Background Notes - Bhutan

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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).
Annual growth rate: 2.12% (2006 est.). Density--14 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: Dzongka (official language), English (medium of instruction), Sharchop, Nepali.
Education: Years compulsory--11. Literacy--54% (est.). Primary school gross enrollment rate (2004)--81%. Women's literacy (2004)--34%.
Health: Infant mortality rate (2006 est.)--total: 98.41 deaths/1,000 live births; female: 100.79 deaths/1,000 live births; male: 96.14 deaths/1,000 live births. Life expectancy (2006 est.)--total population 54.78 years; male 55.02 years; female 54.53 years.
Work force (2002): Agriculture--93%; industry--2%; services--5%. There is a high unemployment rate.

Government
Type: Evolving from a monarchy to a constitutional monarchy. The Royal Government, prompted by the King, released a draft constitution in March 2005. The King and Crown Prince conducted consultations on the constitution in all 20 dzongkhag (districts) in 2005 and 2006. Bhutan will adopt the constitution in early 2008.
National Day: December 17 (1907).
Branches: Executive--King or Druk Gyalpo (chief of state), Prime Minister (head of government), Council of Ministers, Royal Advisory Council (together they make the Cabinet or Lhengye Zhungtsho). Advisory--Monastic Order (or Monk Body-Dratshang). Legislative--National Assembly (Tshogdu). Judicial--High Court (Thrimkhang Gogma), District Courts, and local area arbitration.
Administrative subdivisions: 20.
Political parties: None.
Suffrage: Registered resident with legitimate citizenship, age 21 and above.

Economy
GDP (purchasing power parity 2003): U.S. $2.9 billion.
Real growth rate (2004): 6.5%.
Per capita GDP (2004): U.S. $929.60.
Natural resources: Hydroelectric power, construction, timber, gypsum, calcium carbide.
Agriculture and forestry (all figs., 2001): 33.8% of GDP.
Construction: 11.8% of GDP.
Finance: 10.3% of GDP.
Transport and communication: 10% of GDP.
Electricity: 9.9% of GDP.
Government service: 9.9% of GDP.
Manufacturing: 9.8% of GDP.
Trade: Exports (2001-2002)--U.S. $97.7 million: hydroelectricity, vegetables and fruits, processed foods, minerals, wood products, textiles, machinery. Imports (2001-2002)--U.S. $188.4 million: machinery, mechanical appliances and electronics, plastics and rubber products, textiles, whiskies and prepared foodstuffs, medicines and pharmaceuticals, vegetable oils and foodstuffs. Major trade partners--India, Bangladesh, Japan, Singapore, Denmark.

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 Dzongka, 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 Wanchuck 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 that Bhutan's democratization process was well in train, he abdicated in December 2006 rather than wait until the promulgation of the new constitution in 2008. His son, Jigme Khesar Namgvel Wangchuck became King upon his abdication.

GOVERNMENT AND POLITICAL CONDITIONS
Traditionally a decentralized theocracy and, since 1907, a monarchy, Bhutan is evolving into a constitutional monarchy with a representative government. In 2002, the election laws were changed so that each citizen over the age of 21 could vote by secret ballot for a representative to the National Assembly (Tshongdu); previously, only one vote per family was allowed. The Tshongdu is composed of about 150 members, including some appointed from the Monk Body as well as some senior government representatives. They in turn elect the Council of Ministers. Prior to 2003, the Council had six members and rotated the responsibility as prime minister and head of government between each one for a period of one year, but in 2003, the National Assembly elected four additional ministers and also selected the prime minister.

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. In addition, each district also is broken into smaller areas known as geog (village), led by a locally elected leader called 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 (Head of Government and Minister of Foreign Affairs)--Lyonpo Khandu Wangchuk
Minister for Trade and Industry--Lyonpo Yeshey Zimba
Minister for Home and Cultural Affairs--Lyonpo Jigmi Y. Thinley
Minister for Finance--Lyonpo Wangdi Norbu
Minister for Education--Lyonpo Thinley Gyamtsho
Minister for Health--Lyonpo (Dr.) Jigme Singay
Minister for Labor and Human Resources--Lyonpo Ugyen Tshering
Minister for Works and Human Settlements--Lyonpo (Dr.) Kizang Dorji
Minister for Information and Communications--Lyonpo Leki Dorji
Minister for Agriculture--Lyonpo Sangay Ngedup
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 informal and cordial 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 agriculture, forestry, and hydroelectricity. 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 areas are increasing productivity, there continues to be a positive outlook for development throughout Bhutan. The economic program in the current 5-year-plan (2002-07) places a strong emphasis on improving education and infrastructure with a special emphasis on increasing activities in the sectors of information and communication technology, energy, and tourism. After the global slowdown within the travel industry, BhutanÌs tourist industry is beginning to show signs of recovery.

BhutanÌs 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 BhutanÌs 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
Relations between India and Bhutan are governed by the 1949 Treaty of Peace and Friendship. The treaty ensures India's neutrality in Bhutan's internal affairs, in exchange for Bhutan's agreement to be guided by India in foreign policy matters. But in practice, Bhutan exercises sovereignty on many issues. India is Bhutan's largest donor and supplies approximately 80% of Bhutan's foreign assistance. 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 border talks between the two nations have occurred.

Nepal
These two countries established diplomatic relations in 1983. Nepal and Bhutan are currently negotiating to resolve a 16-year-old refugee situation, in which 100,000 refugees are residing in seven UNHCR camps in Nepal. Most of the refugees claim they are Bhutanese citizens, while Bhutan alleges that most 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.

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.

Principal U.S. Officials (U.S. Embassy, India)
Ambassador--David C. Mulford
Deputy Chief of Mission--Geoffrey Pyatt
Public Affairs--Larry Schwartz
Political Affairs--Ted Osius
Economic Affairs--John Davison
Scientific Affairs--Dr. Satish V. Kulkarni
Commercial Affairs--Carmine DÌAloisio
Agricultural Affairs--Holly Higgins
Management Affairs--James Forbes
Consular Affairs--Peter Kaestner
USAID Mission, Director--George Deikun

The U.S. Embassy in India is located on Shantipath, Chanakyapuri, New Delhi 110021 (tel. 91-11-2419-8000) (fax: 91-11-24190017). Embassy and consulate working hours are Monday to Friday, 8:30 a.m. to 5:30 p.m. Visa application hours are Monday to Friday, 8:30 a.m. to 10:00 a.m. Please consult the Consular Affairs Web site. Further information about Bhutan also can be obtained at the official Web site of Bhutan's Tourism Corporation.

TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program advises Americans traveling and residing abroad through Consular Information Sheets, Public Announcements, and Travel Warnings. Consular Information Sheets exist for all countries and include 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. Public Announcements 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, Public Announcements, 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: 1-877-4USA-PPT (1-877-487-2778). Customer service representatives and operators for TDD/TTY are available Monday-Friday, 7:00 a.m. to 12:00 midnight, 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 877-FYI-TRIP (877-394-8747) and a web site at http://www.cdc.gov/travel/index.htm give the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. A booklet entitled "Health Information for International Travel" (HHS publication number CDC-95-8280) is available from the U.S. Government Printing Office, Washington, DC 20402, tel. (202) 512-1800.

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.