Bhutan, the small landlocked country wedged between India and China, is perhaps best known for “Gross National Happiness,” the alternate measure that the country claims gives a fuller understanding of economic development than GDP.
But the country wants to be known for more than just spiritual tourism and Himalayan mountains. Bhutan now hopes to attract foreign investment, foster new industries, and enter the global economy.
It’s a steep hill to climb for the isolated Himalayan country, which has recently grappled with a brain drain problem as young Bhutanese travel abroad for new opportunities.
“Geography is a challenge for us, demography is a challenge for us,” said Ujjwal Deep Dahal, CEO of Druk Holdings and Investments (DHI), Bhutan’s sovereign wealth fund. Bhutan and DHI need to “learn to engage with the world as we move,” he added.
Yet Bhutan and its sovereign wealth fund–tiny by global standards–hope to leverage the country’s strengths, including cheap and widespread hydropower, which in turn can feed investments in data centers and Bitcoin mining. Key to the country’s plan is the Gelephu Mindfulness City, a new zone to connect Bhutan with businesses in South and Southeast Asia.
‘Size does not matter’
The most prominent sovereign wealth funds—like those from Norway, Saudi Arabia or Singapore—are gigantic global investors. These funds move hundreds of billions of dollars of funds, garnered from pensions, natural resources or foreign exchange reserves, to seek high returns and invest in strategic industries.
DHI is smaller compared to these global giants. A lot smaller.
Founded in late 2007, DHI has around $3 billion in assets under management, and owns stakes in 24 different Bhutanese companies.
By comparison, Singapore’s Temasek has $300 billion in assets under management, with stakes in the country’s most prominent companies, like Singapore Airlines and DBS.
But Dahal sees opportunity in DHI’s small size. “Size does not matter,” he said; instead, DHI can focus on “efficiency and how we grow.” Still, he sees Temasek as a role model for DHI.
“We look at Temasek to a large extent, in terms of governance, in terms of divestments. But having said that, Bhutan’s economy and Singapore’s are completely different,” Dahal said. “We need to look at running DHI in a way that’s complementary to the challenges.”
Bhutan’s happiness and brain drain
Bhutan calculates Gross National Happiness through a survey of 300 questions administered every few years. The most recent GNH index, released in May 2023, reported a score of 0.781 for 2022, higher than the 0.743 reported in 2010.
The country’s GDP per capita grew from $2,435 to $3,711 over the same period—yet experienced a steep decline in 2020, the height of the pandemic.
Pessimism about the economy has meant that the country, with a population of less than 800,000, is currently going through a brain drain. Around 13,500 Bhutanese, equal to 1.6% of the country’s entire population, moved to Australia in 2023. The country, which is still mostly covered in forest, has battled declining income, a lack of job opportunities, and rising youth unemployment.
Tourism is one of Bhutan’s main sources of income, but has yet to recover from the COVID pandemic. The country reported 145,000 tourist arrivals last year, less than half of the 315,599 arrivals recorded in 2019. The country also has a mixed view of the tourism industry, promoting a “high-value, low-impact” tourism model to avoid stressing the country’s infrastructure.
Big bets
DHI manages several firms that are key to the country’s economy, like Bhutan Power Corporation, Bank of Bhutan, and Bhutan Telecom. And Dahal thinks DHI can be a platform to carve out a niche for Bhutan in today’s AI and internet economy.
For example, Dahal, who has a background in engineering and hydropower, hopes that Bhutan can be a place where green energy firms can explore “interesting technologies,” like pump storage and hydrogen power, and test their commercial viability.
“We can quickly test it out in Bhutan, solve the problem in Bhutan and take it global or regional,” Dahal argued.
He’s particularly focused on hydropower, now Bhutan’s major source of electricity generation. Bhutan currently has 2.5 gigawatts of current capacity, and an additional 3 gigawatts under construction.
DHI’s also making some more unconventional bets. Bhutan is one of the world’s largest sovereign holders of Bitcoin. The country started mining the cryptocurrency back in 2019, when it was worth just under $10,000. It’s now worth around $97,000 as of May 7, 2025.
Bitcoin mining is normally energy intensive, but Dahal claims that Bhutan’s crypto mining, due to its use of hydropower and other green energy, helps offset carbon emissions elsewhere.
“Bitcoin is a parallel to digital gold,” Dahal said, noting that the country’s cryptocurrency strategy is part of a diversified approach for alternative investments.
DHI, as Bhutan’s investment arm, is also supporting the development of Gelephu Mindfulness City, a special administrative region that hopes to be an economic corridor to South and Southeast Asia. The City, which spans about 2,500 square kilometers, tries to combine economic growth with sustainability and holistic living, and offers space to businesses like healthcare, technology, and green energy.
“We’re trying to bring an innovation strategy into DHI to build startups with global founders, academicians and innovators, and bring them together to build a startup culture and economy,” Dahal said.
