In 2003, 46.6% of Bhutanese earned their livelihood from farming. Almost one third of Bhutanese now earn a salary.
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.
Bhutan refused to take them back and Nepal refused to give them citizenship. In 2007, the United States agreed to resettle at least 60,000 of them. The first arrived in early 2008.
In the early 1990s, Bhutan expelled tens of thousands of Nepali Bhutanese, most of them from poor farming families, accusing them of immigrating illegally. The majority ended up in seven refugee camps in Nepal, where they lived in bamboo-and-thatch huts and were cared for by international aid agencies.
In the case of Bhutan, the traditional world was not so long ago. It was only in the 1960s that the third king, Jigme Dorji Wangchuck, seeing the dramatic Chinese takeover in Tibet, began the process of opening Bhutan to the outside world. Since then, change has occurred at an accelerating pace. In 1960, there were only foot trails, no modern schools, no medical clinics, no communications infrastructure. Today Bhutan is highest among all of thte Himalayan states in the UNDP human development index, and is rapidly making up for lost time.
Archaeological evidence suggests Bhutan was inhabited as early as 1500-2000 BC by nomadic herders who lived in low-lying valleys in winter and moved their animals to high pastures in summer. Many Bhutanese still live this way today. The valleys of Bhutan provided relatively easy access across the Himalaya, and it is believed that the Manas River valley was used as a migration route from India to Tibet.
Bhutanese New Year or Losar (Lo gsar), according to the lunar calendar, falls sometime in February-March and it is by far the single most important semi-religious festival for the entire country.
National dress is compulsory - the knee-length wrap-around "gho" for men and the ankle-length dress known as the "kira" for women.
The Bhutanese monarchy has also promoted the philosophy of "Gross National Happiness" (GNH), which strives to achieve a balance between the spiritual and the material.
King Jigme Singye Wangchuck - the father of the present monarch - went to great lengths to preserve the indigenous Buddhist culture of the majority Drukpa people. This ethnic group has a common culture with the Tibetans and other Himalayan peoples.
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.