BHUTAN

Kingdom of Bhutan

Druk-Yul

CAPITAL: Thimphu (Tashi Chho Dzong)

FLAG: The flag is divided diagonally into an orange-yellow field above and a crimson field below. In the center is a wingless white Chinese dragon.

ANTHEM: Gyelpo Tenjur, beginning "In the Thunder Dragon Kingdom, adorned with sandalwood."

MONETARY UNIT: The ngultrum (n) is a paper currency of 100 chetrum. There are coins of 5, 10, 25, and 50 chetrum and 1 ngultrum, and notes of 1, 5, 10, and 100 ngultrum. The ngultrum is at par with the Indian rupee (r), which also circulates freely. n1 = $0.02207 (or $1 = n45.317) as of 2004.

WEIGHTS AND MEASURES: The metric system is the legal standard, but some traditional units are still in common use.

HOLIDAYS: King's Birthday, 11–13 November; National Day, 17 December. Movable Buddhist holidays and festivals are observed.

TIME: 5:30 pm = noon GMT.

LOCATION, SIZE, AND EXTENT

Bhutan, a landlocked country in the Himalayan mountain range, has an area of 47,000 sq km (18,147 sq mi), extending 306 km (190 mi) e–w and 145 km (90 mi) n–s. Comparatively, the area occupied by Bhutan is slightly more than half the size of the state of Indiana. It is bordered on the e, s, and w by India and on the n and nw by China, with a total boundary length of 1,075 km (668 mi). The capital city of Bhutan, Thimphu, is located in the west central part of the country.

TOPOGRAPHY

Bhutan is a mountainous country of extremely high altitudes and irregular, often precipitous terrain, which may vary in elevation by several thousand feet within a short distance. Elevation generally increases from south to north. The mountains are a series of parallel north–south ranges. The loftiest peaks, found in the Himalayan chain that stretches along the northern border, include Kula Kangri (7,554 m/24,783 ft) and Chomo Lhari (7,314 m/23,997 ft). Great spurs extend south from the main chain along the eastern and western borders. In the rest of the country are mainly ranges of steep hills separated by narrow valleys. Bhutan is drained by many rivers flowing south between these ranges and for the most part ultimately emptying into the Brahmaputra River in India.

CLIMATE

Because of the irregular terrain, the climate varies greatly from place to place. In the outer foothills adjoining the Indian plains, rainfall ranges from about 150–300 cm (60–120 in) a year; the forests are hot and steaming in the rainy season, while the higher hills are cold, wet, and misty. Violent Himalayan thunderstorms gave rise to Bhutan's Dzongkha name, DrukYul, which translates as "Land of the Thunder Dragon." Rainfall is moderate in the central belt of flat valleys (which have an elevation of 1,100–3,000 m/3,500–10,000 ft). The uplands and high valleys (above 3,700 m/12,000 ft) are relatively dry. There is less rainfall in eastern Bhutan. In general, the mountainous areas are cold most of the year. Temperatures there average 4°c (39°f) in January and 17°c (63°f) in July.

FLORA AND FAUNA

Dense jungle growth is characteristic at altitudes below 1,500 m (5,000 ft). Above that height the mountain slopes are covered with forest, including beech, ash, birch, maple, cypress, and yew. At 2,400–2,700 m (8,000–9,000 ft) are forests of oak and rhododendron. Above this level, firs and pines grow to the timber line. Primulas, poppies (including the rare blue variety), magnolias, and orchids abound.

The relative abundance of wild animals is attributed to the Buddhist reluctance to take life. In the lower parts of southern Bhutan, mammals include the cheetah, goral, sambar, bear, and rhinoceros; in the higher regions are snow deer, musk deer, and barking deer. Game birds include pheasants, partridges, pigeons, and quail.

ENVIRONMENT

The most significant environmental problems in Bhutan were soil erosion and water pollution. The erosion of the soil occurs because 50% of the land in Bhutan is situated on mountainous slopes which are subject to landslides during the monsoon season. Other contributing factors are overcutting of timber, road construction, and the building of irrigation channels. The nation has about 95 cu km of renewable water resources, but only 86% of all city dwellers and 60% of people in rural areas have pure drinking water.

The Manas Game Sanctuary is located along the banks of the Manas River in southeastern Bhutan. According to a 2006 report issued by the International Union for Conservation of Nature and Natural Resources (IUCN), threatened species included 21 types of mammals, 18 species of birds, 1 species of amphibian, and 7 species of plants. Threatened species included the tiger, snow leopard, Asian elephant, and wild yak.

POPULATION

The population of Bhutan in 2005 was estimated by the United Nations (UN) at 970,000, which placed it at number 151 in population among the 193 nations of the world. In 2005, approximately 4% of the population was over 65 years of age, with another 40% of the population under 15 years of age. There were 103 males for every 100 females in the country. According to the UN, the annual population rate of change for 2005–10 was expected to be 2.5%, a rate the government viewed as too high. The government lauched a campaign with the slogan "Small Family, Happy Family" to encourage broader use of contraception and lower the fertility rate, especially among adolescents. The projected population for the year 2025 was 1,432,000. The population density was 20 per sq km (53 per sq mi).

The UN estimated that 21% of the population lived in urban areas in 2005, and that urban areas were growing at an annual rate of 5.83%. The capital city, Thimphu (Tashi Chho Dzong), had a population of 35,000 in that year, and Phuntsholing had an estimated population of more than 18,000.

Some 93% of the population was rural in 2001. The laboring population is not gathered into towns but lives in the country-side in the vicinity of fortresses called dzongs. A dzong, the official center of a region or district, often houses substantial numbers of Buddhist monks. Many place names incorporate the word dzong, which means "castle-monastery."

MIGRATION

Bhutan opposes immigration and forbids the entry of new settlers from Nepal. Since 1959, when about 4,000 Tibetan refugees entered Bhutan, the border with Tibet has been closed to immigration. By 1980, most of the refugees had become citizens of Bhutan; the rest migrated to India. The border between Bhutan and India is open, and citizens of Bhutan are free to live and work in India. The net migration rate for 2005 was estimated as zero. The total number of migrants residing in Bhutan in 2000 was 10,000.

ETHNIC GROUPS

The Bhutanese are mainly of Tibetan stock, and are also known as Buotias; they account for approximately 50% of the population. The Ngalop (also called Bhote) are people of Tibetan origin who live in northern and western Bhutan; the Sharchop inhabit the eastern regions and also have ethnic affinities with the people of China's Tibetan region. Aboriginal or indigenous tribal peoples live in villages scattered throughout Bhutan and account for approximately 15% of the population. The Ngalops, Sharchops, and the indigenous tribal people are collectively known as Druk-pas. The remaining peoples are Nepalese settlers (about 35% of the population), living mostly in the south. These include a group known as the Lhotsampas. Some 85,000 were expelled to Nepal in 1992–93, and about 5,000–15,000 more moved to India.

LANGUAGES

Four main languages are spoken in Bhutan. The official language is Dzongkha, a Tibetan dialect spoken mainly by Ngalop in the northern and western parts of the country. Bumthangkha, an aboriginal language, is spoken in central Bhutan, while Sharchopkha is spoken in eastern Bhutan. Both of these are used in primary schools in areas where their speakers predominate. The Nepalese largely retain their own language, Nepali.

RELIGIONS

About 75% of the Bhutanese practice Buddhism and about 25% practice Indian- and Nepalese-influenced Hinduism. While the law provides for religious freedom, Drukpa Kagyup, a branch of Mahayana Buddhism, is the state religion, and the law prohibits religious conversions. The Drukpa (people of the dragon), introduced from Tibet in the 12th century, dominates the collective life of the Bhutanese through a large clerical body estimated at more than 6,000 lamas or monks, centered in 8 major monasteries (dzongs ) and 200 smaller shrines (gompas ) scattered throughout the land. This sect incorporates both the ideology of the classical Buddhist scriptures and the indigenous pre-Buddhist animistic beliefs called Bon. The Ningmapa school of Mahayana Buddhism is also practiced, primarily in the eastern regions. The royal family practices a combination of Drukpa Kagyup and Ningmapa Buddhism. Most Ngalops are of the Drukpa Kagyup school; they hold a majority of positions in the government. The Sharchops are primarily of the Ningmapa school.

Among Hindus, the Shaivite, Vaishnavite, Shakta, Ghanapath, Paurinic, and Vedic schools are all represented. There are still a few Bon priests and followers in the country and there are small numbers of Christians, with worship practices generally limited to the family home.

The law provides for freedom of religion, but this right is some-what limited in practice. Proselytizing is prohibited and all religious organizations must have a license from the government in order to build a new place of worship. There have been reports of government discrimination against the Hindu Nepalese.

TRANSPORTATION

Traditionally, Bhutan's communications have been mostly with Tibet, through several strategic mountain passes. Most travelers continue to journey on foot or mounted on hardy ponies bred to withstand great altitudes and steep slopes. Goods are transported by porters or on pack animals. Many of the rivers are still crossed by native cantilever bridges of excellent construction.

Prior to the 1961–66 development plan, there were no surfaced roads in Bhutan. Since then, a network of roads and suspension bridges has been built by India. In 2002, there were about 3,285 km (2041 mi) of roads, including about 1,994 km (1,239 mi) of surfaced roads. Of the 186 suspension bridges projected in the 1981–87 economic plan, 102 were completed by 1985. There is bus service linking Paro Dzong and Tashi Gang Dzong with Indian border towns. In 2004 there were two airports, only one of which (as of 2005), had a paved runway. The national air carrier, Druk Airlines, began operations in 1983 with regular flights between Calcutta and Paro Dzong, the site of Bhutan's main airfield. In 2001, 35,100 passengers were carried on scheduled domestic and international flights.

HISTORY

Little is known of the history of Bhutan before the 17th century. Buddhism was originally introduced from India in the 8th century, although the Buddhism of today's Bhutan is very much Tibetan in character. The forebears of the Bhotes (or Bhotias) came from Tibet, probably in the 9th century, when Tibetans invaded the area and met little resistance from the indigenous Tephu tribe. In the middle of the fifteenth century, Shabdung Ngawang Nangyal, a Tibetan lama exercising temporal as well as spiritual power, united the country and built most of the fortified villages (dzongs ). His successors in power established a dual system, separating the temporal ruler (Desi or deb raja) and the spiritual ruler (Je Khempo or dharma raja).

The first recorded contact with the West occurred in 1772, when the British East India Company repelled a Bhutanese invasion of the princely state of Cooch Behar in India; they concluded a peace treaty two years later. During the 18th century and most of the 19th, British efforts to open trade with Bhutan proved futile, with the Bhutanese frequently attacking the relatively level areas of Assam and Bengal along their southern border. In 1865, the British finally defeated the Bhutanese, and Bhutan formally accepted a British subsidy of r50,000 a year, which was dependent upon their keeping the peace.

With British approval, Ugyen Dorji Wangchuk became the first hereditary king in 1907, replacing the temporal ruler. In 1910, the Punakha Treaty was concluded between the British Indian Government and Bhutan, under which British India agreed explicitly not to interfere in Bhutanese internal affairs, while Bhutan accepted British "guidance" in handling external matters—a role independent India assumed after 1947. A formal IndoBhutanese accord concluded in 1949 reaffirmed and amplified the earlier Punakha Treaty. Besides increasing Bhutan's annual subsidy to r500,000 and returning to Bhutan 83 sq km (32 sq mi) of territory around Dewangiri (wrested by the British in 1865), it made India responsible for Bhutan's defense and strategic communications, committing India to avoid interfering in Bhutan's affairs and affirming Bhutan's agreement to be "guided by the advice of" India in foreign affairs.

In 1959, China published maps of the Himalayan frontier with South Asia that showed as Chinese part of the territory claimed by Bhutan; Chinese representatives also asserted that Bhutan belonged to a greater Tibet. In response, Indian prime minister Jawaharlal Nehru warned that an attack on Bhutan would be deemed an act of war against India. Fighting between India and China in neighboring border regions in the fall of 1962 did not violate Bhutan's borders, although survivors from Indian army units decimated east of Bhutan straggled back to India through Bhutan.

In April 1964, the long-time prime minister, Jigme Dorji, was assassinated, revealing fissures among the ruling elite. The plotters who were caught were executed, including the deputy commander of the army; others fled to Nepal. In the 1960s, Bhutan's advance toward modernization and the end of its insularity were accelerated by economic plans prepared and underwritten by India.

Relations with Nepal have grown difficult since the late 1980s, due to a dispute with Nepal concerning Bhutanese refugees of Nepalese descent. The mostly Hindu "Nepali Bhutanese," comprising approximately a third of Bhutan's population, were granted citizenship in 1958. However, Bhutan changed its citizenship laws in the late 1980s, making the Nepali Bhutanese illegal immigrants. In 1990, the Bhutanese government expelled 100,000 Nepali Bhutanese, who fled to refugee camps in eastern Nepal. In 1993, Bhutan and Nepal established a Joint Ministerial Level Committee (JMLC) to address the issue of ethnic Nepalese refugees.

Nepalese activism, spearheaded by the Bhutan People's Party based in Nepal, continued through the early 1990s. It resulted in violence from both sides, and brought charges of violations of human rights against Bhutan's security forces. In 1996, "peace marches" of refugees from Nepal into Bhutan were met by force, and the marchers were deported by the Bhutanese police. The following year, the National Assembly adopted a resolution (later discarded) that prohibited family members of ethnic Nepalese refugees from holding jobs in the government or armed forces. The government also began resettling Buddhist Bhutanese from other regions of the country on land vacated by the refugees. In 1998, Foreign Minister Jigme Thinley took office with a mandate to settle the refugee issue. Although Bhutan and Nepal originally agreed in principal that the refugees be divided into four categories (1) bonafide Bhutanese; (2) Bhutanese émigrés; (3) nonBhutanese; and (4) Bhutanese who have committed crimes in Bhutan, the question of what to do with the more than 100,000 refugees living in the camps in Nepal remained unresolved.

At the 10th JMLC round of talks held in December 2000, negotiators created a Joint Verification Team (JVT) to interview and verify the status of the Bhutanese refugees, but by the 11th round of JMLC talks held in August 2001, the verification process was moving at a rate of only 10 families per day. In addition to the JMLC talks, Foreign Secretary Level talks (FSLT) were held in November 2001, at which differences between the Nepali and Bhutanese positions on the issue of categorization of the refugees were clarified: Nepal proposed to reduce the four categories to two (Bhutanese and non-Bhutanese), a plan that was rejected by Bhutan.

In October 2003, the Nepalese and Bhutanese governments agreed to repatriate approximately 70% of the refugees from the first of the seven camps to undergo the verification procedure. However, following an incident where refugees at one of the camps injured three Bhutanese inspectors, progress came to a halt in December 2004.

There have also been tensions between Bhutan and India's northeastern state of Assam. Two separatist groups from Assam—the United Liberation Front of Asom (ULFA) and the National Democratic Front of Bodoland (NDFB)—maintain well-entrenched bases in Bhutan. The separatist Kamatapur Liberation Organization (KLO) from West Bengal state is there as well. Bhutan refrained from taking direct action against the Indian separatists for fear of retaliatory attacks on its nationals, but in late December 2002, the Bhutanese government announced it would use military might to remove the separatists from bases within its borders. The Assam government has blamed Bhutan for the rise in militancy in the region, and welcomed the government's decision to launch a military response.

Reforms introduced by King Jigme Singye Wangchuck in June 1998 mark a milestone in Bhutan's political and constitutional history. Continuing his efforts toward modernization, the king issued a royal edict relinquishing some of the monarch's traditional prerogatives and giving a greater role in Bhutan's administration to elected government officials.

On 3 December 2002, the king of Bhutan issued a first draft of a constitution for Bhutan including the option of impeachment of the king by a two-thirds majority of the National Assembly. The draft was scheduled to be discussed in the country's 20 districts before presented for ratification; the final document was released in March 2005. A referendum, which had not been scheduled as of 2006, would allow the citizens final approval.

Bhutan in June 1999 took major steps toward modernization, legalizing television and the Internet. The first Internet cafe opened in Thimphu in 2000 and the country's first university opened in 2003. A January 2005 agreement with India provided Bhutan the opportunity to link to Indian railways to Southern Bhutan. There is no internal rail system in Bhutan and foreigners are not permitted to travel to many of its areas in an attempt to minimize the effects of tourism on the local culture.

GOVERNMENT

Bhutan is an absolute monarchy, ruled by a hereditary king, the "Druk Gyalpo," who governs with the aid of a Royal Cabinet and a National Assembly (the Tshogdu). As of 2006, the king was Jigme Singye Wangchuck, who has ruled since 1972. In the past, the king appointed members to a Royal Advisory Council and to a Council of Ministers. Following the political reforms of 1998, however, these two councils were combined to form the cabinet. Th is body consists of six ministers elected by the National Assembly, six advisors also elected by the National Assembly, a member nominated by the king, and two representatives of the clergy.

The unicameral National Assembly (established in 1953), known as the Tshogdu, consists of 154 members. Of these, 37 are appointed by the king to represent government and other secular interests; 105 are elected to threeyear terms by groups of village headmen, who are, in turn, elected by a onefamily, one-vote system; and the remaining 12 are chosen by the lamas acting in concert. The Tshogdu meets twice a year at Thimphu, the capital (previously known as Punakha). Candidates file their own nominations. The assembly is charged with addressing the king on matters of national importance. It also enacts laws and approves senior government appointments. A simple majority is needed to pass a measure and is conducted by secret ballot. While the king may not veto legislation, he may return bills for further consideration; the king generally has enough influence to persuade the assembly to approve legislation he considers important or to withdraw proposals which he opposes. Since 1969, it has become a more active, independent influence on government policy through its power to overrule bills proposed by the king or his advisors.

During the 1960s, King Jigme Dorji Wangchuk (r.1952–72) was a prime mover behind political and administrative changes that took the country in the direction of constitutional monarchy. When Crown Prince Jigme Singye Wangchuk assumed the throne upon his father's death in July 1972 and was crowned in June 1974, he continued his father's policy of sharing authority with the Council of Ministers and the National Assembly. In 1998, the king announced ambitious political changes that moved Bhutan further down the road towards a true constitutional monarchy. He relinquished his role as Head of Government and assigned full executive powers to a cabinet consisting of ministers and advisors to be elected by the National Assembly (in reality, the National Assembly chooses from a list of nominees proposed by the king, who also retains authority relating to security issues). The Council of Ministers, a subgroup of the cabinet, elects one of its members on a rotational basis to serve a oneyear term as chairman. It is this official who is the Head of Government. As part of his reforms, King Jigme Singye Wangchuk also introduced legislation by which any monarch would have to abdicate in favor of his hereditary successor if the National Assembly supported a vote of no-confidence against him by a two-thirds majority. And in December 2002, the king issued a draft for a first constitution for Bhutan; it was debated in the country's 20 districts before being officially presented in March 2005. As of 2006, no ratification referendum had been scheduled.

POLITICAL PARTIES

The government discourages political parties and none operate legally. Freedom of speech, the press, assembly, association and workers' rights are restricted by the government, and judicial processes are based on tradition rather than written criminal or civil procedure codes.

An opposition group known as the Bhutan State Congress (BSC) composed mainly of ethnic Nepalese has long maintained its headquarters in nearby India; other such groups, all very small and headquartered in either India or in Nepal, include the People's Forum for Democratic Rights and the Students' Union of Bhutan. A militant opposition group, operating under the banner of the Bhutan People's Party (BPP) and affiliated with the Bhutan National Democratic Party (BNDP) in Nepal, was founded in 1990 in Siliguri, India. It claims to represent the interests of the thousands of ethnic Nepalese who have migrated (or been forced to flee) from farming areas of southern Bhutan. Allegedly supported by the Communist Parties of India (CPI) and Nepal (CPN), the BPP was responsible for demonstrations in September 1990 in Bhutan; it has charged the Bhutan government with human rights violations and "ethnic cleansing" in the area.

BPP tactics in 1991 and 1992 included hit-and-run terrorist raids into Bhutan, burning schools, census and land records, and health facilities and attacking ethnic Bhutanese (as well as loyal Nepalese) in national dress; BPP activists also organized camps for the tens of thousands of refugees in southern Nepal. In 1992, Bhutan government policy toward the terrorist attacks stiffened, with arrests and long prison sentences meted out to captured BPP activists. The conflict continued throughout the 1990s. On 9 September 2001, BPP leader R. K. Budhathoki was assassinated, weakening the BPP. The BPP in October 2002 requested that Bhutanese authorities dispense justice in the case.

LOCAL GOVERNMENT

The country is divided into four regions—East, Central, West, and South—each administered by a governor appointed by the king. As of 2002 there were 20 districts (dzongkhas ) under the supervision of district commissioners (dzongdas ), who are appointed by the Royal Civil Service Commission and are responsible for law and order. Districts are further subdivided into blocks (gewog ), of which there are 202 in the country. As part of the king's efforts to encourage decentralization in decision-making, in 1991 the government began a program to establish Block Development Committees. This project allowed people to plan and implement development projects within their respective blocks (in the 1980s, a development plan was organized for the districts). The success of the district and block development programs encouraged citizens to form other types of associations, such as school management boards, village health development committees, and associations for different agricultural products, such as apples and potatoes, for example.

JUDICIAL SYSTEM

The legal system is based on English common law and Indian law. Local headmen and magistrates (thrimpon ) hear cases in the first instance. Appeals may be made to a six-member High Court (also known as the Royal Court of Justice), established in 1968. From the High Court, a final appeal may be made to the king. Judges are appointed for life by the king. Criminal matters and most civil matters are resolved by application of the 17th century legal code as revised in 1957. Precedence is not used in the delivery of justice. Questions of family law are governed by traditional Buddhist or Hindu law. Minor offenses are adjudicated by village headmen. Criminal defendants have no right to court appointment of an attorney and no right to a jury trial. Under the 1979 Police Act, police need a warrant to arrest a person and must bring the detainees before a court within 24 hours of arrest. Bhutan does not accept the compulsory jurisdiction of the International Court of Justice.

In keeping with the policies of modernization being pursued in Bhutan, the government formed a special committee in 1998 to review the country's laws and propose changes in the legal system. One of these changes saw the creation, in April 2000, of a Department of Legal Affairs to investigate and prosecute criminal and civil cases against civil servants. This department was predicted to be the likely forerunner of a fully fledged Attorney General's office or a Department of Justice. In 2001, a Civil and Criminal Procedure Code was enacted by the National Assembly, as a way of strengthening and reforming the legal system.

In addition, in 2003, the king approved the establishment of a five-member National Judicial Commission to oversee the appointment of judges and other judicial staff. The government prohibits collective bargaining, unions, and strikes. Capital punishment was abolished in 2004 and a new penal code was established in August of that same year.

Bhutan is a member of many international organizations including the United Nations.

ARMED FORCES

The armed forces consist of the Royal Bhutan Army, the National Militia, the Royal Bhutan Police, body guards, and a paramilitary force. The army is trained and equipped by India. In 2001 military expenditures were $9.3 million, or 1.9% GDP.

INTERNATIONAL COOPERATION

Bhutan became a UN member on 21 September 1971; it participates in several specialized agencies of the UN, such as the FAO, ICAO, IDA, IFAD, IMF, ITU, UNESCO, the World Bank, UNIDO, and WHO. Bhutan is an observer in the WTO. The country also belongs to the Colombo Plan, the Asian Development Bank, the SACEP, and G-77. In addition, Bhutan is a member of the Nonaligned Movement and was a founding member of the South Asian Association for Regional Cooperation (SAARC). Bhutan is part of the South Asian Free Trade Agreement (SAFTA). In February 2004, Bhutan joined the Bangladesh, Indian, Myanmar, Singapore, and Thailand Economic Cooperation Forum (BIMSTEC). In environmental cooperation, Bhutan is part of the Convention on Biological Diversity, the Kyoto Protocol, the Nuclear Test Ban Treaty, and the UN Convention on Climate Change.

ECONOMY

Bhutan, a tiny Himalayan kingdom with a geographic size that is about half that of the state of Indiana, has one of the smallest and poorest economies in the world. Nevertheless, international lending authorities such as the International Monetary Fund (IMF) were optimistic about the country's growth potential for the first decade of the 21st century. The IMF projected that GDP would grow as much as 20% in 2006/07 and that growth rates for the rest of the decade would remain at a healthy 9–10%.

About 90% of its labor force subsists by farming or forestry. Much of the country consists of rugged, mountainous terrain, which has made development of roads, utilities and other infrastructure difficult. Bhutan depends heavily on neighboring India for migrant labor, foreign aid, and trade.

Until the early 21st century, Bhutan was largely sealed off from the rest of the world. The kingdom banned television and kept foreign travel to a minimum. This situation changed after 1998, when King Jigme Singye Wangchuck, who has ruled Bhutan since 1972, began taking steps to devolve power and shift the country's governance toward one of constitutional monarchy. A new constitution was unveiled in March 2005. Although it had not been approved by referendum as of 2006, it calls for universal suffrage, a two-party electoral system, and a mandatory retirement age of 65 for the king. Many observers praise the steps as measures that will pave the way for more contact with outsiders and economic development.

As of the early 2000s, Bhutan was becoming less isolated. Foreign travelers, who are environmentally conscientious and capable of spending as much as $200 a day, can visit the country. Cable television and the Internet are permitted, and the country shows potential in hydropower and further tourism development. However, Bhutan contains to keep a tight grip on development. Any economic program is only allowed to proceed if it is in keeping with the country's environmental and social traditions.

Agriculture and forestry together make up 45% of the country's GDP. Although the government has relaxed the emphasis on maintaining food self-sufficiency that characterized its most isolationist decade, 1988 to 1998, the country supplies most of its food needs through the production of grains, fruits, some meat, and yak butter. Services, with tourist-related business comprising a major share, account for a further 35% of GDP. By the mid-1970s, tourism had surpassed the sale of postage stamps as the chief source of Bhutan's limited foreign exchange revenue. In turn, since the completion the first mega hydroelectric project in 1988, power exports have become the leading source of a more comfortable hard currency position. Industrial production makes up about 10% of the country's GDP.

A series of five-year plans, initiated in 1961 and financed primarily by India, have begun to improve transportation, modernize agriculture, and develop hydroelectric power. Realization of several hydroelectric and industrial projects during the 1980s helped increase industry's share of the GDP, and helped overall GDP grow 7.3% annually during 1985–90. A slowdown in government project investment in the early 1990s caused GDP growth to stabilize at an average of 3%, although an upturn in economic activity brought the rate back up to 6% by 1995 and to 7.3% by 1998. In 1999, real GDP growth dropped to 5.5%, but recovered to around the long-term average of 6% in 2000 and 2001. GDP was at 5.3% in 2003, according to the US Central Intelligence Agency (CIA), but the rate was projected to climb to more than 7% in 2004 and 2005 by the International Monetary Fund (IMF).

Bhutan's extensive forests, mineral resources, and swif-trunning rivers offer great potential for future development, although preservation of the country's environment continued to rank high among the government's priorities. Concern over the environment has also led the government to impose a strict set of regulations on tourists, although they are no longer subject to strict quotas that in the past held tourists to 2,500 to 4,000 a year, and banned individual tourism altogether. In 2002, tourism had climbed to about 7,000 visitors a year.

INCOME

The US Central Intelligence Agency (CIA) reports that in 2005 Bhutan's gross domestic product (GDP) was estimated at $2.9 billion. The CIA defines GDP as the value of all final goods and services produced within a nation in a given year and computed on the basis of purchasing power parity (PPP) rather than value as measured on the basis of the rate of exchange based on current dollars. The per capita GDP was estimated at $1,400. The annual growth rate of GDP was estimated at 5.3%. The average inflation rate in 2002 was 3%. It was estimated that agriculture accounted for 45% of GDP, industry 10%, and services 45%.

LABOR

About 93% of the economically active population consisted of agricultural workers in 2002, with 5% employed in services and the remaining 2% in industry and commerce. There is a severe shortage of skilled labor. The salaried labor market is predominantly in government service. Most of the industrial sector consists of home-based handicrafts and privately owned small or medium-scale factories producing consumer goods.

As of 2002, Bhutan had a government-set minimum wage of approximately $2.50 per day, which provided a decent standard of living for a family. The workday was set at eight hours per day, with one hour for lunch. In addition regular leisure days are required and overtime work is paid at a time-and-a-half rate. Although there is no minimum age for employment, the age of 18 was established "in all matters of the state." However, minors under the age of 18 frequently work in agriculture, perform chores on family farms and in shops during holidays and after school. While unions are not illegal, collective bargaining or the right to strike are not authorized by the law. Labor regulations do not provide a worker with the right to remove themselves from hazardous conditions without jeopardizing their employment. The government provides free medical care to workers and compensation in the event of partial or total disability, or in the case of death.

AGRICULTURE

Only about 3.5% of the land area, comprising 165,000 hectares (408,000 acres), was used for seasonal and permanent crop production in 2002. In 2003, agriculture contributed about 33% to GDP, and engaged 94% of the economically active population. Nonetheless, Bhutan's near self-sufficiency in food permitted quantities of some crops to be exported to India, in exchange for cereals. Since there is little level space available for cultivation, fields are generally terraced. Stone aqueducts carry irrigation water. The low-lying areas raise a surplus of rice; in 2004, output of paddy rice was estimated at 45,000 tons. Other crops include wheat, maize, millet, buckwheat, barley, potatoes, sugarcane, cardamom, walnuts, and oranges. Part of the crop yield is used in making beer and chong, a potent liquor distilled from rice, barley, and millet. Paper is made from the daphne plant, which grows wildly. Walnuts, citrus fruits, apples, and apricots are grown in government orchards.

Agricultural holdings are restricted to 12 hectares (30 acres) per family; almost all farm families own their own land. Since the mid-1960s, the government has established demonstration farms, distributed fruit plants, and implemented irrigation schemes. High-yielding varieties of rice, wheat, and corn seeds have been introduced.

ANIMAL HUSBANDRY

Yaks, cattle, and some sheep graze in the lowland forests and, during the summer, in the uplands and high valleys. In 2004 there were an estimated 372,000 head of cattle, 41,000 hogs, 20,000 sheep, and 30,000 goats. Draft animals that year included 28,000 horses, 18,200 donkeys, and 9,900 mules. Meat production in 2004 was estimated at 6,900 tons, 74% of it beef. Wool has been in short supply since its importation from Tibet was stopped by the government in 1960; sheep breeding is therefore encouraged. In 2004, 1,080 tons of cattle hides were produced.

FISHING

The government has established a hatchery and started a program of stocking Bhutan's rivers and lakes with brown trout. Freshwater fish are found in most waterways. The total catch was 300 tons in 2003.

FORESTRY

About 64% of Bhutan's land area was covered with forests in 2002. Although lack of transportation facilities has hampered forest development, timber has become a major export. Roundwood production in 2003 totaled 4.5 million cu m (160 million cu ft), about 99% of which was used for fuel.

MINING

The mineral industry of Bhutan was small and dominated by the production of cement, coal, dolomite, and limestone, and was insignificant to its economy. Estimated production totals, in metric tons, for 2004 were: limestone, 288,000; dolomite, 275,000; cement, 170,000; gypsum, 56,000; quartzite, 55,000; ferrosilicon, 20,000; and talc, 3,900. Marble and slate were quarried for use as a dimensional stone; production totals in 2004 were estimated at 4,000 and 9,000 sq m, respectively. Dolomite has constituted an important export to India since 1960, and almost all the ferrosilicon output is exported to India. For centuries, silver and iron have been mined in Bhutan for handicrafts. Deposits of beryl, copper, graphite, lead, mica, pyrite, tin, tungsten, and zinc have also been found. A graphite-processing plant was established at Paro Dzong.

ENERGY AND POWER

Electric power was introduced in Bhutan in 1962. By the mid-1980s, six hydroelectric and six diesel power stations were in operation. The 336-MW Chukha hydroelectric project, in south-western Bhutan, was completed in early 1987 and is connected to the Indian power grid; the project was funded by India, which is to receive all the electrical output not used by Bhutan. As of 2002 the major hydroelectric project under construction was the 1,020 MW Tala plant, slated for completion in 2004/05. In 2002, Bhutan's electric power generating capacity totaled 0.442 million kW, of which 0.430 million kW was hydroelectric and 0.012 million kW thermal. In that same year, Bhutan produced a total of 1.880 billion kWh of electricity from hydroelectric sources and only 0.001 billion kWh from thermal sources. In 2002, electric power consumption totaled 0.277 billion kWh. Bhutan suffers frequent power outages and shortages.

INDUSTRY

The US Central Intelligence Agency (CIA) describes Bhutan's industrial sector as "technologically backward." However, great strides have been made in the country's hydroelectricity sector in the early 21st century. Most industrial production is craft-based, with homespun textiles—woven and embroidered cottons, wools, and silks—being the most important products. Other Bhutanese handicrafts include daphne paper; swords; wooden bowls; leather objects; copper, iron, brass, bronze, and silver work; wood carvings; and splitcane basketry.

Larger development projects such as road building and hydro-electricity projects rely on financing from Indian investors, as well as Indian migrant laborers. The building of new power projects, however, also has led to growth in the transport and construction sectors, including a number of local cement operations. The country's first cement plant was completed in 1982 in Penden, a border town, by India, to which the bulk of its output is exported. Bhutan's first mega power plant, the 336-MW Chukha hydroelectricity project (CHEP), came on line in early 1987, having been first agreed to as a turnkey operation with India in 1961, on what has become a standard arrangement of 60% grant and 40% concessional loan. 70% of the power generated by the CHEP is exported to India, and by 1996 export receipts were sufficient to produce a trade surplus with India. It is estimated that only about 3% of Bhutan's hydroelectric potential has yet tapped, and even less of its industrializing potential.

The decade following the opening of the Chukha facility (1988–98) saw government resistance to industrialization. However, in 1988, in conjunction with the country's sixth economic plan (1987–1992), the Bhutan Development Finance Corporation was established to promote small-and medium-scale businesses. A second cement plant was established in Nanglam by the late 1980s, and another, in 1995, in the same town, by an Indian investor, along with several manufacturing plants producing carbide, particle board and other products destined for the Indian market.

A major project funded by India known as the 1020 MW Tala Hydroelectric Project was begun in 1998. It was expected to become fully operational in 2006, and with it, growth rates in GDP of 20% were anticipated. Plans for the even more ambitious Sunkosh Multipurpose Project (SMP), with installed capacity envisioned at 4,060 MW, were developed by the India's Central Water Commission in 1997. It is expected to take 10 years to complete. Two other projects that have been submitted to government of India for consideration are a 360 MW plant at Mangdue Chu and a 870 MW plant at Puna Tsangchhu.

There are a large number of small, privately owned sawmills throughout Bhutan since most of its domestic energy actually comes from firewood, not electricity. A sawmill with a furniture-making unit has been established in Thimphu. Industrial estates have been set up at Phuntsholing and Geylegphug, and the ninth five-year plan (2002–06) called for five to be located around the country.

Besides cement, there is a narrow range of other manufactures exported—ferro-alloys, calcium carbide, processed foods, and particleboard—which tend to rely on energy-and capital-intensive methods and expatriate labor. Bhutan Ferro Alloys Ltd., which makes ferrosilicon and exports to India and Japan, began operations at a new plant at Pasakha in April 1995. Calcium carbide is produced at several private dolomite-mining operations, as well a private and joint public-private limestone mining operations. It is likely that with the emphases in the ninth five-year plan on commercial and private sector development as means of achieving economic self-sufficiency and generating employment, manufacturing will continue to grow.

SCIENCE AND TECHNOLOGY

Royal Bhutan Polytechnic College, founded in 1974 in Deothang, offers courses in civil, mechanical and electrical engineering. The Royal Technical Institute in Phuntsholing offers courses in electronics, mechanics, and motor mechanics. Sherubtse Degree College, founded in 1983 in Tashigang, offers science courses.

DOMESTIC TRADE

About 90% of the population is employed in agriculture. Home-made handicrafts, cement, and food processing are the primary industries. Retail sales are carried out mainly in small, local bazaars. Bartering is common at the local level, with grains, butter, and cloth being the principal commodities of exchange, although Indian and Bhutanese currencies are increasingly being employed.

Indian traders sell imported articles and buy a number of handicraft items for export to India. The ninth five-year plan (2002–06) for the first time envisions plans for each of Bhutan's 201 localities or geogs. Through this approach, the government hoped to enhance rural connectivity and economic activity while putting a check on rural to urban movement.

FOREIGN TRADE

Bhutan's external sector has been almost exclusively oriented toward trade with India. With the completion in 2002 of the second hydroelectric power project financed by India—built largely with Indian migrant labor and designed to deliver the majority of its power outputs to India—India's dominance in terms of exports was about 85.6% in 2004. Import sources, however, have become increasingly diversified. In 2000, for instance, the main export destinations were India (94%) and Bangladesh, and the main import sources were India (77%), Japan, United Kingdom, Germany, and the United States. By 2004, the statistics on exports destinations revealed shifts, to India (85.6%), Bangladesh (6.7%), and Japan (4.3%). Imports that year came from Germany (41.8%), India (35.5%), Japan (9.2%), and Austria (4.3%).

Bhutan's merchandise trade balance has been persistently negative, although for three years, 1996, 1997, and 1998, the country registered a surplus in its trade with India due to the combination of power exports and the lack, until 1998, of major construction projects. With the start of construction on the Tala Hydroelectric

Project (THEP) in 1998, scheduled to be online with a 1020 MW capacity in 2006, Bhutan has incurred large and increasing trade deficits. As a percent of GDP, Bhutan's trade deficit increased from a low of 4.3% in 1996 to 40% by mid-2000 and 90% in 2004. The 2004 trade deficit was estimated at $188 million for 2004/05 by the IMF, with $123 million project for 2005/06.

Bhutan's principal exports include electric power (to India), cement, cardamom, timber, gypsum, dolomite, coal, handicrafts, fruit, vegetables, precious stones, spices, ferrosilicon, calcium carbide, particle board, some preserved food, alcoholic beverages, yak tails for fly whisks, and yak hair. The country's principal imports are fuel and lubricants, grain, machinery and parts, vehicles, fabrics, and rice.

The government has been trying to increase Bhutan's presence on the international trade scene in recent years. To this end, Bhutan joined the IFC in December 2003, the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) in February 2004 and held its first WTO working party meeting in November 2004. The IMF also noted that the financial sector was being upgraded through a series of measures in mid-2005.

BALANCE OF PAYMENTS

The IMF reported in 2005 that while steady inflows of aid helped Bhutan maintain a surplus in balance of payments. Although a trade deficit persists, the IMF calls the country's fiscal position "sustainable."

Foreign reserves grew in 2004 and 2005, and covered more than 18 months of import costs as of mid-2005.

The IMF reported that in 2003/04, Bhutan's exports totaled $158 million, while imports totaled $245 million, resulting in a trade deficit of $73 million. Imports were projected to outpace exports in 2004/05 and 2005/06, as Bhutan brought in equipment and additional supplies in efforts to bring the Tala power plant on line by 2006.

BANKING AND SECURITIES

Bhutan's central bank is the Royal Monetary Authority, established in 1982 to manage currency and foreign exchange. There are in addition four other major financial institutions. The Bank of Bhutan was founded in 1968 as a joint venture with India. A second commercial bank, the Bhutan National Bank (BNB), was established in 1997 as a public corporation, though the government retains 51%. The BNB's operations are computerized and it is connected with major foreign banks, unlike the Bank of Bhutan, which still uses handwritten ledgers. The Bhutan Development Finance Corporation (BDFC) was set up in 1988 to finance small and medium enterprises. The small Royal Bhutan Stock Exchange (RBSE) currently trades about 13 companies.

In 2001 there was a reduction of interest rates in all lending categories and on large deposits. There are no ATMs, and banking hours are mostly restricted to 9 am to 1 pm Monday to Friday, and 9 am to 11 am on Saturday, but there are some "evening banks" in Thimphu and Phuentsholing with hours between 1 to 5 pm Wednesday and Sunday, 1 to 3 pm on Monday, and closed on Tuesday. Gross foreign currency reserves reached $300 million in 2001. The International Monetary Fund reports that in 2001, currency and demand deposits—an aggregate commonly known as M1—were equal to $107.2 million. In that same year, M2—an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual funds—was $227.1 million.

INSURANCE

The Royal Insurance Corporation of Bhutan (RICB), founded by royal charter in January 1975, is the only insurance company in the kingdom and covers all classes of insurance. The government owns 39.25% while private and public shareholders own 60.25%. The RICB's 2000 shareholder are comprised primarily of civil servants and members of the business community. The Royal Insurance Corporation of Bhutan has reinsurance arrangements with ten companies in India, Japan, Thailand, Hong Kong, Nepal, Bangladesh, and Germany.

The use of insurance, however, is limited. In 2001, there were 15,259 policy holders of general insurance, and only 4,650 holders of life insurance, the latter figure up from 114 in 1975. Within the terms of its own business, the RICB has had a steady growth in profit and assets over its 27 years of operation, but it also manages, under a Memorandum of Understanding (MOU) with the government, the rural house insurance scheme which it operates as a social welfare program in accordance with the terms of the MOU. In 2001, the rural house insurance scheme covered 31,172 permanent rural houses and 21,407 semipermanent houses for fire, earthquake, flood, landslide, and storm, all of which are common events in Bhutan. The scheme was revised in January 2000 to give compensation of n100,000 (about us$2,150) for a permanent house with an annual premium of n150 (about us$3.23), and n40,000 (about us$860) for a semipermanent house with an annual premium of n60 (about us$1.30). Claims have increased considerably since the revision. In 1999, under the previously less generous scheme, claims were n2.425 million (about us$52,000) against premiums of n1.77 million (about us$25,312), where as by 2001 claims had risen to n11.292 million (about us$243,000) against premiums of n5.98 million (about us$128,000). The ratio of claims to premiums improved somewhat, from 2:1 in 1999 to 1.89:1 in 2001.

PUBLIC FINANCE

The largest category of annual current expenditure is public works, which presumably includes the maintenance of monasteries. Most of the annual budget deficit is covered by grants from India and from the UN and other international agencies. By 1996, Bhutan had achieved self-sufficiency in current expenses, thanks primarily to revenues from the Chhukha power project, Bhutan's largest hydro-electric plant.

The US Central Intelligence Agency (CIA) estimated that in FY95/96 Bhutan's central government took in revenues of approximately $146 million and had expenditures of $152 million. Revenues minus expenditures totaled approximately -$6 million. Total external debt was $245 million.

The International Monetary Fund (IMF) reported that in 2004, the most recent year for which it had data, central government revenues were n10,158.3 million and expenditures were n11,274.8 million. The value of revenues was us$224 million and expenditures us$249 million, based on an official exchange rate for 2004 of us$1 = n45.317 as reported by the IMF. Government outlays by function were as follows: general public services, 25.2%; public

order and safety, 4.8%; economic affairs, 33.8%; housing and community amenities, 6.8%; health, 10.8%; recreation, culture, and religion, 1.6%; and education, 17.0%.

TAXATION

The corporate income tax (CIT), excises taxes, taxes on real estate income, and nontax revenues (particularly power tariffs on the export of electricity to India) were the main sources of domestic revenue in 2001. The power tariff, at Bhutan's insistence, was doubled to r1 (about $0.028) per unit on 1 April 1997, and then raised 50% to r1.5 (about $0.034) per unit 1 July 1999. The business income tax (BIT) accounted for only about 5% of revenue in 2001 because of the weakness of the private sector. In January 2003, the government introduced a personal income tax (PIT) for individuals with taxable incomes above n100,000. The PIT is expected to raise only n110 million (or about 1%) of the 2001–03 budget of n11,184.6, but at this stage the government considers the social benefits of the PIT—reducing income disparities and instilling a sense of responsibility—to be more important than its revenue contribution. In July 2002, the government launched the Pension and Provident Fund Plan, a scheme converting the social security system to a pension plan to provide retirement benefits for civil servants, corporate employees, and the armed forces

External assistance continued to provide the bulk of Bhutan's development budget, but since 1996 domestic revenues have covered current expenses. In 2001, domestic revenues also covered a portion of the capital budget. A major goal of the ninth five-year plan (2002–06) is the increase of domestic revenue through taxes. In 2002–03, it is projected that for the first time tax revenues will exceed nontax revenues. Tax revenues are expected to come to 12% of GDP and nontax revenues to 8% of GDP.

CUSTOMS AND DUTIES

Under the Indo-Bhutanese Treaty of 1949, goods pass from one country to another without payment of customs duties. Bhutan currently has observer status with the World Trade Organization (WTO). In 1999, the WTO accepted Bhutan's application for accession. However, as of December 2002, Bhutan had not provided the WTO with the required memorandum on its foreign trade regime, the next step in the process of negotiating an accession. In 2002, the government identified a site in Phuentsholing for the construction of a dry port to expedite export and import formalities and revised some of its more restrictive import rules.

FOREIGN INVESTMENT

The CIA notes that Bhutan's isolationism hampers foreign investment. The kingdom's policies on industrial licensing, trade, labor, and finance are often overly detailed and subject to change.

Foreign investment comes primarily from India, and is carried out within the context of Bhutan's special relationship with India. Bhutan's first two five-year plans in the 1960s were 100% financed by India. Since then, Bhutan has relied on an increasingly diverse set of countries—Australia, Austria, Finland, Denmark, Japan, the Netherlands, Norway, Canada, Switzerland, Germany, Italy, New Zealand, Italy, New Zealand, Sweden, South Korea, South Korea, the United Kingdom, and the United States—and multilateral institutions—the United Nations (UN), the World Bank, and the Asian Development Bank (ADB)—to provide capital on a concessional basis, though India remains the dominant source.

On private foreign investment, the government's stance is that foreign direct investment (FDI) it is becoming increasingly necessary to meet the country's employment and self-sufficiency goals. FDI is now permitted in certain sectors, including tourism where joint ventures with international hotel and resort chains are being pursued.

ECONOMIC DEVELOPMENT

One of Bhutan's greatest challenges will be creating jobs for its growing population of youths. Much of the educated workforce has been employed traditionally by the public sector; however, the IMF encourages the nation to encourage more private-sector development to avoid the potential of unemployment. Progress in this respect, however, may be slow. Bhutan lacks railroads, helicopters, domestic airlines, and modern conveniences like automated teller machines. What hydroelectricity it produces is mainly for export. In addition, Bhutan embarked on its ninth five-year plan in 2002 with a goal of seeking "gross national happiness," not gross national income, and while this strategy is in keeping with the country's Buddhist traditions, it does risk an economic crisis down the road. Bhutan's leaders remain cautious about future development; they have emphasized a maintenance of culture and protection of environment over modernization.

Bhutan also faces a public debt that was nearly as large as its entire GDP in late 2004/5. Much of the debt resulted from investments in hydropower, and is expected to be paid off through revenue that will come from exporting electricity to India.

Despite Bhutan's growth in the early 21st century, poverty in the country remains high. The nation conducted its first Poverty Analysis Report in 2004, and found that 32% of its population was living below the poverty line, which the IMF has tagged as a concern. Many of those who fall below the poverty line are residents of Bhutan but, because they are not ethnic Bhutanese, are not recognized as citizens of the kingdom. More than two-thirds of the population lacks electricity, though a rural electrification effort was scheduled to bring electricity to the full country by 2020.

Structural reforms since 1998 showed promise of further moving Bhutan into a more modernized economy. The ninth fiscal year plan (2002–06) promised a continuation of the same moderate progress, with more intensive rural development. The prospect was for Bhutan to continue to proceed at its own restrained pace.

SOCIAL DEVELOPMENT

There is no national social welfare system, although the government implemented a modest maternal and child welfare program in the early 1980s, including family planning. The sick, indigent, and aged are cared for within the traditional family structure.

Bhutan's culture does not isolate or disenfranchise women. Dowry is not practiced, and land is divided equally between sons and daughters. Girls receive nearly equal educational opportunities, and, while accorded a lower status than boys, they are cherished because they are the ones who care for parents in old age. As of 2004 women made up approximately 30% of the workforce. Polygamy is legal, but only with the consent of the first wife. The law clarifies the definition of sexual assault and imposes harsh penalties. There is no societal pattern of spousal or child abuse.

A pattern of discrimination against the minority Hindus of Nepalese origin exists. Nepali is no longer taught in schools, and national dress is required for official occasions. While this policy has lead to the cultural repression of Hindus, it has also contributed to a growing number of Nepalese obtaining employment in the public sector and in government.

Although there were some improvements in 2004, human rights are restricted by the government. The king exercises control over the government, security forces, and the judiciary. Abuses include violence against Nepalese refugees and arbitrary arrest and detention.

HEALTH

Bhutan suffers from a shortage of medical personnel with only 65% of the population having access to any form of medical care. In 2004, there were an estimated 5 physicians, 23 nurses, and 56 midwives per 100,000 people.

The average life expectancy in 2005 was only 52.7 years. The infant mortality rate was 100 per 1,000 live births for that year. Approximately 38% of children under five were underweight. It was estimated that 2% of married women (15–49 years) were using contraception. The fertility rate was reported as 5.2 per woman in 1999.

Immunization rates for children up to one year old were: tuberculosis, 81%; diphtheria, pertussis, and tetanus, 79%; polio, 77%; and measles, 82%. Although smallpox has been wiped out, malaria, tuberculosis, and venereal disease remained widespread. Bhutanese refugees in the eastern Nepal region have high rates of measles, cholera, tuberculosis, malaria, diarrhea, beriberi, and scurvy. The HIV/AIDS prevalence was 0.10 per 100 adults in 2003. As of 2004, there were approximately 100 people living with HIV/AIDS in the country.

HOUSING

Though a small number of urban settlements have been developed over the past few years, most of the population (80%, 2001 est.) lives in rural areas, many on small family farms. It is, however, expected that the urban population will grow by about 50% over the next two decades, an estimate that has the Beninese government taking a harder look at options for new and improved housing construction and utility services. As of 2002, the housing shortage has been most serious in urban areas, where most housing is rental property. It was estimated that in Thimphu alone, 600 new dwellings would need to built each year in order to keep up with rapid population growth. In 2002, about 10% of the residents of Thimphu were living in hut villages and squatter settlements.

The Municipal Act of 1999 was established to decentralize control of housing and utilities, resulting in greater service and improved plans for the future. As part of the government's socio-economic development policy, all homeowners are eligible for assistance through subsidized timber purchases and group fire insurance. The government has also established the National Committee on Human Settlements to oversee projects for urban development.

Traditional houses are built of stone set in clay mixed with small stones and made into blocks or layers. Roofs are gently inclined and formed of pine shingles kept in place by heavy stones. As of 2000, 80% of urban and 60% of rural dwellers had access to improved water supplies, while 65% of urban and 70% of rural dwellers had access to sanitation services.

EDUCATION

A modern educational system was introduced in Bhutan in the 1960s. Prior to that, education was provided only by monasteries. In the interim, more than 340 schools and institutions of higher education have been established, including over 150 community schools to serve remote rural areas. However, many of these schools have no sanitation facilities, electricity, or drinking water, and students may have to walk several hours a day to get to them. A growing number of children are attending school, but over 50% still do not attend.

Primary schooling covers a seven-year course of study followed by two years of junior high. This is followed by either a general secondary program (four years of high school) or a technical course of study (three years at a technical center). In 2001, about 88,000 students were enrolled in primary schools and 26,000 were enrolled in secondary schools. The student-to-teacher ratio for primary school was at about 38:1 in 2003; the ratio for secondary school was about 34:1. Efforts have been made to improve the education of women, and girls account for 45% of primary school enrollment. However, the overall literacy rate for women is still very low and lags far behind that for men.

Bhutan's estimated rate of adult illiteracy for the year 2000 stood at 52.7% (males, 38.9%; females, 66.4%). The official language is Dzongkha (written in the Tibetan script). However, English is widely used.

In 1991, Bhutan had 209 schools altogether, including 22 monastic schools, schools for Tibetan refugees, and six technical schools. There was at the highest-level one junior college, two teacher training colleges, and one degree college which was affiliated to the university at Delhi in India. Many teachers from India are employed in Bhutan.

LIBRARIES AND MUSEUMS

The largest library in Bhutan is the National Library at Thimphu. This library boast of having one of the largest collections of Mahayana Buddhist literature in the world and also features a collection of over 10,000 xylographic or wood block prints. Jigme Dorji Wangchuck Public Library in Thimphu was the only public library in the country in 2005. Most of this library's 15,000-book collection consists of donated books from countries such as the United States. The vast majority of the books are in English. Located in Konglung, Sherbutse College Library holds 22,000 volumes. The National Institute of Education in Samtse, founded in 1968, holds 12,000 volumes, and the Royal Institute of Management in Thimphu holds 5,000 volumes. The Center for Bhutan Studies Library in Langjophakha has about 2,470 books. The India House Library contains about 7,000 volumes.

The National Museum of Bhutan opened to the public in 1968 at Paro Dzong, in a seven-story 17th-century fortress, featuring religious art objects reflective of Bhutan's unique Northern Buddhist culture, as well as historical objects. Some monasteries have valuable collections of Buddhist manuscripts and art objects.

MEDIA

International postal service was inaugurated in 1963; there are direct postal, telex, and microwave links to India. Telephone service is said to be very poor. In 2003, there were 25,200 mainline phones in use throughout the country. In 2005, there were an estimated 22,000 mobile phones in use.

In 2005, there was only one radio station, operated by the government-owned Bhutan Broadcasting Service (BBS). It includes broadcasts in Dzongkha, Nepali, English, and Sharchop. From 1989 to 1999, the government had imposed a ban on private television reception. Television broadcasting was reintroduced to the country in 1999. The same year, the government allowed for the licensing of cable companies. In there were three main television stations, one sponsored by BBS and two cable stations. In 2004, there were about 15,000 cable subscribers. Druknet, the nation's first Internet service provider was also established in 1999. By the end of 2003, there were about 15,000 subscribers, including Internet cafés in three major cities. In 1997, the country had an estimated 11 radios per 1,000 population.

A weekly government-subsidized newspaper, Kuensel, publishes simultaneous editions in Dzongkha, English, and Nepali, with a total circulation of about 15,000 as of 2004. This is the nation's only regularly published newspaper. Indian and other foreign publications are also available.

There are no legal provisions for the right of free expression in Bhutan; the government is said to restrict criticism of the King and government policies of the National Assembly.

ORGANIZATIONS

The Bhutan Chamber of Commerce and Industry is in Thimphu.

There are about 125 youth organizations throughout the country, which are affiliated through the Bhutan Youth Welfare Association (BYWA), established in 1985. The objectives of the BYWA are to preserve and promote the cultural and religious heritage of Bhutan and its national integration through the representation of youth to governmental authorities. Youth groups include Youths and Students Alliance for Human Rights and Democracy in Bhutan (YSAHRDB) and the Youth Organization of Bhutan, both of which focus on interests of peace and human rights. Scouting programs are available through Bhutan Scout Tshogpa. There are also sports associations representing several different pastimes, including tennis, tae kwan do, badminton, and track and field.

The National Women's Association of Bhutan is one of the few nongovernmental organizations officially registered in Bhutan. Other women's organizations, such as Bhutan Women and Children Organization and Refugee Women and Children Welfare Society have formed in exile. All of these are focused on the promotion human rights.

TOURISM, TRAVEL, AND RECREATION

In 1974, Bhutan opened its door to tourists, but strict entry regulations, the remoteness of the country, and relatively limited transportation facilities have restricted the number of visitors. Tourists may only enter as a member of an established tour group. An approved visa along with a valid passport is required of all visitors to enter Bhutan. The beautiful Thimphu, Paro, and Punakha valleys, with their many monasteries, are accessible to tourists. Visitors may also enjoy the intricate weavings found in high eastern mountain regions; kayaking down the Mochhu; or the archery competitions held during festivals.

In 2003, there were 6,266 foreign visitors, including over 2,500 visitors from Europe. There were 1,239 hotel rooms with 2,366 beds, and an occupancy rate of 25%. Travelers stayed an average of eight nights.

In 2004, the US Department of State estimated the cost of staying in Bhutan at $96.

FAMOUS BHUTANESE

Jigme Dorji Wangchuk (1928–72) instituted numerous social reforms during his reign as king of Bhutan. He was succeeded by his son Jigme Singye Wangchuk (b.1955).

DEPENDENCIES

Bhutan has no territories or colonies.

BIBLIOGRAPHY

Basu, Gautam Kumar. Bhutan: The Political Economy of Development. New Delhi: South Asian Publishers, 1996.

Berthold, John. Bhutan: Land of the Th under Dragon. Boston: Wisdom Publications, 2005.

Bhutan: Aspects of Culture and Development. Gartmore, Scotland: Kiscadale, 1994.

Bhutan: Perspectives on Conflict and Dissent. Gartmore, Scotland: Kiscadale, 1994.

Cooper, Robert. Bhutan. New York: Marshall Cavendish, 2001.

Das, B. S. Mission to Bhutan: A Nation in Transition. New Delhi: Vikas Pub. House, 1995.

Dhakal, D. N. S. Bhutan: A Movement in Exile. Jaipur: Nirala Publications, 1994.

Fraser, Neil. Geography of a Himalayan Kingdom: Bhutan. New Delhi: Concept Publishing, 2001.

Hellum, A. K. A Painter's Year in the Forests of Bhutan. Edmonton: University of Alberta Press, 2001.

Johnson, Gordon. Cultural Atlas of India: India, Pakistan, Nepal, Bhutan, Bangladesh and Sri Lanka. New York: Facts on File, 1996.

BHUTAN

Kingdom of Bhutan

Druk-Yul

COUNTRY OVERVIEW

LOCATION AND SIZE.

A landlocked country located in South Asia, north of India and south of China, Bhutan has an area of 47,000 square kilometers (18,1467 square miles). Comparatively, the area occupied by Bhutan is about half the size of Indiana. Bhutan's capital city, Thimpu, is centrally located towards the country's western border with India. Bhutan shares a 605-kilometer (376-mile) border with India and a 470-kilometer (292-mile) border with China.

POPULATION.

In 2000 the population of Bhutan was estimated at 2,005,222 by the CIA World Factbook. The UN Statistical Yearbook gave the population as 1,034,774. Giving a third figure, the World Bank World Development Report 2000/1 estimated the population at 782,000. The disparity between population estimates is caused by 2 different ways of counting people: the government of Bhutan's population estimate, the World Bank figure, is based upon those who have "official" citizenship, and the CIA estimate seems to account for those who claim such status or live in the country and may not be recognized by the government. Uncertainty in population figures is also connected to Bhutan's ongoing problem with the Lhotshampa people (Bhutanese of Nepalese origin), who have lost their citizenship or are simply not recognized due to a series of nationality-specific laws enacted in the 1980s. The government claims that a large number of the Lhotshampa are illegal immigrants who threaten the cohesion of traditional Bhutanese society, while the Lhotshampa argue that they are rightful citizens. Another problem with such estimates is the limited number of statistical gathering mechanisms in Bhutan, partly due to the country's limited financial resources and infrastructure . As a result, statistical indicators such as gross domestic product (GDP) or the quantity of telephones per capita are difficult to estimate. Clearly, the formulation of statistical averages depends upon which population estimate is used. To encourage comparative consistency, this entry indicates what population estimates are used to express particular statistical data.

In 2000 the birth rate stood at 36.22 per 1,000, while the death rate was 14.32 per 1,000. The overall population density is very low at 12.5 people per square kilometer, but this figure does not take account for the fact that, with 92.9 percent of the population living in rural areas, access to arable land is primary in any estimate of population density. Therefore, if the ratio of population to arable land is taken into account then density rises to 100 people per square kilometer. Bhutan has a very young population with almost 50 percent aged 17 years or younger. Given the continuation of Bhutan's current annual population growth of 2.19 percent, the United Nations Development Programme (UNDP) in Bhutan projects that there will be 3.64 million people living in Bhutan by 2025, from a 1998 level of 1.91 million. The UNDP also estimates that 31,000 people live in Thimpu city (the capital and administrative center) and another 25,000 in Phuentsholing (the primary commercial center on the Indo-Bhutanese border).

OVERVIEW OF ECONOMY

In 2001 Bhutan's economy remained one of the smallest and least developed in the world, almost entirely dependent upon basic agricultural production, forestry, and hydroelectricity. In 2000 rural inhabitants constituted 92.9 percent of the total population, a slight decline from the 1990 level of 94.8 percent. A large majority of agricultural activity is subsistence-based and takes place outside of the monetized economy . In other words, subsistence farmers do not use the ngultrum (the national currency) in their day-to-day lives; they trade and barter goods for the few basic manufactured essentials that they might need. However, in 2000 the government cited indications that the monetized economy was experiencing substantial growth.

Bhutan is a very poor country with a GDP per capita of only US$197 (based upon a population of 1.03 million), although it is important to note that because the majority of subsistence farmers are outside of the monetized economy this figure is not an adequate representation of actual living standards.

After the serious attacks upon Buddhism in Tibet by the communist government in China during the late 1950s, Bhutan began to develop more links with India in order to counter the possibility of a similar fate. In 1960, Bhutan closed its borders with Tibet and, with considerable Indian financial and technical assistance, began to construct roads to link India with Bhutan. This action constituted a key turning point for Bhutan's economic development, and by 2001 the national economy was highly dependent upon Indian trade, aid, and investment.

It must be stressed that the government emphasizes the concept of "Gross National Happiness" (GNH) as an essential indicator and factor in Bhutan's development, a very specific approach to developmental ideology. The GNH idea stresses the importance of cultural heritage, the stability and protection of the natural environment, greater self-sufficiency, and human development. This approach, with its roots in the traditional Buddhist principles of compassion, compromise, and pragmatism, is in direct contrast to the globally dominant view of the primacy of economic and material development. As the government maintains in a policy document for the UNDP in 2000 that GNH "means that development is only valuable if it is an 'efficient means' to happiness and human development."

National debt in Bhutan is relatively stable and controllable in amount. The government has actually been able to reduce total public sector debt from US$139.5 million in 1993-94 to US$115.8 million by 1997-98. Consequently, over the same period debt service payments declined from US$17.6 million to US$9.6 million. Official development assistance from both individual governments and international financial institutions in 1997 consisted of US$59.9 million in grants and US$10.1 million in loans. The Asian Development Bank (ADB) made 2 loans to Bhutan in 2000. The first, of US$10 million, was to assist Bhutan in setting out a health reform program, The Bhutan Health Trust Fund, which has the aim of maintaining the free supply of medicines to the public. The second, of US$9.6 million, was for the regeneration of the country's primary road, the east-west highway. The ADB had made another loan of US$10 million in 1999 for a Sustainable Rural Electrification Project to provide electricity to the poorer and more remote areas of Bhutan.

POLITICS, GOVERNMENT, AND TAXATION

Bhutan is the world's only Buddhist kingdom. The Bhutanese name for their country is Druk Yul which means "Land of the Thunder Dragon." Ruled by a hereditary monarchy since 1907, Bhutan received full independence from India in 1949 after the British colonial administration withdrew from India. Bhutan's political system is unlike historical precedents in the West and is most appropriately categorized as a "Buddhist monarchy."

The third hereditary monarch, Jigme Dorji Wang-chuck, ruled Bhutan from 1952 to 1972. He is generally considered the "architect of modern Bhutan." In 1953 he established the National Assembly. Consisting of representatives of the people, the civil service, and the Buddhist monastic order, the National Assembly meets once a year to debate aspects of public policy and development. The Royal Advisory Council was formed by the king in 1965 to constantly monitor the progress of National Assembly resolutions and advise the king on dayto-day policy matters.

In a similar vein, his son King Jigme Singye Wangchuk (who acceded to the throne in 1972 and continued to reign in mid-2001) has also followed a reformist approach to rule. In 1999 an analyst of Bhutanese affairs, Thierry Mathou, maintained: "Many Bhutanese . . . were stunned by the suddenness and amplitude of the changes introduced by the king. . . . [c]ontrary to most countries with monarchies where royals have resisted democratic politics, Bhutan's has always been the leading force of change." For example, in 1998 the king pushed a political reform that reduced his authority through the devolution of executive powers to the cabinet. Nonetheless, the king continued to have final say on matters relating to security and sovereignty as well direct administration of the Royal Bhutan Army.

Even though Bhutan's governmental system of monarchy is justified on the grounds of maintaining traditional values and national identity by the country's ruling elite, it has received considerable criticism both domestically and internationally. For example, Freedom House (a U.S.-based political liberties and civil rights organization) classified Bhutan in 2000 as "Not Free." Freedom House measured this conclusion upon the lack of democratic representation of the people and the apparent mistreatment of critics of the regime. In its report for 2000, Amnesty International (a London-based human rights organization) maintained that individuals in Nepali-speaking communities faced police discrimination when they attempted to get permission to open a bank account, when attempting to travel abroad for training, for work, or to send their children to school.

In fact, discrimination against Lhotshampa is rife. A series of laws passed in the 1980s revealed tough remits for the acquisition of citizenship, even if an individual were married to a Bhutanese national, and the fact that naturalized citizenship can be terminated if a person criticizes the government. Still, there is some justification for this policy because militant Lhotshampa movements have called for a merging of Bhutan into a greater Nepal. Some of these militants, whom the government calls "anti-nationals," have been involved in campaigns of violence and have done damage to some infrastructure and development projects.

Nationalism and tradition are actively promoted in Bhutan. In part due to the economic and military-political weakness of the country in international relations and also due to the perceived threat from the Lhotshampa community's tendency to reduce Bhutanese identity, the government emphasizes rules of national dress, the code of etiquette (driglam namzha), and the national language (Dzongkha).

A serious ongoing security problem for the government is the presence of the communist guerrilla group, the United Liberation Front of Assam (ULFA) and the Assamese (Bodo) guerrilla insurgency in east and south Bhutan. These groups are fighting for independence for Assam. Although there has been vocal engagement between the ULFA and the Bhutanese government, a solution to their presence has yet to be reached. The existence of these anti-Indian government forces on Bhutanese territory could led to a deterioration in the special friendship between India and Bhutan.

Non-tax revenue constituted 61 percent of total revenue in 1998-99. The Chukha Hydro Power Corporation, the Department of Power, and the Department of Telecommunications are some of the key sources of this revenue. Government revenue from the power sector provided 42 percent of total national revenue in 1998-99. Direct tax collection improved in the late 1990s from Nu831 million in 1997-98 to Nu914 million in 1998-99. Of this direct tax 65 percent was from corporate income tax . Taxation on rural areas is very low, around 0.02 percent of total revenue in 1998-99, in order to encourage the population to remain on their farms and thus reduce the strain of uncontrolled urbanization. However, it should be noted that rural inhabitants contribute via the application of their labor to the construction and maintenance of local schools, water supplies, and health centers.

INFRASTRUCTURE, POWER, AND COMMUNICATIONS

Bhutan's infrastructure is limited although the government is actively attempting to open the more isolated areas of the country by improving the road network. Around 14,000 passenger vehicles were in use on Bhutan's 3,285 kilometers (2,041 miles) of roads in 1999. In 1997 the Road Surface Transport Authority was established to improve the efficiency and quality of the road infrastructure and to enforce the observation of transport regulations. There are no railways in Bhutan. In accordance with the government policy of allowing a restricted opening-up of Bhutan for both citizens and foreigners, total passengers on scheduled flights rose from 8,000 in

1990 to 36,000 in 1997. The national airline, Druk Air, owns 2 planes which fly to and from Paro International Airport which opened a new terminal building in the late 1990s. Bhutan is landlocked; the nearest seaport is 435 miles away in Calcutta.

Electricity, gas, and water provided 11.8 percent of value-added activity to the economy in 1997. In 2000, Bhutan's electricity-generating capacity was 3530 megawatts, 97 percent of which is hydro power and the rest thermal. The central role of electricity production to Bhutan's economy is likely to expand in the early 21st century. New large-scale hydro power stations were under construction by 2001 which are expected to provide considerable government revenue. However, over 95 percent of domestic energy consumption in Bhutan consists of biological mass, predominantly firewood.

Bhutan was cut off from the outside world for centuries. Television only began to be provided by the state-run Bhutan Broadcasting Service (BBS) Corporation in 1999 and was limited to a small number of hours a day of programming (consisting solely of national news and documentaries about Bhutan). Nonetheless, (based upon a population of 1.03 million) there were already 5.5 televisions per 1,000 population in 1997, which by 2000 received 25 channels from 2 cable television companies. By 1997, there were 19 radios per 1,000 inhabitants. According to UN estimates there is only 1 telephone per 100 inhabitants. In 1999, a Japanese-funded project to provide domestic digital telecommunications was completed. The Internet became operational in Bhutan in 1999.

ECONOMIC SECTORS

Bhutan's economic sectors are small like the country; the country has limited population, domestic markets, and natural resources. Geographical isolation caused by highly mountainous terrain and political isolation due to a formerly inward-looking society means that the economy's integration into the world economy is minimum. Isolation in combination with previously low levels of education means that a medium and large-scale private sector is almost non-existent. The majority of the monetized economy is dominated by parastatals .

Bhutan's economy is primarily agricultural, mostly subsistence farming, although some export-oriented commercial farming of fruit and spices does exist. Industry is limited to the production of hydro power and basic manufactures. Services to support these sectors are basic. Tourism, whilst small in size, provides a high proportion of the country's foreign exchange.

AGRICULTURE

The agricultural sector provided 38.5 percent of GDP in 1997, a significant decline from the 55 percent in 1985. The 1997 GDP consisted of a total production of 18.1 percent crops, 11.4 percent of economic activity in the forestry sector, and 9 percent livestock production. Of the 970,000 people who were employed in Bhutan in 1998 (using a population estimate of 2 million) 93.8 percent were engaged in agricultural activities. There were 160,000 hectares of arable land under permanent crops in 1998, compared to the 1980 level of 122,000. In 1998 only 40,000 hectares of this land was irrigated, an improvement upon the 1980 level of 26,000 hectares.

Cereal production increased from 95,000 metric tons in 1989 to a consistent level of 112,000 tons per annum in the period 1995 to 1998. While self-sufficient in maize, barley, millet, and buckwheat, Bhutan is only 50 percent self-sufficient in rice and 30 percent in wheat. In total the country is around 60 percent self-sufficient in cereals. Other key crops which are actually exported are potatoes, spices (mainly cardamom and nutmeg), and fruit which in 1997 consisted mainly of oranges (54,000 metric tons) and apples (13,600 metric tons). In total, agricultural goods provided 13.7 percent of Bhutan's total exports in 1997.

Bhutan continues to import substantial amounts of essential food items. The Food Corporation of Bhutan imports subsidized food items from India, among which are rice, wheat, edible oils, sugar, and salt. Between 1994-98 an annual average of 12,500 metric tons of rice, 12,500 tons of wheat, and 3,600 tons of sugar were imported. It is important to note that 58 percent of farming households own less than 2 hectares. This small level of landholding makes some households susceptible to seasonal shortages of food, to poor health, and even to malnutrition.

FORESTRY.

The government is actively trying to maintain the economic exploitation of Bhutan's extensive forestry resources at sustainable levels. In keeping with the GNH concept, plans by the Forest Services Division of the Ministry of Agriculture for improved harvesting of forests are being undertaken to assure environmental balance. For example, 60 percent of Bhutan's total land area is required to have good tree cover; by 2000 72 percent was covered. In 1997-98, 27,770 cubic meters of trees were felled for commercial logging and an additional 22,884 cubic meters for housing construction and public works. The gross sales of Bhutan Board Products in 1998 were Nu383.8 million.

INDUSTRY

HYDRO POWER.

The electricity sector showed an average growth of 48.2 percent in the period 1985-1995. In 1998-99 hydro power contributed 30 percent to total exports. This rate will increase considerably in the early 21st century when new hydro power stations being built in Tala, Kurichhu, and Basochhu are completed. Hydro power has also acted to stimulate the growth of the manufacturing and services sectors.

MANUFACTURING.

Manufacturing provided 12.8 percent of value added activity to the economy in 1997. The production of cement is one of the principal enterprises in Bhutan's industrial sector. In 1998, Penden Cement Authority had gross estimated sales of Nu564.7 million, a substantial increase from the 1997 level of Nu265.5 million. Another cement plant was due to be completed by 2002, but due to disturbances related to Assam insurgents this project was suspended. The processing of Bhutan's agricultural produce is another significant dynamic factor in the manufacturing sector. For example, Bhutan Fruit Products enjoyed gross sales of Nu112.3 million in 1998; these sales were mainly of juices and canned fruit.

SERVICES

TOURISM.

Bhutan is one of the safest countries in the world. Crime rates are minimal and foreign visitors are treated politely and with respect. The country's history, culture, and isolation offer a great deal to the more adventurous tourists who have been visiting Bhutan since 1974. The privatization of the tourism sector in 1991 led to fast-paced growth in hotels and travel agencies. This growth was so rapid that by 2001 there was excess capacity in tourism services. The failure to fully exploit this capacity is primarily due to government restrictions on the number of tourists admitted into Bhutan, a policy devised to reduce outside influence upon national traditions. Consequently, only 6,203 tourists entered Bhutan in 1998, and these people provided US$7.8 million in much-needed foreign currency. Around 40 percent of these tourists came from EU countries, 24 percent from the United States, and 17 percent from Japan. Nonetheless, this is a significant rise from the 1993 level of 2,984 where only US$3 million in tourism receipts were recorded. The high level of foreign exchange earnings from tourism is partly due to a compulsory government charge on tourists of US$200 a day.

INTERNATIONAL TRADE

Bhutan's engagement with international trade is highly dependent upon its neighbor and ally, India. In 1997, US$114.2 million of Bhutan's exports were purchased by India, which constituted 94.6 percent of the total. Bangladesh received US$5.1 million of Bhutanese goods. In the same year, the direction of the flow of Bhutan's imports consisted of US$97.6 million from India, 69.4 percent of the national total. In addition, Bhutan imported US$23.8 million of goods from Japan, US$4 million from Singapore, and US$1.8 million from Germany.

Bhutan is a founding member of the South Asian Association for Regional Co-operation (SAARC), whose other members are Bangladesh, India, Nepal, Pakistan, and Sri Lanka. Bhutan will host the 2002 SAARC summit meeting. As part of its policy of engagement with the world economy, Bhutan is preparing to join the World Trade Organization.

MONEY

The widespread use of money in Bhutan only began in the early 1960s with the growth of trade with India and the initiation of bilateral development aid from India to Bhutan. Even though Bhutan's economy is highly

underdeveloped the price of consumer goods has remained fairly stable. The average percentage change of prices each year was only 10 percent between 1990 and 1998. Total international currency reserves by major Bhutanese holders (mainly the Royal Monetary Authority, Bank of Bhutan, and Bhutan National Bank) rose dramatically in value from US$106.9 million in 1993-94 to US$218.2 million in 1997-98.

Two banks operate in the country: the Bhutan National Bank has offices in Thimpu and a branch in Phuentsholing, and the Bank of Bhutan has branches in the country's main centers. No restrictions are placed on the quantity of currencies that can be taken into Bhutan although they are limited to the main international currencies. In the late 1990s Bhutan National Bank was partly privatized when the government sold 40 percent of its shares to Citibank and the Asian Development Bank; the government now owns only 27 percent of the bank. Bhutan has a stock exchange but it is not open to external investment.

POVERTY AND WEALTH

From the 1960s free basic health services began to be provided by the government across most of Bhutan where populations were concentrated. Nonetheless, by 2000 the UNDP estimated that 20 percent of the population still lacked sufficient access to health services.

Lack of health care is a serious drawback because the general diet lacks sufficient fruits and vegetables. Consequently, over half of the country's children 6 and younger suffer from stunting, and over 30 percent are underweight. Poor nutrition is not nation wide, however, but determined by regional, urban-rural, and socio-economic factors. For example, in Pemagatshel average calorie consumption per day is 1,647 whereas in Punakha it is 3,227.

The incidence of rural poverty is as high as 90 percent. Unhygienic conditions are prevalent in Bhutan with 42 percent of the population lacking access to safe water and 30 percent of the people living in conditions of poor sanitation. Nonetheless, poverty in Bhutan has declined as indicated by the rise of average life expectancy from 37 years in 1960 to 66 years in 1994. The increased longevity suggests that the consistent government policy of providing a socially oriented infrastructure, in accordance with the GNH concept, is effective even though much work remains to be done.

WORKING CONDITIONS

Bhutan is yet to ratify the key International Labour Organization Conventions Number 87 (Freedom of Association and Protection of the Right to Organize, 1948) or Number 98 (Right to Organize and Collective Bargaining). Trade unionism is not permitted in Bhutan, nor does it exist in practice. In fact, terms and conditions as well as salaries are generally fixed by the government, which requires employees and employers (at least in the formal economy) to engage in formal written contracts of agreement. The population employed in Bhutan is estimated at 970,000 (based upon a population of 2 million).

Education has received considerable emphasis by the government of Bhutan, and primary schooling is available in even the remotest areas. The Bhutanese government spent 7 percent of total expenditure on education in 1997. Mainly due to government initiatives in its drive to reduce illiteracy, levels fell from 71.9 percent in 1980 to 52.7 percent in 2000. The Bhutanese workforce is becoming more skilled, although this is problematic because there are serious limits upon the amount of educated workers required in what is essentially an agricultural economy. Consequently, while there are rising employment expectations amongst the literate population the labor market cannot provide sufficiently skilled work.

COUNTRY HISTORY AND ECONOMIC DEVELOPMENT

1616. Bhutan is unified by Zhabdrung Ngawang Namgyal who makes comprehensive laws and local administrations.

1907. The hereditary monarchy is created.

1949. The Indo-Bhutan Treaty of friendship is signed, and Bhutan receives full independence.

1952. Jigme Dorji Wangchuck (the "architect of modern Bhutan") becomes king.

1953. The National Assembly is established.

1960. Trading is entirely oriented toward India.

1965. The king forms the Royal Advisory Council.

1972. Jigme Singye Wangchuk becomes king.

1974. Bhutan begins to encourage tourism.

1983. The South Asian Association for Regional Cooperation is established.

1998. The king devolves some of his executive powers to the cabinet.

FUTURE TRENDS

Problems with the Lhotshampa population seem likely to continue into the 21st century. Unless the Bhutanese government finds an amicable solution to this problem, Lhotshampa militancy is likely to intensify. Similarly, the security issue of the presence of Assam independence insurgencies on Bhutanese territory needs to be addressed in order to avoid embittering relations with militarily powerful India. This point is all the more important due to the ongoing flow of free trade with India. Bhutan is highly dependent upon developments within India's economy. As a result, levels of integration with the world economy will closely follow those of India. Planned membership of the WTO will exacerbate Bhutan's economic openness.

In 2001, Bhutan's excellent environmental conservation and balance meant that the economy had greater ability to use its forestry and hydroelectricity resources. For example, while the government insists that 60 percent of the country remain forested, the 2000 coverage of 72 percent indicated room for increased use without compromising governmental policy. Similarly, the 3 hydroelectricity plants to be completed early in the 21st century are projected to contribute vast amounts of government revenue without significantly damaging the environment. This revenue is intended to support human-centered development. If the government remains true to these policies and continues to widen political freedoms, Bhutan has a bright political, social, and economic future.

DEPENDENCIES

Bhutan has no territories or colonies.

BIBLIOGRAPHY

Amnesty International. Amnesty International: Report 2000. London: Amnesty International, 2000

British Broadcasting Corporation (BBC). Country Profile: Bhutan. <http://news.bbc.co.uk//hi/english/world/south_asia/country_profiles/newsid_11660000/1166513.stm>. Accessed June 2001.

Central Intelligence Agency. CIA World Factbook. <http://www.odci.gov/cia/publications/factbook/index.html>. Accessed June 2001.

Ciment, J. and I. Ness. The Encyclopaedia of Global Population and Demographics. Chicago: Fitzroy Dearborn, 1999.

Europa. The Far East and Australasia 2001. 32nd edition. London: Europa, 2001.

Food and Agriculture Organization. FAO Yearbook: Trade, Vol. 52, 1998. Rome: FAO, 1999.

Food and Agriculture Organization. Nutrition Country Profile— Bhutan. Rome: FAO, December 1999. <http://www.fao.org/es/ESN/ncp/BHU.pdf>. Accessed July 2001.

Freedom House. Freedom in the World: The Annual Survey of Political Rights and Civil Liberties 1999-2000. New York: Freedom House, 2000.

International Monetary Fund. Bhutan: Statistical Annex. No. 99/63. Washington, D.C.: IMF, July 1999.

International Monetary Fund. International Financial Statistics Yearbook 2000. Washington D.C.: IMF, 2000.

Mathou, T. "Bhutan in 2000: Challenges Ahead." Asian Survey. Vol. 41, No. 1, 2001.

Mathou, T. "Political Reform in Bhutan: Change in a Buddhist Monarchy." Asian Survey. Vol. 39, No. 4, 1999.

Pattanaik, S. S. "Ethnic Identity, Conflict and Nation Building in Bhutan." Strategic Analysis. Vol. 22, No. 4, 1998. <http://www.idsa-india.org/an-jul8-10.html>. Accessed June 2001.

Pommaret, F. Bhutan, translated by E. B. Booz. London: Hodder and Stoughton, 1991.

Royal Government of Bhutan. Background Document to the Seventh Round Table Meeting for Bhutan, Thimpu 7-9 November 2000. <http://www.undp.org.bt/RTM2000/Final%20RTM%20Documents.pdf>. Accessed July 2001.

United Nations. International Trade Statistics Yearbook 1998. New York: United Nations, 1999.

United Nations. Statistical Yearbook Forty-Fourth Issue. New York: United Nations, 2000.

United Nations Development Programme. <http://www.undp.org>. Accessed June 2001.

United Nations Development Programme. Human Development Report 2000. New York: UNDP, 2000.

United Nations Development Programme in Bhutan. Briefing Report: Bhutan. Thimpu: UNDP, July 1999. <http://www.undp.org.bt/BHUTAN/Brieflc99.PDF>. Accessed June 2001.

United Nations Economic and Social Commission for Asia and the Pacific. Asia-Pacific in Figures. 14th edition. New York: United Nations, February 2001.

Upham, M. Trade Unions of the World. 4th edition. London: Cartermill, 1996.

U.S. Energy Information Administration. <http://www.eia.doe.gov/emeu/cabs/bhutan2.html>. Accessed June 2001.

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World Bank. World Development Report 2000/2001: Attacking Poverty. Oxford: Oxford University Press, 2001.

—Liam Campling

CAPITAL:

Thimpu.

MONETARY UNIT:

Ngultrum (Nu). One ngultrum equals 100 chetrum. Notes in circulation are Nu1, 2, 5, 10, 100, and 500. Indian currency (rupees) is also legal tender and at par value with Bhutanese currency.

CHIEF EXPORTS:

Cardamom, gypsum, timber, handicrafts, cement, fruit, electricity, precious stones, and spices.

CHIEF IMPORTS:

Fuel and lubricants, grain, machinery and parts, vehicles, fabrics, and rice.

GROSS DOMESTIC PRODUCT:

US$0.44 billion (1999). [CIA reports GDP at purchasing power parity to be US$2.1 billion (1999 est.).]

BALANCE OF TRADE:

Exports: US$146 million (1999). Imports: US$243 million (1999). [The CIA World Factbook reports exports to be US$111 million (f.o.b., 1998) and imports to be US$136 million (c.i.f., 1998).]

BHUTAN

Compiled from the August 2004 Background Note and supplemented with additional information from the State Department and the editors of this volume. See the introduction to this set for explanatory notes.

Official Name:
Kingdom of Bhutan

PROFILE

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: 2,185,569 note: other estimates range as low as 810,000 (July 2004 est.)

Annual growth rate: 2.12% (2004 est.). Density—14 per sq. km.

Ethnic groups: Bhote 50%, ethnic Nepalese 35% (includes Lhotsampas—one of several Nepalese ethnic groups), 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.). Women's literacy (est.)—20%.

Health: Infant mortality rate—total: 102.56 deaths/1,000 live births; female: 104.89 deaths/1,000 live births (2004 est.); male: 100.35 deaths/1,000 live births). Life expectancy—total population: 53.99 years. male: 54.27 years. female: 53.68 years (2004 est.)

Work force: (1994) Agriculture—57.2%; government—2%; business—1.4%; others—1.4%. There is a high unemployment rate.

Government

Type: Evolving from a monarchy to a constitutional monarchy. Previously, various laws and Buddhist values guided the relationship between the state and the people, but currently a 39-member Drafting Committee composed of representatives of the people, judiciary, the Monastic Order, and the Royal Government are writing a Constitution which is expected to be presented to the National Assembly for ratification in 2005.

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: (2001) U.S.$482 million.

Real growth rate: (2002-03) 6.0%.

Per capita GDP: (2002) U.S.$1,300.

Natural resources: Hydroelectric power, 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 (2001-02)—U.S.$97.7 million: hydroelectricity, vegetables and fruits, processed foods, minerals, wood products, textiles, machinery. Imports (2001-02)—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. 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 descended from 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 and Sharchops are collectively known as Drukpas and account for about 74% 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 25% 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, the present king, Jigme Singye Wanchuck, ascended the throne at age 16. He has emphasized modern education, decentralization of governance, the development of hydroelectricity and tourism and improvements in rural developments. The current king has established an overarching development philosophy of "Gross National Happiness." It recognizes that there are many dimensions to development and that economic goals alone are not sufficient.

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) when 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 a prime minister to serve for the next 3 years.

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

Last Updated: 8/23/04

King: Wangchuck , Jigme Singye
Prime Minister: Zimba Yeshey
Min. of Agriculture: Ngedup , Sangay
Min. of Education: Gyamtsho , Thinley
Min. of Finance: Norbu , Wangdi
Min. of Foreign Affairs: Wangchuk , Khandu
Min. of Health: Singay , Jigmi
Min. of Home & Cultural Affairs: Thinley , Jigme Y.
Min. of Information & Communication: Dorji , Leki
Min. of Labor & Human Resources: Tshering , Ugyen
Min. of Trade & Industry: Zimba , Yeshey
Min. of Works & Human Settlements: Dorji , Kinzang
Chief Justice: Tobgye , Sonam
Chmn., Royal Advisory Council: Gyaltshen , Rinzin
Permanent Representative to the UN, New York: Penjo , Daw

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. 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. 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. 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. Bhutan has requested the insurgents to leave on several occasions in 2001 and 2002. However, the Bhutanese Government finds itself facing an increased number of insurgents in 2003 and has threatened military action against them if negotiations for their voluntary withdrawal fail in the next few months.

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 13-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 nonnationals or "voluntary emigrants," who forfeited their citizenship rights. In 2003, a joint Bhutan-Nepal veri-fication team categorized refugees from one camp into four groups. A repatriation process is expected to begin in 2004.

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 U.N. Security Council. Bhutan was elected to the UN Commission on Human Rights in 2003 and will serve 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. Embassy Officials

NEW DELHI (E) Address: Shanti Path, Chanakaya Puri New Delhi-110021, India; Phone: 91-11-24198000; Fax: 91-11-24190017; Workweek: Monday thru Friday; 0830 hrs to 1730 hrs; Website: www.usembassy.state.gov/delhi.html

TRAVEL

Consular Information Sheet

August 11, 2004

Country Description: Bhutan is a small land-locked Himalayan country led by a king, and is in transition to a constitutional monarchy. Facilities for tourism are limited. There is no U.S. diplomatic or consular presence in Bhutan. The U.S. Embassy in New Delhi handles all assistance to U.S. citizens.

Entry/Exit Requirements: Independent travel is not permitted in Bhutan. Visitors are required to book travel through a registered tour operator in Bhutan. This may be done directly or through a travel agent abroad. Further information may be obtained through the Department of Tourism, P.O. Box 126, Thimphu, Bhutan, telephone (975) 2-32351, 2-32352; fax (975) 2-323695 or at http://www.tourism.gov.bt. Entry is available only via India, Bangladesh, Nepal, and Thailand. The border with China is closed. The minimum daily tariff is set by the Bhutanese Department of Tourism and cannot be negotiated. The rate includes all accommodations, all meals, transportation, services of licensed guides and porters, and cultural programs where and when available. The rate is the same for both cultural tours and treks. The only carrier servicing Bhutan is Druk Air, the Bhutanese government airline. Corporate headquarters address: Druk Air Corporation Ltd., P.O. Box 209, Thimphu, Bhutan. Further information is also available at http://www.drukair.com.bt. Druk Air will board only travelers with visa clearance from the Tourism Authority of Bhutan.

A passport and visa are required for entry into and exit from Bhutan. Most visitors, including those on official U.S. government business, should obtain visas prior to entering the country. Travel agencies will usually arrange for travelers' entry visas. For additional entry/exit information, please contact the Bhutan Mission to the United Nations (Consul General), 763 First Avenue, New York, NY 10017, telephone (212) 682-2268, fax (212) 661-0551.

In an effort to prevent international child abduction, many governments have initiated procedures at entry/exit points. These often include requiring documentary evidence of relationship and permission for the child's travel from the parent(s) or legal guardian if not present. Having such documentation on hand, even if not required, may facilitate entry/departure.

Safety and Security: For the latest security information, Americans traveling abroad should regularly monitor the Department's Internet web site at http://travel.state.gov where the current Worldwide Caution Public Announcement, Travel Warnings and other Public Announcements can be found.

Up-to-date information on security can also be obtained by calling 1-888-407-4747 toll free in the United States, or, for callers outside the United States and Canada, a regular toll line at 1-317-472-2328. These numbers are available from 8:00 a.m. to 8:00 p.m. Eastern Time, Monday through Friday (except U.S. federal holidays).

Crime Information: There is relatively little crime in Bhutan. Petty crime, such as pick pocketing and purse snatching, is occasionally reported. The loss or theft abroad of a U.S. passport should be reported immediately to the local police and the nearest U.S. Embassy or Consulate. If you are the victim of a crime while overseas, in addition to reporting to local police, please contact the nearest U.S. Embassy or Consulate for assistance. The Embassy/Consulate staff can, for example, help you find appropriate medical care, to contact family members or friends and explain how funds could be transferred. Although the investigation and prosecution of the crime is solely the responsibility of local authorities, consular officers can help you to understand the local criminal justice process and to find an attorney if needed.

U.S. citizens may refer to the Department of State's pamphlet A Safe Trip Abroad for ways to promote a trouble-free journey. The pamphlet is available by mail from the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402, via the Internet at http://www.gpoaccess.gov, or via the Bureau of Consular Affairs home page at http://travel.state.gov.

Medical Facilities: Medical facilities in the populated areas in Bhutan are available but may be limited or unavailable in rural areas. Medical services may not meet Western standards and some medicines are in short supply. Emergency medical services are provided free of charge to all tourists.

Medical Insurance: The Department of State strongly urges Americans to consult with their medical insurance company prior to traveling abroad to confirm whether their policy applies overseas and if it will cover emergency expenses such as a medical evacuation. U.S. medical insurance plans seldom cover health costs incurred outside the United States unless supplemental coverage is purchased. Further, U.S. Medicare and Medicaid programs do not provide payment for medical services outside the United States. However, many travel agents and private companies offer insurance plans that will cover health care expenses incurred overseas, including emergency services such as medical evacuations.

When making a decision regarding health insurance, Americans should consider that many foreign doctors and hospitals require payment in cash prior to providing service and that a medical evacuation to the U.S. may cost well in excess of $50,000. Uninsured travelers who require medical care overseas often face extreme difficulties. When consulting with your insurer prior to your trip, ascertain whether payment will be made to the overseas healthcare provider or if you will be reimbursed later for expenses you incur. Some insurance policies also include coverage for psychiatric treatment and for disposition of remains in the event of death.

Useful information on medical emergencies abroad, including overseas insurance programs, is provided in the Department of State's Bureau of Consular Affairs brochure Medical Information for Americans Traveling Abroad, available via the Bureau of Consular Affairs home page.

Other Health Information: Information on vaccinations and other health precautions, such as safe food and water precautions and insect bite protection, may be obtained from the Centers for Disease Control and Prevention's hotline for international travelers at 1-877-FYI-TRIP (1-877-394-8747); fax 1-888-CDC-FAXX (1-888-232-3299), or via the CDC's Internet site at http://www.cdc.gov/travel. For information about outbreaks of infectious diseases abroad consult the World Health Organization's website at http://www.who.int/en. Further health information for travelers is available at http://www.who.int/ith.

Traffic Safety and Road Conditions: While in a foreign country, U.S. citizens may encounter road conditions that differ significantly from those in the United States. The information below concerning Bhutan is provided for general reference only, and it may not be totally accurate in a particular location or circumstance:

Safety of Public Transportation: Poor.
Urban Road Conditions/Maintenance: Good
Rural Road Conditions/Maintenance: Poor
Availability of Roadside Assistance: Poor

Tourists pay a set fee per day, which includes transportation so it is unlikely that Bhutanese public transportation will be utilized. Although Bhutan's road network is not extensive, reasonably well-maintained, paved, two-lane roads connect principal sites likely to be visited by travelers. Traffic is rarely heavy, but sharp curves, narrow lanes, and limited visibility in mountainous terrain make traveling slow and potentially hazardous. Reduced speeds and special caution are advisable.

For specific information concerning transportation in Bhutan refer to the Bhutanese Department of Tourism's website via the Internet at http://www.tourism.gov.bt/ or the Bhutan Ministry of Trade and Industry's website at http://www.kingdomofbhutan.com/.

Aviation Safety Oversight: As there is neither direct commercial air service between the U.S. and Bhutan by local carriers at present, nor economic authority to operate such service, the U.S. Federal Aviation Administration (FAA) has not assessed Bhutan's Civil Aviation Authority for compliance with international aviation safety standards. For further information, travelers may contact the Department of Transportation within the U.S. at 1-800-322-7873, or visit the FAA's Internet website at http://www.faa.gov/avr/iasa/index.cfm.

Customs Regulations: Bhutan customs authorities enforce strict regulations concerning temporary importation into or export from Bhutan of items such as firearms, ammunition, explosives and military stores; narcotics and drugs (except medically-prescribed drugs); wildlife products, especially those of endangered species; and antiques. It is advisable to contact the Bhutan Mission to the United Nations (Consul General), 763 First Avenue, New York, NY 10017, telephone (212) 682-2268, fax (212) 661-0551, for specific information regarding customs requirements.

In many countries around the world, counterfeit and pirated goods are widely available. Transactions involving such products are illegal and bringing them back to the United States may result in forfeitures and/or fines. A current list of those countries with serious problems in this regard can be found at http://www.ustr.gov/reports/2003/special301.htm.

Criminal Penalties: While in a foreign country, a U.S. citizen is subject to that country's laws and regulations, which sometimes differ significantly from those in the United States and may not afford the protections available to the individual under U.S. law. Penalties for breaking the law can be more severe than in the United States for similar offenses. Persons violating Bhutanese laws, even unknowingly, may be expelled, arrested or imprisoned. Penalties for possession, use, or trafficking in illegal drugs in Bhutan are strict and convicted offenders can expect jail sentences and heavy fines. Under the PROTECT Act of April 2003, it is a crime, prosecutable in the United States, for a U.S. citizen or permanent resident alien, to engage in illicit sexual conduct in a foreign country with a person under the age of 18, whether or not the U.S. citizen or lawful permanent resident alien intended to engage in such illicit sexual conduct prior to going abroad. For purposes of the PROTECT Act, illicit sexual conduct includes any commercial sex act in a foreign country with a person under the age of 18. The law defines a commercial sex act as any sex act, on account of which anything of value is given to or received by a person under the age of 18.

Under the Protection of Children from Sexual Predators Act of 1998, it is a crime to use the mail or any facility of interstate or foreign commerce, including the Internet, to transmit information about a minor under the age of 16 for criminal sexual purposes that include, among other things, the production of child pornography. This same law makes it a crime to use any facility of interstate or foreign commerce, including the Internet, to transport obscene materials to minors under the age of 16.

Special Circumstances: Visitors are advised to carry cash or travelers checks, since credit cards are not widely accepted in Bhutan. Druk Air, the only carrier servicing Bhutan, has rigid restrictions on the amount and size of luggage passengers may carry into the country. Passengers are advised to book bulky items ahead as unaccompanied baggage, since the aircraft servicing Bhutan have limited space available for large bags, and airline employees may not load large pieces of luggage. Flights into Paro Airport are restricted to daylight hours and are dependent on suitable weather conditions. Flights are sometimes delayed or cancelled. Passengers are advised to allow at least 24 hours transit time for connecting flights from Paro Airport and to travel on non-restricted air tickets so that they can be rebooked on the first available air carrier if a connecting flight is missed.

Disaster Preparedness: Bhutan has occasional earthquakes. General information about natural disaster preparedness is available via the Internet from the U.S. Federal Emergency Management Agency (FEMA) at http://www.fema.gov/.

Children's Issues: For information on international adoption of children and international parental child abduction, please refer to our Internet site at http://travel.state.gov/family/index.html or telephone Overseas Citizens Services at 1-888-407-4747. This number is available from 8:00 a.m. to 8:00 p.m. Eastern Standard Time, Monday through Friday (except U.S. federal holidays). Callers who are unable to use toll-free numbers, such as those calling from overseas, may obtain information and assistance during these hours by calling 1-317-472-2328.

Registration/Embassy Locations: There is no U.S. Embassy or Consulate in Bhutan. Although no formal diplomatic relations exist between the United States and Bhutan, informal contact is maintained through the U.S. Embassy in New Delhi. Updated information on travel and security in Bhutan may be obtained at any U.S. Consulate or Embassy in India, Bangladesh or Nepal. Americans living or traveling in Bhutan are encouraged to register with the nearest U.S. Embassy or Consulate through the State Department's travel registration website, https://travelregistration.state.gov, and to obtain updated information on travel and security within Bhutan. Americans without Internet access may register directly with the U.S. Embassy in New Delhi. By registering, you'll make it easier for the Embassy or Consulate to contact you in case of emergency.

The U.S. Embassy in New Delhi, India is located at Shantipath, Chanakyapuri 110021; telephone (91) (11) 2419-8000; fax (91) (11) 2419-0017. The Embassy's Internet home page address is http://usembassy.state.gov/delhi.html/.

The U.S. Consulate General in Mumbai (Bombay), India is located at Lincoln House, 78 Bhulabhai Desai Road, 400026, telephone (91) (22) 2363-3611; fax (91) 22) 2363-0350. Internet home page address is http://mumbai.usconsulate.gov.

The U.S. Consulate General in Calcutta (now often called Kolkata), India is located at 5/1 Ho Chi Minh Sarani, 700071; telephone (91)(33) 2282-3611 through 2282-3615; fax (91)(33)2282-2335. The Internet home page address is http://calcutta.usconsulate.gov.

The U.S. Consulate General in Chennai (Madras), India is located at 220 Anna Salai, Gemini Circle, 600006, telephone (91) (44) 2811-2000; fax (91) (44) 2811-2027. The Internet home page address is http://chennai.usconsulate.gov.

The U.S. Embassy in Dhaka, Bangladesh is located in the Diplomatic Enclave, Madani Avenue, Baridhara, Dhaka, telephone (880-2) 885-5500, fax number (880-2) 882-3744. The Embassy's Internet home page address is http://dhaka.usembassy.gov/.

The U.S. Embassy in Kathmandu, Nepal is located at Pani Pokhari in Kathmandu, telephone (977) (1) 441-1179; fax (977) (1) 444-4981. The U.S. Embassy's Internet home page address is http://nepal.usembassy.gov.

Bhutan

Compiled from the July 2007 Background Note and supplemented with additional information from the State Department and the editors of this volume. See the introduction to this set for explanatory notes.

Official Name:

Kingdom of Bhutan

PROFILE

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).

Government 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.

Political 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’ 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’ 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

Last Updated: 2/1/2008

Per new laws pertaining to the illegality of cabinet members with political party affiliations remaining in office during the preelection caretaker regime, all but three members of Bhutan's previously existing cabinet stepped down in late July 2007 in advance of first-ever parliamentary elections slated for early 2008. The current caretaker cabinet—which consists of only three remaining members—is tasked only with maintaining day-to-day government functioning and not with formulating new government policies.

King: Jigme Khesar Namgyel WANGCHUCK

Prime Minister: Kinzang DORJI

Min. of Agriculture:

Min. of Education: Thinley GYAMTSHO

Min. of Finance:

Min. of Foreign Affairs:

Min. of Health:

Min. of Home & Cultural Affairs:

Min. of Information & Communication: Leki DORJI

Min. of Labor & Human Resources:

Min. of Trade & Industry:

Min. of Works & Human Settlements: Kinzang DORJI

Chief Justice: Sonam TOBGYE

Chmn., Royal Advisory Council: Rinzin GYALTSHEN

Permanent Representative to the UN, New York: 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, Bhutan's tourist industry is beginning to show signs of recovery. Bhutan's 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 Bhutan's 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. Embassy Officials

Last Updated: 2/19/2008

NEW DELHI (E) Shanti Path, Chanakya Puri New Delhi–110021, India, 91-11-24198000, Fax 91-11-24190017, Workweek: Monday thru Friday; 0830 hrs to 1730 hrs, Website: http://newdelhi.usembassy.gov.

TRAVEL

Consular Information Sheet

September 13, 2007

Country Description: Bhutan is a small land-locked Himalayan country led by a king, and is in transition to a constitutional monarchy. Facilities for tourism are limited. The United States does not have diplomatic relations with Bhutan; therefore, there is no U.S. diplomatic or consular presence in Bhutan. The U.S. Embassy in New Delhi handles all assistance to U.S. citizens.

Entry Requirements: Independent travel is not permitted in Bhutan. Visitors are required to book travel through a registered tour operator in Bhutan. This may be done directly or through a travel agent abroad. Further information, including a list of authorized tour operators in Bhutan, may be obtained through the Bhutanese Department of Tourism, PO Box 126, Thimphu, Bhutan, telephone +975-2-323251, 2-323252; fax + 975-2-323695 or at www.tourism.gov.bt. Entry by air is available only via India, Bangladesh, Nepal, and Thailand. The border with China is closed. The minimum daily tariff is set by the Bhutanese Department of Tourism and cannot be negotiated. The rate includes all accommodations, all meals, transportation, services of licensed guides and porters, and cultural programs where and when available. The rate is the same for both cultural tours and treks. Travelers should contact the Department of Tourism for the latest daily tariff. At this time, the only carrier servicing Bhutan is Druk Air, the Bhutanese government airline. More information on the airline is available at www.drukair.com.bt. Druk Air will board only travelers with visa clearance from the Tourism Authority of Bhutan. A passport and visa are required for entry into and exit from Bhutan. Visa applications are available from selected travel agencies. Travel agencies will usually arrange for a traveler's entry visa and clearance. Most visitors, including those on official U.S. government business, should obtain visas prior to entering the country. For additional entry/exit information, please contact the Bhutan Mission to the United Nations (Consul General), 763 First Avenue, New York, NY 10017, telephone (212) 682-2268, fax (212) 661-0551.

Safety and Security: For the latest security information, Americans traveling abroad should regularly monitor the Department's Internet web site, where the current Travel Warnings and Travel Alerts, including the Worldwide Caution Travel Alert, can be found. Up-to-date information on safety and security can also be obtained by calling 1-888-407-4747 toll free in the U.S. and Canada, or for callers outside the U.S. and Canada, a regular toll-line at 1-202-501-4444.

Crime: There is relatively little crime in Bhutan. Petty crime, such as pick-pocketing and purse snatching, is occasionally reported.

Information for Victims of Crime: The loss or theft abroad of a U.S. passport should be reported immediately to the local police and the U.S. Embassy in New Delhi or the U.S. Consulate in Kolkata. If you are the victim of a crime while in Bhutan, in addition to reporting to local police, please contact the U.S. Embassy in New Delhi for assistance. The Embassy's consular staff can, for example, assist you to find appropriate medical care, contact family members or friends and explain how funds could be transferred. Although the investigation and prosecution of crime is solely the responsibility of local authorities, consular officers can help you to understand the local criminal justice process and to find an attorney if needed.

Medical Facilities and Health Information: Medical facilities in the populated areas in Bhutan such as Thimphu or Paro are available, but may be limited or unavailable in rural areas. Medical services may not meet Western standards and some medicines are in short supply. Certain emergency medical services are provided free of charge to all tourists. Visitors planning to trek in Bhutan should pay special attention to the risk of altitude illness. Treks in Bhutan can take visitors days or weeks away from the nearest medical facility. Helicopter evacuation from remote areas is available in Bhutan through the registered tour operators, or by contacting the U.S. Embassy in New Delhi. Information on vaccinations and other health precautions, such as safe food and water precautions and insect bite protection, may be obtained from the Centers for Disease Control and Prevention's hotline for international travelers at 1-877-FYI-TRIP (1-877-394-8747) or via the CDC's Internet site at http://wwwn.cdc.gov/travel. For information about outbreaks of infectious diseases abroad consult the World Health Organization's (WHO) web site at http://www.who.int/en. Further health information for travelers is available at http://www.who.int/ith.

Medical Insurance: The Department of State strongly urges Americans to consult with their medical insurance company prior to traveling abroad to confirm whether their policy applies overseas and whether it will cover emergency expenses such as a medical evacuation.

Traffic Safety and Road Conditions: While in a foreign country, U.S. citizens may encounter road conditions that differ significantly from those in the United States. The information below concerning Bhutan is provided for general reference only, and may not be totally accurate in a particular location or circumstance.

General road conditions outside of urban areas are poor, and emergency services generally are not available. However, because tourists to Bhutan are required to arrange their trips through registered tour operators, most tourists do not drive themselves, but rather travel in groups with experienced drivers.

Visit the web site of Bhutan's national tourist office and national authority responsible for road safety at http://www.mti.gov.bt.

Aviation Safety Oversight: As there is no direct commercial air service between the United States and Bhutan, the U.S. Federal Aviation Administration (FAA) has not assessed Bhutan's Civil Aviation Authority for compliance with International Civil Aviation Organization (ICAO) aviation safety standards. For more information, travelers may visit the FAA's Internet web site at http://www.faa.gov.

Special Circumstances: Visitors are advised to carry cash or travelers checks, since credit cards are not widely accepted in Bhutan. When credit cards are accepted, an extra service fee, usually a percentage of the overall purchase, is often charged.

Druk Air, the only carrier servicing Bhutan, has rigid restrictions on the amount and size of luggage passengers may carry into the country. Passengers are advised to book bulky items ahead as unaccompanied baggage, since the aircraft servicing Bhutan have limited space available for large bags, and airline employees may not load large pieces of luggage. Flights into and out of Paro Airport are restricted to daylight hours and are dependent on suitable weather conditions. Flights are sometimes delayed or cancelled, particularly during the monsoon season between June and August.

Passengers are advised to allow at least 24 hours transit time for connecting flights from Paro Airport and to travel on non-restricted air tickets so that they can be rebooked on the first available air carrier if a connecting flight is missed. Bhutanese customs authorities enforce strict regulations concerning temporary importation into or export from Bhutan of items such as firearms, ammunition, explosives and military stores; narcotics and drugs (except medically-prescribed drugs); tobacco products; wildlife products, especially those of endangered species; and antiques.

It is advisable to contact the Bhutan Mission to the United Nations (Consul General), 763 First Avenue, New York, NY 10017, telephone (212) 682-2268, fax (212) 661-0551 for specific information regarding customs requirements.

Criminal Penalties: While in a foreign country, a U.S. citizen is subject to that country's laws and regulations, which sometimes differ significantly from those in the United States and may not afford the protections available to the individual under U.S. law. Penalties for breaking the law can be more severe than in the United States for similar offenses. Persons violating Bhutanese laws, even unknowingly, may be expelled, arrested or imprisoned. Bhutan recently implemented extremely strict restrictions on the sale or use of cigarettes and other tobacco products. A traveler caught selling tobacco products could be charged with illegal smuggling and fined or imprisoned. Smoking is prohibited in public places. Penalties for possession, use, or trafficking in illegal drugs in Bhutan are severe, and convicted offenders can expect long jail sentences and heavy fines. Engaging in sexual conduct with children or using or disseminating child pornography in a foreign country is a crime, prosecutable in the United States.

Children's Issues: For information on international adoption of children and international parental child abduction, see the Office of Children's Issues website at http://travel.state.gov/family.

Registration and Embassy Locations: There is no U.S. Embassy or Consulate in Bhutan. Although no formal diplomatic relations exist between the United States and Bhutan, informal contact is maintained through the U.S. Embassy in New Delhi, India. Updated information on travel and security in Bhutan may be obtained at the U.S. Embassy in New Delhi, at any other U.S. Consulate in India, or at the U.S. Embassy in Kathmandu, Nepal, as well as the U.S. Embassy in Bangkok, Thailand. Americans living or traveling in Bhutan are encouraged to register through the State Department's travel registration web site or with the U.S. Embassy in New Delhi to obtain updated information on travel and security within Bhutan. Americans without Internet access may register directly with the U.S. Embassy in New Delhi in person or via mail. By registering, American citizens make it easier for the Embassy or Consulate to contact them in case of emergency.

The U.S. Embassy in New Delhi is located on Shanti Path, Chanakya Puri, New Delhi 110 021, India. Tel. +91-11-2419-8000, fax +91-11-2419-8407, web page http://newdelhi.usembassy.gov. The U.S. Consulate in Kolkata is located at 5/1 Ho Chi Minh Sarani, Kolkata 700 071, India. Tel. +91-33-3984-2400, fax +91-33-2282-2335, web page http://kolkata.usconsulate.gov.

The U.S. Embassy in Kathmandu is located at Maharajgunj in Kathmandu, Nepal, telephone (977) (1) 400-7200. The Consular Section can be reached through the Embassy switchboard at (977) (1) 4000-7200, directly by fax (977) (1) 400-7281 or email at [email protected]. The U.S. Embassy Kathmandu's official web site is http://nepal.usembassy.gov.

The U.S. Embassy in Bangkok is located at 120/22 Wireless Road, Bangkok, Thailand, tel. +66-2-205-4000; fax +66-2-205-4103, web page http://bangkok.usembassy.gov.

International Adoption

July 2007

Bhutan is a small land-locked Himalayan country with limited tourism and medical facilities. Americans have adopted only one Bhutanese child in the past seven fiscal years, and there are no standardized procedures for doing so. No U.S.-based adoption service providers or adoption agencies operate in Bhutan, and there is no U.S. diplomatic or consular presence in the country. The U.S. Embassy in New Delhi, India handles all emergency assistance to U.S. citizens. Americans considering travel to Bhutan should read the Country Specific Information for Bhutan for additional general information.

BHUTAN

Compiled from the November 2003 Background Note and supplemented with additional information from the State Department and the editors of this volume. See the introduction to this set for explanatory notes.

Official Name:
Kingdom of Bhutan

PROFILE
PEOPLE
HISTORY
POLITICAL CONDITIONS
ECONOMY
FOREIGN RELATIONS
DEFENSE
U.S.-BHUTAN RELATIONS
TRAVEL

PROFILE

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: (2001 est.) 698,950; urban 21%.

Annual growth rate: 2.5%. Density—14 per sq. km.

Ethnic groups: Ngalops and Sharchops 71%, Lhotsampas (Nepalese) 28%, others 1%.

Religions: Mahayana Buddhism 75% (state religion); Hinduism 25%.

Languages: Dzongka (official language), English (medium of instruction), Sharchop, Nepali.

Education: Years compulsory—11 Literacy—54% (est.). Women's literacy (est.)—20%.

Health: Infant mortality rate—70.7/1,000 (1994). Life expectancy—66 years.

Work force: (1994) Agriculture—57.2%; government—2%; business—1.4%; others—1.4%. There is a high unemployment rate.

Government

Type: Evolving from a monarchy to a constitutional monarchy. Previously, various laws and Buddhist values guided the relationship between the state and the people, but currently a 39-member Drafting Committee composed of representatives of the people, judiciary, the Monastic Order, and the Royal Government are writing a Constitution which is expected to be presented to the National Assembly for ratification in 2005.

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: (2001) U.S.$482 million.

Real growth rate: (2002-03) 6.0%.

Per capita GDP: (2001) U.S.$708.

Natural resources: Hydroelectric power, timber.

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 (2001-02)—U.S.$97.7 million: hydroelectricity, vegetables and fruits, processed foods, minerals, wood products, textiles, machinery. Imports (2001-02)—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. 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 descended from 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 and Sharchops are collectively known as Drukpas and account for about 74% 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 25% 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, the present king, Jigme Singye Wanchuck, ascended the throne at age 16. He has emphasized modern education, decentralization of governance, the development of hydroelectricity and tourism and improvements in rural developments. The current king has established an overarching development philosophy of "Gross National Happiness." It recognizes that there are many dimensions to development and that economic goals alone are not sufficient.

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) when 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 a prime minister to serve for the next 3 years.

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
Last Updated: 2/3/04

King: Wangchuck, Jigme Singye

Prime Minister: Thinley, Jigme Y.

Min. of Agriculture: Ngedup, Sangay

Min. of Education: Gyamtsho, Thinley

Min. of Finance: Norbu, Wangdi

Min. of Foreign Affairs: Wangchuk, Khandu

Min. of Health: Singay, Jigmi

Min. of Home & Cultural Affairs: Thinley, Jigme Y.

Min. of Information & Communication: Dorji, Leki

Min. of Labor & Human Resources: Tshering, Ugyen

Min. of Trade & Industry: Zimba, Yeshey

Min. of Works & Human Settlements: Dorji, Kinzang

Chief Justice: Tobgye, Sonam

Chmn., Royal Advisory Council: Gyaltshen, Rinzin

Permanent Representative to the UN, New York: Penjo, Daw

Bhutan maintains a Permanent Mission to the United Nations in New York. The address is 763 First Avenue, New York, NY 10017; tel: 212-682-2371, 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. 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. 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. 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. Bhutan has requested the insurgents to leave on several occasions in 2001 and 2002. However, the Bhutanese Government finds itself facing an increased number of insurgents in 2003 and has threatened military action against them if negotiations for their voluntary withdrawal fail in the next few months.

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 13-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. A repatriation process is expected to begin in 2004.

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 U.N. Security Council. Bhutan was elected to the UN Commission on Human Rights in 2003 and will serve 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. Embassy Officials

New Delhi (E), Shanti Path, Chanakyapuri, New Delhi 110021, Tel [91] (11) 2419-8000; Fax 2419-0017; COM Fax 2331-5172; USAID Tel 2419-8000, US AID Fax 2419-8454; 2419-8612.

TRAVEL

Consular Information Sheet
November 14, 2003

Country Description: Bhutan is a small land-locked Himalayan country led by a king, and is in transition to a constitutional monarchy. Facilities for tourism are limited. There is no U.S. diplomatic or consular presence in Bhutan. The U.S. Embassy in New Delhi handles all assistance to U.S. citizens.

Entry and Exit Requirements: Independent travel is not permitted. Further information cam be obtained through the Department of Tourism, P.O. Box 126, Thimphu, Bhutan, telephone (975) 2-32351, 2-32352; fax (975) 2-323695 or at www.tourism.gov.bt. Entry is available only via India, Bangladesh, Nepal, and Thailand. The border with China is closed.

Visitors to Bhutan are required to book travel through a registered tour operator in Bhutan. This can be done directly or through a travel agent abroad. The minimum daily tariff is set by the Department of Tourism, Bhutan and cannot be negotiated. The rate includes all accommodations, all meals, transportation, services of licensed guides and porters, and cultural programs where and when available. The rate is the same for both cultural tours and treks. The only carrier servicing Bhutan is Druk Air, the Bhutanese government airline. Corporate headquarters address: Druk Air Corporation Ltd., P.O. Box 209, Thimphu, Bhutan. Further information is also available at www.drukair.com.bt. Druk Air will board only travelers with visa clearance from the Tourism Authority of Bhutan.

A passport and visa are required for entry into and exit from Bhutan. Most visitors, including those on official U.S. government business, should obtain visas prior to entering the country.

In an effort to prevent international child abduction, many governments have initiated procedures at entry/exit points. These often include requiring documentary evidence of relationship and permission for the child's travel from the absent parent(s) or legal guardian.

For additional entry/exit information, please contact the Bhutan Mission to the United Nations (Consul General), 763 First Avenue, New York, NY 10017, telephone (212)682-2268, fax (212)661-0551.

Safety and security: For the latest security information, U.S. citizens traveling abroad should regularly monitor the Department's Internet website at http://travel.state.gov where the current Worldwide Caution Public Announcement, Travel Warnings and Public Announcements can be found.

The Overseas Citizens Services call center at 1-888-407-4747 can answer general inquiries on safety and security overseas. This number is available from 8:00 a.m. to 8:00 p.m. Eastern Time, Monday through Friday (except U.S. federal holidays). Callers who are unable to use toll-free numbers, such as those calling from overseas, may obtain information and assistance during these hours by calling 1-317-472-2328.

Crime Information: There is relatively little crime in Bhutan. Petty crime, such as pick pocketing and purse snatching, is occasionally reported. The loss or theft of a U.S. passport abroad should be reported immediately to local police and the nearest U.S. Embassy or Consulate. If you are the victim of a crime while overseas, in addition to reporting to the local police, please contact the nearest U.S. Embassy or Consulate for assistance. The Embassy/Consulate staff can, for example, assist you to find appropriate medical care, to contact family members or friends and explain how funds could be transferred. Although the investigation and prosecution of the crime is solely the responsibility of local authorities, consular officers can help you understand the local criminal justice process and to find an attorney if needed.

U.S. citizens may refer to the Department of State's pamphlets, "A Safe Trip Abroad" and "Tips for Travelers to South Asia," for ways to help ensure a trouble-free journey. The pamphlets are available by mail from the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402, via the Internet at http://www.access.gpo.gov/su_docs, or via the Bureau of Consular Affairs home page at http://travel.state.gov.

Medical Facilities: Medical facilities in the populated areas in Bhutan are available but may be limited or unavailable in rural areas. Medical services may not meet Western standards. Some medicine is in short supply. Emergency medical services are provided free of charge to all tourists.

Medical Insurance: The Department of State strongly urges U.S. citizens to consult with their medical insurance company prior to traveling abroad to confirm whether their policy applies overseas and if it will cover emergency expenses such as a medical evacuation. U.S. medical insurance plans seldom cover health costs incurred outside the United States unless supplemental coverage is purchased. Further, U.S. Medicare and Medicaid programs do not provide payment for medical services outside the United States. However, many travel agents and private companies offer insurance plans that will cover health care expenses incurred overseas, including emergency services such as medical evacuations.

When making a decision regarding health insurance, U.S. citizens should consider that many foreign doctors and hospitals require payment in cash prior to providing service and that a medical evacuation to the United States may cost in excess of $50,000. Uninsured travelers who require medical care overseas often face extreme difficulties. When consulting your insurer prior to your trip, please ascertain whether payment will be made to the overseas healthcare provider or if you will be reimbursed later for expenses that you incur. Some insurance policies also include coverage for psychiatric treatment and for disposition of remains in the event of death.

Useful information on medical emergencies abroad, including overseas insurance programs, is provided in the Department of State's Bureau of Consular Affairs brochure, Medical Information for Americans Traveling Abroad, available via the Bureau of Consular Affairs home page at http://travel.state.gov or auto fax: (202) 647-3000.

Other Health Information: Information on vaccinations and other health precautions, such as safe food and water precautions and insect bite protection, may be obtained from the Centers for Disease Control and Prevention's hotline for international travelers at 1-877-FYI-TRIP (1-877-394-8747); fax 1-888-CDC-FAXX (1-888-232-3299), or via the CDC's Internet site at http://www.cdc.gov/travel. For information about outbreaks of infectious diseases abroad consult the World Health Organization's website at http://www.who.int/en. Further health information for travelers is available at http://www.who.int/ith.

Traffic Safety and Road Conditions: While in a foreign country, U.S. citizens may encounter road conditions that differ significantly from those in the United States. The information below concerning Bhutan is provided for general reference only, and it may not be totally accurate in a particular location or circumstance:

Safety of Public Transportation: Not Applicable (Tourists pay a set fee per day, which includes supplied transportation).
Urban Road Condition s/Maintenance: Good
Rural Road Co nditio ns/Maintenance: Poor
Availability of Roadside Assistance: Poor

Although Bhutan's road network is not extensive, reasonably well-maintained, paved, two-lane roads connect principal sites likely to be visited by travelers. Traffic is rarely heavy, but sharp curves, narrow lanes, and limited visibility in mountainous terrain make traveling slow and potentially hazardous. Reduced speeds and special caution are advisable.

For additional general information about road safety, including links to foreign government sites, please see the Department of State, Bureau of Consular Affairs home page at http://travel.state.gov/road_safety.html. For specific information concerning transportation in Bhutan refer to the Bhutanese Department of Tourism's website via the Internet at http://www.tourism.gov.bt/ or the Bhutan Ministry of Trade and Industry's website at http://www.kingdomofbhutan.com/.

Aviation Safety Oversight: As there is no direct commercial air service by local carriers at present, or economic authority to operate such service between the United States and Bhutan, the U.S. Federal Aviation Administration (FAA) has not assessed Bhutan's Civil Aviation Authority for compliance with international aviation safety standards. For further information, travelers may contact the Department of Transportation within the United States at telephone 1-800-322-7873, or visit the FAA's Internet website at http://www.faa.gov/avr/iasa.

The U.S. Department of Defense (DOD) separately assesses some foreign air carriers for suitability as official providers of air services. For information regarding the DOD policy on specific carriers, travelers may contact the DOD at telephone (618) 229-4801.

Customs Regulations: Bhutan customs authorities enforce strict regulations concerning temporary importation into or export from Bhutan of items such as firearms, ammunition, explosives and military stores; narcotics and drugs (except medically prescribed drugs); wildlife products, especially those of endangered species; and antiques. It is advisable to contact the Bhutan Mission to the United Nations (Consul General), 763 First Avenue, New York, NY 10017, telephone (212) 682-2268, fax (212)661-0551, for specific information regarding customs requirements.

Criminal Penalties: While in a foreign country, a U.S. citizen is subject to that country's laws and regulations, which sometimes differ significantly from those in the United States and may not afford the protections available to the individual under U.S. law. Penalties for breaking the law can be more severe than penalties for similar offenses in the United States. Persons violating Bhutan laws, even unknowingly, may be expelled, arrested or imprisoned. Penalties for possession of, use of, or trafficking in illegal drugs are strictly enforced. Convicted offenders can expect jail sentences and heavy fines.

Special Circumstances: Visitors are advised to carry cash or travelers checks, since credit cards are not widely accepted in Bhutan. Druk Air, the only carrier servicing Bhutan, has rigid restrictions on the amount and size of luggage passengers may carry into the country. Passengers are advised to book bulky items ahead as unaccompanied baggage, since the aircraft servicing Bhutan have limited space available for large bags, and airline employees may not load large pieces of luggage. Flights into Paro Airport are restricted to daylight hours and are dependent on weather. Flights are sometimes delayed or cancelled. Passengers are advised to allow at least 24 hours transit time for connecting flights from Paro Airport and to travel on non-restricted air tickets so that they can be rebooked on the first available air carrier if a connecting flight is missed.

Disaster Preparedness: Bhutan has occasional earthquakes. General information about natural disaster preparedness is available via the Internet from the U.S. Federal Emergency Management Agency (FEMA) at http://www.fema.gov/.

Children's Issues: For information on international adoption of children and international parental child abduction, please refer to our Internet site at http://travel.state.gov/children's_issues.html or telephone the Overseas Citizens Services (OCS) call center at 1-888-407-4747. The OCS call center can answer general inquiries regarding international adoptions and abductions and will forward calls to the appropriate country officer in the Bureau of Consular Affairs. This number is available from

8:00 a.m. to 8:00 p.m. Eastern Time, Monday through Friday (except U.S. federal holidays). Callers who are unable to use toll-free numbers, such as those calling from overseas, may obtain information and assistance during these hours by calling 1-317-472-2328.

Embassy Location and Registration: There is no U.S. Embassy or Consulate in Bhutan. Although no formal diplomatic relations exist between the United States and Bhutan, informal contact is maintained through the U.S. Embassy in New Delhi. Updated information on travel and security in Bhutan may be obtained at any U.S. Consulate or Embassy in India or Bangladesh. U.S. citizens living in or visiting Bhutan are encouraged to register at the U.S. Embassy in New Delhi. They may also obtain assistance from the U.S. Consulates in India or, to a more limited degree, from the U.S. Embassies in Dhaka, Bangladesh or Kathmandu, Nepal.

The U.S. Embassy in New Delhi is located at Shanti Path, Chanakyapuri 110021, telephone (91) (11) 2419-8000, fax: (91) (11) 2419-0017. The Embassy's Internet home page address is http://usembassy.state.gov/delhi.html

The U.S. Consulate General in Mumbai (Bombay) is located at Lincoln House, 78 Bhulabhai Desai Road, 400026, telephone (91) (22) 2363-3611; fax: (91) (22) 2363-0350. Internet home page address is http://mumbai.usconsulate.gov

The U.S. Consulate General in Calcutta (Kolkata) is at 5/1 Ho Chi Minh Sarani, 700071, telephone (91)(033)2282-3611 through 2282-3615; fax: (91)(33)2282-2335. The Internet home page address is http://calcutta.usconsulate.gov

The U.S. Consulate General in Chennai (Madras) is at 220 Anna Salai, Gemini Circle, 600006, telephone (91) (44) 2811-2000; fax: (91) (44) 2811-2027. The Internet home page address is http://chennai.usconsulate.gov

The U.S. Embassy in Dhaka is located at Diplomatic Enclave, Madani Ave, Baridhara, Dhaka 1212, telephone (880) (2) 885-5500, fax (880) (2) 882-3744. The Internet home page address is http://dhaka.usembassy.gov/.

The U.S. Embassy in Kathmandu is located at Pani Pokhari, Kathmandu, telephone (977)(1)4411179; fax(977)(1)4419963. The Internet home page address is http://www.south-asia.com/usa/.