Introducing Bhutan

Background
Bhutan is a landlocked country. It is about 47,000 kilometres - roughly the size of Switzerland. It is located between Tibet in the north, Indian states of West Bengal and Assam in the south, and Arunachal Pradesh in the east.

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.
Location: Southern Asia, between China and India
Area total: 38,394 sq km
Climate: Current weather 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
Population: 699,847
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
Government type: Constitutional Monarchy
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 are nominated by the monarch
Elections: The monarchy 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 nominated as the prime minister
Legislative Branch: 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)
Election results: National Council - NA; National Assembly - percent of vote by party - DPT 67%, PDP 33%; seats by party - DPT 45, PDP 2
Judicial Branch: Supreme Court of Appeal (the monarch); High Court (judges appointed by the monarch); note - the draft constitution establishes a Supreme Court that 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 [Tshering TOBGAY]
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 overall growth. New hydropower projects will be the driving force behind Bhutan's ability to create employment and sustain growth in the coming years.

(Source: CIA World Factbook)