Mountainous Bhutan, half the size of Indiana, is situated on the southeast slope of the Himalayas, bordered on the north and east by Tibet and on the south and west and east by India. The landscape consists of a succession of lofty and rugged mountains and deep valleys. In the north, towering peaks reach a height of 24,000 ft (7,315 m).
Although archaeological exploration of Bhutan has been limited, evidence of civilization in the region dates back to at least 2000 B.C. Aboriginal Bhutanese, known as Monpa, are believed to have migrated from Tibet. The traditional name of the country since the 17th century has been Drukyul, Land of the Drokpa (Dragon People), a reference to the dominant branch of Tibetan Buddhism that is still practiced in the Himalayan kingdom.
For centuries, Bhutan was made up of feuding regions until it was unified under King Ugyen Wangchuck in 1907. The British exerted some control over Bhutan's affairs, but never colonized it. Until the 1960s, Bhutan was largely isolated from the rest of the world, and its people carried on a tranquil, traditional way of life, farming and trading, which had remained intact for centuries. After China invaded Tibet, however, Bhutan strengthened its ties and contact with India in an effort to avoid Tibet's fate. New roads and other connections to India began to end its isolation. In the 1960s, Bhutan also undertook social modernization, abolishing slavery and the caste system, emancipating women, and enacting land reform. In 1985, Bhutan made its first diplomatic links with non-Asian countries.
A pro-democracy campaign emerged in 1991, which the government claimed was composed largely of Nepali immigrants. As a result, some 100,000 Nepali civil servants were either evicted or encouraged to emigrate. Most of them crossed the border back into Nepal, where they were housed in UN-administered refugee camps. They continue to languish there a decade later.
In 1998, King Jigme Singye Wangchuck, who is Bhutan's fourth hereditary ruler, voluntarily curtailed his absolute monarchy, and in March 2005 released a draft constitution (not yet put to a referendum) that outlined plans for the country to shift to a two-party democracy. In Dec. 2006, he abdicated in favor of his son, and Crown Prince Jigme Khesar Namgyal Wangchukin became king. Prime Minister Lyonpo Khandu Wangchuk resigned in July 2007 so he could join a political party in anticipation of the country's first elections, scheduled to be held in early 2008. Lyonpo Kinzang Dorji took over as the interim prime minister.
GDP/PPP (2007 est.): $3.359 billion; per capita $5,200. Real growth rate: 22.4%. Inflation: 4.9% Unemployment: 2.5% (2004 est.) Arable land: 3%. Agriculture: rice, corn, root crops, citrus, foodgrains; dairy products, eggs. Labor force: n.a.; note: major shortage of skilled labor; agriculture 93%, industry and commerce 2%, services 5%. Industries: cement, wood products, processed fruits, alcoholic beverages, calcium carbide. Natural resources: timber, hydropower, gypsum, calcium carbide. Exports: $154 million f.o.b. (2000 est.): electricity (to India), cardamom, gypsum, timber, handicrafts, cement, fruit, precious stones, spices. Imports: $196 million (c.i.f., 2000 est.): fuel and lubricants, grain, machinery and parts, vehicles, fabrics, rice. Major trading partners: India, Bangladesh, Japan, Germany, Austria (2004).
Telephones: main lines in use: 25,200 (2003); mobile cellular: 22,000 (2005). Radio broadcast stations: AM 0, FM 1, shortwave 1 (2004). Television broadcast stations: 1 (2005). Internet hosts: 985 (2003). Internet users: 15,000 (2003).
Railways: 0 km. Highways: total: 4,007 km; paved: 24 km; unpaved: 3,983 km (2002). Ports and harbors: none. Airports: 2 (2004 est.).
approximately 104,000 Bhutanese refugees live in Nepal, 90% of whom reside in seven UN Office of the High Commissioner for Refugees camps; Bhutan cooperates with India to expel Indian separatists.