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 some 100,000 Bhutanese in Nepal remains unresolved; 90 percent 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.

A referendum date has yet to be named, but should occur in 2008. 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.

Source: CIA World Fact Book

Population: 2,327,849 note: the Factbook population estimate is inconsistent with the 2005 Bhutan census results; both data are being reviewed and when completed, the results will be posted on The World Factbook Web site (https://www.cia.gov/cia/publications/factbook) later this year (July 2007 est.)

---

Age structure: 0-14 years: 38.6% (male 465,340/female 433,184) 15-64 years: 57.4% (male 688,428/female 647,134) 65 years and over: 4% (male 47,123/female 46,640) (2007 est.)

---

Median age: total: 20.5 years male: 20.4 years female: 20.7 years (2007 est.)

---

Population growth rate: 2.082% (2007 est.)

---

Birth rate: 33.28 births/1,000 population (2007 est.)

---

Death rate: 12.46 deaths/1,000 population (2007 est.)

---

Net migration rate: 0 migrant(s)/1,000 population (2007 est.)

---

Sex ratio: at birth: 1.05 male(s)/female under 15 years: 1.074 male(s)/female 15-64 years: 1.064 male(s)/female 65 years and over: 1.01 male(s)/female total population: 1.066 male(s)/female (2007 est.)

---

Infant mortality rate: total: 96.37 deaths/1,000 live births male: 94.09 deaths/1,000 live births female: 98.77 deaths/1,000 live births (2007 est.)

---

Life expectancy at birth: total population: 55.17 years male: 55.38 years female: 54.96 years (2007 est.)

---

Total fertility rate: 4.67 children born/woman (2007 est.)

---

HIV/AIDS - adult prevalence rate: less than 0.1% (2001 est.)

---

HIV/AIDS - people living with HIV/AIDS: less than 100 (1999 est.)

---

HIV/AIDS - deaths: NA

---

Nationality: noun: Bhutanese (singular and plural) adjective: Bhutanese

---

Ethnic groups: Bhote 50%, ethnic Nepalese 35% (includes Lhotsampas - one of several Nepalese ethnic groups), indigenous or migrant tribes 15%

---

Religions: Lamaistic Buddhist 75%, Indian- and Nepalese-influenced Hinduism 25%

---

Languages: Dzongkha (official), Bhotes speak various Tibetan dialects, Nepalese speak various Nepalese dialects

---

Literacy: definition: age 15 and over can read and write total population: 47% male: 60% female: 34% (2003 est.)

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. Bhutan's hydropower potential and its attraction for tourists are key resources. Model education, social, and environment programs are underway with support from multilateral development organizations. Each economic program takes into account the government's desire to protect the country's environment and cultural traditions. For example, the government, in its cautious expansion of the tourist sector, encourages visits by upscale, environmentally conscientious tourists. Detailed controls and uncertain policies in areas such as industrial licensing, trade, labor, and finance continue to hamper foreign investment.

---

GDP (purchasing power parity): $3.503 billion (2006 est.)

---

GDP (official exchange rate): $840.5 million (2005 est.)

---

GDP - real growth rate: 8.8% (2005 est.)

---

GDP - per capita (PPP): $1,400 (2003 est.)

---

GDP - composition by sector: agriculture: 24.7% industry: 37.2% services: 38.1% (2005)

---

Labor force: NA note: major shortage of skilled labor

---

Labor force - by occupation: agriculture: 63% industry: 6% services: 31% (2004 est.)

---

Unemployment rate: 2.5% (2004)

---

Population below poverty line: 31.7% (2003)

---

Household income or consumption by percentage share: lowest 10%: NA% highest 10%: NA%

---

Inflation rate (consumer prices): 5.5% (2005 est.)

---

Budget: revenues: $272 million expenditures: $350 million; including capital expenditures of $NA note: the government of India finances nearly three-fifths of Bhutan's budget expenditures (2005)

---

Public debt: 81.4% of GDP (2004)

---

Agriculture - products: rice, corn, root crops, citrus, foodgrains; dairy products, eggs

---

Industries: cement, wood products, processed fruits, alcoholic beverages, calcium carbide, tourism

---

Industrial production growth rate: 9.3% (1996 est.)

---

Electricity - production: 2.05 billion kWh (2004)

---

Electricity - consumption: 526.5 million kWh (2004)

---

Electricity - exports: 1.4 billion kWh (2004)

---

Electricity - imports: 20 million kWh (2004)

---

Oil - production: 0 bbl/day (2004)

---

Oil - consumption: 1,160 bbl/day (2004 est.)

---

Oil - exports: NA bbl/day

---

Oil - imports: NA bbl/day

---

Oil - proved reserves: 0 bbl

---

Natural gas - production: 0 cu m (2004 est.)

---

Natural gas - consumption: 0 cu m (2004 est.)

---

Natural gas - proved reserves: 0 cu m (1 January 2005 est.)

---

Exports: $186 million f.o.b. (2005)

---

Exports - commodities: electricity (to India), cardamom, gypsum, timber, handicrafts, cement, fruit, precious stones, spices

---

Exports - partners: India 69.2%, Japan 9.1%, Germany 3.7% (2006)

---

Imports: $410 million c.i.f. (2005)

---

Imports - commodities: fuel and lubricants, grain, aircraft, machinery and parts, vehicles, fabrics, rice

---

Imports - partners: India 75.3%, Hong Kong 16.1%, Mexico 4.9% (2006)

---

Debt - external: $593 million (2004)

---

Economic aid - recipient: $78 million; note - substantial aid from India (2004)

---

Currency (code): ngultrum (BTN); Indian rupee (INR)

---

Exchange rates: ngultrum per US dollar - 45.279 (2006), 44.101 (2005), 45.317 (2004), 46.583 (2003), 48.61 (2002) note: the ngultrum is pegged to the Indian rupee

---

Fiscal year: 1 July - 30 June