Background Note: Bhutan

Background Notes : Bhutan (02/10)

Background Note: Bhutan

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 (2007 est.): 2.082%. 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 1988-1993, thousands of ethnic Nepalis fled to refugee camps in Nepal alleging ethnic and political repression. As of January 20, 2010, 85,544 refugees resided 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, with over 26,000 refugees repatriated to third countries (over 23,000 are now settled in the U.S.). 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. As these two economic sectors contribute to increased productivity, Bhutan's development prospects are positive. The Tala hydroelectric project, completed March 2007, has bolstered government revenue and exports, and will continue to do so for the next several years. In late 2009, Bhutan signed four memoranda of understanding (MOUs) with India to prepare four additional hydroelectric projects in Bhutan.

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 had not yet finalized the tenth five-year plan as of October 2008; it intended 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); Bhutan will host the SAARC summit in Thimphu in April 2010. 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; King Jigme Khesar Namgyel Wangchuck also visited India in December 2009.

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 19 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 over 85,000 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 blamed 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 US. 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 and Fulbright Programs.

Principal U.S. Officials (U.S. Embassy, India)
Ambassador--Timothy J. Roemer
Deputy Chief of Mission--Steven White
Public Affairs--Michael Pelletier
Political Affairs--Uzra Zeya
Economic and Scientific Affairs--Blair Hall
Commercial Affairs--Carmine D'Aloisio
Agricultural Affairs--Holly Higgins
Management Affairs--Gerri O'Brien
Consular Affairs--James Herman
USAID Mission, Director--Erin Soto

TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program advises Americans traveling and residing abroad through Country Specific Information, Travel Alerts, and Travel Warnings. Country Specific Information exists for all countries and includes information on entry and exit requirements, currency regulations, health conditions, safety and security, crime, political disturbances, and the addresses of the U.S. embassies and consulates abroad. Travel Alerts are issued to disseminate information quickly about terrorist threats and other relatively short-term conditions overseas that pose significant risks to the security of American travelers. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country because the situation is dangerous or unstable.

For the latest security information, Americans living and traveling abroad should regularly monitor the Department's Bureau of Consular Affairs Internet web site at http://www.travel.state.gov, where the current Worldwide Caution, Travel Alerts, and Travel Warnings can be found. Consular Affairs Publications, which contain information on obtaining passports and planning a safe trip abroad, are also available at http://www.travel.state.gov. For additional information on international travel, see http://www.usa.gov/Citizen/Topics/Travel/International.shtml.

The Department of State encourages all U.S. citizens traveling or residing abroad to register via the State Department's travel registration website or at the nearest U.S. embassy or consulate abroad. Registration will make your presence and whereabouts known in case it is necessary to contact you in an emergency and will enable you to receive up-to-date information on security conditions.

Emergency information concerning Americans traveling abroad may be obtained by calling 1-888-407-4747 toll free in the U.S. and Canada or the regular toll line 1-202-501-4444 for callers outside the U.S. and Canada.

The National Passport Information Center (NPIC) is the U.S. Department of State's single, centralized public contact center for U.S. passport information. Telephone: 1-877-4-USA-PPT (1-877-487-2778); TDD/TTY: 1-888-874-7793. Passport information is available 24 hours, 7 days a week. You may speak with a representative Monday-Friday, 8 a.m. to 10 p.m., Eastern Time, excluding federal holidays.

Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at 800-CDC-INFO (800-232-4636) and a web site at http://wwwn.cdc.gov/travel/default.aspx give the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. The CDC publication "Health Information for International Travel" can be found at http://wwwn.cdc.gov/travel/contentYellowBook.aspx.

Further Electronic Information

Department of State Web Site
. Available on the Internet at http://www.state.gov, the Department of State web site provides timely, global access to official U.S. foreign policy information, including Background Notes and daily press briefings along with the directory of key officers of Foreign Service posts and more. The Overseas Security Advisory Council (OSAC) provides security information and regional news that impact U.S. companies working abroad through its website http://www.osac.gov

Export.gov provides a portal to all export-related assistance and market information offered by the federal government and provides trade leads, free export counseling, help with the export process, and more.

STAT-USA/Internet, a service of the U.S. Department of Commerce, provides authoritative economic, business, and international trade information from the Federal government. The site includes current and historical trade-related releases, international market research, trade opportunities, and country analysis and provides access to the National Trade Data Bank.

The Office of Electronic Information, Bureau of Public Affairs, manages this site as a portal for information from the U.S. State Department.
External links to other Internet sites should not be construed as an endorsement of the views or privacy policies contained therein.

ENDS

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