GNH and Neo-liberalism

(This was submitted as an assignment during my PGDPA at RIM)
Until the turn of the 19^th century, Bhutan was seen as a lost land. The people were seen as a sort of curious mountain tribe, “with a deep running devil-worship tradition” (Baillie, 2005), and with little personal hygiene to speak of. Of course, it all changed. Thanks largely to a succession of great hereditary monarchs since 1907.

The same Imperial forces that had once forgone the chance to take over this hidden and impoverished land, like they did so many kingdoms of its kind in the Himalayas, are now suddenly looking up to it to provide the glimmer of hope that they so desperately need. Their long standing belief in the forces of market is crumbling before their eyes.

Left on their own, markets are invariably hijacked by a few elites at the cost of others. The belief of market delivering justice seems farfetched as billions of people around the world go hungry. The ‘trickle down effect’ loses its way in a myriad of unjust barriers that are created. However, those who are at the receiving end of it all are not going away silently. With nowhere else to run, they are fighting back and taking the fight all the way to the heart of the capitalist system. The twin World Trade Towers in New York went up in flames that were first lit in the backyards of so many impoverished nations.

Mass consumerism that the capitalists advocate is stretching the limits of sustainability. Bush fires are raging on a scale never seen before. So are the cases of heat strokes. Nature is bringing on fury in unprecedented ways on record scale. Polar icecaps are melting and the glaciers of the mighty Himalayas are retreating at a rate which could leave billions of people with no fresh water sources by the next decade. And all these are because the earth is heating up. Holes are being created in our atmosphere. The stock of our natural resources is running dangerously low, threatening to derail our way of lives on this planet.

All these are the consequences of debauch living promoted by the forces of capitalist liberalism. But before we write its final epitaph, we must acknowledge that change has already come in the old ways of thinking. Neo-liberals promote a much refined blueprint for a more harmonious living.

The search for alternative models of development has begun. The first Prime Minister of democratic Bhutan. Lyonchoen Jigme Y. Thinley said in his address to the United Nation Council that “many academic institutions and indeed nations and researchers across the world are engaged in such a search and making progress as well. The latest to join is the OECD which has hosted a series of regional and world conferences to develop indicators to measure true human progress (2008).” That is why the capitalist West is keeping a keen eye on where Bhutan’s holistic development model of Gross National Happiness can take it.

As it is, realization has set in early that Bhutan had to be unique in its approach to development. The Prime Minister attributes this line of thinking to the fourth King. It served as the main motivator and the basis of all his policies and actions during a glorious reign of 34 years. His perfection of the alternative development paradigm saw Bhutan rise from being one of the poorest in the region to being one of the shining examples of success. Life expectancy has increased, people enjoy a better standard of living, the country’s development infrastructures have been put in place, and these have been done with much of the country’s natural resources still intact. At around US$ 12000, the country’s GDP per capita is the highest in the region. It only shows that the concept of bringing happiness to the people has transcended subjective conjectures to becoming firmly rooted in reality and bringing about real and wholesome material development.

GNH as propounded by the King, and refined by the country’s policy makers, makes a viable alternative to the Neo-liberal model. It integrates the best of Neo-liberal practices with the all-important human well-being aspect. The latest draft economic policy of Bhutan identifies eleven areas for investment which is in sync with the ten Neo-liberal propositions forwarded by John Williamson (Dorji, 2009). One dare say that Williamson would have found much economic sense in this policy that seeks to promote privatization through the opening up of the economy to FDI.

The GNH concept, which many think is more an “intellectual inquiry” of an Utopia, has in fact, never come in the way of Bhutan’s material development as it is often feared (Thinley, 2008). It only defines a sustainable limit for it. It is not dogmatic, and certainly presents no Bible truth. The concept is well grounded, and is utopian in only as much as our situation will allow. Thus, Bhutan was able to formulate a policy to build a massive 10,000 MW of hydro power by 2020 (ibid). But the concept of GNH means that we do not overreach ourselves and fall into the debt trap invariably set by market fundamentalism, which Neo-liberalism can be.

The end result of our development process is wholesome wellbeing of our society within the overarching pillars of GNH. These four broad themes are sustainable and equitable socio economic development, environmental conservation, promotion of culture and good governance. Further, these pillars have been enlarged to encompass nine domains to their promote clarity and usability. These are  community vitality, time use, health, education, living standards, ecological resilience, culture, and psychological well-being. Though the domains have distinctive concepts and purposes, in reality these domains are simply constructs - not definitive boundaries - and so, all overlap with each other in the complex matrix of our lives (Centre for Bhutan Studies).

At some point though, similarities seem to end between the Bhutanese GNH and the Neo-liberal principles formed on the basis of the “Washington Consensus” (Williamson, 1990). Analyzing the 2008 ‘financial crisis,’ the Bhutanese Prime Minister said that “it is becoming quite clear that its main cause lies in our culture of living beyond our means, of private profiteering, of socializing risks. Unfortunately, the only possible solution seems to lie in transferring our debt to future generations who are not here to argue against it (2008).” Although somewhat simplistic, this argument gains credence in the face of how some of the Neo-liberal propositions actually transformed in practice.

In Confession of an Economic Hitman, John Perkins writes about his job “as an economic hit man for an international consulting  firm that worked to convince poorer countries to accept enormous development loans-and to make sure that such projects are contracted to US companies. Once the countries were saddled with huge debts, the American government would request their pound of flesh in favours, including access to natural resources, military cooperation and political support (2005).” This is exactly how Neo-liberal propositions of Williamson worked out in Argentina as Mario E. Carranza (2002) makes out. “In the early 1990s, Argentina was the poster child for successful pro-globalization ‘economic adjustment’ policies,” writes Carranza. However, the dream run war short lived and proved as artificial as the whole process propped up by huge debt from US-based financial institutions. The only real beneficiaries were the American institutes, companies, contractors and expatriate workers who fed of Argentine economy. Analyzing Argentina’s catastrophic loan default in December 2001 which led to its economic and political collapse, she laments the remorselessness shown by the advocates of Neo-liberalism in America and criticizes them for not owning up their faulty theories which smacked of imperialist design. She argues that “neo-liberal discourse ignores the principal cause of Argentina’s fiscal deficits in 1991-2001: the interest payment on debt. By July 2001, these disbursements were three times greater than the expenditures on administration, six times greater than social assistance and 23 times the resources spent on employment plans.”

Bhutan was always wary of this situation. It meant to develop on its own terms and not be hurried in to making any unreasonable commitments. So, when the President of World Bank, Mr Wolfesnsohn visited Bhutan, the Fourth King turned down huge development aids which were in return for unconditional implementation of World Bank policies. It took courage to stand up against a man most leaders around the world gladly suck up to. But it took more wisdom to live with the consequences of such a stand. Thus, a careful building of the brand Bhutan began. GNH was a big part of it.

Today, even the World Bank gladly submits to Bhutanese terms. Speaking in grand terms, Graeme Wheeler, Managing Director of the World Bank was quoted by Kuensel as saying that “…Bhutan has been translating this philosophy in to action on the ground. It has been practicing what other countries need to do. We need to extend the concept of Gross National Happiness to Gross International Happiness.”

In the end, one is tempted to say that Bhutan and its development philosophy has prevailed, at least for now. But one must never forget that every philosophy starts out being good because it suits a particular need. But practitioners ultimately become complacent and blur its true essence overtime.

Bhutan will do well to stay clear of this situation. It should continue to value its time-tested philosophy which integrates the best of every development model, including Neo-liberalism, while deftly avoiding the pitfalls that come with them. Fortunately, we can take solace in the wisdom of the new King, Jigme Khesar Namgyel Wangchuck. He talks about continuously adapting the concept to suit changing times while emphasizing the need to understand that “whatever goals we have-and no matter how these may change in this changing times- ultimately without peace, security and happiness, we have nothing.” He goes on to say that this is the essence of the philosophy of GNH.” One cannot agree more.    

Reference

Carranza, M. (November 6, 2005). Poster Child or Victim of Imperialist Globalization? Vol. 32: Latin American Press pp. 65-89.

Centre for Bhutan Studies (2009). Gross National Happiness. Retrieved on August 25, 2010 from www.bhutanstudies.com

Dorji, P. (August 23, 2009) Areas for investment found, EDP awaited. Bhutan Times, pp. 5.

Lyonchoen Jigme Y. Thinley (2008). Statement at the 4^th International GNH Conference on Practice and Measurement. Thimphu: Kuensel Corporation Limited.

Perkins, J. (2005). Confessions of an Economic Hitman. London: Ebury Press, Random House.

Ura, K. (July 31, 2009). Comprehending GNH. Bhutan Observer, pp.12.

Williamson, J. (Agusut 2000). What Should the World Bank Think About the Washington Consensus? Vol. 15. No 2. The World Bank Research Observer. Pp. 251-264.