Five Year Plans of Bhutan

The Five Year Plans (FYP) of Bhutan are a series of national economic development plans adopted by the government of Bhutan since 1961 based on socialist model of Russia and as dovetailed by India.  In the World Bank’s 1989 appraisal:

“Coming late to the development scene, Bhutan was eager to avoid mistakes committed elsewhere. Although strongly dependent on foreign aid, it was determined to follow its own set of priorities, keep public finance on an even keel, build up a well-trained but lean bureaucracy, and prevent environmental damage from over exploitation of the forests or uncontrolled growth of tourism.”

His Majesty used traditional social institutions and involved people at the local level in planning and implementation for their own dzongkhag, dungkhag and gewog plans. Consequently, the World Bank observed:

“As a result of these factors, development in Bhutan has been remarkably free from seeing economic, social, or cultural disruption.”


Development is a function of harnessing physical and human resources, laying down an appropriate strategy of development and implementing them. Development functions exceptionally with honest, devoted and visionary leadership. It is the quality of leadership, which has often led to the rise and fall of nations. Thus good governance is the sine qua non of development as also of the proper discharge of other vital functions of the state e.g., maintenance of law and order, dispensation of justice and ensuring national security and stability.

By inviting the Prime Minister of India in 1958 to Bhutan, bilateral relationship was established and secured development assistance. With the development assistance from India, construction of roads were initiated,  and different departments were established to provide services such as postal services, forestry, education, agriculture, animal husbandry, etc. Initially the activities were placed under the administrative jurisdiction of the Secretary General of the Development Wing and later regrouped under the Ministry of Development.  His Majesty The Fourth Druk Gyalpo Jigme Singye Wangchuck later rationalised and segregated the various departments under different ministries.

Past is continuing to bear its fruits of economic prosperity, self-reliance, sustainable development, strengthening of sovereignty and security. Consequently, we have pursued balanced development and equity. The social benefits and economic prosperity are omnipresent and enduring. His Majesty Jigme Singye Wangchuck’s budgeting system, administrative structures, accounting and auditing systems endured safely from fluctuating fortunes and marauding powers. Now, as dawn is breaking with His Majesty’s clarion vision, I pray that the political leaders, local leaders, intellectuals and academicians are hearing these messages:

“The security and sovereignty of our nation, our unity and harmony, and sense of peace and happiness;

Our vision, simply put, is expressed in the philosophy of Gross National Happiness. It is to ensure that we have a just, equal, and harmonious society. When our people are able to live happy and secure lives, we know that we have achieved our objectives. That is what Gross National Happiness means;

Firstly, as a country, we must continue to focus on the pursuit of higher standards. Whatever we do, we have to strive for excellence. As I always say, good is not good enough. It is a simple but effective rule. Secondly, we will never go wrong if we invest in human resources and building intelligent institutions. We have to empower the people to achieve their full potential. What we lack in numbers, we must make up in talent; and

The King, country, and people of Bhutan have a common aspiration for our democracy– we aspire for a democracy with rule of law, democracy with unity, democracy with integrity, democracy with talent and meritocracy, democracy that is responsible, and democracy that serves.”

Eco-political Policies

Enlightened successive Kings of Bhutan with their common insights and practical wisdom steered Bhutan’s socio-economic development progressively through tumultuous times. The country then lacked its own proficient and endowed talent and friendly foreign intellectual connectivity to visualise and formulate philosophical, intellectual and academic foundation of the principles and policies for peace, prosperity and progress of Bhutan. Nevertheless retracing the past, we come across distinctive public policies enunciated by our benevolent Monarchs which shaped the economic and development history of Bhutan. Besides social and political, public policies followed a certain philosophical framework and principles that often cross fertilised unique economic doctrines for Bhutan’s progress and standing in the world.

Historically, Bhutan’s economic thoughts have evolved from theologism to small-scale mercantilism to a unique development philosophy of Gross National Happiness today that is congruent to a mixed economy system. Much of economic thoughts in the literature could not influence Bhutan because of the self-imposed isolation policy and as Bhutan was never colonised. In essence, Bhutan has leap-frogged the capitalist stage of history.

The Third Druk Gyalpo while inclined towards laissez faire also pursued economic policies comparable to socialist economic system that has tenets of Socialist-Communism and Neo-Keynesian economics. The introduction of FYPs, establishment of an egalitarian society, introduction of land reforms, and establishment of central government to provide almost all services such as education, healthcare, housing, transportation and other social amenities, all supports this economic system during this period. Furthermore, The Third King’s infrastructure-based economic development (spending more than 50 percent of all FYPs during his reign in construction of roads) combines policy characteristics inherited from Roosevelt’s Neo-Keynesian economics in the United States and state capitalism in China.

His peaceful and courageous social reforms also ensured and secured Bhutan’s future as an egalitarian society. His Majesty, Inter-alia, focused on reforming civil and public administration. His Majesty pointed out on the importance of civil administration when we had the first audience on 13th of April 1971.

“I am happy to see that you are joining me. Civil administration is very important for the progress of the country”.

Contributed by

Justice Sonam Tobgye (Retired)