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Bhutan (formally the Kingdom of Bhutan) is a small, landlocked Buddhist constitutional monarchy in the eastern Himalayas, located between China's Tibetan autonomous region and India. Its terrain is largely mountainous, and its economy is based on agriculture and forestry. Bhutan's official national language is Dzongkha, and its multiethnic population, reported in the 2005 government census to be approximately 691,000, is 75% Buddhist and 25% Hindu.

Tantric Buddhism took root in Bhutan in the eighth century, superseding the indigenous Bon religion, which nevertheless subsists today in local practices. Ngawang Namgyel, a leader of the Drukpa Kagyupa (“Thunder Dragon”) sect of Tibetan Buddhism, unified the territory of Bhutan in the 17th century, establishing Bhutan as a sovereign state and endowing it with its Drukpa character. In the early 20th century, Bhutan became a hereditary monarchy, and in 2008, it transitioned to a constitutional monarchy when its fifth king, Jigme Khesar Namgyel Wangchuck, ratified the country's first constitution.

Bhutan's participation in globalization has been largely through its own rapid internal modernization. Bhutan has walked a fine line between preserving its cultural and religious heritage while embracing elements of globalization that yield the greatest perceived benefits to its population. In this process, religion has played a profound role in shaping Bhutan's responses to the challenges and opportunities that modernization has presented. A prime example of this can be seen in Bhutan's official program, established in 2008, of promoting and measuring the quality of life of its citizens through a “Gross National Happiness” index, which it quantifies in census reports and includes as part of the country's GDP (gross domestic product). The concept is based on Buddhist principles of a well-balanced life.

In the last decades of the 20th century, Bhutan made dramatic strides in modernization through effective development programs in the areas of agriculture, education, health, and overall infrastructure. Emerging from centuries of isolation, in the 1960s, the government pursued policies that would balance the gains of modernization with cultural and religious preservation of the country's majority Drukpa Buddhist heritage. Through royal patronage, select cultural traditions such as the Tshechu dance festival have been preserved and afforded new vitality. The country's strictly controlled tourism industry also benefits from the vitality of these cultural traditions, and sometimes tourists further support them in return.

The Bhutanese government has pursued policies and programs that have preserved the country's natural environment from the degradation witnessed in other Himalayan countries resulting from industry, development, and tourism. These policies, which are informed by a Buddhist orientation to the phenomenal world wherein the land is the abode of various local forms of the sacred, have ensured the preservation of vast natural resources.

In the 1980s, governmental concerns with Drukpa cultural preservation took the form of ethnonationalist policies that sought to exclude Hindu Lhotshampas (Bhutanese of Nepali descent) from definitions of Bhutanese identity. This led to the eventual expulsion of more than 100,000 Lhotshampas, most of whom are housed in UNHRC (United Nations Human Rights Commission) camps over the Nepal border. Such concerns also led to the implementation of an array of policies—including new Druk sartorial codes—intended to strengthen Bhutan's Drukpa identity.

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