Bhutan - Politics, government, and taxation

Bhutan is the world's only Buddhist kingdom. The Bhutanese name for their country is Druk Yul which means "Land of the Thunder Dragon." Ruled by a hereditary monarchy since 1907, Bhutan received full independence from India in 1949 after the British colonial administration withdrew from India. Bhutan's political system is unlike historical precedents in the West and is most appropriately categorized as a "Buddhist monarchy."

The third hereditary monarch, Jigme Dorji Wang-chuck, ruled Bhutan from 1952 to 1972. He is generally considered the "architect of modern Bhutan." In 1953 he established the National Assembly. Consisting of representatives of the people, the civil service, and the Buddhist monastic order, the National Assembly meets once a year to debate aspects of public policy and development. The Royal Advisory Council was formed by the king in 1965 to constantly monitor the progress of National Assembly resolutions and advise the king on dayto-day policy matters.

In a similar vein, his son King Jigme Singye Wangchuk (who acceded to the throne in 1972 and continued to reign in mid-2001) has also followed a reformist approach to rule. In 1999 an analyst of Bhutanese affairs, Thierry Mathou, maintained: "Many Bhutanese . . . were stunned by the suddenness and amplitude of the changes introduced by the king. . . . [c]ontrary to most countries with monarchies where royals have resisted democratic politics, Bhutan's has always been the leading force of change." For example, in 1998 the king pushed a political reform that reduced his authority through the devolution of executive powers to the cabinet. Nonetheless, the king continued to have final say on matters relating to security and sovereignty as well direct administration of the Royal Bhutan Army.

Even though Bhutan's governmental system of monarchy is justified on the grounds of maintaining traditional values and national identity by the country's ruling elite, it has received considerable criticism both domestically and internationally. For example, Freedom House (a U.S.-based political liberties and civil rights organization) classified Bhutan in 2000 as "Not Free." Freedom House measured this conclusion upon the lack of democratic representation of the people and the apparent mistreatment of critics of the regime. In its report for 2000, Amnesty International (a London-based human rights organization) maintained that individuals in Nepali-speaking communities faced police discrimination when they attempted to get permission to open a bank account, when attempting to travel abroad for training, for work, or to send their children to school.

In fact, discrimination against Lhotshampa is rife. A series of laws passed in the 1980s revealed tough remits for the acquisition of citizenship, even if an individual were married to a Bhutanese national, and the fact that naturalized citizenship can be terminated if a person criticizes the government. Still, there is some justification for this policy because militant Lhotshampa movements have called for a merging of Bhutan into a greater Nepal. Some of these militants, whom the government calls "anti-nationals," have been involved in campaigns of violence and have done damage to some infrastructure and development projects.

Nationalism and tradition are actively promoted in Bhutan. In part due to the economic and military-political weakness of the country in international relations and also due to the perceived threat from the Lhotshampa community's tendency to reduce Bhutanese identity, the government emphasizes rules of national dress, the code of etiquette (driglam namzha), and the national language (Dzongkha).

A serious ongoing security problem for the government is the presence of the communist guerrilla group, the United Liberation Front of Assam (ULFA) and the Assamese (Bodo) guerrilla insurgency in east and south Bhutan. These groups are fighting for independence for Assam. Although there has been vocal engagement between the ULFA and the Bhutanese government, a solution to their presence has yet to be reached. The existence of these anti-Indian government forces on Bhutanese territory could led to a deterioration in the special friendship between India and Bhutan.

Non-tax revenue constituted 61 percent of total revenue in 1998-99. The Chukha Hydro Power Corporation, the Department of Power, and the Department of Telecommunications are some of the key sources of this revenue. Government revenue from the power sector provided 42 percent of total national revenue in 1998-99. Direct tax collection improved in the late 1990s from Nu831 million in 1997-98 to Nu914 million in 1998-99. Of this direct tax 65 percent was from corporate income tax . Taxation on rural areas is very low, around 0.02 percent of total revenue in 1998-99, in order to encourage the population to remain on their farms and thus reduce the strain of uncontrolled urbanization. However, it should be noted that rural inhabitants contribute via the application of their labor to the construction and maintenance of local schools, water supplies, and health centers.