This encroachment was seen as mainly, but not solely, coming from people of Nepali origin living in Bhutan. The code made wearing national dress compulsory and removed Nepali language from school curricula. This triggered an exodus of ethnic Nepalis to Nepal, where refugee camps were gradually set up. A low-level insurgency was waged in some southern areas of Bhutan, but little activity has occurred for the past few years. In addition, the government ordered the compulsory retirement of over 400 civil servants, on the grounds that they were related to alleged militants in the refugee camps in Nepal and thus posed a potential threat to national security.
Negotiations are now underway on the return of valid refugees.
Although the government relies heavily on external aid, it is determined to decrease its dependence on the 58,000 skilled expatriate workers who are needed to fill skill gaps in Bhutan. Most are Indian, working in construction, business and teaching. The government permits only a relatively small number of donors and agencies to be based in Bhutan. The VSO programme started in 1983 and was very well known and highly valued for its input into primary education. The VSO programme operates with a maximum of 17 volunteers, part of the government s policy of restricting expatriate workers.