SINGAPORE – If Bhutan Prime Minister Tshering Tobgay had his way, the Himalayan kingdom would eventually see a big jump in its resident population – helped by its proposed economic hub on its southern border with India. Bhutan, one of the world’s few carbon-negative countries, is hoping to leverage its masterplan for “Gelephu Mindfulness City” to generate growth in the long run and create economic opportunities for its young. Bhutan’s cornerstone economic project contains “mindfulness” in its name to reflect its sustainable approach to urban development, in keeping with the country’s focus on living in harmony with nature.
Increased economic activity may inevitably raise questions about the feasibility of Bhutan’s longstanding practice of living sustainably, but the country also faces socio-economic challenges of stemming high youth unemployment, reducing the prospect of its young people moving overseas and enticing the Bhutanese diaspora to move back home. In Singapore partly to drum up interest in the new economic hub, Mr Tobgay spoke with The Straits Times on Sept 19 before leaving for New York for the United Nations General Assembly. He said he hoped to see one million to two million people eventually living and working in the new economic hub to be constructed near the town of Gelephu, which currently has a population of around 10,000.
The country’s population is now just under 780,000. “Invitations, I understand, are going out to founding investors,” Mr Tobgay added. He declined to discuss the identities of wealthy individuals invited to invest in the proposed city, though he said there has been interest from India.
Since this project was launched in December 2023, Bhutan’s leaders have been at pains to stress that only individuals and investments that share Bhutan’s values will be invited. Bhutan is famously known for eschewing the concept of gross domestic product for measuring economic growth. Instead, the country’s leaders are embracing the more holistic notion of gross national happiness, which counts ecological resilience and psychological well-being among nine pillars for what it considers as true prosperity.
As it stands, the kingdom’s Constitution mandates a minimum 60 per cent forest cover of its lands, with that figure now standing at around 72 per cent. Thirty-five rivers and streams meander through the project’s site that also contains two protected nature sanctuaries which will be preserved. The new city is slated to comprise 11 neighbourhoods, while a dam and a new airport are also planned within this area.
More than just increasing the country’s accessibility and infrastructure, there is also an urgent economic need to create employment for the country’s youth. Youth unemployment stood at 19.2 per cent in the quarter that ended June, compared with the broader 3.
7 per cent jobless rate, according to the latest Bhutan government data. A dearth of jobs has led to many of the country’s young people moving abroad for better economic opportunities, a brain drain which Bhutan’s leaders are keen to curb. The country shut its borders during the Covid-19 pandemic from 2020 to 2022, but there has been a marked increase in migration to Australia, a popular destination for work and study, since borders reopened in September 2022.
A Reuters report cited Australian official data showing student visa applications from Bhutan jumping fivefold in the fiscal year ended June 2023. The landlocked Himalayan kingdom – which shares its northern borders with Tibet and China – is also looking to generate revenue by concluding a bilateral carbon credit trading pact with Singapore. Singapore and Bhutan have concluded final-round negotiations on the deal, which is in line with the Paris Agreement guidelines on carbon credit projects.
Talks have also concluded for an implementation agreement which, once inked, would allow businesses in the Republic to purchase carbon credits from certified green projects in Bhutan to offset part of their carbon tax. “I am delighted that Singapore has offered a platform where we can sell our carbon credits and monetise and sell our carbon credits in a fair manner, and which will benefit all parties involved, the buyer and the seller,” said Mr Tobgay, who is Bhutan’s seventh prime minister and came to power in January. “I know our people are meeting almost every week, so I expect something significant and something definite in the near future.
.. hopefully by the end of the year,” he added.
Many of the credits, Mr Tobgay said, will be derived from Bhutan’s more recent hydropower projects that have been recognised and certified to produce carbon credits. Singapore is collaborating with more than 20 countries on carbon credits, according to a parliamentary reply in August. Of these, only two, Papua New Guinea and Ghana, have finalised bilateral pacts and signed implementation agreements with Singapore so far.
Paraguay is also close to signing a final implementation agreement with the Republic. While in Singapore, Mr Tobgay spoke at the Asia Summit of the Milken Institute, an American think-tank. He called on President Tharman Shanmugaratnam and met Senior Minister Lee Hsien Loong.
Not many Singaporeans have been to Bhutan, but it is a unique and beautiful country - and also helps sustain our...
Happy to catch up with Bhutan PM Tshering Tobgay. We last met in September 2017 when PM Tobgay visited to speak at the..
. He also met Prime Minister Lawrence Wong – who was his classmate at the Harvard Kennedy School in the early 2000s and has remained a firm friend – and Foreign Minister Vivian Balakrishnan. Great to catch up with Bhutan Prime Minister Tshering Tobgay.
We’ve known each other since our time at the Harvard...
Welcomed Bhutan Prime Minister Tshering Tobgay back to Singapore. Our small states share unique challenges and..
. Mr Tobgay is keen for more visitors from Singapore to boost his country’s tourism industry, which is second only to hydropower in terms of revenue generation. Tourism arrivals in Bhutan peaked at about 316,000 in 2019 – a figure that is close to an unofficial 300,000 limit for the purpose of sustainability and a level its Prime Minister is keen to hit again as a shorter term boost to the local economy.
Post-Covid-19, tourist arrivals were still hovering in 2023 at about a third of the 2019 peak. While aiming to increase tourist numbers, the carrying capacity of 300,000 “must never be breached”, said Mr Tobgay. “We are going to continue with a policy of high value, low volume, but to market Bhutan and to get in the numbers that we can accommodate.
We need to be more strategic, and that means we need more flights to the right location,” he added..
