State of Nation

Introduction
The State of the Nation address delivered on 4 July 2024 by Dasho Tshering Tobgay, Prime Minister of Bhutan, was presented in the form of a formal parliamentary address (Check against delivery) to the joint sitting of Parliament. It marks the opening of the First Session of the Fourth Parliament of Bhutan. The Prime Minister frames the State of the Nation around sovereignty, security, and peace, acknowledging the central role of the Armed Forces and De-suung under His Majesty The King. The speech is structured into five chapters—State of the Country (Chapter 1), Challenges Facing the Country (Chapter 2), Strategies to Address Challenges (Chapter 3), Government Plans and Priorities for 2024-2025 (Chapter 4), and Government’s Legislative Plans for 2024-2025 (Chapter 5)—followed by a concluding note of gratitude and prayers. The Introduction also notes the Parliament’s ceremonial context and expresses gratitude to His Majesty The King and to the leadership of the Parliament, civil servants, and media for the opportunity to present the State of the Nation. The address begins with a strong emphasis on sovereignty, security, and peace as the nation’s principal priorities, and it places the State of the Nation within the broader framework of Bhutan’s constitutional monarchy and democratic governance.

Chapter 1: State of the Country
The state of the country is presented as intrinsically linked to Gross National Happiness (GNH), a guiding wisdom established by His Majesty The Fourth Druk Gyalpo. For fifty years, policies and plans have been rooted in GNH’s vision and principles. A good state of GNH indicates overall well-being; a poor state indicates the opposite. The four pillars of GNH are examined: (i) the economy, (ii) social development, (iii) spiritual heritage and culture, and (iv) environmental stewardship, with good governance as the cornerstone that enables the other pillars. The economy, though small, is rooted in equality and sustainability, with a GDP of $227{,}000{,}000{,}000$ Nu. and a growth rate of 4.5 ext{%} in 2023, signaling a steady trajectory but highlighting risks associated with a small economy. Social progress is evident: literacy stands at 70.6 ext{%} and life expectancy now exceeds 70 years, driven by free education and healthcare services and widespread Kidu programs. In the spiritual realm, Vajrayana Buddhism continues to flourish under the Je Khenpo, the Five Lopens, Zhung Dratshang, Rabdeys, Lams, and Trulkus, alongside Hindu pundits supporting prayers for long life and prosperity. Bhutan’s spiritual heritage and rich cultural traditions remain a national pride and identity. The environmental pillar is underscored by Bhutan’s status as a carbon-negative country, recognized worldwide for its sustainable development ethos. Good governance—the fourth pillar—underpins all, ensuring both present and future national interests. Since the advent of parliamentary democracy, Bhutan has conducted 12 elections (four rounds for the National Council, the National Assembly, and Local Governments) with several by-elections, illustrating democratic resilience amid changes of governing and opposition parties. Constitutional bodies like the judiciary, the Royal Civil Service Commission, the Anti-Corruption Commission, the Royal Audit Authority, and the Election Commission of Bhutan have strengthened, while the Royal Monetary Authority has provided robust stewardship over financial institutions. Local Government has grown stronger and closer to the people, and civil society organizations and media have become more robust, with notable Royal Patronage-linked entities such as the Tarayana Foundation, Bhutan Youth Development Fund, Bhutan Nuns Foundation, RENEW, and the Royal Textile Academy contributing to welfare. Special tribute is paid to the Queen Mothers for their patronage, including the silver jubilee of the Bhutan Youth Development Fund. The analysis of the four GNH pillars shows broad national strength, evidenced by rapid social and economic development transitioning Bhutan from a medieval state to a modern, prosperous society in just one generation. Detailed analysis of the GNH index is provided by the Centre for Bhutan and GNH Studies, based on extensive quinquennial surveys across thromdes, dzongkhags, gewogs, chiwogs, and villages. The GNH index rose from $0.743$ in 2010 to $0.756$ in 2015, with no index in 2020 due to the Covid-19 pandemic, and an unexpected increase to $0.781$ in 2022 despite pandemic challenges. This increase is attributed to His Majesty The King’s leadership and relief Kidu programs, which cushioned ordinary Bhutanese during the crisis. The state of the nation, under royal guidance, is presented as progressively stronger, and there is an explicit wish for the long life of His Majesty and for the continuity of the Wangchuck Dynasty.

Chapter 2: Challenges Facing the Country
The address acknowledges that progress under the dharma-advancing tradition brings challenges. The foremost challenge is out-migration: approximately $64{,}000$ Bhutanese, about 9 ext{%} of the population, have migrated abroad for better employment opportunities. While migration provides livelihoods and skill development, it also risks depopulation and the loss of human resources essential for economic progress. Skilled professionals—teachers, doctors, nurses, engineers, technicians, bankers, and lawyers—are increasingly leaving, which affects public services and growth. The small size of the economy compounds these pressures, as Covid-19 disrupted economic activity, and many businesses struggle to secure loans or service existing debt, leading to imports exceeding exports, shrinking foreign exchange reserves, and rising external debt. The government warns of an existential crisis and urges national unity to avert adverse consequences; the responsibility for nation-building is presented as a collective duty.

Chapter 3: Strategies to Address Challenges
The central strategy proposed is reviving and expanding the economy as quickly as possible, with the Gelephu Mindfulness City identified as a historic, flagship project rooted in His Majesty The King’s wisdom. The Gelephu initiative is framed as a catalyst for economic prosperity, private sector opportunities, employment for youth, market access for agricultural products, incentives for Bhutanese living abroad to return, and long-term national security. His Majesty’s leadership of plans, policies, and programs is highlighted, with government alignment and public support essential for success. Illustrative achievements of His Majesty are cited, including the Druk Holding and Investments, the De-suung, leadership during Covid-19, citizenship and land Kidu programs, disaster management, and the Gyalsung project. The Gelephu Mindfulness City is presented as a vehicle for broad-based benefits, and it is acknowledged that the government must not become complacent by relying solely on the King’s leadership; active effort to rebuild the economy, create jobs, diversify income, and raise wages is required. A Nu. 15 billion Economic Stimulus Programme (ES) is announced, with substantial support from the Government of India, to inject cash flow and stimulate private sector growth across sectors such as agriculture, livestock, tourism, construction, transportation, and media/film. A historical reference to a Nu. 5 million stimulus plan implemented in 2013 with Indian support is cited to emphasize the continuity and potential success of stimulus measures. The 13th Five Year Plan is introduced as a major growth engine: a total budget of $512{,}000{,}000{,}000$ Nu. (with $267{,}000{,}000{,}000$ recurrent and $245{,}000{,}000{,}000$ capital expenditure). External partners include India (the largest), the European Union, Japan, the Asian Development Bank, the World Bank, the United Nations, and others, with Indian support for the 13th Plan totaling $85{,}000{,}000{,}000$ Nu. The Plan’s components are summarized: infrastructure (approx. $68{,}000{,}000{,}000$ Nu), ICT development (approx. $10{,}000{,}000{,}000$ Nu), local government (approx. $72{,}000{,}000{,}000$ Nu), human resource development (approx. $60{,}000{,}000{,}000$ Nu), hydropower expansion (targeting an installed capacity increase of $3{,}119$ MW over five years to reach about $5{,}500$ MW), and an overall push for foreign direct investment (FDI) of $500{,}000{,}000{,}000$ Nu. The plan also emphasizes the goal of doubling the size of the economy, a robust, sustainable growth path, and the role of national and international experts in refining the roadmap adopted in response to His Majesty’s 112th National Day command for a 21st-century economy. It is noted that hydropower expansions are critical, with transmission of power from Punatsangchhu-2 to begin in the current year and Punatsangchhu-1 construction resuming, while other hydro projects (Kholongchhu, Suchhu, Burgangchhu, Yungichhu, Druk Bindu-1 and -2, Gamri-1, Begana, and Jomori) are also underway. In agriculture and livestock, the plan includes low-interest loans, repair and black-topping of gewog center roads (20 gewog centers), maintenance of 200 chiwog roads, a total of 56 irrigation projects (47 new), chain-link fencing across ~200 chiwogs, a new policy prioritizing cereals, fruits, and livestock with market access, a loan program for power tillers, and policies for crop and livestock compensation and insurance. In human resources, the Gyalsung program for national service will be inaugurated on 5 September 2024, education reforms will be strengthened per the Royal Kasho, 63 schools will be upgraded to central schools, a Gyalsuen Mother and Child Hospital will be established in Thimphu and Mongar, a cancer hospital project will be developed, and the Health Trust Fund will be expanded. Vocational training institutes will be upgraded, sports plans will be developed in partnership with the Bhutan Olympic Committee, interest-free loans for youth studying abroad will be introduced, and a national strategy to address substance abuse will include a new school for students with substance use issues and a dedicated rehabilitation center. Cultural priorities include continuing Sarpang Dzong construction and renovation/expansion of sacred temples (Rigsum Gonpa, Sangag Choekhor, and others), development of Dzongkha via ICT, and specialized performing arts programs. Foreign policy priorities underscore ongoing high-level state visits and Bhutan’s strengthening ties with India through the Ngadag Pel gi Khorlo award to Prime Minister Narendra Modi and reciprocal deepening of bilateral relations. The Prime Minister reflects on recent visits to Thailand, Bangkok, and plans for UNGA participation, with a broader strategy for diplomatic engagement with neighboring nations and donor countries. He emphasizes civil service reform under the Royal Kasho, the development of an integrated service center to deliver timely public services, orientation for local governments on the 13th Plan, and policy initiatives to support home ownership (low-interest loans), rural life insurance expansion, and allowances for mothers giving birth to a third child.

Chapter 4: Government Plans and Priorities for 2024-2025
To realize the 13th Plan’s objectives, the government outlines concrete first-year priorities. The Gelephu Mindfulness City remains the foremost priority, personally overseen by His Majesty The King, with government support and coordination to ensure comprehensive engagement from the government and people. Other key priorities include: revitalizing the private sector through lifting the loan moratorium under the ES Programme, facilitating low-interest loans to revive businesses and encourage startups, and enacting business-friendly policies to strengthen private sector development and ease of doing business. Infrastructure expansion includes widening 11 national highways and constructing seven new highways, with dedicated monitoring teams to ensure timely delivery and quality public works. Tourism policy development will focus on policy refinement, systems, services, and identifying new markets. The ICT sector will be strengthened by enabling business opportunities for ICT firms, initiating the establishment of a third Internet gateway, and working toward reducing internet tariff charges. Foreign direct investment will be actively pursued through the Economic Development Board, with a review of the Foreign Direct Investment Policy and the creation of special investment opportunities for Bhutanese living abroad. Hydropower capacity growth will be supported by starting transmission from Punatsangchhu-2 this year and resuming construction on Punatsangchhu-1, with continued development of other hydro projects (Kholongchhu, Suchhu, Burgangchhu, Yungichhu, Druk Bindu-1 and -2, Gamri-1, Begana, Jomori). The government will formalize and pursue a 21st-century economic roadmap and implement initiatives to advance agriculture and livestock: low-interest ES loans to farmers, repair and blacktopping of 20 gewog center roads, maintenance of 200 chiwog roads, 56 irrigation projects (47 new), chain-link fencing in about 200 chiwogs, and a cereals-fruits-livestock policy with market access. Other agricultural measures include low-interest loans for power tillers and policies for crop and livestock compensation and insurance. For human resource development, the Gyalsung inauguration will occur, education reforms will be implemented, 63 schools will be upgraded to central schools, Gyalsung-related health infrastructure (Mother and Child Hospital) will be advanced, cancer hospital project will be developed, and the Health Trust Fund will be expanded. Sports policy development will be pursued in collaboration with the Bhutan Olympic Committee, with facilities and support for school sports. Subsidy-style, interest-free loans to youth for higher studies abroad will be introduced, and a targeted plan to address substance abuse will involve a new school for students with substance use issues and a dedicated rehabilitation center. The government will also advance spiritual heritage and culture: continued Dzongkha promotion through ICT, specialized training in performing arts, and ongoing temple construction and renovation work (including Sarpang Dzong and other sacred sites). Foreign policy priorities include continuing high-level state visits, recognizing His Majesty’s overseas engagements as a driver of tourism and diplomacy, and acknowledging the Ngadag Pel gi Khorlo award to Prime Minister Modi as a symbol of Bhutan-India friendship. The address notes extensive travel to India and Thailand to advance bilateral and regional development, and outlines plans to participate in the United Nations General Assembly. For public service delivery, reforms under the Royal Kasho will be pursued in collaboration with the Royal Civil Service Commission, with the aim of delivering timely services through an integrated service center, and local government orientation on the 13th Plan. Other priorities include policies to support home ownership with low-interest loans, rural life insurance expansion, and allowances for mothers with a third child.

Chapter 5: Government’s Legislative Plans for 2024-2025
In the legislative arena for the first session of the Fourth Parliament, the government notes that, aside from financial and money bills and an aviation agreement, no new legislative bills have been tabulated. The government indicates it has no plans to introduce new bills unless necessary, but intends to table the Tax Amendment Bill in the winter session to support private sector development and economic growth. In addition to this, the government will continue refining existing policies and formulating new ones in line with the 13th Plan and the ES Programme.

Conclusion: Gratitude and Prayers
The concluding section expresses deep gratitude to His Majesty The King, who presided over the opening ceremony of the first session of the Fourth Parliament, demonstrating royal commitment to Parliament and the civil service. The government acknowledges His Majesty’s financial generosity in providing Nu. 8 billion for civil servant salary increments (Nu. 4 billion in the previous year and Nu. 4 billion this year) from a special project fund, independent of the regular budget. Honorary doctorates awarded to His Majesty by seven Thai universities in June 2024 are celebrated as a unique global acknowledgment of His leadership and service. The address also pays tribute to Their Majesties, including Her Majesty The Gyaltsuen, and to Their Royal Highnesses. The King is praised for pioneering the Gross National Happiness development philosophy, safeguarding sovereignty, and inspiring national confidence. The Speaker, the Queen Mother, and the Royal Family are acknowledged for their leadership. The speech closes with a prayerful note of gratitude for His Majesty’s long life and continued wisdom, and with a blessing for Palden Drukpa’s peaceful and prosperous nation. The State of the Nation report is submitted to His Majesty The King for counsel, guidance, and assent, dated 29th day of the 5th month of the Wood Male Dragon Year (4 July 2024), by Tshering Tobgay, Humble Servant. Copies are directed to the Hon’ble Speaker, Hon’ble Chairperson, Hon’ble Leader of Opposition, and all Hon’ble Members of Parliament. A final note on page 23 presents a Tibetan Buddhist verse, reiterating prayers and blessings for the nation’s well-being.

Closing reflection
The document, while anchored in constitutional and democratic norms, emphasizes a holistic national project—economic revival through the Gelephu Mindfulness City, robust public investments, strategic partnerships (notably with India), human capital development, governance reforms, and a reaffirmation of Bhutan’s unique blend of spiritual heritage and modern statehood. The State of the Nation is presented as a living, forward-looking framework that seeks to balance economic growth with social welfare, environmental stewardship, and cultural integrity, while acknowledging the challenges of depopulation and post-pandemic recovery. The conclusion underscores gratitude for royal leadership, loyalty to the monarchy, and a shared commitment to a peaceful, prosperous, and spiritually grounded Bhutan.

Appendix: Tibetan closing stanza
The closing page presents a Buddhist stanza in Tibetan script, underscoring the spiritual dimension of Bhutan’s national narrative and the continuity of prayers for the King’s long life and the nation’s welfare.