Global Search for the Best Compass

In a world obsessed with growth metrics, Gross Domestic Product (GDP) has long been the undisputed king. It determines economic strength, influences political decisions, and shapes national strategies. But as global crises deepen—from climate change to rising social inequality—the question has grown louder: does GDP really measure what matters? This dissatisfaction is not new. Back in 1968, Senator Robert F. Kennedy gave a famous speech criticizing the Gross National Product (GNP), GDP’s predecessor, for measuring “everything except what makes life worth living,” including air pollution and prison construction, but not “the health of our children, the quality of their education, or the smiles on their faces.”¹Today, more than half a century later, this sentiment has evolved into a pressing global debate about the need for alternative development models.²

Amid this search, the most radical and structured answer came from an unexpected place: the Himalayan Kingdom of Bhutan. The concept of Gross National Happiness (GNH) was proposed as a holistic development philosophy that prioritizes the well-being of people and the planet over mere economic production.³The VNS is not just an ephemeral concept, but a holistic system designed to balance the material and spiritual needs of society.⁴

But while Bhutan remains a pioneer, its unique path – that of a small, relatively homogeneous monarchy – raises questions about the scalability and applicability of the model to other contexts. This is where Nepal enters the global arena. With breathtaking natural beauty and deep structural problems, it represents a more complex and perhaps more relevant testing ground for the rest of the world. Nepal is a young federal democracy with a diverse population that is grappling with a legacy of civil conflict, deep-rooted social inequality, and acute geopolitical tensions.⁵

The central question of this study is: Can Nepal, using the principles laid down by Bhutan but adapting them to its own complex reality, create its own model of a happiness-oriented economy? And if so, what practical steps are needed to turn this ambitious idea into a viable national strategy? The answer to this question may not only determine Nepal’s future, but also offer the world a much-needed, replicable compass for development in the 21st century.

The Himalayan Idea – Deconstructing Gross National Happiness

To understand the potential of GNH for Nepal, it is necessary to first understand its essence, separating its philosophical underpinnings from its practical application and inevitable controversies. GNH is not just an alternative indicator; it is a fundamental reconsideration of national development goals and methods.

Philosophy: More than just a good mood

The concept of Gross National Happiness was born in 1972, when the fourth king of Bhutan, Jigme Singye Wangchuck, made a bold statement that became the foundation of the national philosophy: “Gross National Happiness is more important than Gross National Product.”⁷The idea didn’t just pop up out of nowhere. It has its roots in Bhutan’s 1729 legal code, which said that a government that couldn’t ensure the happiness of its people had no reason to exist.⁸

Unlike Western development models, whose ultimate goal is economic growth, the GNS argues that true progress of society is only possible when material and spiritual development go hand in hand, complementing and reinforcing each other.⁷This philosophy is based on Buddhist spiritual values, which emphasize harmony, compassion and the interconnectedness of all forms of life.¹This is not a rejection of economic development, but a rethinking of it. Progress within the framework of the GNH is realized through five-year planning, in which economic steps are taken slowly and carefully so as not to destroy traditional values: family, culture, nature and religion.⁴

The Four Pillars: The Foundation for Well-Being

The philosophy of the GNH is embodied in four basic principles, or pillars, which serve as a framework for all public policies. These pillars are enshrined in the Constitution of Bhutan and guide the country’s development.¹

1. Sustainable and equitable socio-economic development. This principle recognizes the importance of material well-being, but insists that its benefits should be distributed fairly among all sections of the population. It aims to reduce the gap between rich and poor and to ensure economic self-sufficiency, but not at the cost of social or environmental damage.¹
2. Preservation and promotion of culture. The GNH views culture not as a relic of the past, but as a living, dynamic force that provides identity, unity and meaning. This pillar aims to protect Bhutan’s unique heritage from the homogenising forces of globalisation and to develop cultural resilience, the ability to preserve and nurture its identity.¹
3. Environmental protection. This principle reflects a deep belief that human happiness is inextricably linked to the health of the planet. Bhutan is committed to preserving its unique ecosystems, which is reflected in policies such as banning the import of chemical fertilizers and maintaining high levels of forest cover. The environment is viewed not just as a resource, but as a source of aesthetic and spiritual healing.¹⁰
4. Good management. Effective, transparent and accountable government is considered the cornerstone of creating conditions in which citizens can thrive. This pillar implies that all government decisions and laws should be assessed in terms of their impact on the general well-being.¹To achieve this goal, Bhutan even created a special Ministry of Happiness.⁴

From Philosophy to Politics: Nine Areas and Their Dimensions

To turn these four pillars into a practical management tool, they have been detailed into nine key areas (domains) that form the basis for measuring ANS. These areas cover all aspects of human life and well-being.¹¹:

1. Psychological well-being
2. Health
3. Education
4. Use of time
5. Cultural diversity and sustainability
6. Good management
7. Community Viability
8. Ecological diversity and sustainability
9. Standard of living

The GNI Index, which consists of 33 specific indicators, is used to assess these nine areas.¹⁴The Bhutanese government regularly conducts nationwide surveys asking citizens direct and detailed questions about their lives: “Can you concentrate?” “Do you lose sleep because of worry?” “How many loved ones can you count on if you get sick?”⁸The results of these surveys allow the government to identify “hot spots” of discontent and direct resources to address specific problems, whether it is improving health services in a remote area or supporting cultural initiatives.⁸

Table 1: Comparison of two metrics: GDP and GNI

To clearly demonstrate the fundamental differences between the traditional approach and the happiness approach, it is useful to compare them along key dimensions.

The Bhutan Experiment: A Critical Look

Despite the appeal of the concept, it is important to approach the Bhutanese experience with a critical eye. GNH is not only a development philosophy, but also a brilliant soft power tool. It has enabled a small, vulnerable state, caught between two giants, India and China, to carve out a unique niche on the world stage and to “get ahead” in international development debates.²⁰By creating the GNH, Bhutan offered the world an alternative ideology that attracted attention and respect, strengthening its sovereignty and national identity.²¹

Behind this façade, however, lie serious contradictions. The most glaring of these is the charge that the GNH policy, with its emphasis on preserving “traditional Bhutanese culture,” was used as an ideological cover for repressive and racist policies in the 1990s. These policies led to the forced expulsion of more than 100,000 ethnic Nepalese (Lhotsampa), who were stripped of their citizenship and forced to flee the country.²²For these refugees, the slogan “Gross National Happiness” has become “Gross National Sorrow.” This tragic episode demonstrates the dangers of a state monopolizing the definition of “culture” and “happiness” and using it to suppress minorities.

Even within Bhutan, there is an understanding that the concept is often misunderstood abroad. Former officials and citizens explain that it is not about being “the happiest country in the world,” but about creating conditions for “harmony” – harmony with oneself, with society, and with nature.²⁴This subtlety gets lost in the international headlines, but it is crucial. Bhutan’s success in promoting GNH is inseparable from its specific cultural context – Buddhist philosophy and a monarchical form of government that allowed such a radical idea to be implemented from the top down.²²

So for Nepal and any other country considering a similar path, the lesson is clear: it is necessary to separate the universalprinciplesFGC (fair development, environmental protection, good governance) from the specific and sometimes controversialcultural realizationBhutan: The challenge is not to copy the model, but to adapt it to its own democratic, multicultural and complex context.

Nepal’s Reality: A Nation at a Crossroads

Before we can plan to implement a happiness-focused model, we need to take a sober look at the soil in which these seeds will need to grow. Nepal today is a country of great contrasts: the majestic Himalayas and deep poverty, ancient traditions and turbulent political modernity. It is in these contradictions that lie both the greatest obstacles and the most compelling reasons for adopting a new, more humane approach to development.

Economic Engine: Potential and Paralysis

Nepal’s economy, with a GDP of about US$41 billion²⁵, is classified by the UN as one of the least developed countries in the world.²⁶It rests on three pillars: agriculture, remittances and tourism. The agricultural sector, although providing employment for almost three-quarters of the population, remains poorly mechanized and cannot always meet the country’s domestic needs.²⁷Remittances from millions of Nepalis working abroad play a huge role in the economy, creating dependence on external labour markets and making the economy vulnerable.⁵

Still, the potential for growth is huge. The World Bank projects the economy to grow by 4.5% in fiscal 2025, driven by hydropower, domestic trade, and agriculture.²⁹Key sectors for the future include hydropower, with its enormous untapped potential, tourism, which can be reoriented towards more sustainable models, and the emerging digital sector.⁵

It is noteworthy that Nepal’s official development strategy is already moving in a direction consistent with the principles of the GNH. The recently adopted 16th National Plan (2024-2029) sets as its main goal “good governance, social justice and prosperity.”³⁰The plan is aimed not just at GDP growth, but at specific indicators of human well-being: reducing the poverty rate from 20.3% to 12%, increasing the Human Development Index (HDI) from 0.601 to 0.65, and increasing life expectancy to 73 years.³²It also places emphasis on creating decent jobs, increasing productivity and ensuring a smooth transition out of the least developed country category.²⁸In essence, the 16th plan is already a “general outline of the GNH plan,” which lacks only the formalized structure and measuring instruments offered by the concept of happiness. This means that the transition to the GNH would not be a revolution, but a logical evolution of the already established national course.

Social Fabric: Deep Cracks, Resilient Vitality

The main challenge to any inclusive development in Nepal remains its deeply stratified society. Although the caste system was formally abolished in 1963, its legacy continues to shape the life chances of millions of people.³³Dalits, who make up about 13% of the population and have historically been considered “untouchable,” continue to face systemic discrimination in access to education, health care, land and justice.³³As of 2022, 42% of Dalits lived below the poverty line.³⁵This barrier is compounded for members of other marginalised groups such as ethnic minorities (Janajatis) and lowlanders (Madhesi).³⁶

Gender inequality is another deep crack in the social fabric. Despite legislative quotas, women’s participation in political and economic life remains limited. Violence against women, especially domestic violence, is widespread and often hushed up.³⁷Changing the mentality that still assigns women a subordinate role is a more difficult task than passing laws.³⁸

For Nepal, with its recent history of civil war, largely driven by feelings of exclusion and injustice, the issue of social inclusion is not just a moral imperative, but a guarantee of national stability. Any concept of “national happiness” will be perceived as an empty slogan if it does not first and foremost aim to dismantle these archaic structures and ensure real equality for all citizens. This is why social justice must not just be an element, but a cornerstone of Nepal’s GNH model.

Fragile Environment: Crisis in the Clouds

Nepal’s economy and well-being are inextricably linked to its unique and fragile environment. And that environment is under threat. The Himalayas, the “water tower of Asia,” are warming twice as fast as the global average.³⁹This is causing glaciers to melt at a catastrophic rate, threatening the water supply of billions of people downstream and increasing the risk of devastating floods. The Himalayas are expected to lose up to two-thirds of their ice cover by 2100.³⁹

This global threat is compounded by local problems. Deforestation for fuel and agricultural land leads to soil erosion and landslides.⁵Uncontrolled tourism, especially in the Everest region, has created a serious garbage problem: tons of waste left by expeditions accumulate on the slopes of the world’s highest mountain.⁴⁰

Nepal’s government and local communities are beginning to recognise the scale of the problem, with initiatives to clean up the mountains, such as removing 11 tonnes of trash from Everest⁴⁰, and ecosystem restoration projects such as the Terai Arc Landscapes, which aims to protect the habitats of tigers and rhinos.⁴³These efforts demonstrate a growing understanding in the country that a development model that ignores environmental costs is suicidal for Nepal. The GNH, with its built-in environmental pillar, offers a systems approach to integrating these efforts into a coherent national strategy.

Geopolitical Tightrope: Between the Dragon and the Elephant

Nepal’s geographic location is both a blessing and a curse. Sandwiched between two nuclear powers and rival giants, India and China, Nepal is at the epicenter of geopolitical rivalry.⁶Added to this is the growing influence of the United States, which also views the region as an arena of strategic interests.⁴⁵

In this “great game,” development projects and foreign aid often become instruments of “soft power” and geopolitical influence.⁴⁶China is pushing its global Belt and Road Initiative (BRI) and the US is pushing its Millennium Challenge Account (MCC), offering infrastructure investments that will inevitably draw Nepal into their orbit.45This puts the Nepalese government in a difficult position, forcing it to navigate between powers and risk turning the country into a battleground for influence.⁴⁶

In such circumstances, forging a strong, independent national identity and its own unique development path is not just a philosophical choice, but a strategic imperative to preserve sovereignty. A model based on the principles of the GNH could be just that for Nepal. It offers an alternative to the dominant development models promoted by external forces and allows Nepal to build its foreign policy on the basis of values, not just pragmatic concessions. Adopting the GNH could be a powerful act of national assertion, demonstrating to the world that Nepal is choosing its own compass.

A Practical Plan for a ‘Happy’ Nepal

Transitioning from theory to practice is the most difficult part of any ambitious project. For Nepal, creating a happiness-focused economy does not require inventing something entirely new, but rather integrating and strengthening existing initiatives into a single, coherent strategy. Below is a practical plan, structured around adapted GNH principles, that can set Nepal on this path.

First the Foundation: Good Governance and Social Justice

Without a solid foundation of justice and good governance, any talk of “national happiness” will remain empty words. In the Nepalese context, this means confronting deeply entrenched structures of discrimination head-on.

• Practical step: From laws to action. There is a need to move from declaratory condemnation of discrimination to real enforcement. This includes strict implementation of the Caste Discrimination and Untouchability Act, 2011.³⁵The government should empower and resource national commissions on human, Dalit and women’s rights, ensure impartial investigation and prosecution of caste-based hate crimes, and launch major nationwide awareness campaigns to change public consciousness.³⁵
• Practical step: Implementation of the “Social Inclusion Map”. To make social justice measurable, Nepal should develop its own GNH Index, which places significant weight on inclusion indicators. This “Map” could track and publish data such as the percentage of Dalits and women in local government, the dynamics of women’s land ownership, and marginalized groups’ access to justice and higher education. This would turn an abstract goal into a concrete policy objective with clear success criteria. This approach is directly aligned with the provisions of Nepal’s 2015 Constitution, which guarantees equality for all citizens.³⁴

Rethinking Prosperity: Sustainable Livelihoods

Economic development must be aimed at creating quality jobs, not just numerous ones, that are in harmony with the country’s natural and cultural assets.

• Practical step: Development of “VNS-tourism” – high quality and low impact. Instead of chasing the number of tourists, Nepal should focus on quality. This means developing niche destinations: spiritual and wellness tourism, agro-tourism, cultural immersion, and educational eco-tours. Local communities need to be empowered to run guesthouses, provide guide services, and create craft cooperatives, ensuring that revenues stay local.⁴⁸This approach will help solve the problem of overcrowding and pollution in popular areas such as Everest and Annapurna.⁴⁸
• Practical step: Launching a national mission on organic agriculture. Taking inspiration from Bhutan, which banned chemical fertilizers¹³, Nepal can become a global hub for organic farming. The government should support existing local initiatives⁵⁰, creating a national certification system, promoting premium export brands (such as Himalayan Organic Tea or Nepal Specialty Coffee) and closely linking the agricultural sector with the tourism industry through a farm-to-table model in hotels and lodges.
• Practical Step: Responsible Development of Hydropower. Hydropower is a key growth driver for Nepal²⁹, but its development is fraught with risks. The VNC principles require that all hydropower projects comply with the highest international environmental and social standards. This includes conducting transparent impact assessments, ensuring equitable benefit sharing with local communities, and minimizing damage to river ecosystems. This will help avoid the negative impacts often associated with the construction of large dams.⁵²

Using Soft Power: Culture and Community as National Assets

In a world dominated by economic and military power, Nepal’s unique culture and strong communities are its greatest strategic advantage.

• Practical step: Integrating UNESCO heritage sites into the national VNS strategy. World Heritage sites such as Lumbini (the birthplace of the Buddha), the Kathmandu Valley temple complexes and national parks should be seen not just as tourist attractions but as platforms for global dialogue on peace, spirituality and sustainable living.⁵⁴The management of these sites should aim to preserve their authenticity and harness their potential to strengthen Nepal’s soft power in the global arena.⁵⁷
• Action Step: Scaling Community Empowerment Programs. Nepal already has numerous effective NGOs, such as Volunteers Initiative Nepal (VIN), that work to empower women, develop youth skills, improve public health, and protect the environment.⁵⁸The government must recognise their value and provide national support and funding to scale up the most successful models. Their work directly contributes to strengthening ‘community resilience’ – one of the key areas of GNH.

Building Resilience: An Environmental Charter for the Himalayas

For a country on the front lines of the climate crisis, environmental sustainability is a matter of survival.

• Practical step: Establishment of an inter-agency task force on climate change adaptation. It is necessary to overcome departmental disunity and create a single coordination center uniting the ministries of the environment, agriculture, tourism and water resources. The task of this group is to develop and implement a comprehensive national plan for adaptation to the effects of climate change, from melting glaciers to changing monsoon patterns.
• Practical step: Implementation of a national waste management strategy. This strategy should focus on reducing waste at source, especially plastics in the tourism industry. It is necessary to invest in modern waste-processing facilities and implement circular economy principles, learning from the problems faced on Everest.⁴⁰This step will build on existing government commitments and the work of organisations such as the Climate and Clean Air Coalition (CCAC) in Nepal.⁶¹

The key to the plan’s success is integration, not invention. Nepal does not need to create dozens of new programs from scratch. The challenge is to use the GNH framework as an umbrella concept to connect, amplify, and scale up the many positive but disparate initiatives that already exist in the country. The most important practical step is to develop Nepal’s own GNH Index. This tool will turn good intentions into measurable, accountable policy goals, and allow citizens and policymakers to see whether economic growth is actually leading to better lives, a healthier environment, and a more equitable society.

Conclusion: A beacon of hope, a difficult climb

The analysis shows that directly copying the Bhutanese model of Gross National Happiness, born under a monarchy and a specific cultural environment, is not only impossible but also undesirable for Nepal, a young, diverse and dynamic democracy. Trying to impose a single, state-run definition of “culture” or “happiness” in a country with such deep social stratification and a recent history of conflict would be counterproductive and dangerous.

However, the fundamental principles GNH – the pursuit of equitable and sustainable development, harmony with nature, preservation of cultural heritage, and good governance – offers Nepal a powerful, organic, and highly relevant framework for shaping its future. Rather than contradicting, this philosophy complements and systematizes the goals already laid out in the country’s 16th National Plan. GNH can provide Nepal with not just a new economic model, but a holistic compass for national development that will help it address its most pressing challenges: deep social inequality, existential environmental threats, and enormous geopolitical pressures.

By adopting an adapted version of the GNH, Nepal can transform its greatest vulnerabilities into pillars of a new national identity. The fight for social justice can become the foundation for building a truly inclusive society. Protecting the fragile Himalayas can make the country a world leader in climate adaptation and sustainable tourism. And navigating between giants can push it to create a unique soft power based on peace, spirituality, and harmony.

Nepal’s journey, if it chooses to embark on it, will be an uphill climb, fraught with political obstacles and practical challenges. It will require enormous political will, broad public participation, and a commitment to long-term change. But if it succeeds, Nepal will have something the world desperately needs: a scalable, democratic model for building a more sustainable, equitable, and truly prosperous future. It will have proven that happiness, in its truest, most holistic sense, is not just a place on a map, but a path that an entire nation can choose to take.

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