 As Bhutan is gradually coming out of its shell and successfully grappling with democracy, it is also exploring new thresholds in bilateral relations with its giant neighbors.
In the South Asian environment, Bhutan is the most stable and the least problematic country. From a feudal/semi feudal set up, it has seamlessly eased into a democratic set up and the country is learning. Thanks to the wise and benign guidance of both Kings Gyalpo IV and Gyalpo V, democracy is developing deep roots in the country which made history when it formally announced a draft democratic constitution on March 26, 2005. The draft was a radical departure from a set up run by royal decree since 1953.
The democratic multi party constitution now in force was not forced on the King. There were no "orange revolutions" or "armed insurrections." Perhaps former King Gyalpo IV anticipated the inevitable march of time and globalization and decided to introduce democracy on his own.
There are very many innovative provisions in the new constitution worthy of emulation. This includes abdication of the King under certain circumstances, right to information, state funding of elections, emphasis on fundamental duties of the citizen rather than on fundamental rights and protection of the environment.
The central piece of the Constitution is the focus on the concept of GNH - Gross National Happiness which is now being taken up by many other countries. GNH is said to encompass four pillars - cultural, environmental and spiritual, balanced with socio economic growth.
The fourth Gyalpo sprang another surprise to the people by voluntarily and prematurely handing over power to Crown Prince Jigme Khesar Namgyal Wangchuk as the fifth Gyalpo on December 9, 2006.
The first ever open elections were held for the National Council on December 31, 2007, very successfully using EVMs (Electronic Voting Machines) and not ballot papers. Elections to the National Assembly followed for 47 seats on March 24 the next year. They were contested by two major parties, the DPT and PDP, both led by senior functionaries of the old regime.
Surprisingly there was heavy turnout in the elections. The campaign was lively and devoid of any law and order problems. There were televised debates between the leaders of the contesting parties and the election itself looked more like a football match.
The DPT (Bhutan United Party) swept the polls winning 43 of the 47 seats. The strength of the opposition party (People's Democratic Party) has been reduced further and now it is almost a single seat party led by Prime Minister Jigme Y. Thinley.
The country has thus made remarkable progress. It is in fact an achievement to have a smooth transition from theocracy to monarchy and now into a two-party democracy.
Democracy is new to the people who a while ago did not even understand the meaning of "opposition" in governance. Yet, from the lively debates in parliament and the assertive stance of the upper house - the National Council, one can see that democracy is taking firm roots in the country and there will not be reversals.
Bhutan is a stratified society with nobles and ordinary men having distinctive identification in dress and protocol. This will change in the course of time. It will have to change radically now, with the introduction of democracy. The country is experimenting both with political and social engineering, a difficult challenge for any country.
 Wedged between two giants, India and China, Bhutan has been closer to India so far which is a matter of necessity, given the open border and easy access in the south, while in the north, the forbidding mountains forbid easy access. India is tied to Bhutan by a special security treaty where, in keeping with the times, Bhutan was able to persuade India to rephrase Article 2 of the treaty from one of guidance and advice in foreign relations to one of "cooperation." This was done in 2007. Economically, Bhutan and India have developed a mutually beneficial arrangement with the former setting up hydro electric plants with grants and loans and then selling the power to the power-hungry India.
The Indian view as one sees, is to ensure that Bhutan does not turn out to be another Nepal. But it all depends on India to let Bhutan feel fully sovereign. India should also open up its economic frontiers for a country that is strategically important and closest to it.
It is not known to many that regular interaction between Bhutan and China is taking place. Since 1994, the Chinese Ambassador has been visiting Bhutan and there have been frequent visits of Chinese delegations to Thimpu.
The major issue complicating relations between Thimpu and Beijing is the border dispute. Nineteen meetings have taken place on the issue so far and substantively very little progress has been made. China is looking for a comprehensive package that includes trade and closer diplomatic relations, first mooted in 1974 and reiterated recently.
One view that does not appear to be quite appealing is that China will probably be more reasonable and generous once Bhutan is weaned away from India. But China cannot be kept indefinitely away from having a residential status in Thimpu and Bhutan could only then have a stable and balanced relationship with both India and China. 
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