Background Note: Bhutan
Sunset over hills surrounding Thimphu, Bhutan, March 22, 2001. [© AP Images]
PROFILE
OFFICIAL NAME:
Kingdom of Bhutan
Geography
Area: 46,500 sq. km.
Cities: Capital--Thimphu (pop. approx. 55,000) Other significant cities--Paro, Phoentsholing, Punakha,
Bumthong.
Terrain: Mountainous, from the Himalayas to lower-lying foothills and some savannah.
Climate: Alpine to temperate to subtropical with monsoon season from June to September.
People
Nationality: Noun and adjective--Bhutanese.
Population: Approximately 672,425 (according to the 2005 census). Domestic and international
estimates of the population vary greatly.
Annual population growth rate: 2.082% (2007 est.). Density--45 per sq. km.
Ethnic groups: Drukpa 50% (which is also inclusive of Sharchops), as well as ethnic Nepalese
(Lhotsampas) 35%, and indigenous or migrant tribes 15%.
Religions: Lamaistic Buddhist 75% (state religion), Indian- and Nepalese-influenced Hinduism 25%.
Languages: Dzongkha (official language), Bumthang-kha, English (medium of instruction), Sharchop-
kha, Nepali.
Education: Years compulsory--11. Literacy--59.5% (Ministry of Education General Statistics
2007). Primary school net enrollment rate 82.1% (UNDP). Women's literacy--59.5% (2007).
Health: Infant mortality rate (2007 est.)--total: 96.37 deaths/1,000 live births; male: 94.09 deaths/1,000
live births; female: 98.77 deaths/1,000 live births. Life expectancy --total population 67 years; male 69.1
years; female 59.5 years (Ministry of Education General Statistics 2007).
Work force (2005): Agriculture--94%; industry--1%; services--5%. The unemployment rate is 3.1%
(2005 est.).
Government
Type: Constitutional monarchy.
Constitution: The Royal Government, prompted by the King, initiated a draft constitution in 2003, which
was published in 2005. On July 18, 2008, the parliament formally adopted the constitution, marking the
final step in Bhutan's historic transition from absolute monarchy to parliamentary democracy.
Branches: Executive--prime minister, cabinet. Legislative--parliament (National Council and National
Assembly). The king appoints five members of the National Council and the remaining members are
elected. Elections for the National Council (upper house) took place in December 2007. The 47-
member National Assembly (lower house) was elected in March 2008. Judicial--High Court
(Thrimkhang Gogma), District Courts, and local area arbitration.
National Day: December 17 (1907).
Administrative subdivisions (dzongkhags): 20.
Political parties: Two. Druk Phuensum Tshogpa (DPT) and People's Democratic Party (PDP).
Suffrage: Registered resident with legitimate citizenship, age 18 and above.
Economy
GDP (purchasing power parity 2007 est.): U.S. $3.359 billion.
Real growth rate (2007): 8.5%.
Per capita GDP PPP (2007 est.): U.S. $5,200.
Natural resources: hydroelectricity, timber, limestone, clay, and slate.
Sectors as percent of GDP (all figures, 2006-2007): Agriculture--22.3%; industry--37.9%; services--
39.8%.
Trade: Principal exports (2006-2007)--electricity 26.5%, recorded media 16.8%, palm oil 7.4%, copper
wire 6.2%. Principal imports (2006-2007)--diesel fuel 7.9%, copper wires 7.3%, crude palm oil 5.5%,
petrol 3.1%. Major trade partners--India, Hong Kong, Japan, Germany, Singapore, and Thailand.
PEOPLE
The people of Bhutan can be divided into three broad ethnic categories--Ngalops, Sharchops, and
Lhotsampas. The Ngalops make up the majority of the population, living mostly in the western and
central areas. The Ngalops are thought to be of Tibetan origin, arriving in Bhutan during the 8th and 9th
centuries A.D. and bringing Buddhism with them. Most Ngalops follow the Drukpa Kagyupa discipline
of Mahayana Buddhism. In a country that is deeply rooted within the Buddhist religion, many people's
sect of religion, as opposed to their ethnic group, characterizes them. The Ngalops predominate in the
government, and the civil service and their cultural norms have been declared by the monarchy to be
the standard for all citizens.
The Sharchops, who live in the eastern section of Bhutan, are considered to be descendants of the
earliest major group to inhabit Bhutan. Most follow the Ningmapa discipline of Mahayana Buddhism.
Sharchop is translated as "people of the east." The Ngalops, Sharchops, and the indigenous tribal
people are collectively known as Drukpas and account for about 65% of the population. The national
language is Dzongkha, but English is the language of instruction in schools and an official working
language for the government.
The Lhotsampas are people of Nepali descent, currently making up 35% of the population. They came
to Bhutan in the 19th and 20th centuries, mostly settling in the southern foothills to work as farmers.
They speak a variety of Nepali dialects and are predominantly Hindu.
HISTORY
Bhutan's early history is steeped in mythology and remains obscure. It may have been inhabited as
early as 2000 B.C., but not much was known until the introduction of Tibetan Buddhism in the 9th
century A.D. when turmoil in Tibet forced many monks to flee to Bhutan. In the 12th century A.D., the
Drukpa Kagyupa school was established and remains the dominant form of Buddhism in Bhutan today.
The country's political history is intimately tied to its religious history and the relations among the
various monastic schools and monasteries.
The consolidation of Bhutan occurred in 1616 when Ngawana Namgyal, a lama from Tibet, defeated
three Tibetan invasions, subjugated rival religious schools, codified an intricate and comprehensive
system of law, and established himself as ruler (shabdrung) over a system of ecclesiastical and civil
administrators. After his death, infighting and civil war eroded the power of the shabdrung for the next
200 years when in 1885, Ugyen Wangchuck was able to consolidate power and cultivated closer ties
with the British in India.
In 1907, Ugyen Wangchuck was elected as the hereditary ruler of Bhutan, crowned on December 17,
1907, and installed as the head of state Druk Gyalpo (Dragon King). In 1910, King Ugyen and the
British signed the Treaty of Punakha which provided that British India would not interfere in the internal
affairs of Bhutan if the country accepted external advice in its external relations. When Ugyen
Wangchuck died in 1926, his son Jigme Wangchuck became the next ruler, and when India gained
independence in 1947, the new Indian Government recognized Bhutan as an independent country. In
1949, India and Bhutan signed the Treaty of Peace and Friendship, which provided that India would not
interfere in Bhutan's internal affairs but would be guided by India in its foreign policy. Succeeded in
1952 by his son Jigme Dorji Wangchuck, Bhutan began to slowly emerge from its isolation and began a
program of planned development. Bhutan became a member of the United Nations in 1971, and during
his tenure the National Assembly was established and a new code of law, as well as the Royal
Bhutanese Army and the High Court.
In 1972, Jigme Singye Wangchuck ascended the throne at age 16. He emphasized modern education,
decentralization of governance, the development of hydroelectricity and tourism and improvements in
rural developments. He was perhaps best known internationally for his overarching development
philosophy of "Gross National Happiness." It recognizes that there are many dimensions to
development and that economic goals alone are not sufficient. Satisfied with Bhutan's transitioning
democratization process, he abdicated in December 2006 rather than wait until the promulgation of the
new constitution in 2008. His son, Jigme Khesar Namgyel Wangchuck, became King upon his
abdication.
GOVERNMENT AND POLITICAL CONDITIONS
Traditionally a decentralized theocracy and, since 1907, a monarchy, Bhutan completed its successful
transition to a constitutional monarchy in 2008. Bhutanese officials began preparations for the first-ever
elections in 2006, shortly before King Jigme Singye Wangchuck abdicated in December 2006. The
National Council of the new bicameral parliament was elected in December 2007, and National
Assembly elections followed in March 2008. The Druk Phuensum Tshogpa (DPT) won 44 out of 47
seats in the latter election in which 80% of the 320,000 registered voters cast a ballot.
Migration by Nepalis into southern Bhutan began in the early 19th century. Currently these and other
ethnic Nepalis, referred to as Lhotsampas, comprise 35% of Bhutan's population. In 1988, the
government census led to the branding of many ethnic Nepalis as illegal immigrants. Local
Lhotshampa leaders responded with anti-government rallies demanding citizenship and attacks against
government institutions. Between 1998-1993, thousands of ethnic Nepalis fled to refugee camps in
Nepal alleging ethnic and political repression. Currently, 107,000 refugees reside in seven camps.
Bhutan and Nepal have been working for over seven years to resolve the refugee problem and
repatriate certain refugees living in Nepal. The resettlement of Bhutanese refugees from the camps in
Nepal to the U.S., Australia, and New Zealand is proceeding. The transition to democracy may improve
the situation: of its 47 candidates, the DPT fielded nine Nepali-speakers. Officials from both the DPT
and PDP have said that resolving the grievances of ethnic Nepalis is a priority.
The spiritual head of Bhutan, the Je Khempo--the only person besides the king who wears the saffron
scarf, an honor denoting his authority over all religious institutions--is nominated by monastic leaders
and appointed by the king. The Monk Body is involved in advising the government on many levels.
Bhutan is divided into 20 districts or dzongkhags, each headed by a district officer (dzongda) who must
be elected. Larger dzongkhags are further divided into subdistricts called dungkhags. A group of
villages are grouped to form a constituency called gewog, administered by a locally elected leader
entitled a gup. There are 201 elected gups. In 2002, the National Assembly created a new structure for
local governance at the geog level. Each local area is responsible for creating and implementing its
own development plan, in coordination with the district.
Principal Government Officials
Head of State--King Jigme Khesar Namgyel Wangchuck
Prime Minister--Jigme Y. Thinley
Minister of Foreign Affairs--Ugyen Tshering
Minister for Economic Affairs--Khandu Wangchuk
Minister for Trade and Industry--Lyonpo Yeshey Zimba
Minister for Home and Cultural Affairs--Minjur Dorji
Minister for Finance--Wangdi Norbu
Minister for Education--Thakur Singh Powdyel
Minister for Health--Zangley Dukpa
Minister for Labor and Human Resources--Dorji Wangdi
Minister for Works and Human Settlements--Yeshey Zimba
Minister for Information and Communications--Nandalal Rai
Minister for Agriculture--Pema Gyamtsho
Ambassador to the United Nations Headquarters--Lyonpo Daw Penjo
The United States and the Kingdom of Bhutan have not established formal diplomatic relations;
however, the two governments have warm informal relations.
Bhutan maintains a Permanent Mission to the United Nations in New York. The address is 763 First
Avenue, New York, NY 10017; tel: 212-682-2268, fax: 212-661-0551.
ECONOMY
The economy, one of the world's smallest and least developed, is based on hydroelectricity, tourism,
agriculture, and forestry. Rugged terrain makes it difficult to develop roads and other infrastructure.
Despite this constraint, hydroelectricity and construction continue to be the two major industries of
growth for the country. The Tala hydroelectric project, completed March 2007, has bolstered
government revenue and exports, and will continue to do so for the next several years. Additionally,
India has committed to funding three more hydroelectric projects and other industrial development. As
these two economic sectors contribute to increased productivity, Bhutan's development prospects are
positive.
The Bhutanese Government expects the tourism sector to expand as well; however, restrictions on
visitor numbers and minimum per-day spending requirements will impede rapid growth.
Bhutan's tenth five-year plan (2008-2013) focuses on ways to manage the country's new-found wealth
with special emphasis on three development areas: rural, regional, and private-sector. India has
pledged to support the plan and promised to double the amount of aid given to Bhutan in the previous
five-year plan. The parliament has not yet finalized the tenth five-year plan; it intends to do so during
the next session later in 2008.
Bhutan's economy has been on an upturn due to recent subregional economic cooperation efforts.
Already this plan has strengthened the current trade relations with India, as well as opened an avenue
of trade with Bangladesh. In May 2003, the Bilateral Free Trade Agreement between Bangladesh and
Bhutan was re-signed. Bangladesh is Bhutan's second largest trade partner, after India. In January
2004, as a member of the South Asian Association for Regional Cooperation (SAARC), Bhutan also
joined the South Asian Free Trade Agreement (SAFTA). In February 2004 Bhutan joined the
Bangladesh, Indian, Myanmar, Singapore, and Thailand Economic Cooperation Forum (BIMSTEC).
Bhutan has applied for membership in the World Trade Organization and is in the process of
developing clear legal and regulatory systems designed to promote business development
FOREIGN RELATIONS
India
India is Bhutan's largest trade and development partner, providing significant amounts of foreign aid
and investment. Traditionally, the 1949 Treaty of Peace and Friendship governed relations between the
countries. In February 2007, India and Bhutan signed a new treaty removing the clause that India will
"guide" Bhutan's foreign policy and allowing Bhutan to purchase military equipment from other
countries. However, bilateral ties remain close, demonstrated by Indian Prime Minister Manmohan
Singh's May 2008 visit to Thimpu during which he addressed the newly elected parliament. Prime
Minister Jigme Thinley returned the gesture when he made his first official trip abroad as prime minister
to New Delhi in July 2008.
In recent years, insurgents on the Indian side of the border from the United Liberation Front of Assam
(ULFA) and the Bodos have used Bhutan as a safe haven. In December 2003, Bhutan military troops
expelled Indian insurgents from Assam. Through this joint effort with India, Bhutan strengthened border
security and continued cooperation with the Indian military.
China
Bhutan and China do not have diplomatic relations, although they have engaged in 17 rounds of high-
level talks regarding a border dispute over three Chinese-built roads which the Bhutanese Government
alleges encroach on its territory. Although the current official trade between the countries is minimal,
the Chinese Government announced that trade had increased by 3,000% from 2006 to 2007.
Nepal
Bhutan and Nepal established diplomatic relations in 1983 and are still negotiating a solution to a
protracted refugee situation, in which 107,000 refugees reside in seven UNHCR camps in Nepal. Most
of the refugees claim Bhutanese citizenship, while Bhutan alleges that they are non-nationals or
"voluntary emigrants," who forfeited their citizenship rights. In 2003, a joint Bhutan-Nepal verification
team categorized refugees from one camp into four groups, but progress remains stalled. Out of these
refugee camps have arisen several insurgent groups, such as the Bhutan Communist Party (Marxist-
Leninist-Maoist), the Bhutan Tiger Force, and the United Revolutionary Front of Bhutan. Bhutanese
security forces blame these groups for a series of bombings targeting the country in the lead-up to the
2008 parliamentary elections.
United Nations
Bhutan became a member of the United Nations in 1971. Bhutan does not have diplomatic relations
with any of the permanent members of the UN Security Council. Bhutan was elected to the UN
Commission on Human Rights in 2003 and served until 2006.
Other Countries
Bhutan enjoys diplomatic relations with seven European nations, which form The "Friends of Bhutan"
group, together with Japan. These countries are Switzerland, Denmark, Sweden, Norway, the
Netherlands, Finland, and Austria. Also known as donor nations, they contribute generously to
Bhutanese development and social programs. Bhutan also has diplomatic relations with South Korea,
Canada, Australia, Kuwait, Thailand, Bahrain, Bangladesh, the Maldives, Sri Lanka, and Pakistan.
DEFENSE
Bhutan has 8,000 members in five military branches: the Royal Bhutan Army, Royal Bodyguard,
National Militia, Royal Bhutan Police, and Forest Guards. In FY 2002, the Bhutanese Government
spent 1.9% of its GDP on the military or U.S. $9.3 million. India maintains a permanent military training
presence in Bhutan through IMTRAT, the Indian Military Training Team.
U.S.-BHUTAN RELATIONS
The U.S. Embassy in New Delhi, India, has consular responsibilities for Bhutan, but U.S. citizens also
may request assistance from U.S. Embassies in Kathmandu, Nepal, or Dhaka, Bangladesh. The United
States and Bhutan do not have diplomatic relations, and the United States does not give foreign
assistance to Bhutan. Informal contact is maintained through the U.S. Embassy and the Bhutanese
Embassy in New Delhi. Bhutan does participate in a regional program for South Asia sponsored by the
U.S. Agency for International Development (USAID) that helps countries develop their power
infrastructure (SARI-E). A few Bhutanese military officers have attended courses at the Asia-Pacific
Center for Security Studies. The U.S. Government annually brings several Bhutanese participants to
United States through its International Visitors Program.
Bhutan (10/08). (n.d.). [Link]
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