The kingdom of Bhutan is a tiny and impoverished country nestling in the Himalayas between two powerful neighbours, India and China.
The Bhutanese name for Bhutan, Druk Yul - Land of the Thunder Dragon - only began to open up to outsiders in the 1970s. The hereditary monarch wielded absolute power power until 1998 in Bhutan which does not have a constitution.
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.
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, formalised the annual subsidies the country received, and defined India's responsibilities in defence and foreign relations.
A refugee issue of some 100,000 Bhutanese in Nepal remains unresolved; 90 per cent of the refugees are housed in seven United Nations Office of the High Commissioner for Refugees (UNHCR) camps.
History: The early history is vague. At the beginning of the 16th century, Bhutan was ruled by a dual monarchy consisting of a Dharma Raja, or spiritual ruler, and a Deb Raja, or temporal ruler.
With provincial governors (ponlops) becoming quite strong, the Deb Raja held little real clout. In 1720 the Chinese invaded Tibet and established suzerainty over Bhutan.
After Bhutan and Indian Bengal fell out, leading to the Bhutanese invasion of Cooch Behar in 1772, followed by a British incursion into Bhutan, the Tibetan lama's intercession with the governor-general of British India improved ties.
British occupation of Assam in 1826 led to renewed border raids from Bhutan. In 1864 the British occupied part of S Bhutan, which was formally annexed after a war in 1865. Sinchula Treaty had a provision for an annual subsidy to Bhutan as compensation.
In 1907 Sir Ugyen Wangchuk, the most powerful of Bhutan's provincial governors, supported by the British, became the monarch of Bhutan, the first of a hereditary line.
A treaty signed in 1910 doubled the annual British subsidy to Bhutan in return for an agreement to let Britain direct the country's foreign affairs.
After Indian independence, a treaty (1949) returned the part of Bhutan annexed by the British and allowed India to assume the former British role of subsidising Bhutan and directing its defence and foreign relations.
However, the Indians promised not to interfere in Bhutan's internal affairs. When Chinese Communist forces occupied Tibet in 1950, Bhutan, because of its strategic location, became a point of contest between China and India.
The Chinese claim to Bhutan (as part of a greater Tibet) and the persecution of Tibetan Buddhists led India to close the Bhutanese-Tibetan border and to build roads in Bhutan capable of carrying Indian military vehicles.
The next twenty years were very important in kingdom's history as in the 1960s, Bhutan formed a small Army, trained and equipped by India, the kingdom's admitted to the United Nations in 1971, and by the 1980s relations with China improved considerably.
Bhutan's third hereditary ruler, King Jigme Dorji Wangchuk (reigned 1953-72), modernised Bhutanese society by abolishing slavery and the caste system, emancipating women, dividing large estates into small individual plots, and starting a secular educational system.
In 1969 the absolute monarchy gave way to a "democratic monarchy." In 1972 the crown prince, Jigme Singye Wangchuk, became the fourth hereditary king of Bhutan upon his father's death.
The crowning of new king in June, 1974, saw the gradual democratisation of the Bhutanese government. By 1999, the king was no longer head of government; that position was held by head of the cabinet, which is responsible to the National Assembly.
An uprising by the Nepalese minority in 1989, a national policy of forcing non-ethnic Bhutanese to adopt Bhutanese Buddhist traditions, and the expulsion of thousand of ethnic Nepalese regarded by the government as illegal aliens were a source of tension within Bhutan, and with Nepal and India, in the 1990s.
Also, Assamese and West Bengali separatist guerrillas have established bases in Bhutan, from which they make attacks into India. After attempts to negotiate the Assamese guerrillas' withdrawal failed, Bhutan mounted attacks (2003) on their bases.
Population: 2.3m (UN, 2004)
Area: 38,364 sq km (14,812 sq miles)
Major language: Dzongkha (official)
Major religions: Buddhism (official), Hinduism
Life expectancy: 62 years (men), 64 years (women) (UN)
Monetary unit: 1 ngultrum = 100 chetrum
Main exports: Electricity, timber, cement, agricultural products, handicrafts
GNI per capita: US $660 (World Bank, 2003)
International dialing code: +975
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
Natural resources: Timber, hydropower, gypsum, calcium carbide.