GMC – Unlocking Bhutan’s  Potential

GMC – Unlocking Bhutan’s Potential

A month and two days earlier, His Majesty the King publicly announced the establishment of the Gelephu Mindfulness City (GMC) that would see Gelephu become a special administrative region (SAR). His Majesty also underscored that the project would ensure sustained prosperity. At every point of the Royal address, the need and urgency to take advantage of the global scenario, especially economically resonated. While the coming days would provide us a clearer picture of the Royal Vision and the way forward, the GMC is about building a city that will enable Bhutan to seize the immense opportunities that await and enable us to achieve our immediate and collective goal of making Bhutan a developed country.

Firstly, a special administrative region (SAR) is a relatively autonomous portion of a country that maintains some degree of political and economic independence. Currently, most of the literature on SAR surrounds the two SARs of China, Hong Kong and Macau. Thus, the Gelephu SAR (Ge-SAR) would be a region under Bhutan but with some degree of autonomy, politically and economically. The region would be governed by some form of a council or other governing body. The economic structure of the region would also differ from the one that Bhutan today has. In the words of His Majesty, “As our economic hub, the SAR will have the autonomy to formulate laws and policies that are needed. It will have executive autonomy and legal independence.”

An important aspect of GMC or Ge-SAR is the location and we have many people asking why Gelephu has been chosen over other potential sites. It can justifiably be said that there are no other regions in Bhutan like Gelephu, in terms of feasibility. This can be looked at from different angles.

Bhutan does not have any region that can beat Gelephu from the prisms of location, size, and current infrastructure. It is strategically located. It is a town sharing a border with the Indian state of Assam. As mentioned by His Majesty, “the land connection from Gelephu or Samdrup Jongkhar through Assam and Northeast Indian states, to Myanmar, Thailand, to Cambodia and Laos, Vietnam, Malaysia and Singapore, is a vibrant economic corridor linking South Asia to Southeast Asia.” Gelephu is also close to Tsirang district, Nganglam town, and the adjoining regions of Bhutan.

Concerning size, what Gelephu offers is a massive stretch of flatland, most suitable for infrastructure development. The proposed GMC would cover an area of 1000 sq km, stretching from the eastern gewog of Tayreythang to Sarpang’s extreme East, Singye gewog.  For those who know the region, it is a stretch from the Gyalsung site in Tareythang to the Phibsoo Wild life Sanctuary. This is bigger than Singapore. Currently, a huge part of such a promising land has been left fallow and untouched.

As Bhutan’s most ambitious economic venture, projects of this type will require enormous work related to infrastructure development, especially associated with connectivity and physical structures. Gelephu is home to an international airport. Thus, Bhutan would be spared the additional costs that would ensue if a new airport needed to be built. Thus, the costs incurred will just be for expanding the airport. Time and money will be saved. Additionally, Gelephu would be connected to the Indian town of Kokhrajhar by a railroad in 2026. The town also has provisions for a dry port.

Soon, it will be imperative to connect the different parts of GMC. As mentioned earlier, Ge-SAR is a flatland. Thus, it will be easier to build new roads or expand the existing ones. There is also the potential for constructing railroads.

Another comparative advantage that the SAR holds is the two massive structures under construction within the region- the Sarpang Dzong and the Taraythang Gyalsung Center. The former could be used as the headquarters of the SAR, while the latter, which looks like a small town in itself, is feasible for commercial use. Spread over 4500 acres, its length is nearly four kilometers (3658.8 meters). It has a minimum breadth of about half a kilometer (460 m) and a maximum of nearly a km (941m). Within this area are dozens of structures.

Apart from the above what does Bhutan have and what can it offer to bring in investors? Why are we going forward with such a project? These are questions on the minds of several Bhutanese and those associated with Bhutan.

Foremost, Bhutan enjoys immense goodwill in the international community. Though abstract, this is a priceless factor and a result of several concrete elements. We are internationally famed as the country, which gave the world an alternative path towards development. Bhutan is home to Gross National Happiness (GNH); the country, which opened the eyes of social and developmental scholars and gurus, telling them that humanity’s ultimate goal is happiness.

Similarly, Bhutan has been a leader in sustainable development. We are the only country, whose Constitution has a separate article on the environment and mandates that at all times, 60% of our area should be under forest cover. Intergenerational equity and other associated concepts have been and continue to be at the bosom of our developmental policies. Bhutan is a carbon negative country.

Further, Bhutan enjoys unprecedented trust, mainly because of the visionary leaders of the country. Our spiritual and cultural heritage has also added to make us stand out as a unique nation.

However, we have not been able to take advantage of the goodwill and associated elements mentioned above. In other words, Bhutan has not been able to market itself. And one of the reasons behind it could be the lack of a project, a vision, which calls for marketing. GMC provides us the opportunity to do this.

In the same vein, Bhutan has not been able to seize the opportunity provided by its location; as the country between two economic giants, India and China. On the contrary, we have seen ourselves unable to compete with them and ultimately falling on the development index. The GMC opens the doors for us to unlock our potential in this area.

Additionally, economic experts point out several factors that investors look forward to, such as free trade and investment policy, level-playing field, Rule of Law, complete freedom of capital movement, clean and efficient government, low and simple taxation, a robust and efficient financial market, proximity to other markets, modern infrastructure with sophisticated support services, skilled and multicultural talent pool, amongst others. While we already have a few of them, the others can be easily developed.

Another intriguing question concerns the kind and type of investors who would be attracted to open-shop at GMC. A close study of global economic trends and forecasts, with Bhutan and Ge-SAR’s comparative advantages in the backyard, provides a rough picture, with some sectors emerging as the main areas where investors would come in. These are industries and ventures associated with the Green Economy, Finance, Wellness (Spiritual) Industry, and Health and Education.

Experts predict that the global green technology and sustainability market will grow from $16.50 billion in 2023 to $61.92 billion by 2030, at a compound annual growth rate (CAGR) of 20.8%. There will be an increased transition to a Green Economy. In terms of Finance, there is an increased shift of wealth managers to Asia. The Boston Consulting Group (BCG) in a report released in 2023, said that in Asia (excluding slow-growth Japan), fortunes are predicted to rise faster, powered by an average 7.8 per cent annual increase in financial assets, well above the 5.3 per cent global average. As a result, the multinational financial hubs that dominate the world wealth management business will see Asian centers growing faster than their North American or European rivals. BCG forecasts that Switzerland, today’s largest center, will be surpassed by Hong Kong by 2025. Singapore is expected to expand even faster, but from a smaller base, thus remaining in third place. “The conclusion for the European and North American banks that dominate the top of the wealth management market is clear — keep investing in the emerging centers of Asia,” the report says. These are indications of the opportunities awaiting Ge-SAR as a spot for green industries and also a financial hub.

Additionally, for a variety of reasons, there is mounting evidence that spiritual practices are related to improved health and well-being. There is a growing belief that a strong spiritual attitude can assist in finding significance in life’s challenging circumstances. The Global Wellness Institute (GWI) in a report released in 2023 projected that the wellness industry would see an 8.6% average annual growth, with the wellness economy reaching $8.5 trillion in 2027. The wellness economy represented 5.6% of global economic output in 2022. This is also another prospective market that could become part of GMC. The promises that health and education provide are similar.

While potentials exist, Bhutan has not been able to seize the opportunities that the world provides. But it is still not too late. As said by His Majesty the King: “South Asia is experiencing an unprecedented economic transformation. This is a period of growth and a period of immense opportunities for our region, which is home to around two billion people. We are in a unique position to reap great benefits if we seize the opportunity, make good plans, and work together diligently.” The GMC is all about doing this. It is in more than one way, unlocking Bhutan’s potential.

(This is the first in a series of articles about GMC. The next will further explore the opportunities in the areas mentioned above)

Ugyen Tenzin from Thimphu