The answer to that question is complicated, since the current Dalai Lama (born Tenzin Gyatso) has hinted that the process for selecting his successor may depart from the traditional process. First, some background.
The Dalai Lama is the spiritual leader of the Tibetan Buddhist people. The position was established in the 14th Century, and there have been 14 Dalai Lamas to date.
"Dalai Lama" is the combination of the Mongolic word, dalai, meaning "ocean" and the Tibetan word, bla-ma, meaning teacher or mentor. The Dalai Lama is sometimes referred to as the "Ocean of Wisdom."
Whoever holds the title is traditionally thought to be the current rebirth in a line of tulkus (religious leaders thought to be enlightened beings) who are manifestations of the bodhisattva of compassion. Bodhisattvas are people who commit themselves to the way of life of a Buddha with the goal of bringing peace and enlightenment to all beings.
For periods of time between the 17th and 20th Centuries, the Dalai Lama served as both the religious and political leader of Tibet. In 2011, the current holder of the position retired as head of state for the Tibetan government. He retains religious leadership of Tibetan Buddhists throughout the world.
[Note: due to military pressure from China, the current Dalai Lama and many of his followers were forced to flee their homeland in 1959. The seat of the Tibetan government in exile is the city of Dharamsala in northern India.]
So, how does someone become Dalai Lama? Historically, when an "Ocean of Wisdom" dies, Tibetan spiritual and government leaders spend two or three years trying to find a young child who will next hold the position. The technique for identifying the youngster has traditionally been mystical.
Tibetan spiritual leaders may consult an oracle, and sometimes visit a lake in central Tibet where they ask the lake itself for a sign as to who will be the next Dalai Lama. This was the initial step in finding Tenzin Gyatso. In 1935, the temporary leader who guided the Tibetans after the death of the 13th Dalai Lama also had a vision that led him to the home where Tenzin resided as a small child.
When the religious leaders believe they have found the child (as with Tenzin) who is the rebirth of the Ocean of Wisdom, the boy undergoes a series of tests. In one of these, the child is presented with a number of objects only some of which belonged to the previous Dalai Lama. The boy is asked to select the items that belong to him. If he chooses the items that belonged to the recently departed Dalai Lama, (and passes other tests) he is confirmed as the new leader.
And, what will the next Dalai Lama be like? His Holiness, the 14th Dalai Lama, has hinted that his successor may be found outside Tibet and just might be a woman! He has also suggested that the position of Dalai Lama may be abolished in the future.
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