As world leaders, business executives, and global institutions convened at the World Economic Forum Annual Meeting in Davos 2026, discussions have focused on a world undergoing rapid and often unsettling transformation. From geopolitical tensions and artificial intelligence to climate change and economic volatility, the conversations in the Swiss Alps reflected growing concern that global uncertainty is becoming the “new normal.”
For Bhutan, a small, landlocked country deeply connected to regional and global systems, the outcomes of Davos may seem distant. However, the issues debated there have direct and growing relevance for Bhutan’s economic prospects, employment landscape, climate resilience, and long-term development strategy.
A More Fragmented Global Order
Geopolitical uncertainty have dominated Davos 2026, with leaders warning that the era of predictable globalization is giving way to fragmented trade, strategic competition, and rising nationalism. Global supply chains are being reshaped, multilateral cooperation is under strain, and economic decision-making is increasingly influenced by geopolitical considerations.
For Bhutan, whose economy relies heavily on external trade, development assistance, and regional stability, this trend poses real challenges.
Small economies like Bhutan are particularly sensitive to external shocks. When global markets become volatile or regional trade is disrupted, the impacts are felt immediately through prices, fiscal pressures, and employment.
Bhutan’s close economic relationship with India remains a source of stability, but global uncertainty could still affect hydropower revenues, tourism flows, and access to foreign investment. Davos discussions highlighted the need for countries to strengthen economic resilience at home while maintaining strong diplomatic ties abroad—an approach that aligns closely with Bhutan’s foreign policy tradition.
Artificial Intelligence and the Future of Bhutanese Youth
Artificial intelligence emerged as one of the most prominent themes at Davos 2026. Business leaders and policymakers acknowledged AI’s potential to transform productivity, but also warned of significant job displacement if education systems and labour markets fail to adapt.
Bhutan’s youthful population stands at the centre of this global transition. While AI adoption within the country is still at an early stage, global technological shifts will increasingly shape employment opportunities, especially for educated Bhutanese seeking work in the region.
Young people in Bhutan are already competing in a more digital and technology-driven job market. What Davos made clear is that skills—not geography—will determine competitiveness in the coming years.
Government initiatives such as digital literacy programmes, e-governance, and ICT education reforms are steps in the right direction. However, Davos discussions underscored that incremental change may not be enough. Countries that invest early and decisively in future skills—data, coding, digital services, and innovation—are likely to benefit most from AI-driven growth.
For Bhutan, this raises important policy questions about education reform, private sector development, and how to create meaningful employment beyond the public sector.
Climate Leadership Amid Growing Climate Risks
Climate change remained a central concern at Davos 2026, but the focus has shifted from long-term pledges to immediate resilience and financing. Extreme weather events, climate-induced disasters, and economic losses are now widely seen as unavoidable realities rather than distant threats.
Bhutan’s position in this debate is unique. As a carbon-negative country with strong conservation policies, Bhutan is often cited as a global environmental leader. At the same time, it is highly vulnerable to climate risks such as landslides, floods, and glacial lake outburst floods.
Bhutan’s contribution to global emissions is negligible, but exposure to climate impacts is significant. This is why international climate finance and cooperation are not optional for countries like Bhutan—they are essential.
Davos discussions on green finance, carbon markets, and nature-based solutions are particularly relevant for Bhutan. If global mechanisms to value ecosystem services continue to develop, Bhutan could potentially generate revenue from conservation while funding climate adaptation and rural livelihoods.
However, competition for climate finance is intensifying. Experts at Davos emphasized that countries must demonstrate strong governance, project readiness, and transparency to attract funding—an area where Bhutan will need continued institutional strengthening.
Economic Volatility and Import Dependence
Another key theme at Davos 2026 was global economic instability. Inflation, debt stress in developing countries, and fragile supply chains were discussed as long-term structural challenges rather than short-term disruptions.
Bhutan’s economy, with its limited domestic production base and high import dependence, is particularly vulnerable to global price fluctuations. Fuel costs, food prices, and construction materials are all influenced by external market conditions.
When supply chains are disrupted or prices rise globally, Bhutan feels the impact almost immediately. This reinforces the urgency of economic diversification.
Hydropower will remain the backbone of Bhutan’s economy, but Davos discussions highlighted the risks of over-reliance on a narrow range of income sources. Developing sectors such as high-value tourism, agro-based industries, creative industries, and digital services could help cushion future shocks.
Health Security in an Uncertain World
Although global health received less attention than AI or climate change, Davos 2026 revisited lessons from recent pandemics. Speakers stressed that health crises remain a systemic risk, especially when combined with climate change and economic stress.
Bhutan’s pandemic response demonstrated the strength of public trust and governance, but structural challenges persist—particularly in rural healthcare access and specialist services.
Digital health and telemedicine could be game-changers for Bhutan. Global innovations discussed at forums like Davos can help Bhutan overcome geographic constraints, if adapted wisely.
However, global fiscal tightening may reduce predictable international health funding, making domestic investment and efficiency even more important.
Balancing Global Change with Gross National Happiness
Perhaps the most important question raised by Davos 2026 for Bhutan is how to navigate rapid global change without compromising national values. As many countries struggle with inequality, social polarization, and environmental degradation, Bhutan’s Gross National Happiness (GNH) philosophy offers a distinctive alternative.
Yet Davos discussions made it clear that values must be supported by capability. Countries that fail to adapt to technological, economic, and climate realities risk falling behind, regardless of their development philosophy.
GNH remains Bhutan’s guiding principle. But in a fast-changing world, Bhutan must also be pragmatic, innovative, and outward-looking.
Looking Ahead
Davos 2026 highlighted a world facing profound transformation—and growing uncertainty. For Bhutan, these global debates are not distant conversations among powerful nations; they shape the environment in which national policies must operate.
Geopolitical fragmentation, technological disruption, climate risk, and economic volatility will increasingly influence Bhutan’s development path. At the same time, Bhutan’s strengths—political stability, environmental leadership, social cohesion, and clear development vision—provide a strong foundation.
The challenge ahead lies in translating global awareness into national action: investing in youth and skills, leveraging climate leadership for sustainable finance, diversifying the economy, and strengthening resilience in an unpredictable world.
As Davos 2026 made clear, even the smallest countries are part of a deeply interconnected global system. For Bhutan, proactive engagement—grounded in national values—will be essential to turning global challenges into opportunities.
Ugyen Tenzin
From Thimphu
