BACKGROUND
In 1865, Britain and Bhutan signed the Treaty of Sinchulu, under which Bhutan would receive an annual subsidy in exchange for ceding some border land to British India. Under British influence, a monarchy was set up in 1907; three years later, a treaty was signed whereby the British agreed not to interfere in Bhutanese internal affairs and Bhutan allowed Britain to direct its foreign affairs. This role was assumed by independent India after 1947. Two years later, a formal Indo-Bhutanese accord returned the areas of Bhutan annexed by the British, formalized the annual subsidies the country received, and defined India's responsibilities in defense and foreign relations. A refugee issue of over 100,000 Bhutanese in Nepal remains unresolved; 90% of the refugees are housed in seven United Nations Office of the High Commissioner for Refugees (UNHCR) camps.

In March 2005, King Jigme Singye WANGCHUCK unveiled the government's draft constitution - which would introduce major democratic reforms - and pledged to hold a national referendum for its approval. In December 2006, the King abdicated the throne to his son, Jigme Khesar Namgyel WANGCHUCK, in order to give him experience as head of state before the democratic transition. In early 2007, India and Bhutan renegotiated their treaty to allow Bhutan greater autonomy in conducting its foreign policy, although Thimphu continues to coordinate policy decisions in this area with New Delhi. In July 2007, seven ministers of Bhutan's ten-member cabinet resigned to join the political process, and the cabinet acted as a caretaker regime until democratic elections for seats to the country's first parliament were completed in March 2008. The king ratified the country's first constitution in July 2008.

GEOGRAPHY
Location:   Southern Asia, between China and India
Geographic coordinates:   27 30 N, 90 30 E
Map references:   Asia

AREA
Total: 47,000 sq km
Land: 47,000 sq km
Water: 0 sq km
Area - comparative:   about one-half the size of Indiana
Land boundaries:   total: 1,075 km
Border countries: China 470 km, India 605 km
Coastline:   0 km (landlocked)
Climate:   varies; tropical in southern plains; cool winters and hot summers in central valleys; severe winters and cool summers in Himalayas
Terrain:   mostly mountainous with some fertile valleys and savanna
Elevation extremes:
Lowest point: Drangme Chhu 97 m
Highest point: Kula Kangri 7,553 m
Natural resources:   timber, hydropower, gypsum, calcium carbonate

LAND USE
Arable land: 2.3%
Permanent crops: 0.43%
Other: 97.27% (2005)
Irrigated land:   400 sq km (2003)
Natural hazards:   violent storms from the Himalayas are the source of the country's name, which translates as Land of the Thunder Dragon; frequent landslides during the rainy season
Environment - current issues:   soil erosion; limited access to potable water
Environment - international agreements:  party to: Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Endangered Species, Hazardous Wastes signed, but not ratified: Law of the Sea
Geography - note:   landlocked; strategic location between China and India; controls several key Himalayan mountain passes
Population:    682,321

Note: the Factbook population estimate is consistent with the first modern census of Bhutan, conducted in 2005; previous Factbook population estimates for this country, which were on the order of three times the total population reported here, were based on Bhutanese government publications that did not include the census (July 2008 est.)

Age structure: 
 0-14 years: 30.8% (male 107,360/female 103,093)
15-64 years: 63.7% (male 231,323/female 203,649)
65 years and over: 5.4% (male 19,561/female 17,335) (2008 est.)

MEDIAN AGE
Total: 23.5 years
Male: 24.1 years
Female: 22.8 years (2008 est.)
Population growth rate:   1.301% (2008 est.)
Birth rate:20.56 births/1,000 population (2008 est.)
Death rate:7.54 deaths/1,000 population (2008 est.)

MAJOR INFECTIOUS DISEASES
Degree of risk: intermediate
Food or waterborne diseases: bacterial and protozoal diarrhea, hepatitis A, and typhoid fever
Vectorborne diseases: malaria
Water contact disease: leptospirosis (2008)
Ethnic groups:   Bhote 50%, ethnic Nepalese 35% (includes Lhotsampas - one of several Nepalese ethnic groups), indigenous or migrant tribes 15%
Religions:   Lamaistic Buddhist 75%, Indian- and Nepalese-influenced Hinduism 25%
Languages:   Dzongkha (official), Bhotes speak various Tibetan dialects, Nepalese speak various Nepalese dialects

LITERACY
Definition: age 15 and over can read and write
Total population: 47%
Male: 60%
Female: 34% (2003 est.)

COUNTRY NAME
Conventional long form: Kingdom of Bhutan
Conventional short form: Bhutan
Local long form: Druk Gyalkhap
Local short form: Druk Yul
Government type:   in transition to constitutional monarchy; special treaty relationship with India
Capital Name: Thimpu
Geographic coordinates: 27 29 N, 89 36 E
Time difference: UTC+6 (11 hours ahead of Washington, DC during Standard Time)
Administrative divisions:   20 districts (dzongkhag, singular and plural); Bumthang, Chhukha, Chirang, Daga, Gasa, Geylegphug, Ha, Lhuntshi, Mongar, Paro, Pemagatsel, Punakha, Samchi, Samdrup Jongkhar, Shemgang, Tashigang, Tashi Yangtse, Thimphu, Tongsa, Wangdi Phodrang
Independence:  1907 (became a unified kingdom under its first hereditary king)
National holiday:  National Day (Ugyen WANGCHUCK became first hereditary king), 17 December (1907)
Constitution:   ratified 23 July 2008
Legal system:  based on Indian law and English common law; has not accepted compulsory ICJ jurisdiction
Suffrage:   18 years of age; universal
Executive branch:  chief of state: King Jigme Khesar Namgyel WANGCHUCK (since 14 December 2006); note - King Jigme Singye WANGCHUCK abdicated the throne on 14 December 2006 and his son immediately succeeded him; the nearly two-year delay between the former King's abdication and his son's coronation on 6 November 2008 was to ensure an astrologically auspicious coronation date and to give the new King-who had limited experience-deeper administrative expertise under the guidance of this father
Head of government: Prime Minister Jigme THINLEY (since 9 April 2008)
Cabinet: Council of Ministers (Lhengye Shungtsog) nominated by the monarch, approved by the National Assembly; members serve fixed, five-year terms; note - there is also a Royal Advisory Council (Lodoi Tsokde), members nominated by the monarch
Elections: the monarch is hereditary, but democratic reforms in July 1998 grant the National Assembly authority to remove the monarch with two-thirds vote; election of a new National Assembly occurred in March 2008; the leader of the majority party is nominated as the prime minister.
Legislative branch:   new bicameral Parliament consists of the non-partisan National Council (25 seats; 20 members elected by each of the 20 electoral districts (dzongkhags) for four-year terms and 5 members nominated by the King); and the National Assembly (47 seats; members elected by direct, popular vote for five-year terms)
Elections: National Council elections last held on 31 December 2007 and 29 January 2008 (next to be held by December 2012); National Assembly elections last held on 24 March 2008 (next to be held by March 2013)
Judicial branch:   Supreme Court of Appeal (the monarch); High Court (judges appointed by the monarch); note - the draft constitution establishes a Supreme Court, which will serve as chief court of appeal
Political parties and leaders:   Bhutan Peace and Prosperity Party (Druk Phuensum Tshogpa) or DPT [Jigme THINLEY]; People's Democratic Party or PDP [Sangay NGEDUP]
Flag description:   divided diagonally from the lower hoist-side corner; the upper triangle is yellow and the lower triangle is orange; centered along the dividing line is a large black and white dragon facing away from the hoist side

ECONOMY
Economy - overview:   The economy, one of the world's smallest and least developed, is based on agriculture and forestry, which provide the main livelihood for more than 60% of the population. Agriculture consists largely of subsistence farming and animal husbandry. Rugged mountains dominate the terrain and make the building of roads and other infrastructure difficult and expensive. The economy is closely aligned with India's through strong trade and monetary links and dependence on India's financial assistance. The industrial sector is technologically backward, with most production of the cottage industry type. Most development projects, such as road construction, rely on Indian migrant labor.

Model education, social, and environment programs are underway with support from multilateral development organizations. Each economic program takes into account the government's desire to protect the country's environment and cultural traditions. For example, the government, in its cautious expansion of the tourist sector, encourages visits by upscale, environmentally conscientious tourists. Detailed controls and uncertain policies in areas such as industrial licensing, trade, labor, and finance continue to hamper foreign investment. Hydropower exports to India have boosted Bhutan's GDP growth. New hydropower projects will be the driving force behind Bhutan's ability to create employment and sustain growth in the coming years.


Agriculture - products:   rice, corn, root crops, citrus, foodgrains; dairy products, eggs
Industries:   cement, wood products, processed fruits, alcoholic beverages, calcium carbide, tourism
Telephones - main lines in use:   29,900 (2007)
Telephones - mobile cellular:   149,400 (2007)
Telephone system:   general assessment: urban towns and district headquarters have telecommunications services
Domestic: very low teledensity; domestic service is very poor especially in rural areas; wireless service available since 2003
International country code - 975; international telephone and telegraph service via landline and microwave relay through India; satellite earth station - 1 Intelsat (2007)