In 1865, Britain and Bhutan signed the Treaty of Sinchulu, under which Bhutan would receive an annual subsidy in exchange for ceding some border land to British India. Under British influence, a monarchy was set up in 1907; three years later, a treaty was signed whereby the British agreed not to interfere in Bhutanese internal affairs and Bhutan allowed Britain to direct its foreign affairs. This role was assumed by independent India after 1947. Two years later, a formal Indo-Bhutanese accord returned the areas of Bhutan annexed by the British, formalized the annual subsidies the country received, and defined India's responsibilities in defense and foreign relations. A refugee issue of over 100,000 Bhutanese in Nepal remains unresolved; 90% of the refugees are housed in seven United Nations Office of the High Commissioner for Refugees (UNHCR) camps. In March 2005, King Jigme Singye WANGCHUCK unveiled the government's draft constitution - which would introduce major democratic reforms - and pledged to hold a national referendum for its approval. In December 2006, the King abdicated the throne to his son, Jigme Khesar Namgyel WANGCHUCK, in order to give him experience as head of state before the democratic transition. In early 2007, India and Bhutan renegotiated their treaty to allow Bhutan greater autonomy in conducting its foreign policy, although Thimphu continues to coordinate policy decisions in this area with New Delhi. In July 2007, seven ministers of Bhutan's 10-member cabinet resigned to join the political process, and the cabinet acted as a caretaker regime until democratic elections for seats to the country's first parliament were completed in March 2008. The king ratified the country's first constitution in July 2008.

Location:
Southern Asia, between China and India
Geographic coordinates:
27 30 N, 90 30 E
Map references:
Asia
Area:
total: 38,394 sq km
country comparison to the world: 137
land: 38,394 sq km
water: 0 sq km
Area - comparative:
about one-half the size of Indiana
Land boundaries:
total: 1,075 km
border countries: China 470 km, India 605 km
Coastline:
0 km (landlocked)
Maritime claims:
none (landlocked)
Climate:
varies; tropical in southern plains; cool winters and hot summers in central valleys; severe winters and cool summers in Himalayas
Terrain:
mostly mountainous with some fertile valleys and savanna
Elevation extremes:
lowest point: Drangeme Chhu 97 m
highest point: Gangkar Puensum 7,570 m
Natural resources:
timber, hydropower, gypsum, calcium carbonate
Land use:
arable land: 2.3%
permanent crops: 0.43%
other: 97.27% (2005)
Irrigated land:
400 sq km (2008)
Total renewable water resources:
95 cu km (1987)
Freshwater withdrawal (domestic/industrial/agricultural):
total: 0.43 cu km/yr (5%/1%/94%)
per capita: 199 cu m/yr (2000)
Natural hazards:
violent storms from the Himalayas are the source of the country's name, which translates as Land of the Thunder Dragon; frequent landslides during the rainy season
Environment - current issues:
soil erosion; limited access to potable water
Environment - international agreements:
party to: Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Endangered Species, Hazardous Wastes, Ozone Layer Protection
signed, but not ratified: Law of the Sea
Geography - note:
landlocked; strategic location between China and India; controls several key Himalayan mountain passes

Population:
708,427 (July 2011 est.)
country comparison to the world: 165
note: the Factbook population estimate is consistent with the first modern census of Bhutan, conducted in 2005; previous Factbook population estimates for this country, which were on the order of three times the total population reported here, were based on Bhutanese government publications that did not include the census
Age structure:
0-14 years: 28.9% (male 104,622/female 100,383)
15-64 years: 65.3% (male 245,054/female 217,864)
65 years and over: 5.7% (male 21,347/female 19,157) (2011 est.)
Median age:
total: 24.8 years
male: 25.4 years
female: 24.2 years (2011 est.)
Population growth rate:
1.201% (2011 est.)
country comparison to the world: 98
Birth rate:
19.13 births/1,000 population (2011 est.)
country comparison to the world: 103
Death rate:
7.12 deaths/1,000 population (July 2011 est.)
country comparison to the world: 129
Net migration rate:
0 migrant(s)/1,000 population (2011 est.)
country comparison to the world: 78

Country name:
conventional long form: Kingdom of Bhutan
conventional short form: Bhutan
local long form: Druk Gyalkhap
local short form: Druk Yul
Government type:
constitutional monarchy
Capital name::
Thimphu
geographic coordinates: 27 29 N, 89 36 E
time difference: UTC+6 (11 hours ahead of Washington, DC during Standard Time)
Administrative divisions:
20 districts (dzongkhag, singular and plural); Bumthang, Chhukha, Chirang, Daga, Gasa, Geylegphug, Ha, Lhuntshi, Mongar, Paro, Pemagatsel, Punakha, Samchi, Samdrup Jongkhar, Shemgang, Tashigang, Tashi Yangtse, Thimphu, Tongsa, Wangdi Phodrang
Independence:
1907 (became a unified kingdom under its first hereditary king)
National holiday:
National Day (Ugyen WANGCHUCK became first hereditary king), 17 December (1907)
Constitution:
ratified 18 July 2008

The economy, one of the world's smallest and least developed, is based on agriculture and forestry, which provide the main livelihood for more than 60% of the population. Agriculture consists largely of subsistence farming and animal husbandry. Rugged mountains dominate the terrain and make the building of roads and other infrastructure difficult and expensive. The economy is closely aligned with India's through strong trade and monetary links and dependence on India's financial assistance. The industrial sector is technologically backward, with most production of the cottage industry type. Most development projects, such as road construction, rely on Indian migrant labor. Model education, social, and environment programs are underway with support from multilateral development organizations. Each economic program takes into account the government's desire to protect the country's environment and cultural traditions. For example, the government, in its cautious expansion of the tourist sector, encourages visits by upscale, environmentally conscientious tourists. Complicated controls and uncertain policies in areas such as industrial licensing, trade, labor, and finance continue to hamper foreign investment. Hydropower exports to India have boosted Bhutan's overall growth. New hydropower projects will be the driving force behind Bhutan's ability to create employment and sustain growth in the coming years.
GDP (purchasing power parity):
$3.875 billion (2010 est.)
country comparison to the world: 167
$3.63 billion (2009 est.)
$3.34 billion (2008 est.)
note: data are in 2010 US dollars
GDP (official exchange rate):
$1.412 billion (2010 est.)
GDP - real growth rate:
6.7% (2010 est.)
country comparison to the world: 41
8.7% (2009 est.)
3% (2008 est.)
GDP - per capita (PPP):
$5,500 (2010 est.)
country comparison to the world: 142
$5,300 (2009 est.)
$4,900 (2008 est.)
note: data are in 2010 US dollars
GDP - composition by sector:
agriculture: 17.6%
industry: 45%
services: 37.4% (2009)

Airports:
2 (2010)
country comparison to the world: 197
Airports - with paved runways:
total: 1
1,524 to 2,437 m: 1 (2010)
Airports - with unpaved runways:
total: 1
914 to 1,523 m: 1 (2010)
Roadways:
total: 8,050 km
country comparison to the world: 141
paved: 4,991 km
unpaved: 3,059 km (2003)