May 25, 2017
The Kingdom of Bhutan
Background
the four Associate Justices (Drangpons) serve up to two 10-
The Kingdom of Bhutan is a small, landlocked Himalayan
year terms.
country situated between India and China. The mountainous
kingdom is about half the size of Indiana, with an estimated
Bhutan’s path to democracy was not spurred by a popular
population of 792,000, approximately a quarter of which is
movement but was initiated and encouraged by the fourth
in the capital, Thimphu. Bhutan’s economy has grown
king and fifth king of the Wangchuck dynasty. According
primarily as a result of hydropower, agriculture, and
to Bhutan’s first prime minister, Jigme Y. Thinley, who
forestry development. The United States has no significant
came to power in the country’s first election of 2008, the
trade relations with Bhutan, and its foreign aid mission and
Bhutanese people were apprehensive about the new system
bilateral consular affairs are handled by the U.S. Embassy
because “in many of the countries, democracy had failed or
in New Delhi, India. Bhutan has participated in a U.S.
was in the process of failing, and leading to tremendous
Agency for International Development (USAID) regional
upheavals, strife among the people.” The king, however,
program for South Asia directed at developing power
insisted that the long-term interests of the people were best
infrastructure, and it has implemented programs intended to
served by elected leaders. The first election went smoothly
help mitigate some of the effects of climate change.
in 2008, and the second election, in 2013, brought a
peaceful transition of power in which the opposition
Bhutan in Brief
People’s Democratic Party won 32 of the 42 elected
Form of Government: Constitutional Monarchy
National Assembly seats.
Head of State: King Jigme Khesar Namgyel Wangchuck
Area: 18,146 square miles, or about half the size of Indiana
The birth of the hereditary Wangchuck dynasty in 1907 has
Geography: Mountainous country with 2.6% arable land located
shaped Bhutan’s democracy. The first ruler, King Ugyen
between China and India
(1907-1926), introduced reforms and Western education.
Population: 792,000 with 1.05% annual growth
The second ruler, King Jigme (1926-1952), continued his
Religion: 75.3% Buddhist, 22.1% Hindu, and 2.6% other
father’s moderation and centralization efforts by building
Life Expectancy: 70.1 years (2016 est.)
more schools and roads and bringing public institutions
Literacy: 64.9% (2016 est.)
under government control. Two generations later, the third
Poverty: 13% live below the poverty line (2012 est.)
ruler, King Jigme Dorji (1952-1972), established a high
Unemployment: 2.5% (est. December 2016)
court, introduced a bicameral legislative branch, set up a
GDP Growth/Per Capita (PPP): 6.5% (2015)/$2,532 (2016)
planning commission, and created the Council of Ministers.
Origins of GDP: Agric. 16.4%, Industry 42.1%, Services 41.5%
The sudden death of the third king brought his son, King
Principal Exports: Electricity, ferrosilicon, cement, calcium
Jigme Singye (1972-2006), to power, and, like his
carbide, copper wire, manganese, and vegetable oil
forefathers, King Jigme Singye continued his father’s
Sources: CIA World Handbook, World Bank 2016.
legacy. In 2006, the fourth King abdicated in favor of his
The Constitution, Recent Elections, and
son, Jigme Khesar Namgyel, who started a top-down
the Wangchuck Dynasty
democratic process. In July 2008, Bhutan’s political system
The constitution of Bhutan establishes three branches of
changed from an absolute monarchy to constitutional
government: legislative, executive, and judicial. The
monarchy with a parliamentary form of government.
bicameral legislature, or Chi Tshog, includes the National
Ethnic, Religious, and Refugee Issues
Assembly (Tshogdu), with 47 elected representatives, and
the National Council (Gyelyong Tshongde), with 25
Bhutan has four ethnic groups: the Ngalops (westerners),
members, 5 of which are selected by the king. Legislators
the Sharchop (easterners), aboriginal groups, and the
serve five-year terms. The executive branch includes the
Lhotshampa (southerners). The Ngalops migrated from
“Dragon King” (Druk Gyalpo), currently King Jigme
Tibet to Bhutan around the ninth century CE. They
Khesar Namgyel Wangchuck, as Head of State, and the
introduced Tibetan culture and Mahayana Buddhism to
prime minister, presently Tshering Tobgay, as Head of
Bhutan. The Ngalops are the majority in central, western,
Government. The king is hereditary and appoints the
and northern Bhutan, and they dominate cultural, religious,
majority leader in the parliament as prime minister. There is
and political elements in modern Bhutan. The Sharchops,
also a Council of Ministers (Lhengye Zhungtshog), whose
an Indo-Mongoloid origin, are thought to have originated
members are nominated by the king, in consultation with
from Assam, in present-day India, or perhaps Burma, and
the prime minister, and approved by the National
they also practice Mahayana Buddhism. Several aboriginal
groups (Drokpa, Lepcha, Doya) live and practice Hinduism
Assembly. Ministers serve five-year terms. The judiciary
consists of the Supreme Court, the High Court, District
throughout Bhutan. Hindu Nepali settlers, the fourth group,
Courts (Dzongkhag), and Sub-District Courts (Dungkhag).
are the majority in the south. These southerners, or
The Supreme Court has five members. The Chief Justice,
Lhotshampa, arrived in the late 19th and early 20th centuries
appointed by the king, serves up to two five-year terms, and
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The Kingdom of Bhutan
in search of arable land. Many of the Lhotshampa settlers
The 1910 Treaty of Punakha and 1949 Treaty of Friendship
are not legal residents of Bhutan.
allowed the British and Indian governments, respectively,
to direct Bhutan’s external affairs. Both treaties promised
In the late 1980s and early 1990s, the government of
the policy of “no interference in the internal administration
Bhutan viewed the Lhotshampa, which made up about 28%
of Bhutan” and provided protection from external
of the population, as a threat to the country’s cultural
encroachment. India and Bhutan signed another treaty of
identity. Many Lhotshampa were expelled or voluntarily
friendship in 2007 that grants Bhutan more independence in
emigrated to India and Nepal, escaping government
its foreign relations. Bhutan has joined a number of
attempts to forcibly integrate them into mainstream
international organizations and entered into several
Bhutanese culture. Such forceful assimilation attempts have
international agreements. It was a co-founding member of
been viewed as a threat to their Nepali culture. This tension
the South Asian Association for Regional Cooperation
led to unrest in the south of Bhutan in the early 1990s and
(SAARC) in 1985 and joined the South Asian Free Trade
resulted in an estimated 107,000 Hindu Nepali settlers
Agreement in 2004, the same year it also joined the
returning to Nepal as refugees.
Bangladesh, India, Myanmar, Singapore, and Thailand
Economic Cooperation (BIMSTEC) forum. Bhutan also has
Economic Development and “Gross
representation at the United Nations, which it joined in
National Happiness (GNH)”
1971. Bhutan also joined 174 other countries to sign the
The World Bank projects the acceleration of Bhutan’s
Paris Agreement on Climate Change in 2016.
economic growth in 2018, citing hydropower projects,
robust economic policy, and India’s positive economic
Bilateral relations with the United States are limited, with
outlook as drivers. New hydropower plants are expected to
no formal diplomatic relations. According to the U.S.
come online in the next eight years; past hydropower profits
Department of State, however, “the two countries maintain
have been invested by the government in public health care,
warm informal relations.” The United States has helped
contributing to an increase in Bhutanese life expectancy.
resettle Lhotshampa refugees residing in Nepal, and since
Bhutan’s financial policy has controlled exchange rates and
2006, the United States has admitted 92,462 of these
inflation, as evidenced by “single-digit inflation, a relative
refugees, including 650 in 2017 to date.
stable exchange rate, and accumulating international
reserves,” according to the World Bank. Because Bhutan’s
China also does not maintain formal diplomatic relations
economy is inextricably linked to India’s, a projected
with Bhutan, but some progress in developing relations has
positive economic outlook in India would benefit Bhutan.
been reported. In 2016, China and Bhutan held their 24th
With an average 8% GDP growth from 1996 until 2015,
round of border talks in Beijing. China is currently building
Bhutan fits the low middle-income group profile.
rail links across the Tibetan plateau and has plans to extend
the railway toward the Bhutanese border.
In contrast to Gross Domestic Product (GDP), Gross
National Happiness (GNH) has a deep-rooted history in
Security Concerns
Bhutanese culture. In 1987, the fourth king stated, “We are
Bhutan had experienced external and internal security
convinced that we must aim for contentment and
challenges in recent years. In the 1990s, Indian separatist
happiness.” The king’s vision of happiness has since been
militants (the United Liberation Front of Assam and others)
enshrined in Article 9 of the 2008 Constitution of Bhutan,
left India to establish bases in southern Bhutan. The king,
which reads, “The State shall strive to promote those
concerned about sovereignty, warned India not to cross into
conditions that will enable the pursuit of Gross National
Bhutan. Meanwhile, the National Assembly discussed
Happiness.” Established by the Royal Government of
peaceful and military options to drive out the groups. After
Bhutan, the Centre for Bhutan Studies & Gross National
five rounds of talks with the militants failed, the National
Happiness Research (CBS & GNH), which describes itself
Assembly approved “Operation All Clear” in 2003 to
as “an autonomous research institute” based in the capital
remove the groups forcefully. The operation captured or
Thimphu, is mandated by the government to study the GNH
killed 650 militants, including top ULFA leaders.
concept and develop indicators for the Royal Government
of Bhutan’s Gross National Happiness Commission
New security threats emerged prior to the March 2008
(GNHC), which is responsible for integrating “GNH into
election. Before the election, several bombs exploded in
national planning process.” The GNHC chair and vice chair
Thimphu and other districts. A new group, the United
are the prime minister and finance minister, respectively.
Revolutionary Front of Bhutan (URFB), claimed
GNHC ensures all government policies “are formulated and
responsibility for the bombings to highlight the rights of
implemented in line with the principles of GNH including:
Lhotshampa. There were no URFB-related bomb threats in
(a) developing a dynamic economy as the foundation for a
the March 2013 elections. There was, however, a case of a
vibrant democracy, (b) living in harmony with tradition and
URFB bombing claim in Phuentsholing, 100 miles south of
nature, (c) effective and good governance, and (d) investing
Thimphu, in 2012.
in our people, the nation’s greatest asset.”
Bruce Vaughn, Specialist in Asian Affairs
Foreign Relations
IF10660
Bhutan’s external relations have been influenced by the
United Kingdom and India for much of the past century.


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The Kingdom of Bhutan


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