship, governance and financing will certainly be core elements of any long term competitiveness strategy, and the associated inter-linkages will be a key part of my advisory work.

There is an opportunity for an overarching aspiration which links each of these ambitious projects and develops a sense of national pride as well as purpose. Indeed, one could say that there is a need to go beyond a community of interest or even community of purpose to build a country of purpose.

I look forward to being a part of this journey.

By: Randall Krantz

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