Bhutan is has the dubious distinction of being one of the world's highest per capita generator of refugees as one sixth of its citizens live in exile. This was the result of the government's planned policy for ethnic cleansing, on a pretext that southern Bhutanese raised their voices for equality and justice. Since 1990, over 106,000 Lhotsampas (Ethnic Nepalis form southern Bhutan) are made refugees after being forcibly evicted, forced to flee persecution and repression, or expelled after being coerced into signing 'voluntary emigration forms' (VMF).

King was both the Head of State and Head of Government until 1998 when much of the powers have been transferred to a Council of Ministers he nominated. The country plans for constitutional monarchy with two-party system after 2008 holding the election for this first time in country's history.

The roots of the political crisis in southern Bhutan lie in the rulers' concern who perceived that the population in the south is growing. The rulers perceived threat from the democratic movement across the globe and in Nepal and the Gorkhaland movement in India in 1980s. Indirectly, the Indian government played the major role in evicting the Bhutanese of Nepali origin. The statement given by Indian foreign minister Pranav Mukherjee in early June after the west Bengal government urged the union government to look after the Bhutanese refugee issue, proves the linkage of India's involvement in eviction of the southern Bhutanese. Mukherjee had said, repatriation of the over 100,000 Bhutanese refugees would create demographic imbalance in Bhutan.

The amendment of the citizenship law 1958 in 1985 paved a clear way out for the eviction and according to this law the southern Bhutanese need to produce the documents proving they resided in Bhutanese since before 1958.

In 1988 the government began taking a census in southern Bhutan based on the 1985 Act. It was not made easy by officials who demanded tax receipts for exactly the year 1958, not even ones issued earlier would do ostensibly because that might imply the person may have left the country before 1958 and returned only after the cut-off year. Older people recall that the government did not issue any tax receipt in 1958.

Similarly, the Marriage Act of 1977 prescribed that only children born of Bhutanese fathers, not either spouse as before, would be considered Bhutanese citizens. The 1985 Citizenship Act tightened this requirement further and required both parents to be Bhutanese for citizenship by birth.

The submission of a petition by Royal Advisor Councillors Tek Nath Rizal and B. P. Bhandari in April 1988 urging for review of the census was termed an act of treason. Youth in schools, colleges and villages became agitated and began to express dissent. The 'One Nation, One People' policy was adopted stringently with a uniform compulsory dress code and dropping of the Nepali language from the school curriculum. A green-belt plan was unveiled that threatened to make a third of all southern Bhutanese homeless. When the people reacted by rising up in mass protests all over southern Bhutan, the government began a massive crackdown. Thousands were arrested and among them hundreds detained for years without trial.

The government carried out a second round of census in southern Bhutan in 2001 and formally announced another 80,000 Lhotsampas as illegal immigrants. The Human Rights Watch has expressed concern that these people would be expelled from their country at any time, in any pretext.