Bhutan's People's Democratic Party wins election, returns to power

The People's Democratic Party won the most seats in Bhutan's parliamentary elections on Tuesday and will form the new government as residents hope politicians make good on promises to fix the economic crisis in the Himalayan nation.

Latest figures from the Bhutan Broadcasting Service, a national broadcaster, showed the PDP had won 30 of the 47 National Assembly seats to return to power, and the Bhutan Tendrel Party had secured 17.

It was the country's fourth general elections since its transformation from a traditional monarchy to a parliamentary form of government in 2008.

The Election Commission of Bhutan will make its final declaration on Wednesday.

Candidates on Tuesday's ballot represented only the PDP of former Prime Minister Tshering Tobgay and the BTP led by former civil servant Pema Chewang. A primary round of voting in November eliminated three other parties, including the ruling center-left Druk Nyamrup Tshogpa party.

Bhutan is located between China and India, with both neighbours vying for influence in the landlocked nation of around 800,000 people.

The severe economic crisis played a major role in campaigning. According to the World Bank, Bhutan's economy grew at a rate of 1.7 per cent over the past five years.

With unemployment a chronic problem, an exodus of young people in search of higher education and jobs abroad is undermining the country's economic potential.

In a bid to overcome the economic challenges, Bhutan's King Jigme Khesar Namgyal Wangchuck announced in December plans for a megacity in Gelephu, a town on the border with the northeastern Indian state of Assam, that will have zero-carbon industries with foreign investment.

King Wangchuk said the city-building would be mindful of Bhutanese culture and tradition and will blend with the Himalayan ecosystem. He met with top Indian business leaders who are expected to invest in the project.

Construction will take place in a specially administered zone in Bhutan that has investment-friendly laws.