Bhutan is a tiny, remote and impoverished kingdom, situated between its powerful neighbors, India and China. Proximity to, and interaction with, British India resulted in British control of Bhutan’s foreign affairs in the 19th and early 20th centuries, and a hereditary monarchy was established in 1907. But by 2008, Bhutan had become a two-party parliamentary democracy. Based on agriculture, forestry, and hydroelectricity, Bhutan’s economy is one of the smallest and least developed in the world.