Bhutan is located in the Himalayan Mountains of South Central Asia. It is surrounded by two giant neighbors, China and India. Bhutan occupies 47,000 square kilometers (18,142 square miles) and is about half the size of the U.S. state of Indiana. Its population was estimated to be 2,185,569 in July 2004, but other estimates place its population at less than half that size. Bhutan's per capita income was estimated to be $1,300 in 2003, about the same as Nepal, Côte d'Ivoire, and Rwanda.

Ethnically, Bhutan's population is primarily Bhote (50%) or Nepalese (35%); religiously, it is Buddhist (75%) and Hindu (25%). With a life expectancy of sixty-three years and an adult literacy rate estimated at 47 percent, the United Nations's Human Development Report 2004 ranked Bhutan 133 out of 177 nations for whom it calculated its Human Development Index.

Founded as a Tibetan Buddhist theocracy in 1616, Bhutan became a secular hereditary monarchy under British influence in 1907. In 1910, the British agreed...