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Kingdom of Nepal

Nepal Adhirajya

CAPITAL: Kāthmāndu

FLAG: The national flag consists of two red adjoining triangles, outlined in blue and merging at the center; the points are at the fly. On the upper triangle, in white, is a symbolic representation of the moon; on the lower triangle, that of the sun.

ANTHEM: The national anthem begins "May His Majesty, solemn and supremely valiant, be prosperous forever."

MONETARY UNIT: The Nepalese rupee (nr) is a paper currency of 100 paisa. There are coins of 1, 2, 5, 10, 20, 25, and 50 paisa and 1, 2, 5, 10, 20, 25, 50, and 100 rupees, and notes of 1, 2, 5, 10, 20, 50, 100, 500, and 1,000 Nepalese rupees. nr1 = $0.01357 (or $1 = nr73.674; as of 2004).

WEIGHTS AND MEASURES: The metric system is in use, but some traditional Indian standards also are employed.

HOLIDAYS: National Unity Day, 11 January; Martyrs' Day, 30 January; Rashtriya Prajatantra DivasNational Democracy Day, 18 February; Nepalese Women's Day, 8 March; NavabarshaNepalese New Year's Day, mid-April; UN Day, 24 October; Queen Aishworya's Birthday, 7 November; Constitution Day, 9 November; National Day (King Birendra's Birthday), 28 December. Hindu and Buddhist religious holidays are based on the lunisolar calendar. Saturday is the general day of rest.

TIME: 5:45 pm = noon GMT.


A comparatively narrow strip of territory dividing India from China, landlocked Nepal has an area of about 140,800 sq km (54,363 sq mi), extending 885 km (550 mi) senw and 201 km (125 mi) nesw. Comparatively, the area occupied by Nepal is slightly larger than the state of Arkansas. In its length lie some 800 km (500 mi) of the Himalayan mountain chain. Nepal is bounded on the n by China and on the e, s, and w by India, with a total boundary length of 2,926 km (1,818 mi). Nepal's capital city, Kāthmāndu, is located in the central part of the country.


Nepal is made up of three strikingly contrasted areas. Southern Nepal has much of the character of the great plains of India, from which it extends. Known as the Terai, this region comprises both cultivable land and dense jungle, the latter being for the most part a game preserve inhabited by the wild elephant, tiger, and other typically South Asian fauna. Besides being a hunting ground, the forests are worked for their valuable timber. The Terai contains about one-third of Nepal's population and makes up about one-fourth of the total area. The second and by far the largest part of Nepal is formed by the Mahabharat, Churia, and Himalayan mountain ranges, extending from east to west. Their altitude increases toward the north, culminating on the Tibetan border in Mt. Everest (Sagarmatha in Nepali), standing amid other noble peaks.

Three principal rivers originate from glaciers and snow-fed lakes, break southward through deep Himalayan gorges, and enter, respectively, the Karnali, Gandak, and Kosi basins. Flowing toward India, they become tributaries (as are all Nepal's rivers) of the Ganges system. The third area is a high central region, some 890 km (344 sq mi) in extent between the main Himalayan and Mahabharat ranges; this region is known as the Kāthmāndu Valley, or the Valley of Nepal. Overlooked by mountains, the valley, with its fertile soil and temperate climate, supports a thriving agriculture. Here Kāthmāndu, the capital, is situated, with the foothill towns of Bhaktapur and Patan nearby. This is the only region of Nepal that has any considerable population density.

Eight of the world's highest mountains are situated in the Himalaya range on the Tibetan border. Triangulated in 1850, Mt. Everest was officially given the status of the world's highest peak in 1859. The summit (8,850 m/29,035 ft) was reached for the first time on 29 May 1953 by Sir Edmund Hillary, a New Zealander, and Tenzing Norgay, a Sherpa guide.


Below the Kāthmāndu Valley and throughout the Terai, the climate is subtropical and, in the swamps and forests, extremely humid. The valley itself enjoys the temperate conditions generally found between altitudes of 1,2003,400 m (4,00011,000 ft). At 1,300 m (4,300 ft) above sea level, the elevation of Kāthmāndu, the rainy season lasts from June to October; 80% of annual precipitation falls during this monsoon season. Colder weather follows, lasting until the middle of March, when the warm season begins. The warm season increases in intensity until broken by the rains, which account for precipitation of about 150 cm (60 in) annually. Temperatures in Kāthmāndu in January range from an average minimum of 2°c (36°f) to an average maximum of 18°c (64°f); the July range is 2029°c (6884°f). Northward of the Kāthmāndu Valley, a subalpine zone continues to altitudes of about 4,300 m (14,000 ft); above that elevation, the country is covered with snow during the long winter, and extreme cold is experienced in the upper Himalayas.


The wide range of climate accounts for correspondingly marked contrasts in flora and fauna between different regions of the country. In the south, the sal (the wood of which is used for railroad ties), sisu, and other subtropical trees are abundant in forests; in the extreme north, junipers are seen even at the altitude of the glacial moraines. Many kinds of conifers also exist in the alpine zone, along with the yew, various hollies, birch, dwarf rhododendrons, and other alpine flora.

Dominant in the Langtang Valley are the chir pine, willow, alder, and evergreen oak. Blue pine and silver fir are frequent in the subalpine zone, which also supports tree rhododendronsmagnificent plants often reaching a growth of 12 m (40 ft). Ground orchids, lilies, yellow and blue poppies, and crimson anemones are prevalent in central Nepal. The profusion of wild flowers extends to very high altitudes; at 5,200 m (17,000 ft), several varieties of primula, pink and white cotoneaster, and white erica have been gathered, along with many kinds of alpine mosses and ferns.

The tiger, hyena, and jackal still exist in southern Nepal, although in decreasing numbers. Rhesus monkeys and a variety of other small jungle mammals and rodents are common. At middle altitudes are found the black bear, several species of cats, squirrel, hare, deer, and antelope. Higher in the mountains, wild sheep and goats, marmots, and a species of tailless mouse-hare are numerous. Wild yaks can still be found in the mountains of Nepal. The wild yaks, an endangered species that holds the distinction of being the mammal that lives at the highest altitudes, can make their homes at altitudes up to 6,096 m (20,000 ft), but have trouble in altitudes below 3,048 m (10,000 ft). Small black spiders were found at 6,900 m (22,500 ft) on rocky ledges traversed by the Mt. Everest expedition of 1953.

Birds of Nepal include the green finch, dove, woodpecker, nuthatch, warbler, flycatcher, bulbul, and other familiar species. At about 2,700 m (9,000 ft) are found the hill partridge, pheasant, yellow-backed sunbird, minivet, and many of the flowerpeckers; the redstart, pipit, wagtail, snow pigeon, snowcock, and golden eagle thrive in both the alpine and subalpine zones.

As of 2002, there were at least 181 species of mammals, 274 species of birds, and over 6,900 species of plants throughout the country.


Nepal's environment has suffered the effects of agricultural encroachment, deforestation and consequent soil erosion, and contamination of the water supply. Between the mid-1960s and the late 1970s, forestland declined from 30% to 22% of the total area, mainly because of the felling of timber for firewood, which supplies over 90% of Nepal's fuel requirements. All of Nepal's forests were nationalized in 1957, but reforestation efforts have been minimal. A forest conservation program, begun in 1980, includes the establishment of village tree nurseries, free distribution of seedlings, and provision of wood-burning stoves of increased efficiency. By 1985, however, deforestation averaged 324 sq mi per year, while reforestation was only 4,000 hectares (9,900 acres) per year. An additional 4.4% of forest and woodland were lost between 1983 and 1993. As of 2000, the annual rate of deforestation was at about 1.8%. The FAO has estimated that at the present rates of depletion, the forests will be virtually wiped out by 2015.

Air and water pollution are significant environmental problems in Nepal. In 2000, the total carbon dioxide emissions was at 3.4 million metric tons. The use of contaminated drinking water creates a health hazard. Untreated sewage is a major pollution factor: the nation's cities have produced an average of 0.4 million tons of solid waste per year.

In 2003, about 8.9% of the total land are of Nepal was protected. There are two natural UNESCO World Heritage Sites: Sagarmatha National Park and Royal Chitwan National Park. There are four Ramsar wetland sites. According to a 2006 report issued by the International Union for Conservation of Nature and Natural Resources (IUCN), threatened species included 29 types of mammals, 31 species of birds, 6 types of reptiles, 3 species of amphibians, 1 species of invertebrates, and 7 species of plants. Species classified as endangered in Nepal included the snow leopard, tiger, Asian elephant, pygmy hog, great Indian rhinoceros, Assam rabbit, swamp deer, wild yak, chir pheasant, and gavial.


The population of Nepal in 2005 was estimated by the United Nations (UN) at 25,371,000, which placed it at number 45 in population among the 193 nations of the world. In 2005, approximately 4% of the population was over 65 years of age, with another 39% of the population under 15 years of age. There were 98 males for every 100 females in the country. According to the UN, the annual population rate of change for 200510 was expected to be 2.2%, a rate the government viewed as too high in light of the country's environmental problems and poverty. The projected population for the year 2025 was 36,093,000.

The population density was 172 per sq km (446 per sq mi), but population distribution is uneven, with about 45% of all Nepalese concentrated in the hilly central region, 47% in the fertile Terai plain, and only 8% in the mountains.

The UN estimated that 14% of the population lived in urban areas in 2005, and that urban areas were estimated to be growing at an annual rate for 200005 at 5.1%. The capital city, Kāthmāndu, had a population of 741,000 in that year.


Nearly 20,000 Tibetans arrived in Nepal between the Chinese annexation of Tibet in 1959 and 1989. Hundreds of thousands of Nepalese were believed to be working in India in the 1980s, and over 100,000 Indians were working in Nepal, particularly in the garment industry and on the building of highways.

An influx of Bhutanese refugees into Nepal began in late 1991 and peaked in 1992; the flow of new arrivals slowed after 1997. The total number of migrants in 2000 was 619,000 including refugees. In 2004, there were 104,915 refugees from Bhutan and 20,704 from Tibet, and an additional 654 asylum seekers. In that same year over 1,200 Nepalese applied for asylum in Europe, Hong Kong, the United Kingdom, and the United States. Others of concern to the United Nations High Commissioner for Refugees (UNHCR) in Nepal are 10,000 Bhutanese and 737 Tibetans.

In 2005, the net migration rate was zero per 1,000 population. The government views the migration levels as satisfactory. In 2004, an estimated 1.2 million Nepalese worked abroad in nearly 40 foreign countries returning about $1 billion in remittances.


Nepal consists of two primary ethnic elements: Mongoloids, who migrated to Nepal by way of Tibet, Sikkim, Assam, and northern Bengal; and Indo-Aryans, who came from the Indian plains and from the sub-Himalayan hill areas to the west of Nepal. These can be broken down into more than 75 ethnic groups. There are also small remnants of Dravidian tribes. Bhotes, of Tibetan origin, are the principal occupants of northern Nepal. In the central valley, Newars, considered to be one of the earliest groups of inhabitants, and Murmis predominate, the former being responsible for most of the agriculture and trade. Less numerous groups include Gurungs and Magars in west-central Nepal and Kirantis and Rai in the east. Sherpas, a Himalayan people, have become well known as guides for mountain-climbing expeditions. The aboriginal Tharus live in the southern Terai region. The Brahman and Chetri caste groups are believed to be descendants of Indian settlers. The Dalit, who are members of the lowest caste system formerly called "untouchables," still face social, political, economic, and even religious discrimination, particular in the rural areas of the west. The government has imposed laws prohibiting such discrimination.

At the 2001 census, the Chetri accounted for about 15.5% of the population and the Brahmans made up 12.5% of the population. Magars accounted for 7%, Tharus for 6.6%, Tamang 5.5%, Newar 5.4%, Muslims 4.2%, Kami 3.9%, and Yadav 3.9%.


Nepali is the official language, although some 50 different languages are spoken. Nepali is spoken by about 47.8% of the population and is the language for most intertribal communication; it is used in government publications and has been the language of most of the written literature since the Gurkha unification of Nepal. About 12.1% of the people speak Maithili as their first language, 7.4% Bhojpuri, 5.8% Tharu, 5.1% Tamang, 3.6% Newar, 3.3% Magar, and 2.4% Awadhi. Except in primary schools, where children are taught in their own language, Nepali or English is the medium of instruction. English is taught as a second language in secondary schools and colleges and is widely understood in business and government circles.


Hinduism and Buddhism exist side by side in Nepal and to some extent are intermingled. The importance of both in the national life is manifested everywhere; more than 2,700 temples and shrines have been counted in the Kāthmāndu Valley alone, while innumerable others are scattered along trails and roads extending to the most distant mountain passes. Bodhnath and Shambunath are famous Buddhist temples. The ancient temple of Chandrahigiri is dedicated to both religions. The Baghmati River, flowing through central Nepal, is considered sacred and is visited by pilgrims, as are certain mountains and lakes.

A 2004 report indicated that about 81% of the population were nominally Hindu, while 11% were Buddhist. Muslims constituted about 4.2% of the population. Minorities included Christians, Baha'is, Jains, and Kirants (followers of an indigenous animist religion). The constitution does not establish a state religion but does describe the nation as a "Hindu Kingdom." The constitution also forbids proselytizing. Certain Hindu holidays are recognized as national holidays, as is the birthday of the Buddha. Some local authorities have restricted public celebrations of Tibetan Buddhist festivals.


Nepal's ratios of road mileage to area and to population are among the lowest in the world, and the principal means of land transport is by porters with pack animals. The main highways are the 190-km (118-mi) road that penetrates the Kāthmāndu Valley, connecting it with the Indian border; the 87-km (54-mi) road between Kāthmāndu and Kodari on the Tibetan (Chinese) border, which was severely damaged by flooding in late 1982 and was later rebuilt with Chinese assistance; the 862-km (536-mi) eastwest Mahendra Highway; and the 200-km (124-mi) Kāthmāndu-Pokhara highway, which is being extended to Surkhet. In all, Nepal had 13,223 km (48,217 mi) of roadway in 2002, of which 4,073 km (2,531 mi) were paved.

There are no waterways in Nepal. The only practical seaport for goods bound for Kāthmāndu is Calcutta in India.

Nepal had a total of 59 km (37 mi) of railways in 2004, all of it narrow gauge and all in Kosi, close to the Indian border. Opened in 1927, the line runs from Jayanagar, in India, to Janakpur, a distance of 52 km (32 mi), of which 10 km (6 mi), running from Raxaul, India, to the frontier town of Birganj, is government owned. An electrically driven ropeway, inaugurated in 1925 and improved with US aid in 1962, carries 25 tons an hour a distance of 43 km (27 mi), to a height of nearly 1,400 m (4,500 ft) from Hetaura to Kāthmāndu.

Much of Nepal is easily accessible only by air. In 2004 there were an estimated 46 airports, of which 10 (as of 2005), had permanently surfaced runways. The leading air terminal is Tribhuvan airport at Kāthmāndu. Domestic flights are operated by the Royal Nepal Airlines Corp., which also schedules flights to Great Britain, Germany, India and eight other Asian countries. In 2003, about 625,000 passengers were carried on scheduled domestic and international airline flights.


Fact, myth, and legend are intertwined in Nepal's historical literature, which, in the Vamshavali, traces the origins of the country in the distant past when Nepal was allegedly founded by Ne-Muni and derived its name from this source. A reliable chronology can be established only after the conquest of Nepal by Harisinha-deva, rajah of Simraun in about 1324. Under the Malla dynasty, Nepal was administered in four separate states: Banepa, Bhadgaon (now Bhaktapur), Kantipur (modern Kāthmāndu), and Lalitpur (now Pāţan).

Prithwi Narayan Shah, the ruler of Gorkha, a small principality west of Kāthmāndu, established the modern kingdom of Nepal in 1768 by incorporating the Kāthmāndu Valley into his domain and unifying with it many small independent principalities and states. Under his descendants, most of the present boundaries of Nepal were established and Hinduism was introduced from India as the official religion.

Nepal came in contact with the influence of larger powers outside South Asia in the late 18th century as a consequence of the British East India Company's conquest of India to its south and a trade dispute with Tibet that led to a Nepalese confrontation with China. Peace was imposed by China in 1792, after Chinese forces had invaded, then withdrawn from Nepal. In the same year, a commercial treaty was ratified between Britain and Nepal. Relations with the British in India remained peaceful until 1814 when a border dispute led to inconclusive hostilities between Nepal and the British East India Company. When the fighting ended two years later, Nepal's independence was preserved in an agreement in which Nepal yielded a large piece of territory to the Company on its southern border and agreed to the establishment of a permanent British resident at Kāthmāndu.

The 1816 agreement (reaffirmed by a formal treaty of friendship between Nepal and Great Britain in 1923) also laid the groundwork for more than a century and a half of amicable relations between Britain and Nepal. Included under the agreement was Nepalese approval for British recruitment of Nepalese Gurkha mercenaries for the British-officered Indian army. During the Indian Mutiny of 1857, Nepal's Rana prime minister sent some 12,000 additional Nepalese troops in support of British garrisons; he also offered troops to US president Abraham Lincoln in 1866 during the US Civil War. Over the years, the Gurkha regiments serving in the British Indian army (and after 1947 under both Indian and British flags) won renown for their bravery, skill, and endurancein Afghanistan in 1879 and Tibet in 1904, in Europe, Asian, and Africa in the 20th century's two world wars, in the UN action in the Belgian Congo in the 1960s, in India's conflicts with China and Pakistan, and in 1982, in Britain's conflict with Argentina over the Falkland Islands.

In 1846, Shumshere Jung Bahadur (Rana) became Nepal's de facto ruler, banishing the king and ruling as regent for the king's minor heir. The prime ministership became a hereditary office in his Rana family, not unlike the Tokugawa Shogunate in Japan, ruling successively until 1951. Following the end of World War II, the termination of British rule on the South Asian subcontinent in 1947 caused deep stirrings of change in Nepal. Resentment grew against the autocratic despotism of the Ranas, whoas regentshad kept successive monarchs virtual prisoners. A political reform movement, begun in 1946 with the founding of the Nepali Congress Party on the model of the Indian Congress Party, won the support of King Tribhuvana Bir Bikram Shah, but in a power struggle in 1950, the king was forced to flee from the Ranas to India. With Indian support, insurgents began operations against the Rana government until, with the mediation of Indian Prime Minister Nehru, a political compromise was reached that returned the king to Kāthmāndu and ended a century of hereditary Rana family rule. By late 1951 a new government took office, headed by Matrika Prasad Koirala, with his brother, a co-founder of the Nepali Congress Party (NC).

Political life in Nepal in the years since the restoration of the monarchy in 1951 has been dominated by the struggle between the monarchy and the country's political elements to define the terms under which they will co-exist and bring the country into the modern world. Six different cabinets, each lacking popular support and riddled with dissension, held office in rapid succession between 1951 and 1957, and in 195758, King Mahendra Bir Bikram Shah, who had succeeded to the throne upon the death of his father in 1955, ruled directly for a period of months. In April 1959, he promulgated a democratic constitution, providing for a constitutional monarchy, two houses of parliament, and a cabinet and prime minister responsible to the lower house, in the Westminster model. Bisweswar Prasad (B. P.) Koirala of the NC assumed office on 24 July 1959 as first prime minister under this constitution.

Less than 18 months later, on 15 December 1960, the king suspended the constitution, dissolved parliament, dismissed the cabinet, and again established his own government, this time with an appointed council of ministers. He ruled directly until April 1962 when he promulgated a new constitution establishing an indirect, nonparty system of rule through a tiered system of panchayats (council) culminating in a National Panchayat. Five years later, after growing agitation and hit-and-run attacks by NC elements based in India, the kingagain under Indian pressurepromulgated a series of amendments introducing gradual liberalization.

In January 1972, Mahendra died suddenly and was succeeded by his 27-year-old son, Birendra Bir Bikram Shah Dev. The young monarch, who had attended Harvard University in the United States, was committed to maintaining the authority of the monarchy while keeping Nepal on the course of gradual political and social reform set by his father. Student demonstrations in early 1979 led him to call for a national referendum on whether to continue the panchayat system or create a more conventional multiparty system. With the king promising further liberalization, the existing panchayat system was endorsed by 55% of the voters in May 1980, and later that year, the king's subsequent constitutional amendments established direct elections and permitted the Panchayat, not the king, to choose the prime minister. The king's failure to lift the ban on political parties led party membersineffectivelyto boycott the elections of 1981 in which Surya Bahadur Thapa, a former civil servant who had become prime minister in 1979, was reaffirmed in June 1981 and continued in office until 1983 when he was replaced by Lokendra Bahadur Chand following the government's loss of its majority on an opposition "no confidence" motion.

In nonparty elections to the National Panchayat in May 1986, again in the face of a major party boycott, a majority of the incumbents were defeated, and Marich Man Singh Shrestha became prime minister. Most new members were opponents of the panchayat system, foreshadowing a new struggle between the king and his legislators. By early 1990, the NC and the United Leftist Front (ULF), a Communist alliance of seven parties, again went to the streets, organizing agitations that forced the king to make further constitutional changes in April; included were an end to the ban on political parties and their activities. The king dissolved the National Panchayat and appointed NC president Krishna Prasad Bhattarai interim prime minister, who was assisted by a cabinet made up of members of the NC, the ULF, independents, and royal appointees. A Constitutional Reforms Commission produced a new constitution in November 1990 that ended the panchayat era and restored multiparty democracy in a constitutional monarchy. In May 1991, the first openly partisan elections in 32 years were held, resulting in an NC majority in the new House of Representatives which chose Girija Prasad Koirala as prime minister. As of December 2002, Koirala had held the office of prime minister four times in his career.

On 1 June 2001, the former Crown Prince Dipendra Bir Bikram killed most of the royal family with an assault rifle as they sat around a dinner table. Although many theories circulated as to the motive for the killings, it is generally accepted that he turned against his family because his mother did not approve of a young woman as his choice of bride. Dipendra murdered his father, King Birendra, his mother, Queen Aishwarya, his sister, Princess Sruti, his brother, Prince Nirajan, and five others. He then shot himself in the head. Dipendra was anointed king while in a coma; two days later he died, and his uncle, Gyanendra Bir Bikram Shah Dev, was named king.

In addition to the slayings, Nepal has been embroiled in civil war. In 1996, a "people's war" was launched by several Maoist organizations in the central-western hill districts of Nepal. The Maoists' aims are the removal of the constitutional monarchy and the eradication of rural poverty. As of December 2005, more than 12,000 people had been killed in the fighting. The insurgents call themselves the Communist Party of Nepal (Maoist), modeled after Peru's Maoist Shining Path guerrillas. As of December 2005, they controlled 45% of Nepal, and brought the economy and political system to a virtual standstill. They are led by Chhabi Lal Dahal, or "Prachanda," who is seen by his followers as charismatic and by his enemies as fanatical. In July 2001, the Maoists came into direct combat with the Nepalese army for the first time, and stepped up their campaign of violence. Koirala, who was prime minister at the time, resigned after losing support from his ruling coalition, and alluded to the violence as a reason why the country needed to work for national consensus. Sher Bahadur Deuba became prime minister. In November 2001, after more than 100 people were killed in four days of violence, the king called a State of Emergency. The emergency measures restricted freedom of the press, as well as freedom of assembly, expression and movement. Suspects could be detained for three weeks without charges.

In February 2002, international donor agencies and individual nations pledged us$2.5 billion to Nepal, and the government increased military activity against the insurgents. In April, more than 300 people were killed in two of the most serious attacks of the rebellion, and the Maoists ordered a five-day national strike. Parliament was dissolved on 22 May, and national elections were scheduled for 13 November. In October, Prime Minister Deuba asked the king to put off the national elections for a year due to the mounting Maoist violence. King Gyanendra dismissed him and indefinitely put off the elections. Lokendra Bahadur Chand was appointed interim prime minister until elections were held and Surya Bahadur Thapa was elected prime minister in 2003. However former Prime Minister Deuba was later reinstated as prime minister in 2004. In February 2005, the King dismissed Prime Minister Deuba (again), dissolved the Cabinet and declared a State of Emergency, which was lifted in April 2005.

In 2004 the cease-fire that had existed between the Maoist rebels and the government collapsed. The killings increased on both sides with the Maoist rebels assassinating government officials, usually at the local level, bombing and attacking Indian-owned establishments. The government officially invited the Maoists to negotiate again in 2004, but the rebels refused.

In the area of foreign policy, Nepal has remained generally nonaligned, maintaining friendly relations with China and with India, despite efforts to minimize traditional Indian influence and the occasional clash of policies on matters relating to trade. In 1961, Nepal signed an agreement with China (which had earlier absorbed Tibet) defining the boundary between the two countries along the traditional watershed. Nepal was uninvolved in the 1962 hostilities between India and China on portions of the border to the east and west of Nepal. One result of this conflict however, was India's occupation of Kalapani, a border region of northwestern Nepal which, as of 2005, was still a matter of dispute with India. The refugee issue of some 104,235 Bhutanese in Nepal remained unresolved as of December 2005 as well as the many Tibetan exiles who have crossed the border from China. Ninety percent of these displaced persons are housed in seven United Nations High Commissioner for Refugees (UNHCR) camps. Nepal also faces a severe illiteracy rate with only 30% of women being literate compared to 65% of males in 2005.

Nepal has a very low per capita GDP of us$240 and a high population growth. The Nepalese economy is characterized by being highly dependent on international aid and having few export options (clothing, carpets and leather goods), although the tourist industry had resurged prior to the 2005 State of Emergency. Nepal also has pursued friendly relations with the great powers and has been the recipient of economic aid from India, the United States, the former USSR, and the World Bank.


The 1990 constitution, Nepal's third (with variations) since 1951, established a constitutional monarchy in which the legislature consists of the king and two houses of parliament, the lower house, called the House of Representatives and the upper house, the National Council. The king is Gyanendra Bir Bikram Shah Dev, the descendent of an unbroken Rajput line going back more than 200 years. The House of Representatives has 205 members elected to terms of five years; at least 5% of the contestants from every party must be women. The National Council has 60 members, 35 of whom are elected by the House of Representatives. The National Council members included three elected women as of 2003. Suffrage is universal at 18 years of age.

The National Council is a permanent body, retiring one-third of its members every two years in elections that take place in May of even-numbered years. The king appoints 10 of the 60 members in the National Council. The remaining 15 members are selected by an electoral college.

In May 2002, parliament was dissolved, and elections were scheduled for 13 November of that year. However, King Gyanendra removed his prime minister who had called for a postponement of national elections for a year due to mounting Maoist violence. King Gyanendra subsequently indefinitely postponed the elections, which, as of December 2005, had not been held.

Nepal's supreme court chief justice is appointed by the king on recommendation of the Constitutional Council. Corruption is seen to be endemic in Nepal and government institutions had all but broken down in rural areas as of 2005. The government suppresses speech that might undermine the monarchy, interethnic or intercaste relations or national security. Internet access to Maoist websites is censored, but otherwise allowed. Most NGOs have abandoned efforts in western Nepal due to Maoist domination of the area. Both the government and the Maoist rebels have been accused of increasing human rights violations after the insurgency in 1996. Nepal has the highest number of unexplained political disappearances worldwide. The Moaist rebels consist of approximately 5,000 guerrillas supported by 15,000 fighters who control 45% of Nepal. Maoists have enacted their own judicial system within their jurisdiction termed "people's government". The Maoists are accused of recruiting, as well as abducting, children to be used as soldiers. International organizations estimate that several hundred thousand Nepalese have been displaced due to the Maoist insurgency. The Maoist insurgency has also drastically reduced Nepalese tourism which was once a major source of revenue for the government.

For development purposes, the country is also divided into five regions by geography (Eastern, Central, Western, Mid-Western, and Far-Western), each of which serves also as a parliamentary constituency, electing three members of the lower house. In 1992, the government undertook a reform of the civil service, lowering the age of retirement from 60 to 58, committing itself to reducing its overall size by 25% by 1993, and engaging in wholesale dismissals of those with 20 or more years of service. Nepal is a majority Hindu country and, although against the law, discrimination due to caste is widespread. The dalits, or untouchables, caste is routinely discriminated against through violence and socio-economic exclusion. Organized gangs traffic between 5,00012,000 Nepalese women a year to India to work in brothels. The majority who return are HIV positive and are also strongly discriminated against.


The 1962 constitution originally prohibited the formation of political parties and associations, even though political groups continued to exist and operate underground, at times on a quasi-legal basis. Parties were legalized in 1990 and now operate freely in Nepal's multiparty constitutional monarchy. Nepal does not allow party formation along ethnic, caste, religious, tribal or regional lines. The main party through Nepal's modern historyproviding nearly all of the country's prime ministers even when the ban on parties prohibited party activityis the Nepali Congress Party (NC). Inspired by the socialist wing of the Indian National Congress and founded by the Koirala brothers, M. P. and B. P., in 1946, the party led Nepal's first democratic government in 1959. Most of its leaders were imprisoned during the 1960s, but with Indian help, the party operated from India, mounting hit-and-run attacks and maintaining an underground presence in Nepal.

The NC leadership led the opposition to King Mahendra's tiered panchayat system of indirect government. Although NC leaders called for a boycott of the May 1986 elections to the National Panchayat, 1,547 candidates ran for office, and only 40 of the previously elected members retained their seats. After these elections, a Democratic Panchayat Forum (DPF) was formed by NC members to mobilize voters on a nonparty basis to counter the influence in local elections of the Communist Party of Nepal (CPN), whose members had won 16 seats in the National Panchayat.

The communist movement in Nepal has been severely fragmented for years by personal and ideological schisms, some of them occasioned by splits and the loss of orthodoxy in the communist movement worldwide in the 1960s and 1980s. Operating for electoral and agitational purposes in the 1980s as the United Leftist Front (ULF), the Communist Party (CPN) and its several communist allies have since split, fragmenting the movement into a number of splinter parties but leaving the CPN, now reassembled as the United Marxist-Leninists (UML) as the leading opposition party in the parliament. The latest elections to the House of Representatives were held on 3 and 17 May 1999. The results were: Nepali Congress (NC), 113 seats; Communist Party of Nepal/United Marxist-Leninist (CPN/UML), 69 seats; National Democratic Party (NDP), also called the Rastriya Prajatantra Party, 11 seats; Nepal Sadbhavana Party (NSP), 5 seats; Rastriya Jana Morcha, 5 seats; Samyukta Janmorcha Nepal, 1 seat; Nepal Workers and Peasants Party (NWPP), 1 seat. Elections scheduled to be held on 13 November 2002 were indefinitely postponed by the king.


For centuries, the heads of petty principalities within Nepal exercised local judicial, police, and other powers. Under the panchayat reforms introduced in 1962, the country was divided into 14 zones, which in turn were divided into 75 districts. The zones were directly administered by commissioners appointed by the central government, and the zonal panchayats were executive bodies elected from the 11-member panchayats at the district level, the members of which were in turn selected from village and town panchayats. Each of the 3,600 villages with populations of more than 2,000 and each of the 33 towns with populations over 10,000 also had an 11-member panchayat, as well as its own local assembly.

In April 1990, the partyless panchayat system was abolished as a result of a people's movement organized by the Nepali Congress Party and several leftist parties. However, the country remains divided into 14 zones (headed by appointed commissioners) and 75 districts (under the charge of district officers responsible for law and order, collecting revenues, and setting development priorities). The districts are further divided into smaller unitsinto municipalities and village development committees (VDC). At present, there are 3,913 VDCs and 58 municipalities in the country. A VDC consists of 9 wards and the municipalities consist from 9 to 35 wards. Municipalities and VDCs are directly elected.

In 1997, a royal decentralization ordinance was enacted that allowed for increased political participation by women. The ordinance called for the reservation of 20% of local government ward seats for women. This election resulted in approximately 32,000 local government seats in Nepal held by women. However, due to lack of knowledge, skills and education needed to carry out their responsibilities, arguments ensued amongst representatives against the mandatory percentage afforded to women.


Each district has a court of first instance, civil and criminal, as well as a court of appeals and 14 zonal courts. There are five regional courtsat Kāthmāndu, Dhankutā, Pokharā, Surkhet, and Dipayalto which further appeals may be taken. At the apex is the supreme court in Kāthmāndu, which is empowered to issue writs of habeas corpus and decide on the constitutionality of laws. The court is composed of a chief justice, assisted usually by six other judges, with seven additional judges in reserve; all are appointed by the king. The Supreme Court is the court of last resort, but the king may grant pardons and suspend, commute or remit sentences of any court. There are separate military courts which generally deal only with military personnel. In 1992, the supreme court ruled that civilians may not be tried in the military courts. In April 2001, the supreme court appointed its first female judge.

The 1990 constitution declared the independence of the judiciary. The supreme court has exercised considerable independence in practice, declaring provisions of the Citizenship Act of 1991 and parts of the Labor Act of 1992 unconstitutional. In 1995 the constitutional court also ruled that the dissolution of the parliament at the request of a former primer minister was unconstitutional.

The 1990 constitution affords a number of procedural safeguards for criminal defendants including the right to counsel and protection from double jeopardy and from retroactive application of laws.

Although the judiciary remains, the monarch holds ultimate power, which can be seen in the decree forbidding news media from criticizing the King. While the State of Emergency was formally lifted on 29 April 2005, human rights organizations maintain that many freedoms have yet to be restored. This is most concerning in regards to the Terrorist and Disruptive Activities Ordinance (TADO), which allows up to one-year incommunicado detention. There are many reports of torture, execution and disappearances attributed to both the official government as well as the Maoists rebels.

There is no jury system. Special tribunals hear cases involving terrorism or treason under a treason act. Nepal is a member of the United Nations and the International Criminal Court.


Nepal's armed forces numbered 69,000 active personnel in 2005, all of it accounted for by the Army. The service's primary weapon systems included 40 reconnaissance vehicles, 40 armored personnel carriers and over 95 artillery pieces The Army also had a small air wing of 320 personnel with no combat aircraft. Its air fleet was made up of 2 fixed wing transports, 7 support, and 5 utility helicopters. Nepal also had a paramilitary force of 62,000, which consisted of an armed police force of 15,000 under the Ministry of Home Affairs, and a regular police force of 47,000. The United Kingdom maintained a small military presence in Nepal involved in the recruitment and training of gurkha troops. In 2005, Nepal's defense budget totaled $151 million. Nepalese troops were stationed in 11 countries or regions as UN peacekeepers.

Under separate treaty arrangements going back to 1816, gurkhas of the same mountain stock (especially Magars, Gurungs, Rais, and Limpus) are recruited in Nepal by Great Britain and, since 1947, by the Republic of India. Under British and Indian flags, and with arms, training, and officers provided by their foreign recruiters, gurkhas are among the world's most renowned fighting men with extensive service in all parts of the globe in both world wars and several UN actions of this century.


Nepal was admitted to the United Nations on 14 December 1955 and is a member of ESCAP and several nonregional specialized agencies, including the FAO, the World Bank, ILO, IMF, UNESCO, UNIDO, and the WHO. It also belongs to the Asian Development Bank, the Colombo Plan, and G-77. In 1985, Nepal joined with six other Asian nations to form the South Asian Association for Regional Cooperation (SAARC); the secretariat is in Kāthmāndu.

Nepal is a member of the Nonaligned Movement. The country has offered support to UN missions and operations in Kosovo (est. 1999), Ethiopia and Eritrea (est. 2000), Liberia (est. 2003), Sierra Leone (est. 1999), East Timor (est. 2002), Burundi (est. 2004, Côte d'Ivoire (est. 2004), and the DROC (est. 1999).

In environmental cooperation, Nepal is part if the South Asia Cooperative Environment Program (SACEP), the Basel Convention, the Convention on Biological Diversity, Ramsar, CITES, International Tropical Timber Agreements, the Montréal Protocol, the Nuclear Test Ban Treaty, and the UN Conventions on the Law of the Sea, Climate Change and Desertification.


Despite social and economic reforms begun in the 1950s, Nepal's per capita income was only $1,100 (PPP) in 1998, and general living standards are low. The economy is based on subsistence agriculture, which engages about 80% of the labor force but is inefficiently organized and limited by a shortage of arable land in relation to population. Eight development plans, extending from 1955 to 1992, have slowly built up the nation's infrastructure. Nevertheless, the industrial sector is still small and dominated by traditional handicrafts, spinning and weaving, and similar occupations. Growth in medium-scale and cottage industry-based production of carpets and garments for export, expanding tourism, and some government-promoted development of heavy industry sustained an average GDP growth rate of over 5% from 198088. In 1989/90, Nepal weathered a major trade and transit dispute with India, maintaining a GDP growth rate of 2%, despite the potentially debilitating tariffs suddenly placed on trade with its largest import supplier and external market.

Nepal's economic potential is by no means insignificant. Kāthmāndu Valley and the Terai zone are fertile areas; there is great forest wealth, including valuable medicinal plants such as pyrethrum, belladonna, and ipecac; deposits of several minerals are known to exist; and swift Himalayan rivers offer great possibilities for hydroelectric development.

The principal challenge for the Nepalese is to provide for a rising and unequally distributed population and to achieve material progress without irrevocably depleting the environmental resource base. Structural adjustment measures initiated in 1989 have reduced the regulation of industry and imports, and are supported by similar liberalization in India, to which Nepal's economy is closely tied. However, aggregate economic growth remained sluggish during the early 1990s. Gross domestic product growth declined from 4.6% in 1990/91 to only 2.1% in 1991/92, due in large part to declining agricultural output following poor weather. Gross domestic product growth averaged an annual rate of 5% between 1988 and 1998. International actors fund more than 60% of Nepal's development budget and account for more than 28% of total budgetary expenditures. In 1995 Nepal joined the South Asian Association for Regional Cooperation (SAARC) in the South Asian Preferential Trade Area.

The GDP growth rate was negative in 2002 (-0.3%), but the economy recovered in 2003 and 2004, expanding by 2.8% and 3.4% respectively; in 2005, the GDP growth rate was expected to be 3.5%. The inflation rate has been fluctuating, but at 2.9% in 2004, it was considered to be under control and did not pose a problem to the overall economy. Despite encouraging economic growth rates, Nepal remains one of the poorest countries in the world, land-locked, with a poor infrastructure, and meager connections to outside markets.


The US Central Intelligence Agency (CIA) reports that in 2005 Nepal's gross domestic product (GDP) was estimated at $42.2 billion. The CIA defines GDP as the value of all final goods and services produced within a nation in a given year and computed on the basis of purchasing power parity (PPP) rather than value as measured on the basis of the rate of exchange based on current dollars. The per capita GDP was estimated at $1,500. The annual growth rate of GDP was estimated at 2.5%. The average inflation rate in 2005 was 2.9%. It was estimated that agriculture accounted for 40% of GDP, industry 20%, and services 40%.

According to the World Bank, in 2003 remittances from citizens working abroad totaled $785 million or about $32 per capita and accounted for approximately 13.4% of GDP. Foreign aid receipts amounted to $467 million or about $19 per capita and accounted for approximately 8.0% of the gross national income (GNI).

The World Bank reports that in 2003 household consumption in Nepal totaled $4.57 billion or about $185 per capita based on a GDP of $5.9 billion, measured in current dollars rather than PPP. Household consumption includes expenditures of individuals, households, and nongovernmental organizations on goods and services, excluding purchases of dwellings.

In 2001 it was estimated that approximately 44% of household consumption was spent on food, 7% on fuel, 5% on health care, and 14% on education. It was estimated that in 1996 about 42% of the population had incomes below the poverty line.


In the latest years for which data was available, as of 1998, Nepal's labor force was estimated to number 11 million. In 2002, the vast majority, approximately 81% of the workforce, was engaged in agriculture. Most agriculturists are peasant farmers, and there are many wage laborers, but only in the peak seasons. The service sector provides work for 16% of the labor force, and industry accounts for the remaining 3%. There is a severe lack of skilled labor. Among some tribes, women do most of the farm work, while in others, especially among strict Hindus, they do no farming at all. Many occupations are effectively restricted to certain castes, although the practice has been declared illegal. In 2001, the unemployment rate was 47%.

Unions are allowed to organize and strike. The three largest trade unions are associated with political parties, but the government does not restrict union activity. However, the right of a union to strike is limited to nonessential services. About 20% of the workforce is covered by collective bargaining agreements.

Minimum wage rates and working conditions in the small industrial sector are set by the Nepal Factories and Factory Workers' Act of 1959, as amended. In 2002, the minimum wage was $20 per month for unskilled, $21 for semiskilled, and $25 for skilled workers in the organized industrial sector. Wages can be as low as 50% of the minimum in the informal economy and the agricultural sector. The law establishes a minimum employment age of 16 years in industry and 14 years in agriculture.


In 2003, agriculture provided about 41% of GDP. Only about 7% of the land can actually be cultivated. Regional imbalance and lack of integration also hamper Nepal's agriculture. Although the country produces an overall exportable surplus of food grains, some areas of the country, particularly Kāthmāndu Valley and the hill areas, have a food deficit. Lack of transportation and storage facilities prevents the movement of food grains from the Terai to the hills, with the result that Nepal both exports and imports the same food items.

Agriculture has been hampered by the lack of irrigated land, by the small size of farms (an average of four hectares/10 acres), and by inefficient farming methods. Some of the arable land is still held free of taxation by a few large landowners and farmed by tenants, whose productivity is low. The government has officially abolished tax-free estates (birta ), eliminated the feudal form of land tenure (jagira ), set a limit on landholdings, and redistributed the extra land to farm tenants. Its economic plans also include the use of fertilizers, insecticides, improved seeds, and better implements; the extension of irrigation; and the construction of transportation and storage facilities.

Rice, Nepal's most important cereal, is grown on more than half the cultivated land, mainly in the Terai but also on every available piece of ground in the Kāthmāndu Valley during the monsoon season. In 2004, rice production totaled 4,300,000 tons. Production of maize, grown on the carefully terraced hillsides, was 1,590,000 tons in 2004; land under cultivation with maize was 25% of the area allotted to food grains. The output of wheat in 2004 was 1,387,000 tons; millet, 283,000 tons; and barley, 30,000 tons. Cash crops (with 2004 output) included sugarcane, 2,305,000 tons; potatoes, 1,643,000 tons; mustard seed, 133,000 tons; linseed, 6,100 tons; jute, 6,900 tons; and tobacco, 3,300 tons. Sugarcane, jute, and tobacco are the major raw materials for Nepal's own industries. Potatoes are grown in Ilam and fruit mainly in Dharan, Dhankuta, and Pokhara. Tea is also grown in Ilam and elsewhere. In 2004, exports of agricultural products totaled $94.8 million, while agricultural imports amounted to $187 million.


Livestock, adapted to many uses, forms an essential part of the economy. Livestock accounts for about 30% of gross agricultural output. In farm work, bullocks and asses are largely used. Herds of yaks, cows, and their hybrids, zobos, are grazed in the central valley and to some extent along the borders of the foothill jungles. A few hogs usually are kept on the larger farms. Sheep and goats are used for food and also as pack animals, particularly in the distribution of salt over the trade routes; the sheep also supply a valuable type of wool.

In 2005, Nepal had an estimated 6,994,000 head of cattle, 4,081,000 water buffalo, 817,000 sheep, 7,153,000 goats, and 948,000 hogs. Modern poultry farms are operated principally by the Newaris, who carry on most of the agriculture in the Kāthmāndu Valley. There were about 22.8 million chickens in 2005, when 15,700 tons of poultry meat were produced. Traditionally, butter and cheese are among the leading exports of Nepal. Livestock products in 2005 included an estimated 380,000 tons of cow's milk, 20,000 tons of butter and ghee, and 590 tons of wool (greasy basis).


The commercial fish catch amounted to 36,568 tons in 2003 (up from 5,281 tons in 1991), with aquaculture accounting for 48%. In the Terai are many small fish ponds and several government fish farms. Common fish species are carp, gar, and murrel.


In 2000, forests covered an estimated 27.3% of Nepal's total land area. Timber cutting has been contracted out to private firms. About 91% of the 13.9 million cu m (491 million cu ft) of roundwood cut in 2004 was for fuel.

In 1961, the government established a department of medicinal plants to encourage Nepal's commercially important herb exports. There are regional herbal farms at Kāthmāndu and Nepalganj. There is also a royal research laboratory for drug analysis.


Although mining in Nepal was an ancient occupation, the country's mineral resources have been little exploited. Mining and quarrying was dominated by the production of cement, red clay, coal, limestone, magnesite, and marble. In 2004, cement production totaled 300,000 metric tons, while red clay output came to 29,234 metric tons. Coal output that same year (bituminous and lignite) totaled 10,517 metric tons, while limestone production totaled 388,109 metric tons. In 2004, the country also produced quartz, quartzite, salt, talc, and tourmaline. A lead and zinc deposit near Lari had reserves of two million tons, and there were known deposits of iron, copper, graphite, cobalt, mica, and slate. Development plans included the encouragement of small-scale mining, and provided for continuing mineral surveys.


Nepal, as of 1 January 2004 had no proven reserves of crude oil, natural gas, or any refining capacity, and as of 2003, negligible reserves of coal.

In 2002, Nepal's imports of refined petroleum products averaged 15,620 barrels per day, while demand in that year averaged 15,510 barrels per year. Although there were no recorded imports of natural gas in 2002, Nepal did import 238,000 short tons of coal, and did produce 13,000 tons of bituminous coal.

The bulk of Nepal's electricity is hydroelectric. In 2002, electric generating capacity totaled 0.458 million kW, with hydroelectric accounting for almost 84% of that total. The remaining capacity was dedicated to conventional thermal sources. Electric power output in 2002 totaled 2.333 billion kWh, of which hydroelectric generation produced almost 90% of that amount. Demand for electricity in 2002 totaled 2.268 billion kWh. As of 2000, only 15% of Nepal's population had access to electricity.


Until the 1980s, modern industry was almost nonexistent; only 0.66% of Nepal's GDP was derived from industry in 1964/65. Since then, industrial development has been given emphasis in economic planning. Manufacturing as a percent of total GDP rose from 4.2% in 1980 to 6.1% in 1990 to 9.2% in 1995 to an estimated 22% in 2000. However, manufacturing is a sector that has been hit particularly hard by the Maoist insurgency and the intensification of violence since 2001. The CIA estimates that the industrial production growth rate for 1999/2000 was 8.7%. However, this had dropped to less than 1% for 2001/02 according to IMF estimates.

Starting in the 1930s, a number of public enterprises (PEs) were established by the government with an aim of building an industrial and manufacturing base. About 62 PEs in all were established, close to half in the industrial sector, with others in the trading, service, public utility and financial sectors. The oldest surviving PE is the Biratnagar Jute Mills (BJM), set up in 1936. The jute industry has been in decline since 1966. In 2002 BJM was being operated by a private conglomerate on terms of a five year lease from the government. PEs in the industrial sector include cement factories, brick factories, sugar mills, textile mills, jute products factories, tool factories, foundries, and industrial chemical and fertilizer factories. From the early 1990s, there have been planned campaigns to reform and privatize the PEs. By the beginning of the Ninth Five-Year Plan (19972002), 16 PEs, over half industrial, had been handed over to private owners, and four had been shut down. A list of 30 PEs, 13 in the industrial sector, were scheduled for privatization during the Ninth FYP, but, in fact, only one, the Nepal Tea Development Corporation, has been privatized. The slowdown of the reform is attributable to both the outbreak of the Maoist insurgency in 1996 and a growing resistance to the privatization program from many sides, but particularly from workers' unions who perceive jobs as threatened. The PEs were not originally set up as commercial enterprises, and most do not even maintain updated accounts that would allow an auditor to assess their market viability. Analysts generally agree, however, that they are inefficiently overstaffed with low skill labor, and that most of the industrial PEs have a negative worth. The IMF estimates that net profits from the PE sector as a whole plunged from around nr3 billion (about $44 million) in 1998/99 to nr240 million (about $3.23 million) in 2000/01, despite continued government transfers and investment. That the figure remained positive is due virtually entirely to the profitability of three public utility PEs. Some of the known liabilities in the industrial sector include wage arrears that reached 16 months for the Agricultural Tool Factory, and four months for the Lumbini Sugar Factory. According to a study of eight industrial PEs reported by the IMF, employees of these companies are owed for gratuity, sick and home leaves, medical allowance and insurance premiums to the amount of about nr15.2 billion (about $204 million or 34% of Nepal's GDP). There are also large arrears to banks and suppliers, but monitoring mechanisms are insufficient to make reliable estimates. In February 2002, the government set up a special financing facility at 3% interest to encourage commercial banks to provide concessional loans to ailing industries, particularly those in the garment and hotel industries, which through exports and tourism are major earners of foreign exchange.

According to the CIA, major industries in Nepal include tourism, carpets, textiles, small rice jute, sugar, and oilseed mills; cigarettes, cement and brick factories. Aside from small-scale food processing (rice, wheat and oil mills), light industry, largely concentrated in southeastern Nepal, includes the production of jute goods, refined sugar, cigarettes, matches, spun cotton and synthetic fabrics, wool, footwear, tanned leather, and tea. The carpet, garment and spinning industries are the three largest industrial employers, followed by structural clay products, sugar and jute processing. Sugar production was 49,227 tons in 1995, jute goods, 20,1870 tons; and soap, 23,477 tons. That year, 14.7 million m of synthetic textiles and 5.06 million m of cotton textiles were produced. Industrial production from agricultural inputs included 20,800 tons of vegetable ghee, 16.76 million of beer and liquor, 9 billion cigarettes, and 2,351 tons of tea.

Heavy industry includes a steel-rolling mill, established in 1965, which uses imported materials to produce stainless steel. During the 1980s, the government gave priority to industries such as lumber, plywood, paper, cement, and bricks and tiles, which make use of domestic raw materials and reduce the need for imports. Production by heavy industries in 1995 included 326,839 tons of cement and 95,118 tons of steel rods.

Industrial production growth rates have been higher than the overall economy growth rates, indicating that industry is a growth engine. However, this sector had a share of only 20% in the GDP, and employed only 3% of the working population; agriculture was by far the largest employer, and accounted for 40% of the economy; services came in second, with a 16% representation in the labor force, and a 40% share in the GDP.


The only advanced technology is that brought in under the various foreign aid programs. Foreign technicians provide training in cottage industries, and local workers are trained at the Cottage Industry Center in Kāthmāndu. In 1982, the Royal Nepal Academy of Science and Technology was established at Kāthmāndu to aid in socioeconomic development. The National Council for Science and Technology aims to formulate science and technology policy, promote scientific and technological research, coordinate research among ministries and Mehendra Sanskrit University, and disseminate information to the public. Tribhuvan University has faculties of science and technology, medicine, agriculture and animal science, engineering, and forestry. In 198797, science and engineering students accounted for 13% of college and university enrollments. In 2002 Nepal's expenditures on research and development (R&D) totaled $220.821 million, or 0.67% of GDP. In that same year, Nepal had 62 researchers and 145 technicians engaged in R&D per million people.


For the six and one-half years of the Maoist insurgency in Nepal domestic trade has been severely hampered in rural areas. For many Nepalese, local trade is a part-time activity, limited to such products as cigarettes, salt, kerosene, and cloth. Marketing centers are along the main trails and are supplemented by small local markets. Distribution channels generally move from manufacturer, to distributor, to retailer. Poor communications facilities make extensive domestic trade impractical. However, one major impediment, the local tax on trade called octroi, was eliminated in 1997. Also, in the early 1990s, domestic airline routes were privatized, quadrupling domestic air traffic.

Most shops are open from 10 am to 8 pm. Businesses and government offices generally operate from 9 am to 5 pm. Most stores and businesses are closed on Saturdays.


Traditionally, Nepal's foreign trade was limited to Tibet and India. After 1956, Nepalese trading agencies in Tibet were confined to Xigaze, Gyirong, and Nyalam, with Lhasa, Xigaze, Gyangze, and Yadong specified as markets for trade. In 1980, however, Nepal and China agreed to open 21 new trade routes across the Tibetan frontier. Treaty arrangements with China strictly regulate the passage of both traders and pilgrims in either direction across the border. Up until 1989, treaty agreements between India and Nepal allowed for unrestricted commerce across 21 customs posts along the border, and duty-free transit of Nepalese goods intended for third-party countries through India. In 1989, a breakdown in the treaty renewal negotiations resulted in retaliatory actions on both sides. India's share of Nepali exports plummeted from 38% in 1986/87 to 9% in 1989/90. India's share of the country's imports declined by about 2550%. Despite the severe shock sustained by the Nepali economy, the signing of a new interim agreement in 1990 prevented a prolonged crisis, helping to fuel a robust recovery in export growth as exports increased by 28% in 1990/91 over 1989/90, and again by 35% in 1991/92.

Under the renewal of the bilateral trade treaty with India in 1997, Nepali goods entered India essentially duty free and quota free. As a result, exports to India grew for four years, from 1997 to 2001, at an average rate of 42% a year. The most recent India-Nepal Treaty of Trade, signed in March 2002, continues to allow Nepali manufactures to enter the Indian market on a nonreciprocal, preferential, or duty-free basis, with rules of origin less restrictive than the international norm (Nepal's manufactures can have up to 70% foreign content instead of the international norm of less than 50%). However, it places quotas on four sensitive imports: vegetable fats, acrylic yarn, copper products, and ferro oxide, all at volumes lower than Nepali exports to India.

The imposition of some nontariff barriers (NTBs) by India is just one factor in the estimated decline in the growth rate of Nepal's exports. Other factors are the damage to production caused by the intensification of the country's Maoist insurgency in 2001, the global economic slowdown, and a rapid decline in demand from Nepal's main third-country destinations, the United States and Germany, in the post-9/11 atmosphere. The end of the 1990s

Country Exports Imports Balance
World 708.8 1,557.9 -849.1
India 317.8 575.7 -257.9
United States 192.2 24.1 168.1
Germany 105.5 21.1 84.4
United Kingdom 16.8 20.6 -3.8
Belgium 11.4 11.4
France-Monaco 10.3 27.0 -16.7
Japan 9.9 40.7 -30.8
China, Hong Kong SAR 7.1 95.7 -88.6
Switzerland-Liechtenstein 5.9 143.4 -137.5
Italy-San Marino-Holy See 4.2 12.8 -8.6
() data not available or not significant.
Current Account 110.3
     Balance on goods -987.8
         Imports -1,681.9
         Exports 694.1
     Balance on services 106.6
     Balance on income -20.2
     Current transfers 1,011.7
Capital Account 24.8
Financial Account -413.3
     Direct investment abroad
     Direct investment in Nepal 14.8
     Portfolio investment assets
     Portfolio investment liabilities
     Financial derivatives
     Other investment assets -507.1
     Other investment liabilities 79.0
Net Errors and Omissions 370.8
Reserves and Related Items -92.7
() data not available or not significant.

saw robust growth in Nepal's exports, which increased nearly 12% in 1997/98, nearly 18% in 1998/99 and 37.4% in 1999/2000. The export growth rate fell, however, to 4.6% in 2000/01, according to the IMF. In 2001/02, exports are estimated to have actually declined by 15%.

The CIA reported that for 2000/01, recorded exports from Nepal were an estimated $757 million (FOB) and that imports for this period were $1,600 million, indicating an apparently unsustainable merchandise trade deficit of $843 million, or 111.5% of exports. However, the figure for exports does not include unrecorded border trade with India, including substantial gold smuggling.

The major export destinations in 2000/01 were India (48%), the United States (26%), and Germany (11%). Over the past decade, exports to India, while continuing to account for about half of Nepal's exports, have soared in value and become increasingly diversified as Nepal's manufactures have carved out niches in the Indian market. Exports to the United States consist mainly of apparel, including pashmina (the Indian name for cashmere) products, whereas exports to Germany are dominated by woolen carpets. In the wake of 9/11, exports to the United States declined 15% in 2001, after an increase if 30% in 2000. For 2001/02, the IMF estimates that exports to countries other than India declined more than 40% due to the combination of external slowdown and internal supply disruptions.

In 2004, exports reached $626 million (FOBFree on Board), while imports grew to $1.7 billion (FOB). The bulk of exports went to India (47.4%), the United States (22.7%), Germany (8.4%), and the United Kingdom (3.1%). Imports included petroleum products, vehicles and spares, other machinery and parts, textiles, and thread, and mainly came from India (46.3%), China (10.8%), the UAE (9.3%), and Saudi Arabia (4.1%).


Despite large recorded trade deficits, Nepal often maintains a surplus in its current account thanks to surpluses in services (including tourism), official aid transfers, and increasingly large remittances from Nepalese living abroad, and in spite of unrecorded trade and smuggling across the Indian border. The IMF reported small surpluses on Nepal's current account of $24 million and $28 million respectively, for the fiscal years 1998/99 and 1999/2000, even exclusive of official aid transfers. Adding in official transfers brought the total current account surpluses for these years to $98 million and $114 million, respectively, representing 23% of GDP. Nepal's overall balance of payments was positive for the fiscal years 1998/99 and 1999/2000, at $136 million and $192 million, respectively, as outflows of capital and other payments were estimated to be more than offset by inflows of capital grants and official disbursements. However, in 2001/02, by IMF's preliminary estimate, Nepal's overall balance of payments was a negative $77 million (1.4% of GDP) due primarily to a falling off in foreign aid. Official reserves held by the central bank in 2000/01 were initially estimated to be sufficient to cover 6.7 months of imports, just above the 6 months' coverage deemed financially prudent. However, of these reserves, about $290 million were being held in Indian rupees, with about $732 million in convertible currencies, enough to cover only 4.8 months of imports. Total external debt in FY 2000/01 was $2.55 billion, about 46% of annual GDP. Nepal's debt service ratio (the ratio of annual payments on the debt to annual exports) was a low 6% in this period, reflecting the highly concessional nature of its external finance. Nepal's debt has never been rescheduled. Its last arrangement with the IMF was in October 1992 under the Extended Structural Adjustment Facility (ESAF), for a line of credit of SDR 33.5 million47% of Nepal's quotaof which only half, SDR 16.79, was ever drawn down by Nepal. The obligation was scheduled to be fully repaid by 2006, with payments of SDR 2.4 million in 2003; SDR 0.8 million in 2004; SDR 0.2 million in 2005; and SDR 0.2 million in 2006.

The International Monetary Fund (IMF) reported that in 2001 Nepal had exports of goods totaling $721 million and imports totaling $1.49 billion. The services credit totaled $413 million and debit $215 million. The US Central Intelligence Agency (CIA) reported that in 2001 the purchasing power parity of Nepal's exports was $757 million while imports totaled $1.6 billion resulting in a trade deficit of $843 million.

Exports of goods and services reached $1.1 billion in 2004, up from $925 million in 2003. Imports grew from $1.8 billion in 2003, to $2.1 billion in 2004. The resource balance was consequently negative in both years, reaching -$882 million in 2003 and -$999 million in 2004. The current account balance was also negative, decreasing from -$88 million in 2003, to -$144 million in 2004. Foreign exchange reserves (including gold) grew to $1.5 billion in 2004, covering more than eight months of imports.


The central bank of Nepal is the Nepal Rastra Bank (NRB), established under the NRB Act of 1955, which, effective 31 January 2002, was replaced by a new NRB Act designed to give the central bank more autonomy in setting monetary policy and more supervisory authority. The new legislation outlines the procedures for appointing and dismissing the NRB Governor, Deputy Governor and board, as well as procedures for intervening with insolvent financial institutions. Further reforms are expected with the implementation of the Banking and Financial Institutions Act of 2003 which aims, inter alia, to reduce the government's role as owner and strengthen its role as regulator. Nepal's financial sector has historically been weak and nontransparent, characterized by politically-motivated interference, insider trading, weak management, disruptive unions, an inadequate financial information system, and a deeply entrenched culture of nonpayment of loans.

A World Bank report found that as of November 2002 Nepal had 15 commercial banks. The two largest, the Rastriya Banijya Bank (RBB), Nepal's largest bank with an estimated 27% of total banking assets, and the Nepal Bank Ltd. (NBL), Nepal's oldest commercial bank, founded in 1937, account for over 50% of banking assets. The RBB is wholly owned by the government (but slated for privatization), whereas the NBL, though founded with 51% government ownership, has sold shares to the public sufficient to reduce the government's share to 41%. There are also nine smaller joint venture banks (JVB's) with mixed public-private ownership, and four local commercial bank. The banking sector also includes two large development banks, the Agriculture Development Bank of Nepal (ADB/P) and the Nepal Industrial Development Corporation (NIDC), the second- and third-largest banks. The ADB/N maintains a micro-financing window, as does the NRB, the RBB, the NBL, and the regional development banks. According to the World Bank, as of November 2002, Nepal also had 48 finance corporations, 13 insurance companies, numerous finance institutions, 7 Grameen Replicator Banks, 35 financial cooperatives, and 25 financial NGOs.

Both of the largest commercial banks, the RBB and the NBL, are in precarious financial condition. According to a 2000 study by the World Bank, the most recent available, in 1998 the RBB and NBL together had a losses of $146 million, equivalent to 8.6 % of Nepal's GDP or 46% of the government's budget. The condition of both banks has doubtless deteriorated since then. In 2001 government authorities, in conjunction with the IMF and the World Bank, concluded that external managers, selected by the World Bank and the United Kingdom, were needed to reform the RBB and the NBL. Opposition to these proposals came from all sides: the boards of directors, the employees' unions and the borrowers. In January 2002, the NRB invoked the provisions of the new NRB Act and suspended the board of the NBL, effective 15 March 2002. For the RBB, the government entered into a contract on 31 January, 2002 with the American firm Deloitte Touch Tomatsu (DTT) for that company to take over management of the RBB. DTT, however, soon pulled out of the agreement, citing ambiguities in the contract and security concerns as the Maoist insurgency in Nepal became increasingly violent. In July 2002, a professional management team was installed at NBL, and in late 2002, a new CEO was appointed. The RBB is slated to be privatized in 2003.

Demand for new credit in Nepal was weak in 2001 and 2002, but the demand for credit to refinance from troubled debtors was substantial. Credit expanded in 2001 by about 10%, creating liquidity shortages at some commercial banks. In response, the NRB lowered Cash Reserve Requirements (CRR's) in January 2002 by 1.2% to around 9% (with a 3% of deposits required to be cash-in-vault). Also, refinancing rates were lowered 100200 basis points to 25% in January 2002. In February 2002, the NRB set up a special refinancing facility at 3% interest to encourage commercial banks to make concessional loans to ailing businesses, particularly those in the garment and hotel enterprises hit by sharp declines in export demand and tourism.

At the end of FY 2000/01, in July 2001, net foreign assets held by monetary authorities in Nepal totaled $1 billion, and broad money supply totaled about $2.87 billion The broad money supply grew by 21% in 1999, 21.7% in 2000, and 15% in 2001, considerably ahead of inflation rates for those years, mostly due to expansion of paper currency resulting from the progressive monetization of the Nepalese economy. However, for FY 2001/02, the IMF estimates that broad money growth slowed to 6% because of the weakened economy and stagnant bank deposits due to the voluntary disclosure of income scheme (VDIS) and other asset verification efforts by the tax authorities. Inflation as reflected in consumer prices has been substantially moderated since October 1997 when Nepal shifted its exchange regime to one pegged only to the Indian rupee,

Revenue and Grants 61,250 100.0%
     Tax revenue 42,617 69.6%
     Social contributions
     Grants 8,372 13.7%
     Other revenue 10,261 16.8%
Expenditures 74,715 100.0%
     General public services 18,829 25.2%
     Defense 7,450 10.0%
     Public order and safety 7,065 9.5%
     Economic affairs 16,454 22.0%
     Environmental protection
     Housing and community amenities 3,419 4.6%
     Health 4,065 5.4%
     Recreational, culture, and religion
     Education 13,282 17.8%
     Social protection 4,079 5.5%
() data not available or not significant.

instead of to a composite of currencies. Earlier, in February 1993, Nepal had ended its dual currency system where by both the Indian and Nepalese rupee were allowed to circulate freely. In 2001, weak domestic demand and stable Indian prices combined to produce a subdued inflation rate of 3%. The International Monetary Fund reports that in 2001, currency and demand depositsan aggregate commonly known as M1were equal to $962.8 million. In that same year, M2an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual fundswas $2.9 billion. The discount rate, the interest rate at which the central bank lends to financial institutions in the short term, was 6.5%.

The NIDC, along with the NRB, controlled the Security Exchange Center (SEC), set up in 1981, which was subsequently converted into the Nepal Stock Exchange (NEPSE) in 1984. In January 2003, there were 55 companies listed on the NEPSE, virtually all actively traded.


The World Bank reported in November 2002 that Nepal had 13 insurance companies. All are government owned or have some government participation. Nepal joined the Multilateral Investment Guarantee Agency (MIGA) in 1993. The US Overseas Private Investment Corporation (OPIC) and other investment insurance programs are free to operate in Nepal without restriction. OPIC is authorized to offer its extended-risk guarantee facility to US investments in Nepal.


Nepal's fiscal year ends on July 15. The continued and increasingly violent Maoist insurgency, entering its tenth year in 2006, has had crippling impacts on Nepal's public finances, interfering with tax collections and disrupting production while at the same time requiring increased public spending on security and to repair damaged infrastructure. Most fundamentally, the insurgency hampers the government's efforts to address the poverty and other social problems fueling the rebellion. The perception of widespread corruption aggravates the present difficulties as does the global economic slowdown. Historically, most deficits on capital account have been financed by foreign grants, while domestic revenues have been sufficient to cover expenditures. Macroeconomic policy in FY 2001/02 was focused on increasing revenue collection, maintaining strict expenditure priorities, and containing domestic borrowing. A voluntary disclosure of income scheme (VDIS) plus other special revenue measures probably contributed to raising domestic revenues collected to 11.4% of GDP in FY 2000/01 and FY 2001/02, up from an average of less than 10.5% for the three previous fiscal years, but the relative rise in expenditures1.5% of GDPhas outpaced the 0.9% rise in the revenue effort. Domestic public rose from about 14% of GDP in FY 1998/99 to about 18% of GDP in FY 2001/02, raising concerns that with increased domestic financing, in an environment in which bank deposit rates are stagnant, banks will have to draw on Nepal's scarce hard currency reserves. For FY 2000/01 the CIA estimated Nepal's external debt at $2.55 billion. By IMF estimates, total public debt in FY 2000/01 came to 49.9% of GDP, somewhat below the average for the previous five years of 52.2% of GDP.

The International Monetary Fund (IMF) reported that in 2003, the most recent year for which it had data, central government revenues were nr61,250 million and expenditures were nr74,715 million. The value of revenues was us$804 million and expenditures us$980 million, based on a market exchange rate for 2003 of us$1 = nr76.141 as reported by the IMF. Government outlays by function were as follows: general public services, 25.2%; defense, 10.0%; public order and safety, 9.5%; economic affairs, 22.0%; housing and community amenities, 4.6%; health, 5.4%; education, 17.8%; and social protection, 5.5%.


The principle sources of domestic revenue are customs tariffs, value-added taxes (VAT), excise duties, and income taxes on personal and corporate incomes. There are also local development taxes, as well as license and registration fees for houses, land and vehicles.

The standard corporate income tax rate is 25%, with a minimum rate of 20%. However, financial institutions are liable for 30%. Capital gains are taxed at a 10% rate. Ordinary income cannot be offset by capital losses, and ordinary losses cannot be offset by capital gains.

The VAT was introduced in November 1997 as a reform designed to replace sales taxes and most excises. The "octori," a traditional local tax on trade, was also eliminated at this time. Five years after its introduction, however, the VAT had yet to be completely implemented, as indicated by a finding that whereas net taxes from VAT have increased 65% over the first five years, refunds have increased by a factor of 23. The VAT rate is 10% and is collected at every stage of selling goods and services. Goods exempted for the VAT include primary food stuffs, agricultural products, and industrial machinery. There is no VAT on goods for export, or on raw materials imported by an export promotion industry, nor the products of such an industry.

Excise taxes are applied mainly to goods deemed hazardous to health, such as alcoholic beverages, cigarettes and soft drinks. In January 2002, a new Excise Act went into effect that raised rates slightly as part of the government's effort to pay for increased security expenditures since 2001.

On April 1, 2002 the government put into effect a new Income Tax Act, replacing the previous act of 1958, and developed in close cooperation with the IMF. The new act covers all sources of incomefrom employment, business and investmentand encourages self-assessment and pooled depreciation. In July 2002, personal income tax brackets were adjusted upward somewhat. With these adjustments, there are two tax tiers, 15% and 25%. For individuals, income below nr65,000 (about $850) is exempt, and for couples, nr85,000 (about $2100). The highest marginal rate, 25%, applies to income above nr140,000 (about $1850) for individuals, and nr160,000 (about $2000) for couples.

In addition to regular taxes, the government has imposed a number of "security surcharges" to deal with the increased security expenditure needed to deal with the intensifying Maoist insurgency. Special fees of 3% have been added to the taxable income of individuals, couples, companies, partnerships and nonresident taxpayers. Surcharges of 13% have been applied to imports, plus a nr1 (about $.013) per liter tax has been added to petroleum products. The government also mounted a voluntary disclosure of income scheme (VDIS), which had questionable results. Over 3,000 new taxpayers were registered, but a simultaneous decline in bank deposits suggests more taxable income was being hidden than disclosed.


Customs and duties are a principle source of domestic revenue. Import tariffs are generally assessed on an ad valorem basis, with duties ranging from 0140%. Most primary products, including live animals and fish, enter duty-free. Machinery and goods related to basic needs are charged 5%. Duties on agricultural imports were fixed in 2003 at 10%. Cigarettes and alcoholic beverages are charged at 110%, although alcoholic beverages with more that 60% alcohol are prohibited altogether. Other prohibited imports include narcotic drugs and beef and beef products. Products that may be imported only under special licenses include arms, ammunition, and explosives; and communication equipment, including computers, TVs, VCRs, and walkie-talkies. Valuable metals and jewelry are prohibited except under bag and baggage regulations. According to the World Bank, Nepal's weighted average tariff rate in 2000, the most recent data available, was 17.7%. This average probably increased in 2001 and 2002 because of "security surcharges" levied on most imports. No special fee was assessed on goods with tariff rates less than 2.5%. For goods with charged duties up to 5%, the surcharge was 1%, and for all those with duties above 5%, the surcharge was 3%.

The export service charge is 0.5% and there are export duties on vegetable ghee and plastic goods of 2 to 10%. Prohibited exports include: archeological and religious artifacts; controlled wildlife; narcotics; arms, ammunition and explosives; industrial raw materials; imported raw materials, parts and capital goods; and timber and logs. Goods imported from India are granted a rebate of the application of ad valorem of 10% in tariff rates up to 40% and of 7% on rates above 40%.

Smuggling is substantial across the Indian border, especially on lumber goods, labor, construction equipment, currency and weapons. Gold smuggling is thought to be particularly large. Official records show substantial imports of gold, but few gold exports, even though it is well known that most of the gold imports are intended for the Indian market. Efforts to combat smuggling appeared to have at least changed the dominant mode from men driving trucks and buses to individuals, many women and children, driving bicycles.


Foreign direct investment in Nepal, always low in this land-locked kingdom, has seen annual decreases across the five years of the Ninth economic plan (1997/98 to 2001/02), from an annual total of $11 million in 1997/98 to annual totals of $6 million in both 2000/01 and 2001/02, according to IMF estimates. The fiscal year 1999/2000 actually had the lowest annual total, at $3 million. In 2001, according to the government of Nepal, there were 670 foreign investment projects in the country, worth together about $1 billion. Of these, 35% were Indian and 11% (69 projects) were from the United States with other prominent participants being Japan, China, Germany, and Korea. India's dominance is due not just to its proximity, but also to incentives for Indian investors to take advantage of the preferential trade regime India extends to Nepal's manufactures through their bi-lateral trade agreements. The bilateral trade treaty signed 4 December 1996 lifted all customs duties on Nepalese industrial products, while imposing more lenient rules of origin than the international norm. The renewed treaty in March 2002, while imposing quotas on four primary and raw material exports, preserved the preferences on industrial products intact. Besides India, Nepal has negotiated bilateral investment agreements with Bhutan, Germany, and Norway.

In conjunction with the advent of multiparty democracy in 1991, Nepal has undertaken economic reforms that, at least on paper, have been aimed at making Nepal increasingly attractive to foreign investors, beginning with the Foreign Investment and One Window Policy Act of 1992 and the establishment of an Investment Promotion Board. Steps have been taken to privatize dozens of government-owned public enterprises (PEs), and to open up for private investment previous government monopolies in telecommunications, hydroelectric power, and air transportation.

Licensing requirements have been streamlined, and 100% foreign ownership is now permitted. In 1999, minimum investment requirements were also lifted. The legal basis for the full-scale private development of Nepal's massive hydroelectric resources and private export to India have been laid. The first fully private power projects are now in operation, though less than 1% of the potential has been exploited. Repatriation on income by foreign permanent nonresidents is taxed at 10%. Foreign investors are entitled to repatriate outside of Nepal the amount received from the sale of all or part of shares in their Nepali investment, and all amounts received as profits or dividends.

The US State Department, however, has reported that the implementation of the liberalizing reforms has been distorted not only by bureaucratic delays and inefficiencies, but by contradictory policies that mitigate and even negate the reforms. Many sectors remain closed to foreign investment, including financial services and management consulting, as well as traditional cottage industries, defense-related industries, alcohol and tobacco. On intellectual property rights both legislation and practice are considered inadequate. All foreign investment and technology transfer must have specific permission from the Department of Industries. Problems doing business in Nepal, even aside from the intensifying insurgency, make a formidable list: lack of direct access to airports, poor ground transportation, lack of skilled labor and technological expertise, unclear rules on labor relations, inadequate power, inadequate water supply, few local raw materials, nontransparent and arbitrary tax administration, and inadequate and obscure commercial legislation. One result, according to the US State Department, is the necessity for constant interaction with government officials, far from the "One Window" policy set out in the 1992 legislation.

In 2002, the government has spoken about plans for new bankruptcy and debt recovery legislation, new intellectual property legislation, and intentions to open the country to international accounting and auditing firms, but these have not taken concrete form. For 2002/03 perhaps the promising step is the introduction of a 10 year multi-entry visa for nonresident Nepalis (NRNs) willing to invest in Nepal.

In 2004, there were 927 foreign investment projects in Nepal, whose value rose to approximately $1.7 billion. The total share of FDI included in these projects was $442 million. Most of the investments went to the manufacturing and tourism industry. Major investors included India, the United States, China, the British Virgin Islands, Norway, Japan, and South Korea. Although the government has made some progress in creating a better business environment for foreign investors, Nepal remains an inaccessible country (with the nearest accessible port in Calcutta, India), with a very poor infrastructure, a poorly educated population, scarce natural resources, an inefficient energy sector, and an obtuse law system.


In July 2002, Nepal completed its ninth economic planning period, and embarked on its tenth (2002/03 to 2007/08). It has not been a triumphant progression. Buffeted by a sagging world economy, the aftermath of the 11 September 2001 terrorist attacks on the United States, and an increasingly violent Maoist rebellion, Nepal reported its lowest growth rate0.8% of GDPin over a decade, and a 23.4% plunge in development spending, a serious stumble in the moderate, but steady progress it had been making in the 1990s.

Planned economic development began in 1953 with construction of roads and airfields and of irrigation projects to bring more acreage under cultivation. In 1956, these projects were integrated into the first five-year plan (195661) to assist existing industries, revive and expand cottage industries, encourage private investment, and foster technological training. With the second plan (196265), the government introduced land reform with programs to set ceilings on land holdings, to protect tenancy to redistribute land to the landless, and to initiate a compulsory saving plan. Though declared a success at the time, land holdings have remained seriously skewed in distribution mainly because large land holders were able parcel out land to relatives, and because the poor have been forced to sell their redistributed land to pay debts. The third economic plan (196570), was the first to be administered under the panchayat system, the system overthrown in the economic reforms of the early 1990s. The fourth (197075) and fifth (197580) five-year plans continued to emphasize infrastructural development, primarily in transportation, communications, electricity, irrigation, and personnel. The sixth development plan (198085) allocated nearly one-third of its total expenditure to agriculture and irrigation. However, money targeted for development projects was used for other purposes.

The objectives of the seventh plan (198690) were to increase production, create opportunities for employment, and fulfill basic needs. Of the total expenditure, 65% was to be used for investment, allocated as follows: agriculture, irrigation, and forestry, 30.6%; industry, mining, and electricity, 26%; transportation and communications, 17.7%; social services, 25.2%; and other sectors, 0.5%. Foreign aid was expected to fund about 70% of these projects.

With the establishment of multiparty government in 1991, a comprehensive set of reforms affecting all sectors of the economy was initiated under the eighth five-year plan (199297). Nepal's public enterprises (PEs) were slated for privatization, government monopolies in hydroelectric power, telecommunications, and transportation were opened to private investment, customs were streamlined, and the country declared open for foreign investment. The ninth plan (19972002) emphasized investments in agriculture and hydroelectric power, liberalization and privatization of the economy, and a thorough reform of the tax system and banking practices. Under the tenth plan, to run until 2007/08, priorities have shifted to security and poverty reduction, but with a renewed emphasis on privatization and the effort to encourage private investment.

Nepal has considerable development potential. Its vast hydroelectric power resources are estimated at 83,000 MW, of which less that 1% has been brought on line. The legal framework for the full-scale private development of the hydro-electric sector, with private exports to India, is in place. Other promising growth sectors are air transportation and telecommunications, both open to private investment, and tourism. There is growth potential in both malefactors and agricultural products for export. Although there have been many slips in the implementation of the government's economic liberalization program, it has maintained a stable, noninflationary currency regime, and, until the eruption of problems in 2001, a record of unspectacular but steady 5% annual growth rates in GDP. The government also claims improvement in the reduction of poverty, from 42% of the population in 1997 to 38% in 2003.

Nevertheless, the challenges to Nepal's economic development are formidable. These include limited natural resources, difficult topography, poor infrastructure, landlocked location, weak human capital (with both low levels of education and health), poor public management, and a long history of political interference in the economy. Nepal's economy is characterized by a high vulnerability to shocks, natural and man-made. Its growth has been arrested since 2001, and with a per capita income below $300 in nominal terms, it remains one of the world's poorest countries. It remains to be seen whether its economic reform programs will be swept away, or prove to be built solidly enough to weather the passing storms.

The economy has been expanding modestly in 2003, and 2004, and is expected to continue the trend for at least a couple of more years. The main growth engines of the economy are remittances from Nepali workers overseas. The on-going Maoist conflict, as well as expected insufficient precipitations (which will negatively affect the agriculture sector), will likely place the expansion rate of the economy below its potential.


The government maintains a countrywide village development service, which endeavors to meet the villagers' needs for food, clothing, shelter, health services, and education. Village development workers demonstrate improved methods of sanitation and health and teach the villagers to read and write. The Employee Provident Fund administers a program of old age, disability, and death benefits for government and corporate employees, funded by contributions from both employers and employees. Pensions are provided as a lump sum equal to contributions plus interest. Retirement is at age 55. There is a social assistance program that provides benefits to Nepalese citizens aged 75 or older. Employees of establishments with 10 or more workers are covered by work injury insurance, which is funded by the employer through a private carrier. Severance pay is also mandated in some circumstances.

Women are subject to gender discrimination, especially in traditional rural areas. The present constitution has strengthened provisions protecting women, including equal pay for equal work, but few women work in the money economy. Women's inheritance and marriage rights have been strengthened, but women suffer discrimination in both areas. Domestic abuse and violence against women are serious societal problems that citizens and governmental authorities do not recognize. The tradition of dowry remained strong and the killing of brides for default are still reported in 2004. There are also reports of women being abused because they are suspected of witchcraft. The abduction of young girls to be taken to India to work as prostitutes is a serious problem.

The human rights record remained poor. Members of lower castes suffer from widespread discrimination and many are in positions of bonded labor. Senior positions in politics and the civil service are dominated by urban-oriented castes, such as the Brahmin and Chhetri.


As of 2004, there were fewer than 5 physicians, 26 nurses, and 7 midwives per 100,000 people. In the same year, there were 9 private hospitals and at least 10,000 private pharmacies in the country. Most of the medical personnel work in the Kāthmāndu Valley and health services elsewhere are in short supply. The public sector provides most of the country's health care. Traditional medicine and faith healing are still used frequently, especially in the hill districts. Only one in 10 rural dwellers lived within one hour of a hospital. Total health care expenditure was estimated at 5.4% of GDP.

Although protected by mountain barriers, Nepal is in frequent danger from epidemics, notably cholera. Japanese encephalitis is endemic in the Terai plain and inner Terai zone. Overall, 70% of illness is from communicable disease. Common afflictions are black fever (kala-azar ), amoebic dysentery, eye diseases, typhoid, and venereal diseases. Malnutrition, contaminated water, and inadequate sanitation cause widespread health problems. Improved health programs in rural areas have helped control malaria, leprosy, and tuberculosis. However, tuberculosis remains a significant health problem. Approximately 81% of the population had access to safe drinking water and 27% had adequate sanitation.

Immunization rates for children up to one year old were as follows: tuberculosis, 96%; diphtheria, pertussis, and tetanus, 78%; polio, 78%; and measles, 85%. Major causes of illness in children are perinatal conditions, diarrhea, measles, and severe respiratory conditions.

Nepal has a large number of drug addicts. Stringent amendments to the Narcotic Drug Control Act were adopted in 1986 in response to pressure from the United States and the United Kingdom.

As of 2002, the crude birth rate and overall mortality rate were estimated at, respectively, 32.9 and 10 per 1,000 people. Birth control was used by 29% of married women. The infant mortality rate was 66.98 per 1,000 live births in 2005. In the same year, the average life expectancy was 62.73 years. Malnutrition is a common problem. Over half of all children under five were underweight. It was estimated that 54% of children under five were malnourished.

As of 2004, there were approximately 61,000 people living with HIV/AIDS in the country. There were an estimated 3,100 deaths from AIDS in 2003. The HIV/AIDS prevalence was 0.50 per 100 adults in 2003.


Most of the population lives in rural villages where houses are made of stone or mud bricks, with thatched roofs and raised eaves. Bamboo and reed huts are also prevalent. Most houses have two stories, but some contain only two rooms, a sleeping room and a room for cooking. In slum areas, wood, straw, paper, and plastic sheeting are used for temporary shelters. The well-constructed houses of the Sherpas are generally built of stone and timber, roofed with wooden slats.

In 2001, there were about 3,598,212 dwellings serving about 4,174,372 households. The average household size is 5.4 members. About 49.7% of all households live in temporary housing, those made with bamboo, reeds, mud, or other nondurable materials. About 23.5% live in permanent structures made of concrete, brick, stone, tile, and other durable materials. About 88.3% of all dwellings are owner occupied. About 93% of rural dwellings are owner occupied; compared to 60% of urban dwellings. A little over 53% of all households have access to piped water and only 46% have toilet facilities. Wood is the most commonly used fuel for cooking. Only about 39.8% of households have electric lighting.


Traditional schools (pathshalas ) provide a classical education emphasizing languages. Gompas along the northern border train boys and men to become Buddhist religious leaders. English schools are modeled after those in India. Under a 1954 plan, a national school system with a single curriculum has been replacing the traditional schools, although English schools have increased.

Free primary education was introduced in 1975. Schooling is compulsory for five years, which is the duration of primary school studies. Students then move on to either technical school (8 to 10 years) or general secondary school (about 7 years). In 2001, about 12% of children between the ages of three and five were enrolled in some type of preschool program. Primary school enrollment in 2001 was estimated at about 70% of age-eligible students; 75% for boys and 66% for girls. Secondary school enrollment in the same year was about 43% of eligible students; 49.8% for boys and 37.4% for girls. It is estimated that about 80% of all students complete their primary education. The student-to-teacher ratio for primary school was at about 36:1 in 2003; the ratio for secondary school was about 35:1. In 2003, private schools accounted for about 14.7% of primary school enrollment and 27.8% of secondary enrollment.

Tribhuvan University is composed of five institutes (medicine, engineering, science, agriculture and forestry), four research centers, and four faculties (humanities and social science, management, law, and education) at 61 constituent and 140 affiliated campuses. Other institutions of higher learning include the Mahendra Sanskrit University, Kāthmāndu University, Purbanchal University, and B. P. Korala Institute of Health Science. In 2003, about 5% of the tertiary age population were enrolled in some type of higher education program. The adult literacy rate for 2004 was estimated at about 48.6%, with 62.7% for men and 34.9% for women.

As of 2003, public expenditure on education was estimated at 3.4% of GDP, or 14.9% of total government expenditures.


The National Library in Kāthmāndu has 75,000 volumes in Nepali, English, Sanskrit, Hindi, and other Indian languages. The Bir Library, founded in the 14th century, contains 15,000 manuscripts. Other important collections are maintained by the library of Tribhuvan University (18,000 volumes) and the Singh Darbar, Nepal-Bharat (41,000), and the British Council libraries, all in Kāthmāndu. The Kaiser Library, also in Kāthmāndu, contains the private collection of Kaiser Shumsher Jung Bahadur Rana; with about 50,000 volumes, it also serves as a reference library open for public use. The Library and Documentation Center of the Royal Nepal Academy of Science and technology maintains a collection of about 13,000 books. There are about 600 public libraries within the country, many of which have fairly small collections and some of which are located in community centers.

The National Museum (1928) and the Natural History Museum (1975) are both in Kāthmāndu, along with a postage museum and the King Tribhuvan Memorial Museum. There is a Museum of Excavated Archeological Antiquities in Lalitpur and a National Art Gallery housed in the Palace of Fifty-Five Windows in Bhaktapur.


Postal, telephone, and telegraph services are operated by the government. Telephone service connects Kāthmāndu with Birganj on the Indian frontier, and another line links the capital with foothill towns in the eastern Terai. The telecommunications network includes a 5,000-telephone automatic exchange of over 90 radio relay stations, and an earth satellite station established with help from the United Kingdom in 1982. In 2003, there were an estimated 16 mainline telephones for every 1,000 people; about 319,500 people were on a waiting list for telephone service installation. Also in 2003, there were approximately two mobile phones in use for every 1,000 people.

Radio Nepal, a commercial, semigovernmental network, broadcasts in Nepali and English on both short and medium wavelengths. Television was introduced into the Kāthmāndu Valley in 1986 and the Nepalese Television Corporation, operated by the government, broadcasts about 23 hours a week. While there are private stations, media restrictions imposed in 2005 by King Gyanendra forced many of these stations to cease broadcasting political news. In 2003, there were an estimated 39 radios and 8 television sets for every 1,000 people. The same year, there were 3.7 personal computers for every 1,000 people and three of every 1,000 people had access to the Internet. There were eight secure Internet servers in the country in 2004.

Dailies, weeklies, and monthlies in Nepali, Newari, Hindi, and English are published mainly in Kāthmāndu. The largest daily newspapers (with 2002 circulation) are the Gorkhapatra (75,000), the Nepali Hindi Daily (62,000), Samaya (18,000), and the English-language Rising Nepal (20,000). The 2005 media restrictions set strict guidelines for print media, so that some papers no longer publish editorials and practice self-censorship.

Though the constitution specifies that the government may not censor expression, including that of the press, the press is licensed by the government, and licenses have been suspended and individuals arrested for criticism of the monarchy or support of a political party.


The leading commercial organization is the Federation of Nepalese Chambers of Commerce and Industry. The variety of professional organizations includes the Garment Association of Nepal, the Nepal Journalist Association, and the Nepal Drivers' Association.

National youth organizations include the Foolchowi Youth Star Club, the All Nepal National Free Students Union, Democratic National Youth Federation, Junior Chamber, the Nepal Children's Organization, the Council of Free Students Union of Nepal, the Nepal Scouts Associations, YMCA/YWCA, and Youth for Human Rights, Education and Development. There are several active sports associations as well. National women's organizations include the Nepal Women's Organization, the Nepal Association of University Women, and the Women's Development Society.

Organizations involved in educational pursuits include the Environment, Culture, Agriculture, and Research Development Society in Nepal and the Royal Nepal Academy of Science and Technology. Nepal Medical Association promotes research and education on health issues and works to establish common policies and standards in healthcare. There are several other associations dedicated to research and education for specific fields of medicine and particular diseases and conditions. The World Conservation Union, promoting education and action concerning environmental issues, has an office in Kāthmāndu.

International Organizations with national chapters include Amnesty International, CARE Nepal, Defence for Children International, Caritas, Habitat for Humanity, and the Red Cross.


In 1951, the government of Nepal reversed its long-standing policy and began to encourage visitors; before then, mountaineering expeditions had been permitted into the country only under severe official scrutiny and restraining regulations. For mountain trekkers, travel agencies in Kāthmāndu provide transportation to mountain sites, as well as Sherpa guides and porters. Tents, sleeping bags, and other mountain-climbing gear are available in Kāthmāndu. White-water rafting and kayaking are also popular.

Tourism was first officially included among the country's major potential assets in 1956.There were 338,132 tourists who visited Nepal in 2003, of whom 25% came from India. The 20,063 hotel rooms had 38,270 beds. Tourist expenditure receipts totaled $232 million that year. A valid passport and visa are required to enter Nepal. Upon arrival visitors may obtain a tourist visa at specified ports of entry.

In 2004, the US Department of State estimated the daily cost of travel in Kāthmāndu and Pokhara at $188. Other areas were significantly less expensive at $92 per day.


Buddhism, one of the world's great religions, is based on the teachings of Siddhartha Gautama, who became known as the Buddha ("Enlightened One"). He was born (traditionally about 624 bc but according to most modern scholars about 563 bc) in Lumbini, near Kapilavastu in the Terai, then part of India, and died at Kushinagara (traditionally about 544 bc but according to the modern view about 483 bc).

Amar Singh Thapa, Nepalese military leader of the 19th century and rival of Gen. David Ochterlony in the war between British India and Nepal, is a national hero. The two best-known Rana prime ministers were Sir Jung Bahadur Rana (181777) and Sir Chandra Shamsher Jang Rana (18631929). The most highly regarded writers are Bhanubhakta, a great poet of the 19th century, and the dramatist Bala Krishna Sama (Shamsher, 190281).

King Mahendra Bir Bikram-Shah (192072), who introduced the partyless political system, based on the Nepalese tradition of the village panchayat (council), was succeeded on the throne by his son, King Birendra Bir Bikram Shah Dev (19452001), who democratized the panchayat system. Birenda and most of his family were killed in 2001 by his eldest son and heir, Dipendra (19712001), who killed himself in the rampage. Gyanendra Bir Bikram Shah Dev (b.1947) ascended to the throne in June 2001. Well-known political leaders include the brothers Matrika Prasad Koirala (b.1912), head of the Nepali Congress Party and the first post-Rana prime minister of Nepal (195152 and 195355), and Bisweswar Prasad Koirala (191582), head of the Nepali Congress Party and the first elected prime minister of Nepal (195960).

World renown was gained for Nepal by a Sherpa porter and mountaineer, Tenzing Norgay (Namgyal Wangdi, 191486), who, with Sir Edmund Hillary, a New Zealander, ascended to the summit of Mt. Everest in 1953.


Nepal has no territories or colonies.


Financial Accountability in Nepal: A Country Assessment. Washington, D.C.: World Bank, 2003.

Hutt, Michael (ed.) Himalayan People's War: Nepal's Maoist Rebellion. Bloomington: Indiana University Press, 2004.

Kincaid, Jamaica. Among Flowers: A Walk in the Himalaya. Washington, D.C.: National Geographic, 2005.

Lawoti, Mahendra. Towards a Democratic Nepal: Inclusive Political Institutions for a Multicultural Society. Thousand Oaks, Calif.: Sage Publications, 2005.

Sever, Adrian. Aspects of Modern Nepalese History. New Delhi, India: Vikas Publishing House, 1996.

Shrestha, Nanda R. Nepal and Bangladesh: A Global Studies Handbook. Santa Barbara, CA: ABC-CLIO, 2002.

Shrestha, Nanda R. and Keshav Bhattarai. Historical Dictionary of Nepal. Lanham, Md.: Scarecrow, 2003.

Shrivastava, L.P.S. Nepal at the Crossroads. New Delhi, India: Allied Publishers, 1996.

Thapa, Asoke K. Bramu: A People in Transitions. Kāthmāndu, Nepal: Walden Book House, 1996.

Watkins, Joanne C. Spirited Women: Gender, Religion, and Cultural Identity in the Nepal Himalaya. New York: Columbia University Press, 1996.

Whelpton, John. A History of Nepal. New York: Cambridge University Press, 2005.

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Kingdom of Nepal

Major Cities:
Kāthmāndu, Pokharā, Hetauda, Tulsipur

Other Cities:
Bhairawa, Bhaktapur, Birātnagar, Birganj, Lumbini, P aţán, Rampur


This chapter was adapted from the Department of State Post Report 1999 for Nepal. Supplemental material has been added to increase coverage of minor cities, facts have been updated, and some material has been condensed. Readers are encouraged to visit the Department of State's web site at for the most recent information available on travel to this country.


The mosaic of Nepal's history and culture was protected for centuries from the forces of change that defined the world's international relationships. Its resources began to develop to meet the demands of modern nationhood only after 1951, when the borders were opened to foreigners. The U.S. has played a major part in assisting this development and continues to influence the course of progress in a relationship of mutual respect and cooperation.

Politically, Nepal is neutral in most of the world's disputes, and its foreign policy reflects the position of a small and landlocked country located between two giants, India and China.

Challenges to Nepal's development are formidable and unique, given its high mountains, fast and flooding rivers, undeveloped natural resources, and its previous isolation.

Impressive changes have occurred nonetheless in the fields of transportation, communications, education, and commerce. Nepal must accommodate its enormous geographic and ethnic diversity while managing economic development. Its rapidly growing population is deeply and genuinely attached to ancient customs and traditional attitudes.

The central government is committed to the concept of development and is encouraging growth of a national consciousness and pride in the nation's heritage. A major challenge of the American Mission in Nepal is to assist the country's efforts to become a modern nation while retaining its unique cultural heritage.

A visit to Nepal not only is an introduction to a land of centuries-old cultures relatively untouched in many ways by the outside world but is also an opportunity to explore ancient kingdoms in the shadow of the world's highest mountains.



Kāthmāndu, the nation's capital, is situated in a beautiful valley of about 225 square miles, at an altitude of nearly 4,500 feet, and at the confluence of two rivers. The city is completely surrounded by high hills and, during much of the year, the snow-covered Himalayan peaks can be seen. The valley was once a lake bed and the soil is extremely fertile. Where sufficient water is available, the soil can produce three crops a year.

Kāthmāndu was originally known as Kantipur, or City of Glory. Its modern name is derived from an important temple, Kath Mandir, built in the heart of the city, reportedly with the wood of a single tree. Some of the principal landmarks are the royal palace; the Tundikhel, a large parade ground; and Durbar Square, a fascinating collection of intricately carved temples.

The historic 17th-century Hanuman Khoka Palace and its temple complex, once the residence of the Malla Kings, dominates the old city. Several of the palace's courtyards are open to the public, as is the nine-story Basantapur Tower, with magnificent views of the city. The palace has a gallery and a museum that contains relics of former royal dynasties.

Typical Kāthmāndu houses are of three-or four-story brick construction, many with ornately carved wood trim. The bazaars are a typical Asian assemblage of people, vegetable stalls, tiny shops, and free-roaming cattle.


Kathmandu's electric power is 220v, 50cycle, AC. Power fluctuations and failures that can damage electrical appliances occur often. Transformers are required for 110v appliances. Bring extra transformers to meet your equipment needs. Transformers available on the local market are expensive.

As electrical power is 50 cycles, many U.S. appliances with electric motors such as tape decks (with DC motors) and vacuum cleaners will not operate properly even with a transformer, because the motor speed will be reduced. Some 60-cycle appliances can be modified to work at 50 cycles. Consult your owner's manual or a service representative. Heating appliances such as griddles or coffee makers are not affected by cycles and will work fine with a transformer.

The municipal water is not potable and must be filtered and boiled prior to drinking. Most houses have both a ground-level water storage tank and a roof-mounted supply tank. Water pressure is low by American standards, as the water supply is gravity fed. Water shortages occur during the dry season, and water delivery is available on an as-needed basis from Mission sources.


A variety of fresh meats, fruits, and vegetables is available locally. Meats include pork, poultry, buffalo, and goat. Beef, fresh and frozen fish, and seafood from India are sold in Western-oriented "cold storage" stores. Rice, potatoes, and eggs are plentiful. Fresh fruits and vegetables are available seasonally. Fruits include apples, bananas, oranges, tangerines, papayas, mangoes, watermelon, grapes, coconut, pineapple, and grapefruit. Vegetables include asparagus, green beans, broccoli, cauliflower, carrots, radishes, cucumbers, tomatoes, peas, onions, eggplant, various squashes, lettuce, local spinach, and fresh spices.

A good selection of canned goods, oils, butter, flour, sugar, and other baking items is available in the markets.

Most breads and pastries are made at home, but a number of good local bakeries are here. Although respectable Indian brands of ice cream are sold locally and are safe for consumption.


Summer clothing is worn from April to November. Lightweight tropical suits are worn in the office and women wear short-sleeved or sleeveless cotton or other lightweight washable dresses, skirts, or pantsuits.

During winter, woolen clothing is needed, especially at night. Good use can be made of stoles, sweaters, slacks, and warm long-sleeved dresses. By midday it is often warm enough to shed an outer garment, although at night some choose to wear a heavy winter coat. Warm sleeping wear is essential during the winter months. Flannel sheets and down comforters are popular winter bedtime accessories.

Limited suitable ready-made clothing is available in Kathmandu. Bring clothing for tennis, swimming, and hiking. A lightweight raincoat and umbrella are needed during the monsoon season (June-October).

Women dress simply and informally. Appropriate dress for luncheons, dinners, and informal receptions is required. A few full-length summer and winter dresses are needed.

Bring a generous supply of shoes. Unpaved, rough, and muddy surfaces cause shoes to wear out rapidly. If you intend to hike, bring a pair of good-quality hiking shoes and socks. (Most camping and hiking equipment is available for rent in Kathmandu, and local reproductions of Western-manufactured equipment are for sale.) Good-quality dress shoes for men and women are hard to find in Kathmandu, and the larger sizes are impossible to find. Bring a good supply of children's clothing for warm and cold weather. Include sweaters, flannel pajamas, and a heavy jacket for winter.

Supplies and Services

Kathmandu has several good beauty-and barbershops. Most Westerners patronize the major hotels for this purpose. Excellent facials and massages are offered at major hotels at reasonable costs.

Drycleaning is available. Laundry almost always is done at home by a servant. Local tailors are frequently used. The results usually are acceptable after you have found a tailor to your liking. Woolen and cotton materials are available in Kathmandu, mostly of Indian and Chinese manufacture, though some of British origin also are available. Choice of colors and prints are sometimes limited. Some ready-made clothing is available (usually of Indian, Hong Kong, Japanese, or Thai manufacture, but sometimes European), but styles and sizes are limited. Several quality boutiques cater to Western tastes, and prices in these markets usually are comparable to those in the U.S.

Both large and small supermarkets carry a variety of local goods and imported items. You can find almost anything, including sports equipment and electrical appliances (expensive), cosmetics, nylons (bring your own), clothing, fabrics, children's toys, cassette tapes and CDs (all kinds of music, but as usual, quality varies), and much more.

Since most imported items are more expensive than in the U.S., bring enough of those items you use most.

Kathmandu has a limited number of experienced and trained repair people; available spare parts for cars, trucks, appliances, radios, and phonographs also are limited.

Local bookstores are reasonably stocked with English-language books, including recent novels, many of the classics, histories (mostly regional), travel book, and trekking guides, photographic essay; on Nepal, how-to books, folk tales, anthropology, politics, philosophy, religion, and a growing number of children's books, games, and puzzles. The American Women of Nepal (AWON) operates a 6,000-volume public library.

Domestic Help

Household servants are commonly employed in Kathmandu. Staff may include a cook, housekeeper, gardener, nursemaid (for babies and young children), driver (if you do not wish to risk the local traffic yourself), and day guard. Finding good cook is particularly difficult. In addition to basic wages (currently $50-$80, month for an experienced cook, less for housekeepers, gardeners, or nursemaids), extras include uniforms (usually some form of local dress), a food allowance, a bonus equivalent to 1-month's salary before the Dasain holidays (the largest Hindu celebration of the year, usually in October), medical expenses, transportation, and various other discretionary benefits. It is common for servants to request loans from employers. Employers do not universally agree and repayment arrangements vary for those that do.

Religious Activities

Although traditionally religiously tolerant, Nepal is officially a Hindu state. The law forbids proselytizing and conversion of Hindus to other religions. Christian missionaries, first admitted in 1950, are involved in medical and educational work.

A full-time ordained minister serves the interdenominational Protestant community. Sunday worship services, Sunday school classes, and auxiliary fellowships are available. Roman Catholic Masses are conducted by American Jesuit and Mary knoll priests at least once daily and several times on Sunday at various locations in Kathmandu. Anglican/Episcopalian Holy Communion Services are held about six times a year at the British Embassy. A small, international Baha'i community holds regular meetings and conducts children's classes. No organized Jewish community exists in Kathmandu, and no regular Jewish services are conducted, but the Israeli Embassy holds occasional holiday services. Other religious groups do not have formal facilities, although occasionally ministers of other faiths visit Kathmandu. Some religious groups gather informally in homes, depending on members present in Kathmandu.


Lincoln School, a private coeducational day school founded by USAID in 1954, provides an educational program from kindergarten through grade 12 for students of all nationalities. Enrollment averages 250 students and usually represents more than 30 nationalities. Approximately a third of the students are American and up to a quarter Nepali or Tibetan.

The school is governed by a nine-member board of directors elected for for 2-year terms by the Lincoln School Association, which is made up of all parents and faculty. The school is administered by an American-recruited and-trained principal who directs 30 full-and part-time teachers, 20 Nepalese teaching assistants, and several native language teachers. Facilities include 21 classrooms, an auditorium, gymnasium, library/instructional center, computer center, music room, outdoor reading areas, and a 2½ acre athletic field.

The school year extends from late August to mid-June.

The Lincoln School curriculum is based on the U.S. public school system of education but more recently encompasses an internationalized curriculum to reflect the needs of the diverse student body. Instruction is in English. Kindergarten is a comprehensive school preparation program. Grades 6 to 8 are departmentalized, with students moving from one subject teacher to the next for languages, mathematics, social studies, science, and computers. A variety of extracurricular activities also are offered, either by teacher specialists or regular staff. The high school students follow a similar program but are even more mobile according to their broader curriculum needs. Nepal studies, including language and culture, is offered, and the trek program takes students in grades 5 to 12 into mountain villages for up to 14 days in the fall or spring. Students in all grades bring their lunch from home, as the school does not have a kitchen.

Lincoln School has an extensive Advanced Placement (AP) academic program in the high school in English, U.S. and world history, math, numerous sciences, and art. Students who successfully complete these courses and score a 3 or better on the final examination receive college credit for their work. Lincoln does not offer an International Baccalaureate (IP) diploma.

Kathmandu has a British school, a French school, and a Norwegian school for those who do not wish to enroll their elementary schoolchildren in Lincoln School. There also are a number of preschool or nursery school options available at any time.

Special Educational Opportunities

Several international language schools offer language training in Nepali, while other embassies and missions sponsor training in French, German, Japanese, and Chinese. Private instructors give courses in history and culture, as well as private lessons in music and Nepali dancing. Lecture programs and cultural tours are provided on a regular basis by International Community Service (ICS), a British expatriate support organization. Several American colleges offer programs in Kathmandu.


The pleasant year-round climate of Kathmandu, combined with the social and cultural climate of an international community, permits a variety of both indoor and outdoor activities.

The Phora Durbar recreation center, situated on several acres of land in the center of town, in addition to swimming offers three hard-surface tennis courts, an outdoor basketball court, baseball/softball diamond, and volleyball court. The snackbar serves breakfast and lunch every day, dinner many evenings, and pastries, popcorn, and other snacks throughout the day. The facility also houses a video club.

Kathmandu has a few private tennis courts and two golf courses (bring your own equipment). Golf memberships are expensive.

Private and hotel health club memberships also are available. Major hotels offer summer "saunaand-swim" packages to families and individuals, as well as year-round exercise opportunities.

Touring and Outdoor Activities

The Kathmandu Valley is a sightseeing fantasy land, but the dirt and garbage in the larger towns and cities can interfere with otherwise pleasurable experiences. Tourists can visit the seven national museums scattered throughout the Valley, a small national zoo, botanical gardens, and local art galleries; or wander through Kathmandu's old city and shop at the colorful markets and experience the Newari architecture and temples up close. The other two main cities of the Valley, Patan and Bhaktapur, are marvels of traditional Newari architecture and were once home to kings of the Malla Dynasty. For more organized and in-depth cultural queries, ICS offers lectures, music programs, and hikes through outlying towns and villages to view places and faces mostly unchanged over the centuries. On the hills ringing the Valley are many foot trails that lead to breathtaking views of the Himalayas just north of the Valley.

Sightseeing outside of the Valley might take you north on a trek, organized by one of the many competent local agencies, into the middle hills (6,000-10,000 feet) if you want to meander gently under the Himalayas, or high up into the mountains themselves. Treks suited to all tastes, abilities, and incomes are available, many of which you can organize independently at very little cost. It is an excellent way to experience Nepali village life. If you plan to trek, it is best to bring your own camping equipment (tents, sleeping bags, mats, hiking shoes, rucksacks, canteens). All types of equipment are available for rental or (except for tents) purchase from the many local shops, but buyers must remember that in most cases the items were manufactured in the back room or around the corner. Bring your own shoes, as locally available ones do not last.

If you opt to go south to the warmer jungle climate of Nepal's Terai, you might visit one of the jungle camps located in the Royal Chitwan National Park, a Government of Nepal-sponsored wildlife preserve, where the one-horned rhinoceros coexists with the Royal Bengal tiger, the leopard, the elephant, and the tourist. Hunting is severely restricted. Licenses are required for firearms. Excellent fishing is available in the Narayani and Rapti Rivers in the Terai. Permits are not necessary, but bring your own equipment.

Another choice for adventure sightseeing could take you rafting gently down one of Nepal's rivers during the winter months or over some of the wildest white-water routes during the wet months.

Countless local agencies will arrange the rafting/camping trip most suitable for you. Nepal's many festivals offer a colorful and lively change of pace throughout the year and are a delight for the photographer. Photographic supplies, including black-and-white and color print and slide film, cameras, and lenses are available in the local photo shops. One-hour developing services are abundant, and many are quite good.

Kathmandu is a gardener's paradise. Things grow well here and quickly, even through the winter season when night temperatures often fall below freezing. If you enjoy a garden, you will have great personal satisfaction in Kathmandu. Although most households employ a gardener, you can continue your pursuits (less the heavy work) at your leisure. Gardening tools are available in Kathmandu but are Nepali style. Seed catalogs are available, and local seeds are excellent for local varieties of flowers and vegetables.

Many people in Kathmandu own personal computers. Several good computer hardware stores repair and clean equipment and sell paper, disks, and software, but bring enough parts and extras to fit your own computer. A number of computer schools offer short-term courses in programming, spreadsheets, and word processing. Internet and e-mail is commercially available through local servers. Prices are higher than in the U.S. but are decreasing almost monthly.


Many cuisines are available for those who enjoy dining out, from Nepali, Tibetan, and Indian, to Italian, Thai, Korean, Japanese, Chinese, and American. Quality varies. Prices except for liquor are reasonable. Many restaurants offer live and local entertainment (traditional dances, instrumentals, and Nepalese/Indian ghazals). Others offer beautiful garden settings or views of the Himalayas.

Kathmandu nightlife offers several discotheques, hotel restaurants with dancing and live entertainment, and the occasional visiting cultural program. Several casinos offer to separate you from your money 24 hours daily.

Many Americans participate in an active amateur dramatic group, the Himalayan Amateurs (HAMS), providing periodic dinner/drama entertainment.

Local movie theaters feature only Nepali-and Hindi-language films. Video rentals (PAL system) are available throughout Kathmandu in English, although quality varies.

Social Activities

Because the Nepalese are so friendly and the international community is so accessible, it is easy to meet Nepalese and third country nationals. International contacts can be made through the International Club, membership in which is available to all duty-free personnel in Nepal, and at such organizations as the Lions, Rotary Club, Junior Chamber of Commerce, church groups, the amateur theater group, and by volunteer work at hospitals or charitable organizations.

Another place to meet people is at Phora Durbar, the American Mission Association recreation facilities. Membership includes third-country diplomats and others with duty-free status in the Kingdom. The recreation area sponsors community tournaments for tennis, volleyball, and other games.

Volunteer work through the Active Women's Organization of Nepal (AWON) is a rewarding way to meet people of all nationalities and to participate in social development activities in Nepal. The organization manages a thrift shop, a health clinic for the poor, a 6,000-volume public library, and a girl's scholarship program. Profits are contributed to local charities.

Parents of Lincoln School students automatically are members of the Lincoln School Association, which brings parents together for various school activities throughout the year.

Entertaining at home is a pleasant and often used way to meet people and see friends in a casual atmosphere.


Pokharā, with a population of over 46,000, is situated 96 miles from Kāthmāndu and is connected by air as well as by two land routes. The old Rajpath Highway is a 12 hour drive (via Hetauda and Butwal), while the road via Mugling takes six to eight hours. Daily flights connect Pokharā with Kāthmāndu, except during monsoon season when schedules depend on the weather; it is a 25 minute flight. Pokharā, the third largest city in Nepal, is the center of trade between the high mountain and middle hill people. The skyline of the town is dominated by the 23,000 foot Machapuchare ("the fish-tail mountain").

The Pokharā valley is one of the picturesque spots of Nepal. The beauty of the valley is enhanced by such famous lakes as Phewa, Begnas, and Rupa, which have their perennial source in the glacial region of the Annapuran range of the Himalayas. During the dry months of the year, Pokharā offers spectacular views of the Himalayas. Pokharā is a major departure point for treks into the Himalayan foothills.

Several very good hotels are available in Pokharā at reasonable prices; running water and electricity are available year round. From March to September, the temperature ranges from 69°F to 95°F with occasional showers. The monsoon rains begin about mid-June and last until September. From October to February, the temperature ranges from 35 ° F to 68 ° F with clear weather.

Pokharā has limited shopping facilities. Food, clothing, and other necessities are available, although in less variety than in Kāthmāndu. There is a missionary-run hospital with several doctors, but most Americans are treated in Kāthmāndu.

Communications are provided by international mail and cable. In an emergency, Nepalese Government facilities are used to relay messages by radio. Telephone lines connect Pokharā and Kāthmāndu, but calls must be made through telephone exchange offices.

Many tourists visit Pokharā, either to stay and enjoy the scenery or in passing when going on treks into higher elevations or on the way to India.


The population of Hetauda is more than 40,000. The city is located on a major paved road connecting Kāthmāndu with the Indian border, close to a jungle area. Hetauda is a one-hour drive from Raxual, India, which serves as the primary entry surface point into Nepal.

Royal Nepal Airlines serves the Sumira airstrip, 40 minutes from Hetauda, daily. Service can be very irregular during the monsoon season. Travel time by the old Rajpath Highway to Kāthmāndu is about five hours. Travel to Kāthmāndu can also be made via Narayanghat and Mugling on a longer, but paved, route and requires only four hours.

A government hospital is located at Hetauda and a missionary hospital is located at Raxual at the Nepal/Indian border. Communication is by international mail, telephone, and Government of Nepal cable facilities.

Hetauda is situated above the Terai and, although summer is hot, that season is milder than on the plains. Winters are very mild, with flowers blooming year round. The entire Himalayan range, including Mt. Everest, is visible.

Some hunting is available in the nearby jungle. There is an elephant camp in the Chitwan district, and many opportunities for fishing and trekking exist.


Tulsipur is located in Dang district in the Rapati Zone of western Nepal. Tulsipur is accessible by road from the Indian border and from Nepalgunj in the far west all year. With the completion of the Tulsipur-Ghorahi-Lamahi road (paved) in 1982, access is easy and assured. The East-West Highway provides year-round access to Kāthmāndu by road (12-13 hours). Commercial flights from Tulsipur to Nepalgunj and to Kāthmāndu are generally reliable, except during monsoon season.

In spite of this isolation, and concomitant logistics problems, most basic commodities (rice, kerosene, salt, sugar) are normally available. Tulsipur bazaar has an ever-increasing variety of fresh fruits and vegetables in season, and meat and poultry are generally available. Canned, packaged, and bottled goods suited to American tastes must be brought in from either Kāthmāndu or India.

Running water is normally available for living quarters the year round. Electricity is available and is run by generator. Residential arrangements are adequate by American standards, but are by no means luxurious.

No recreational facilities other than trekking, horseback riding, and possibly volleyball are available in the town. Most health problems requiring diagnosis and treatment are done in Kāthmāndu.

March through September are extremely hot months in Tulsipur, with monsoon rains bringing some relief during July and August. October through to March brings a pleasantly warm climate, with cool nights.


BHAIRAWA is located in the central Terai, close to the Indian border. Roads connecting Bhairawa to Pokharā and Kāthmāndu are occasionally closed because of rock slides during the monsoon season. There is air service to Kāthmāndu. Bhairawa has adequate health facilities, but most medical treatment of Americans is done in Kāthmāndu. Communications are provided by international mail and cable. In an emergency, Nepalese Government facilities are used to relay messages by radio. Radio communication has been established between the Agricultural Farm and the Department of Agriculture, Kāthmāndu.

BHAKTAPUR (also called Bhadgoan) is one of the oldest cities in the Kāthmāndu Valley. Located nine miles from the capital city at the eastern end of the valley, Bhaktapur is known as a center of medieval art. Its five-story Nyatapola Temple is an excellent example of Nepalese architecture. The temple's stairway is flanked by a series of animal pairs, humans, and gods, each supposedly 10 times as strong as that below it. In the center of the old city is the art gallery, which contains Buddhist and Hindu tantric art; the 15th-century Royal Palace; and a replica of the 15th-century Pushupatinath Temple. Adjoining the art gallery is the Golden Gate of Bhaktapur. Near the city is the ancient Pujahari monastery; its central courtyard contains rich wood carvings and a noteworthy peacock window. This enclosure has been renovated and restored. Bhaktapur (which means "the city of devotees") was founded in the ninth century, according to legend. Its industries include pottery and weaving. The city's population is over 130,000.

BIRĀTNAGAR , situated in southeastern Nepal about 150 miles from Kāthmāndu, is one of Nepal's important manufacturing cities. Furniture, stainless steel, processed rice, and oilseeds are produced here. The population is more than 130,000.

BIRGANJ is located in the Terai on the Indian border, about 105 miles south of Kāthmāndu. The city has a population of over 43,000 and is a market town for agricultural products. It is also a manufacturing town producing textiles, sugar, flour, jute, and shoes.

LUMBINI is situated in a remote area south of Pokharā, in the western Terai. This is supposedly the birthplace of Buddha, and there are many religious shrines here. The broken Ashokan Pillar, remnants of a monastery, and images of Buddha's mother are among preserved areas. Extensive excavation work is being conducted in Lumbini.

PAŢĀN is located three miles southeast of Kāthmāndu and, with a population of more than 117,000, is the second largest town in the Kāthmāndu Valley. Once called Lalitpur, meaning "the city of beauty," it was the capital of the independent Malla kingdom. Today, Paţān is a major center of Buddhist art and craftsmanship; many craft shops are in the market area. The old section of Paţān provides visitors with many examples of temple architecture, most dating from the 17th century. Krishna Mandir, Bhimsen, Taleju, and Shiva are some of the temples that may be seen in this area of the city. The old royal palace is also open to tourists. Nearby is Hiranya Varna Mahabihar, one of the most ornately decorated Buddhist temples in the country. The five-storied temple of Kumbeshwar is also interesting; ritual bathing takes place in the courtyard yearly. The spring water here is said to originate in the sacred lake of Gosainkund and the Mahabouddha Temple.

RAMPUR is located in a valley some 140 miles from Kāthmāndu. Royal Nepal Airlines offers regular commercial service to Bharatpur, seven miles from Rampur, over an all-weather road. Rampur has no doctors or hospitals, although both can be found in Bharatpur. Most medical treatment is obtained in Kāthmāndu. No telephone lines connect Kāthmāndu and Rampur. International mail and local telegraphic services are available, but are unreliable. Rampur has virtually no shopping facilities; the nearest bazaar is in Narayanghat near Bharatpur. Clothing, some food, and other necessities must be purchased in Kāthmāndu. Because of the extremely poor road conditions in the area, only four-wheel-drive vehicles should be used. The climate is pleasant from October to March, ranging from the mid-40s (F) at night to the 60s during the day. From April to June, it is extremely hot with occasional rains, and during the monsoon season (June to October), it is hot and humid. The Tiger Tops jungle resort is only 15 miles from Rampur, and is accessible by road except during the monsoons.


Geography and Climate

The Kingdom of Nepal is roughly the size and shape of Tennessee, with an area of about 55,000 square miles. The country is wedged between China to the north and India to the south, east, and west.

Nepal's geography is perhaps the most varied of any nation in the world. From the plains and lowlands of the south (about 150 feet above sea level), the terrain rises in a mere 100 miles to the dramatic heights of the world's highest mountain range, the Himalayas, which include Mount Everest (Sagarmatha) at 29,028 feet. Ten other mountains exceed 24,000 feet, and more than 200 peaks exceed 21,000 feet.

Geographically, the country may be divided into three roughly parallel strips, each running generally east and west. The Terai region, the southernmost strip about 15 miles wide, covers about 20 percent of the total land area. It is an extension of the Gangetic Plain of north Indiaflat open country blending to forested hills, and once noted for its heavy jungles and big game, including tiger, rhinoceros, elephant, wild boar, and crocodile. The central region, sometimes called the "hill area," is about 60 miles wide, ranges from 3,000 to 12,000 feet above sea level, and covers approximately 60 percent of the land area. It includes the Valley of Kāthmāndu, with its encircling "hills" up to 9,000 feet in height. The northern region consists of the high mountain area, 12,000 to 29,000 feet, forming the majestic panorama of the perpetually snow-covered Himalayan range. The region is about 25 miles wide and accounts for nearly 20 percent of the total land area.

The climate in Kāthmāndu, the capital, is generally pleasant. During the fall and winter season (October to March), temperatures range from 28°F to 75°F. This season is characterized by morning fog, sunny days, and cold nights. It may rain occasionally, but Kāthmāndu has had no snow since 1939.

The spring season (March through May) has a temperature range from 40°F to 90°F, with intermittent rain, warm days, and usually comfortable nights. Near the end of the spring season and before the rainy season begins, dust gathers heavily throughout the Kāthmāndu Valley, covering everything with its film and creating a haze that obscures the mountains.

The monsoon season begins in June and continues until late September. Temperatures in the rainy season range from 55°F to 90°F, rainfall is from 30 to 60 inches. Rain showers occur daily.


Nepal's population of 23 million is growing at an annual rate of 2.5%. Approximately 45% of the population live in the Terai Region on 20% of the total land area, and the remaining 55% live in the central or hill regions. The Kathmandu Valley, home to the nation's capital, is growing rapidly and is the most densely populated area, accounting for about 10% of the total population (or 2 million), with Kathmandu proper at about 800,000.

Agriculture absorbs 90% of the economically active workforce and includes animal husbandry, forestry, and fishing. The remainder are occupied in business, industrial, and service sectors. Per capita income is approximately US $210.

Nepal is a multiracial, multilingual country. Major ethnic groups that make up Nepal include Newar, Tamang, Sherpa, Rai, Limbu, Thakali, and Tibetan. Within the different groups, people are further differentiated socially by caste or occupational group. In the hill and Terai regions, people of both Indo-Aryan and Mongoloid stock can be found, and many are a mixture of the two. The northern mountain region is inhabited by the Sherpas of mountaineering fame, as well as by large numbers of Tibetans.

The official language is Nepali, although more than 18 other languages and many dialects are spoken throughout the country. Nepali, derived from Sanskrit, is related to the Indian languages of Hindi and Bengali. The written script (Devnagari) is the same as Hindi. Nepali is spoken by most Nepalese in the Kāthmāndu Valley. The Newars, the original inhabitants of the Kāthmāndu Valley, still constitute over half of the Valley's population and work as artisans, business people, professionals, government officials, and farmers. The old cultural and architectural monuments of the Valley are almost entirely of Newar origin. The Newars have their own language, Newari, a Tibeto-Burman language not related to Nepali; however, most Newars in the Valley also understand Nepali. Many government and business people speak English.

Most Nepalis profess Hinduism, the official religion. The King is believed to be a manifestation of Lord Vishnu, the Protector and Preserver. Religion is important in Nepal, and the Kāthmāndu Valley alone has more than 2,700 religious shrines, some more than 2,000 years old. Temples, stupas, and pagodas vary in size and type, with some of austere simplicity and others of rich architectural beauty. A significant Buddhist minority lives peacefully with the Hindu majority, so that Hindu temples are sacred to Buddhists, and Buddhist shrines are important to the Hindus. Buddhist and Hindu festivals are occasions for common worship and rejoicing.

Public Institutions

For about 100 years, up to 1951, Nepal's Government was in the hands of hereditary Prime Ministers of the Rana family, and the King was a figurehead without real power. After 1947, the people of Nepal, in part sparked by India's independence movement, began to show open resentment to the autocratic Rana rule. Agitation increased for a government more responsive to changing times.

Relations between King Tribhuvan and the Rana Prime Minister deteriorated, and in November 1950, the King escaped from his palace prison and took asylum in India. An armed revolt to overthrow the Rana regime then flared throughout the country, with an armistice being signed the following February. King Tribhuvan returned amid popular rejoicing, and non-Ranas for the first time assumed key positions in the government. Shortly thereafter, the last Rana Prime Minister resigned, marking the end of Rana rule.

The late King Mahendra approved a new constitution in February 1959, under which Nepal's first multiparty parliament was elected. After a brief period of parliamentary rule, the King proclaimed in December 1960 that the experiment in parliamentary democracy had failed. He took full personal control of the government, dissolved the parliament, and banned political parties.

In 1962, the government proclaimed a new constitution, which established a "partyless panchayat system" of government consisting of various councils (panchayat) of increasing power, with ultimate power vested in the King. Subsequently, the constitution has been amended several times in response to the country's developing political demands. King Bihendra in 1979 ordered a referendum to decide whether to retain the panchayat system with suitable reforms or to reintroduce a multiparty system, following widespread discontent spearheaded by university students.

The panchayat system won a disputed election by 2.4 million votes to 2.1 million, and the constitution was amended to establish the direct election of members of the Rastriya Panchayat (national legislature) and expand freedoms of speech, publication, and assembly. In 1990, in response to nationwide agitation for a return to a multiparty system of government, King Bihendra agreed to lift the ban on political parties; to further revise the constitution; and to hold general elections. These elections took place in May 1991, constituting the first free multiparty elections under the new constitution. In all, there have been three free elections in the first 9 years of this constitution.

Arts, Science, and Education

Nepal in 1950 had 321 primary schools enrolling about 8,000 students; 11 secondary schools with 1,500 students; and one small college and a technical school with a combined student body of 250. The country then had no educational facilities for girls, and the few who were educated were either privately tutored or had studied in India. Literacy was negligible.

When Rana rule ended, Nepal undertook to establish a system of universal primary education, greatly supported and developed through USAID efforts. The most recent statistics, from 1994, indicate that 40% of the Nepalese adult population is literate (male: 55%; female: 25%). Approximately 65% of the Kāthmāndu Valley population is literate. The figures reflect the increased importance attached to education: 21,100 primary schools with 3,195,000 students (of whom 1,260,000 were girls) and 81,500 teachers; 4,800 lower secondary schools with 680,000 students and 15,750 teachers; 2,200 secondary schools with 414,000 students and 11,100 teachers; and a higher education system of 10 institutes comprising Tribhuvan University. The University directly administers and supports 65 campuses, approximately half of which are outside the Kāthmāndu Valley. The total number of students of all university campuses is approximately 100,000. The University has four research centers: the Center for Nepal and Asian Studies; the Center for Economic Development and Administration; the Research Center for Applied Science and Technology; and the Center for Educational Reforms, Innovations, and Development.

Severe strains developed within the educational system with such a rapid expansion. In 1970, the Palace appointed a task force to redesign the education system, resulting in the National Education System Plan (NESP) that came into effect in 1971. The educational structure was reorganized in accordance with the NESP to broaden the availability of education to the rural areas, increase its access to women, and meet manpower requirements. In 1975, primary education was made free (but not compulsory), including the provision of classrooms, teachers, and educational materials. Private schools are permitted and have been expanding rapidly.

Under the new plan, Nepal's educational structure is divided into two levels, the school level and the higher education level. Institutes in each subject of higher education have been established under the supervision and control of Tribhuvan University.

The widespread desire for education puts great pressure on the government to increase the number of schools and teachers. In spite of the NESP, quality varies widely, with higher quality schools located in population centers. Under the NESP, however, intense efforts have been made to equalize educational opportunity. Although Nepal is still a long way from universal education, great strides are being made.

In the arts, Nepal, and particularly the Kāthmāndu Valley, is a living museum. Pagoda-style architecture may have originated in Nepal and moved northward to China and Japan. Hundreds of temples are ornately carved; old Nepalese bronzes are exquisite; and older, elaborately carved wooden Newari homes reflect the skills of the Valley woodworkers. The King has established a Royal Nepal Academy, where traditional Nepalese dance and music performances may be seen. Occasional exhibitions of paintings by the country's artists are held at the Nepal Association of Fine Arts. In the past few years, several galleries have opened that regularly exhibit local artwork.

Science is in its infancy in Nepal, although Tribhuvan University has graduate departments in chemistry, zoology, physics, and botany. As a step toward the development of science education, in 1983 His Majesty's Government constituted the Royal Nepal Academy of Science and Technology to promote the study and research of science and technology. Fulbright and National Science Foundation scholars are helping to improve science and mathematics education.

Commerce and Industry

Nepal remains one of the poorest countries in the world, with more than 40% of the population below the Government's poverty line, and little industrialization or private sector growth. Some progress has been achieved with technical and economic assistance, principally from India, Germany, Japan, China, the U.S., the World Bank, and the Asian Development Bank. Malaria is under control in the fertile lowland areas, thereby increasing the potential for agricultural productivity. Roads, although in poor condition, link Kāthmāndu to India and Tibet, and additional roads are being constructed linking major urban centers. Several hydroelectric projects have been completed, and more are being proposed and built. A national and international communications network, including a satellite earth station, has been completed, and small industries such as cotton and jute textiles, cement, cigarettes, and shoes have been operating for years. Commercial attention is directed at development of Nepal's major economic resources: hydroelectric power and tourism.

The economy is essentially agrarian. Agriculture provides about two-thirds of the country's income, with rice the main food crop and jute now grown as the main export crop.

Foreign trade plays a key role in the economic development of Nepal. Currently, Nepal has trade agreements with 16 countries and trade relations with about 60 others.

One-third of Nepal's exports-mainly agricultural products and timber-go to India, and a third of Nepal's imports come from India-mostly textiles and other manufactured goods. Nepal signed a trade agreement with India in 1996, which effectively places it within a free trade area with India. Increased exports of ready-made garments have made the U.S. one of Nepal's leading export markets. Carpets account for about half the exports, going mainly to Europe. Tourism is also a major industry.



A personal vehicle is strongly recommended but not absolutely necessary. Toyota and Mitsubishi have the largest dealership systems in Kāthmāndu; Nissan, Honda, and Subaru are represented but have more limited direct dealer service available. If you ship a car from the U.S. or Japan, consider spare parts. If you ship a used vehicle, make sure it is in excellent condition and has a new or good battery and new tires, since these are expensive and hard to obtain in Nepal. Current Nepali law forbids the import of a car more than 5 years old by anyone who is not on the diplomatic list.

Do not bring large American cars because of the narrow streets of Kāthmāndu, and because spare parts for American cars are not readily available. Consider a four-wheel-drive vehicle for most travel outside the Kāthmāndu Valley. Do not bring a vehicle with low ground clearance, even for strictly local driving within the Valley. A right-hand drive vehicle is best for safety reasons, as Nepalis drive on the left in the British and Japanese manner, but U.S.-style, left-hand drive vehicles are permitted and used without serious problems by assigned employees.

A Nepalese drivers license is required in Nepal and may be obtained on presentation of a valid U.S. drivers license.


The Kāthmāndu Valley has hard-surface roads but also has many dirt roads and jeep tracks. Most streets and roads are narrow and bumpy with blind corners, and congested with ever-increasing numbers of pedestrians, porters, carts, cows, buses, taxis, trolleys, pedicabs, bicycles, and motorbikes. Foreign residents seldom use buses as taxis, and pedicabs are plentiful and convenient, except after dark. Indian and Chinese bicycles are widely used and can be purchased locally at reasonable cost. Used Western-made mountain bikes sometimes can be purchased, although many prefer to bring their own bikes. Air pollution has increased dramatically in the last several years due to the substantial increase in motor vehicles and brick factories within the Valley. Air-filter breathing masks, therefore, are becoming increasingly popular among bikers and walkers.

The national road system linking the major towns within Nepal is improving but still limited, with some of the fewest mile; of paved and improved hardpacked road; compared to population density of any country in the world (about 5,000 miles it 1997). Most of the primary internal Nepali destinations such as Pokhara, Biratnagar, Birgunj, and Janakpur are connected to the capital by paved road. The East-West Highway provides a good paved road throughout the Terai, except west of Nepalgunj. Most of the more famous mountain trekking destinations are accessible only by plane, as are some of the more remote lowland destinations.

It is necessary to go on foot to reach many places in rural Nepal. Use of porters is a traditional and practical method of transporting goods to and from many places in the country.

Kāthmāndu is connected to the Indian border by two all-weather roads. Another, mostly fair-weather road, links the capital with Tibet. Tourists should check the current regulations regarding travel to Tibet, as they are subject to frequent change. Tourists in 1997 could travel to Tibet by obtaining a visa at the border.


Royal Nepal Airlines Corporation (RNAC; has an extensive route structure within Nepal, encompassing more than 3C airfields nationwide. RNAC is a government-owned corporation. Several private airlines also operate domestic routes. They use smaller (and newer) planes and frequently offer lower prices for similar trips Air travel is the only practical means of transportation (save walking) to many areas these airlines service. For domestic routes, RNAC depends on Avro, Twin Otter, and other STOL (short takeoff and landing) aircraft. In the tourist season (October-April), RNAC and domestic private airlines offer a 1-hour "Mountain Flight" from Kāthmāndu and Pokhara that gives a close-up view of the major Himalayan peaks, including Mount Everest.

Ten regional or international airlines serve Kāthmāndu as of June 1999. These include RNAC, Singapore Airlines, Indian Airlines, Thai International, Biman Bangladesh, Burma Airways, Pakistan International, Druk Air, Air Qatar, Dragonair, and Austrian Air. Kāthmāndu enjoys three times a day service to and from New Delhi, daily service to and from Bangkok, 6 days a week service to and from Calcutta, and 3 days a week connections with Singapore. Kāthmāndu also is linked to Dhaka, Rangoon, Karachi, and Hong Kong with several flights a week. Connections for ongoing international flights to Europe and the U.S. are made generally through Bangkok or New Delhi. RNAC flies from Kāthmāndu to London via Dubai, as does Air Qatar through Doha. Bangkok, Hong Kong, and Singapore are the gateways for flights to Japan and the U.S. west coast.


Telephone and Telegraph

Kāthmāndu has an automatic telephone exchange. The cost is modest, and service is generally good, as are long distance connections within Nepal. International telephone service is available via satellite, and direct-dial calls to the U.S. and elsewhere are routine. A call to the U.S. costs about $4.50 per minute. Cellular telephones became available in 1999 but are very expensive.

Facsimile service in Nepal is available locally in all major hotels.

Internet access and e-mail service is available through local commercial sources. Rates generally are higher than in the U.S. but are coming down.

Radio and TV

Kāthmāndu has 20-channel cable TV service available in many, but not all, parts of the city. Stations broadcast a mix of English and Hindi programming. Service accessibility is increasing continuously. Set-up minimum charges and monthly rates are quite reasonable by U.S. standards, usually about $25-$40 and $5, respectively. CNN, BBC, HBO, ESPN, Cinemax, Star Movies, and Star Sports are among the English offerings. TV satellite dishes can be purchased locally.

Cable and local TV broadcasts are on the PAL system. Videotapes available for rent at the American Recreation Center are NTSC, while the British Library next door offers PAL tapes. Bring a multisystem TV and VCR, as local equipment is quite expensive. Radio Nepal broadcasts in English at certain times daily. Reception of VOA, BBC, Indian, and Pakistani stations, and some from the Far East, sometimes is possible with a shortwave radio.

Newspapers, Magazines, and Technical Journals

Several English-language daily newspapers are published in Kāthmāndu. The Rising Nepal and The Kāthmāndu Post are read widely. A total of 450 vernacular newspapers circulate in Nepal. English language Indian newspapers also are available, as are international editions of Time and Newsweek. The international editions of the International Herald Tribune, USA Today, The Economist, and The Asian Wall Street Journal can be purchased locally or are available by subscription from Singapore.

Health and Medicine

Medical Facilities

It is also recommended strongly to have mail-in prescription service in your personal medical insurance.

If you wear glasses, bring at least two pairs and a copy of your current prescription. Contact lenses can be worn here, although only limited local replacements are available.

Although a number of well-trained, excellent Nepali physicians are in Kāthmāndu, local hospitals are poorly equipped and considered inadequate by Western standards. Therefore, for anything but the gravest emergency, serious medical problems requiring hospitalization demand evacuation; in some cases, this may be to the U.S. Kāthmāndu is considered medically inappropriate for obstetrics either complicated or routine.

There are several private clinics used by the international community in Kāthmāndu with doctors and medical staff trained in Europe or in the U.S.

Dental health care is available through a private dental clinic. The dental clinic is staffed by two American dentists and a hygienist and is operated on a fee-for-service basis with a fee structure similar to that in the U.S. Orthodontic care is available.

Community Health

The general lack of basic public sanitation and sewage management poses major health problems in Kāthmāndu and all parts of Nepal. This leads to many illnesses within the Nepali community and is, potentially, a source of disease transmission to the expatriate community. Understanding the problem, however, and taking necessary precautionary measures, such as water purification and proper food handling techniques, help to ensure personal good health. The opportunities for outdoor physical activities in this pleasant climate also contribute to good physical well-being. Air pollution contributes to respiratory problems in the Kāthmāndu Valley.

Preventive Measures

Infectious diseases are a major health problem in Nepal, whether it is a simple respiratory infection, parasitic bowel infestation, or a more serious medical problem such as tuberculosis. Common medical problems among Americans include respiratory infections, allergies, diarrheal diseases, and skin diseases. Although some malaria (falciparum and vivax) still is present in the lowlands (Terai), the government's malarial control programs since the 1960s have transformed an area that once endured the reputation of being one of the worst malarial areas in the world to one where people work and play in relative safety from the malarial parasite. Antimalarial prophylaxis still is necessary for those living in the Terai, or those visiting during most of the year, however. To date, chloroquine-resistant strains of falciparum have not been identified, and chloroquine (Aralen) is the recommended prophylactic. As Kāthmāndu is at 4,500 feet, malaria is not a problem in the city or valley, nor is it a problem anywhere in the middle hills or mountain areas.

Have your immunization status current before departing. Recommended vaccinations (in addition to the usual childhood shots such as DPT, polio, MMR, and HIB) include: rabies (human diploid cell), typhoid, meningococcal (A and C) bivalent vaccine, Hepatitis A and B, and Japanese-B Encephalitis.

All water must be filtered and boiled before consumption. All fresh vegetables, whether purchased in the local market or grown at home, must be soaked and sterilized using a chlorine bleach solution. Iodine is not as effective for protection against parasites and other intestinal agents. Local milk must be boiled before use.

The many pharmacies in Kāthmāndu carry a wide range of pharmaceuticals (most available without prescription), although few American-manufactured drugs are available. Most drugs are manufactured by Indian subsidiaries of European or American pharmaceutical firms and have not passed the rigorous quality controls of Western-manufactured drugs. Bring those brands or items you prefer or arrange for a supply from the U.S.


The normal route from the U.S. east coast to Kāthmāndu is over the North Pole via Tokyo to Bangkok, then to Kāthmāndu after an overnight stay caused by airline connections. The adventuresome still can cross the Atlantic and pass through Europe to India, but connections between India and Nepal can be troublesome. Flights routinely are canceled and New Delhi Airport accommodations are spartan.

Travelers occasionally report immigration difficulties in crossing the Nepal-China border overland in either direction. U.S. citizens planning to travel to Tibet from Nepal may contact the U.S. Embassy in Kāthmāndu for current information on the status of the border-crossing points. Travelers may also wish to check with the People's Republic of China Embassy in Nepal for current regulations for entry into Tibet.

Passport and visa required. Tourist visas can be purchased upon arrival at Tribhuvan International Airport in Kāthmāndu and at all other ports of entry. All foreigners flying out of the country must pay an airport exit tax, regardless of the length of their stay. Travelers may obtain further information on entry/exit requirements by contacting the Royal Nepalese Embassy at 2131 Leroy Place, N.W., Washington, D.C. 20008, telephone (202) 667-4550 or the Consulate General in New York at (212) 370-3988. The Internet address of the Embassy of Nepal is http://www/

Americans living in or visiting Nepal are encouraged to register at the Consular Section of the U.S. Embassy in Nepal and to obtain updated information on travel and security within Nepal. The U.S. Embassy is located at Pani Pokhari in Kāthmāndu, telephone (977) (1) 411179; fax (977) (1) 419963. U.S. citizens may also register by e-mail by accessing the U.S. Embassy's home page at The home page also provides updated information regarding security in Nepal, Embassy services, and travel in Nepal.


Nepal has no quarantine requirements, but Customs does require a current rabies shot and a certificate of health. Get the full range of inoculations to protect your pets. Veterinary service is available in Kāthmāndu with several licensed veterinarians.

Firearms and Ammunition

Only diplomatic-list personnel may import firearms to Nepal.

Currency, Banking and Weights and Measures

The unit of currency is the Nepali rupee, divided into 100 paisa. One rupee equals about 1.6 cents. The abbreviation for rupee is Rs. before the sum, or often NC after the sum to distinguish from Indian currency, which is sometimes expressed as IC. The official rate of exchange in December 1999 was US$1=Rs68.5, but it can fluctuate daily. Nepali currency notes are issued in denominations of Rs. 1,000, 500, 100, 50, 25, 20, 10, 5, 2, and 1. Nepali coins range from 5 rupees down to 1 paisa.

Nepal has its own system of weights and measures, but the metric system is widely used in Kāthmāndu.

Disaster Preparedness

Nepal is an earthquake-prone country. General information about natural disaster preparedness is available via the Internet from the U.S. Federal Emergency Management Agency (FEMA) at


Jan. 11 Unity Day

Jan. 29 Martyrs' Day

Feb/Mar. Shivaratri*

Feb. 19 Democracy Day

Mar. Holi*

Mar. 8 Women's Day

Mar. 9 Fagu Purnima

April Varshapratipada (New Year)*

May Buddha Jayanti*

Aug. Teej Women's Festival*

Oct. Asthami Jayanti*

Oct 17 Armed Forces Day

Nov. 8 Queen Aishworya's Birthday

Dec. 16 Constitution Day

Dec. 28 HM the King Birebdra's Birthday Diwali*



These titles are provided as a general indication of the material published on this country.

Anderson, John Gottbert. Nepal (Insight Guides Series). Apa Productions (HK) LTD: Hong Kong, 1983.

Armington, Stan. Trekking in the Himalayas. Lonely Planet: Victoria, 1979.

Baume, Louis C. Sivalaya. Explorations of the 8,000-Meter Peaks of the Himalayas. The Mountaineers: Seattle, 1979.

Bezruchka, Stephen. A Guide to Trekking in Nepal. The Mountaineers: Seattle, 1981.

Downs, Hugh R. Rhythms of a Himalayan Village. Harper and Row: New York, 1980.

Foreign Area Studies Division. Area Handbook for Nepal. U.S. Army: Washington, D.C., 1972.

Fleming, Robert L., Jr. and Linda F. Fleming. Kathmandu Valley. Kodansha International: Tokyo, 1978.

Hagen, Toni. Nepal, the Kingdom of the Himalayas. Kummerly and Frey: Beme, 1982.

Matthiessen, Peter. The Snow Leopard. Viking and Bantam: New York, 1978.

Rose, Leo, Bhuwan Lal Joshi, and Margaret W Fisher. The Politics of Nepal: Persistence and Change in an Asian Monarch. Cornell University Press: Ithaca, 1979.

Rose, Leo, Bhuwan Lal Joshi, and John Scholz. Nepal: Profile of a Himalayan Kingdom. Westview Press, 1980.

Rowell, Galen. Many People Come Looking, Looking. The Mountaineers: Seattle, 1980.

Schaller, George. Stones of Silence: Journeys of the Himalayas. Viking Press: New York, 1980.

Snellgrove, David. Himalayan Pilgrimage. Shambhala Press: Boulder, 1982.

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Kingdom of Nepal



Nepal is a landlocked country in South Asia, bordered by India on 3 sides and by China to the north. It has an area of 140,800 square kilometers (54,363 square miles), a border of 2,926 kilometers (1,818 miles), and is slightly larger than Arkansas. Roughly rectangular in shape, Nepal can be divided lengthwise into 3 ecological zones from south to north: the fertile alluvial plains of the Tarai region, the mountains and valleys of the central Hilly region, and the inhospitable Mountain region, home to the Himalayas and the world's highest mountain, Everest. Nepal is drained by over 6,000 rivers which form the Karnali, Narayani, and Koshi river systems. Its capital, Kathmandu, is in the central part of the country.


Nepal had a population of 24,702,119 in 2000, up from 19,145,800 in 1990. Government sources estimate a population of 28,618,668 by 2010. While the death rate has declined significantly over the last few decades to 10.41 per 1,000 people, the birth rate has remained high at 33.83 per 1,000. The infant mortality rate declined from 147 deaths per 1,000 in 1985 to 64 deaths per 1,000 in 2000, but while health services have improved, high fertility rates have led to a population growth rate that increased from less than 2 percent in the 1950s to about 2.6 percent in the 1980s. According to the World Bank, the growth rate in 1999 was 2.3 percent.

Nepal is one of the few countries in the world where men live longer than women. Female life expectancy is 57.3 years, compared to 58.3 years for males. Forty-one percent of the population is aged 0-14 years, 56 percent are between 15 and 64, and only 3 percent are above 65 years of age in 2000. The population can be grouped by 3 major ethnicities: Indo-Nepalese, Tibeto-Nepalese, and indigenous Nepalese. In 1991 46.7 percent of the people resided in the southernmost plains of the Tarai region, 45.5 percent in the central Hilly region, and 7.8 percent in the northernmost Mountain region, but large-scale internal migration in recent years has led to overcrowding in the fertile Tarai region. The population of Nepal is overwhelmingly rural, with just over 9 percent living in urban areas such as the Kathmandu Valley. Population density stands at 175 people per square kilometer (453 per square mile).

Family planning in Nepal began in the late 1950s. An increase in government expenditure on family planning offices and door-to-door campaigns have contributed towards the adoption of family planning. In 1969, only 7,774 people used some form of contraception; this number rose to 419,950 by 1999. Difficulties in rural access to family planning services and cultural and socioeconomic considerations which favor large families continue to impede the implementation of a coherent population control policy.

In addition to the established Nepalese population, there are approximately 96,500 Bhutanese refugees in Nepal, 90 percent of whom are accommodated in 7 camps run by the United Nations Office of the High Commissioner for Refugees (UNHCR).


Nepal's place in the western imagination as a latter-day Shangri-La stems from its historical isolation, maintained until the overthrow of the Rana oligarchy (a small group of people who rule a nation) in 1951. Development planning commenced soon after, but half a century on, the country still struggles to free itself from its feudal legacy and temper the effects of an unpredictable global economy. Today, Nepal is one of the least developed countries in the world, with nearly half of its inhabitants living below the poverty line. Decentralization and privatization of government-run businesses have not worked for this agricultural nation; the 1989 trade-transit crisis with India, which caused severe commodity shortages, demonstrated how frail the economy was. Popular protests brought about multiparty democracy in 1990, and the reigning Hindu monarch was relegated to constitutional status. Ever since, recurring political instability culminating in a massacre within the royal family in June 2001 has hampered the implementation of economic reforms designed to relax trade regulations, attract foreign investment, and cut government expenditure.

Nepal's spectacular landscape, while attracting the tourism that both pays and pollutes the country, has been the major hindrance to its economic development. Rugged mountains cover over 80 percent of the land, isolating communities from each other and from the Kathmandu Valley. Trade, industrial growth, and foreign investment have been defeated by the terrain, despite significant efforts to improve the transport and communications infrastructure . As a landlocked nation, Nepal is heavily dependent on India economically. The industrial sector employs only 3 percent of the population, while the successful cottage industries that produce carpets and garments bring in up to 80 percent of foreign exchange earnings from countries other than India. Exports consist largely of primary produce sent to India, and trade with nations other than India is expanding. Imports include industrial and agricultural inputs such as machinery, fertilizers, petroleum products, and additional primary produce.

For now, agriculture constitutes most of Nepal's economy, with 81 percent of the population engaged in farming activities that account for over 40 percent of gross domestic product (GDP). The major food crops are rice, wheat, and maize, while sugar cane, oilseed, tobacco, and potatoes are other major cash crops . Despite government programs to introduce fertilizers and modern techniques, most farms still generate only enough produce to feed the farmer's family, with little or nothing left over to sell. Underemployment is high in the farming sector. The lack of irrigation facilities has left the average farmer dependent on the seasonal monsoon rains, and increased production has resulted mostly from the extension of arable land. The growth of a population heavily reliant on firewood has led to deforestation, which contributes to erosion and floods with serious consequences for communities in southern Nepal, India, and Bangladesh.

While efforts to develop the Nepalese economy systematically through the implementation of the govern-ment's 5-year plans have established a basic infrastructure, the benefits have been reaped by the urbanized, educated minority of Nepalese rather than by the rural poor. However, impoverished peasants and highly qualified urbanites alike emigrate and migrate within the country in search of better prospects, with serious implications for the economy. Foreign aid, which has supplied over 60 percent of development expenditure over the decades, has been underutilized and mismanaged. The increasing loan component of such aid has added to the country's foreign debt , which totaled US$1.5 billion in 1998.


The unification of Nepal in 1769 under the Shah dynasty of Gorkha failed to prevent 2 centuries of intrigue among the aristocratic families of Kathmandu. From 1846 onwards, hereditary prime ministers from the Rana family governed in the name of the Shah kings. Their downfall in 1951 led to a succession of governments appointed by royalty. Nepal had its first democratic elections in 1959, and the Nepali Congress Party governed until a royal coup d'etat, or takeover, a year later. The partyless system known as Panchayat followed. This comprised public assemblies at village, district, and national levels, who were ultimately accountable to the king. Undercurrents of political dissent periodically rumbled beneath the Himalayan kingdom's facade of tranquility, but it took an economic crisis, a coalition of political parties, and widespread urban demonstrations before the ruling Hindu monarch, King Birendra Bir Bikram Shah Dev, was forced to dismantle the Panchayat system in favor of a multiparty democracy within a constitutional monarchy in 1990. More than a decade on from the introduction of democracy, Nepal has failed to achieve political stability. The turmoil of years past echoes among antagonistic factions and has led to much discontent, particularly in the neglected countryside, where a Maoist insurgency has claimed over 1,600 lives in the 5 years from 1996. In June 2001, a massacre within the royal family, instigated by the Crown Prince, led to rioting and curfews in the Kathmandu Valley. The political situation remains fragile.

With the transition to democracy in 1990, the Nepali Congress Party was voted into power. Established in 1947, this party is the largest political organization in the country and has governed for most of the last decade. The old guard of political leaders, represented by Prime Minister Girija Prasad Koirala and Krishna Prasad Bhattarai, has held sway over this reform-oriented centrist party. The Nepali Congress had its roots in democratic socialism , but in the 1980s it modified its program to espouse a mixed economy. During a relatively stable tenure from 1991 to 1994, the party implemented various economic reforms that facilitated privatization and foreign investment, and attempted to improve public enterprise management.

Left of the political spectrum, communist parties briefly worked with the Nepali Congress during the revolution of 1990. Parties within this United Left Front Coalition, however, differed widely in their socialist ideologies. The centrist United Marxist -Leninist Party (UML), which supports the creation of a welfare state (a political system in which the government assumes primary responsibility for the social welfare of its citizens), is the second largest party in Nepal, and remains a potent force despite a damaging split in 1998. The appointment of a minority UML government in 1994 slowed the process of liberalization , and subsidies to public enterprises increased. Other parties include 2 factions of the monarchist National Democratic Party and the Nepal Sadbhavana Party, which is based in the Tarai region and favors closer economic integration with India. Political bickering has consumed the national agenda, resulting in 9 changes of government between 1991 and 2001. The struggle for political power has filtered down to public sectors , which have witnessed widespread corruption and politicization. Though inflation has remained moderate and the urban population has benefited from exposure to the global economy, there has been little progress in reducing rural poverty. If the current state of affairs continues, problems with law and order may seriously jeopardize the internal security of Nepal.

The political system is based on the British parliamentary system. The king is head of state, and, along with the Council of Ministers retains executive powers. There are 2 legislative bodies: the National Council and the House of Representatives. Members of the National Council are appointed by the House, the king, and an electoral college. Members of the House of Representatives are elected by popular vote for 5-year terms. The political party with a majority in the House of Representatives appoints the prime minister. The judiciary is headed by the Supreme Court, and is composed of a network of appellate courts and district courts.

Management of the Nepalese economy has changed significantly over time. Prior to the 1950s, while feudal overlords vied for economic gain at the expense of the rural population, little planned development took place. Under the Panchayat regime, a succession of 5-year plans attempted to impose government control over all aspects of the economy. However, against a background of poor infrastructure, the country's geographical difficulties, and the spread of corruption, the lot of the rural majority was little changed. Attempts to accelerate growth through increased government spending resulted in economic instability in the early 1980s. Under pressure from financial institutions such as the International Monetary Fund (IMF) and the World Bank (WB), certain structural reforms were implemented, which helped the growth of the private sector .

Before 1951, Nepalese administrations extracted revenue in the form of land tax and a tariff on foreign trade. Their reliance on middlemen reduced the revenue available and subjected traders and producers to exploitation that discouraged economic activity. Moreover, the income derived was rarely used for purposes of benefiting the economy. From the late 1950s, a combination of income, sales, and property taxes were introduced. Today, corporate tax stands at 25 percent, though certain industries are taxed at a maximum of 20 percent of their income. Income tax is progressive, with different exemption limits for individuals and families. Relative to average Nepalese incomes, income tax exemption is fairly high. Agreements are underway with other governments to avoid double taxation and encourage foreign investors. Government revenues have increased substantially in recent years, from just over 6 billion rupees in 1989 to a high of over 24 billion rupees in 1997, but falling to 17 billion the following year. Customs and consumption taxes (such as taxes of food and drink) have been the primary sources of revenue. A value-added tax was introduced from 1995. However, a weak tax administration, resulting in low tax compliance, limits this important source of development funds.


In post-1950s Nepal, planners and foreign aid donors viewed the creation of infrastructure as vital to the success of the country's economic development. Five-year plans prioritized transportation and communications, but although the results were significant, they remain inadequate. Nepal has 13,849 kilometers (8,522 miles) of paved, graveled, and fair-weather roads, with the major highways linking east to west and north to south. However, monsoon rains work on the unstable mountain geology, causing widespread landslides and driving up road maintenance costs. There were 253,407 vehicles registered in 1999, of which 142,000 were in the Kathmandu Valley. Airports operate in 44 out of 75 districts, and include domestic airports in remote areas which link up with the international airport in Kathmandu. This network is crucial to the tourist industry. Recently, Nepal adopted an open-sky policy, allowing private airlines to operate domestic and international services.

Other forms of transportation are underdeveloped. There is a single narrow gauge railway line covering a distance of 52 kilometers (32 miles) from Janakpur to Jayanagar in the south, and an under-utilized 42-kilometer (26-mile) ropeway (suspended cable-car line) from Hetauda to Kathmandu, which transported 10,684 metric tons of goods in 1995. A limited trolley bus service operates in the Kathmandu Valley. Access to the sea is only possible through the Indian ports of Calcutta (1,150 kilometers, or 713 miles, from the Nepalese border) and Haldia.

Much has been said about the potential of Nepal's hydropower to fulfill local power needs, drive industrialization, and boost revenues through the sale of surplus power to India. Of a feasible potential of 27,000 megawatts (MW), Nepal currently uses a mere 332.7 MW. "Mega-projects," sponsored by institutions such as the World Bank, have been embraced and publicized by successive governments as a panacea to some of the country's economic

Country Newspapers Radios TV Sets a Cable subscribers a Mobile Phones a Fax Machines a Personal Computers a Internet Hosts b Internet Users b
1996 1997 1998 1998 1998 1998 1998 1999 1999
Nepal 11 38 6 0.2 0 N/A N/A 0.07 35
United States 215 2,146 847 244.3 256 78.4 458.6 1,508.77 74,100
China N/A 333 272 40.0 19 1.6 8.9 0.50 8,900
Thailand 63 232 236 10.1 32 2.5 21.6 4.49 800
aData are from International Telecommunication Union, World Telecommunication Development Report 1999 and are per 1,000 people.
bData are from the Internet Software Consortium ( and are per 10,000 people.
SOURCE: World Bank. World Development Indicators 2000.

ills without sufficient consideration to the displacement of people and the environmental damage they may cause. Examples of power-generating mega-projects under consideration are those in Chisapani (10,800 MW), Pancheshwor (6,480 MW), and the Arun Valley (643 MW). Local opponents have cited the inherently unsustainable and wasteful nature of such projects, which stand to plunge the country into serious debt. Locally based small to medium hydropower schemes have met with success, but this approach needs government support.

Nepal has considerably improved its postal and telephone services, though they remain deficient in rural areas. The Nepalese telecommunications network is digitized, and the Nepal Telecommunications Corporation (NTC) provides basic services for the country. Television programming began in 1985 and many families receive (not always legally) transmissions from foreign networks such as Star TV. Radio Nepal has existed since the 1950s and has a significant rural audience.


The agricultural economy has failed to make the transition from subsistence farming , and is still largely dependent on weather conditions. Despite its undeveloped nature, agriculture supplied 41 percent of the country's GDP in 1998. The industrial sector only involves a minority of the population. In recent years, successive governments have passed legislation intended to encourage investment and privatization. Industry contributed some 22 percent to GDP in 1998. In contrast to the stagnation in both these sectors, the service industry derives major impetus from tourism, where the Himalayan kingdom enjoys a comparative advantage rivaled by few other nations.

All told, the services sector contributed 37 percent to GDP in 1998. While the particular configuration of Nepal's topography and landlocked status have acted as limiting factors on the full development of its economy, this alone cannot explain the problems that continue to trouble a country with one of the highest per capita shares of foreign aid in the world today.


Agriculture in Nepal has long been based on subsistence farming, particularly in the hilly regions where peasants derive their living from fragmented plots of land cultivated in difficult conditions. Government programs to introduce irrigation facilities and fertilizers have proved inadequate, their delivery hampered by the mountainous terrain. Population increases and environmental degradation have ensured that the minimal gains in agricultural production, owing more to the extension of arable land than to improvements in farming practices, have been cancelled out. Once an exporter of rice, Nepal now has a food deficit.

Over 80 percent of the population is involved in agriculture, which constitutes 41 percent of GDP. The seasonal nature of farming leads to widespread underemployment, but programs to grow cash crops and encourage cottage industries have had some success over the years. Two-sevenths of the total land is cultivated, of which 1.5 million hectares produced 3.7 million metric tons of the staple crop of rice in 1999. Wheat and maize together take up a similar portion of the available land, with harvests of 1 million metric tons and 1.5 million metric tons, respectively, in 1999. Production of cash crops increased substantially in the 1970s, and sugarcane, oilseed, tobacco, and potatoes (a staple food in some areas) were the major crops. Agricultural production accounted for about three-fourths of total exports in the late 1980s. As noted earlier, most exports consist of primary agricultural produce which goes to India. In general the majority of Nepalese farmers are subsistence farmers and do not export surplus; this does not prevent a minority in the fertile southern Tarai region from being able to do so. Most of the country is mountainous, and there are pockets of food-deficit areas. The difficulties of transportation make it far easier to export across the border to India than to transport surplus to remote mountain regions within Nepal. A considerable livestock population of cattle, goats, and poultry exists, but the quality is poor and produces insufficient food for local needs.

Government efforts to boost the agricultural economy have focused on easing dependence on weather conditions, increasing productivity, and diversifying the range of crops for local consumption, export, and industrial inputs. Solutions have included the deployment of irrigation, chemical fertilizers, and improved seed varieties, together with credit provision, technical advice, and limited mechanization. This has had some effect. Land under irrigation increased from 6,200 hectares in 1956 to 583,000 hectares in 1990. The use of chemical fertilizers, introduced in the 1950s, climbed to about 47,000 metric tons by 1998. Still, the weather continues to determine good and bad years for the average farmer. On a national scale, while production of both food and cash crops grew annually by 2.4 percent from 1974 to 1989, population increased at a rate of 2.6 percent over the same period.

Increased agricultural activity has placed tremendous stress on the fragile ecosystems of the mountains, with severe deforestation leading to erosion and flooding that threatens the livelihoods of farmers throughout the country. In the rush to open up arable land in the early years of development, Nepal lost half its forest cover in the space of 3 decades. Government plans to maintain cover at 37 percent depend on the success of community forestry programs, which merge traditional and modern agro-forestry and conservation practices. Responsibility is placed in the hands of Forest User Groups, which included almost 800,000 households in 1999.

A potent issue is that of land reform. Before 1950, a feudal system held sway. Land ownership was concentrated in the hands of landlords who contracted out to tenant farmers. Increased productivity may have been suppressed by such a system. Even though the legal mechanisms for land reform (such as placing limits on the amount of land owned) do exist, in practice most farmers still have pitifully small holdings. Predictably, land reform has been the mandate of every political party in Nepal, particularly the communists.


The industrial sector in Nepal is very undeveloped. Early industrial ventures, spurred by domestic shortages in the 1930s and 1940s, fared badly due to inexperience. By 1960 there were 63 registered industries, unsupported by adequate institutional organization or infrastructure. With the influx of foreign aid targeted at both the industrial sector and the transport and communications infrastructure, a mix of modern industries and cottage industries slowly developed, numbering 3,557 institutions by 1997. They are small by international standards. Industrial activity, accounting for about 21 percent of GDP, employs only 3 percent of the population. Most of these industries are located around urban centers such as the Kathmandu Valley and in the Tarai region.

Nepal suffers from a lack of both internal and external investment. This stems from low domestic savings, a small domestic market, a severe shortage of skilled labor, chronically corrupt and inefficient public administrations, high transport and operating costs, the inadequacy of power resources and, increasingly, political instability. There have been recent attempts to encourage investment and privatization through the Industrial Policy 1992 and Foreign Investment and One Window Policy 1992, and the creation of industrial centers with governmental land and buildings on lease for private ventures.


The largest manufacturing industries in Nepal produce jute, sugar, cigarettes, beer, chemicals, tea, vegetable ghee (clarified butter used in Indian and Nepali cooking) and oil, matches, soap, shoes, and processed leather. While industries such as jute, tea, and sugar use local raw materials, other industries have to import inputs from India. Mining is based on deposits of limestone (for cement), clay, garnet, magnetite, and talc. Surveys of other deposits have been sporadic and inadequate, and the difficulty of the terrain has limited development.


As early as 1952, the Nepalese government recognized that industrialization would have to take into account the severe limitations imposed by the country's geography. Cottage industriesthe local production of traditional handicraftswere seen as a way to engage the underemployed rural population and contribute towards export earnings. In Nepal, these industries have included pottery, handmade paper and products, woodwork, metal work, weaving, embroidery, and basket making, and draw on artistic traditions dating back centuries. However, even with the creation of Cottage Industries Training Centers across the country, many of these crafts have been in decline. Still, they contribute about 60 percent of industrial production, with the garment and carpet industries showing rapid growth since the 1980s and earning 84.3 percent of export earnings from countries other than India.



While the topography of Nepal has hampered economic development, it has also blessed the country with the matchless beauty of the mighty Himalayan mountain range in the north, rugged hills and valleys with cultural centers such as Kathmandu, and sub-tropical climes in the south that house rare species of wildlife such as tigers, rhinos, and gharial crocodiles. Ever since the successful ascent of Mount Everest in 1953, the tourist industry has been booming. For a country that was closed to the world until the mid-20th century, tourist arrivals of almost half a million in 1999 are impressive. A network of trekking agencies, hotels, and restaurants exists. There were a total of 708 hotels in 1999, with 31,355 beds. Tourism is an important contributor to the economy, constituting 3.6 percent of GDP and 26.3 percent of export earnings. Recognizing this, the state has supported the industry by building airports in otherwise inaccessible areas and opening up tourist routes.

Through the 1960s and 1970s, Nepal's allure as a tourist destination stemmed as much from the Himalayas as it did from its exotic appeal and the relatively easy availability of marijuana. Today, the industry is more broad-based, and mountaineering, trekking, white-water rafting, wildlife tours, cultural tours, and pilgrimages attract young and old, rich and poor alike. Almost a third of visitors are from neighboring India. The influx of tourists has been a strong influence on the Nepalese people. Ethnic groups such as the Sherpas, who escort mountaineering expeditions, have benefited considerably from their involvement with tourist activities. Culturally, Nepal has been exposed to western influence. Environmentally, the country has suffered adverse effects from tourism, though awareness of environmental issues is growing.

Tourism will continue to represent an important renewable resource, with government targets of a million visitors a year promoted through campaigns such as "Visit Nepal Year 1998" and "Destination Nepal 2002." Lately, pollution in the Kathmandu Valley, political violence, strikes in the hotel industry, and the royal massacre of 2001 have threatened to dent the number of tourist arrivals. Nevertheless, the potential for the expansion of tourism-related activities such as the provision of rural infrastructure and the local production of specialized food and equipment remains high.


The use of institutional financial services has been slow to spread in rural areas. Until the mid-1990s, most Nepalese banks were state controlled or owned. The country's first commercial bank, Nepal Bank Ltd., opened in 1937. The central bank, Nepal Rastra Bank, opened in 1956, and Rastriya Banijya Bank opened in 1966. Specialized financial institutions such as the Nepal Industrial Development Corporation (NIDC) and the Agricultural Development Bank (ADB) were also established to provide assistance to private industry and small farmers, respectively. These have had mixed success since traditional moneylenders still play a central role in village financial affairs. By 1990 the ADB had only granted loans to 9 percent of all farming families. Since 1984, foreign banks have been allowed to operate in Nepal as part of a strategy to encourage foreign investment. By the beginning of the 21st century, there were 14 commercial banks and 45 finance companies in Nepal.


Retail services in Nepal are mostly small, independent, family businesses. Large franchises do not exist and, with the exception of Indian-owned businesses, foreign investment is limited. Ethnic groups such as the Marwaris and the Newars are noted for their entrepreneurial skills and have a large share of the retail sector.


Nepal is a landlocked nation, surrounded by India on 3 sides and by Tibet (now a province of China) in the north. Historically, international trade before the 1950s was with these countries. Exports have consisted of primary agricultural produce, while everything not produced locally has been imported. Throughout the years of development, these imports have included industrial inputs, fertilizers, and petroleum. Since the 1970s, the balance of trade has been increasingly negative. During the same period, however, exports of garments and carpets have grown, reaching sales close to US$300 million, and trade with other countries has increased to the detriment of the trade with India.

Until the 1950s, 90 percent of Nepal's trade was with its giant neighbor, India. The essentially open border facilitates trade, but also makes unquantifiable smuggling hard to control. Exports to India are generally supplied

Trade (expressed in billions of US$): Nepal
Exports Imports
1975 .100 .171
1980 .080 .342
1985 .160 .453
1990 .204 .672
1995 .345 1.330
1998 .474 1.239
SOURCE: International Monetary Fund. International Financial Statistics Yearbook 1999.

by agricultural surplus from the fertile Tarai region mostly rice, but also tobacco, jute, and vegetable oils. Raw materials such as hides, skins, herbs, textile fibers, metal ores, and some manufactured goods, such as bamboo products, wooden furniture, and textiles, are also exported. Imports consist of daily necessities such as salt, sugar, tea, medicines, petroleum products, and items such as chemicals, machines, cement, coal, and spare parts that are needed for development work. The trading relationship with India was first codified in 1950 with the Treaty of Trade and Transit, which lowered tariffs and tax duties on goods passing between Nepal and India. In successive modifications and renewals of the treaty (notably in 1960), transit facilities for trade between Nepal and other countries were established in India at the port of Calcutta. The decline in India's percentage of trade with Nepal to just above 30 percent in 1998 demonstrates the success of these arrangements. In March 1989, delayed negotiations led to the expiration of the treaty, and all but 2 trading points were closed for a year. This crippled the Nepalese economy, as internal trade (much of which had to pass through Indian territory) and external trade with India was subjected to virtual closure. Shortages of basic goods such as salt and petroleum caused considerable strife, leading to both anti-India and anti-government demonstrations in Nepal, and were partly responsible for the downfall of the Panchayat system. An interim government successfully reinstated the treaty in June 1990.

Trade with Tibet, mostly the bartering of agricultural produce, went into decline at the turn of the 20th century when the British in India opened alternative routes. The limited Tibetan market and its inaccessibility further hindered the development of this barter trade. Negotiations on maritime access via Bangladesh, traversing 26 kilometers (16 miles) of Indian territory, have been difficult. Nepal has been more successful in expanding its exports with countries such as the United States, Britain, Germany, and Japan, the value of which rose from 14.4 million rupees in 1965 to over 16 billion rupees in 1996.

Nepal's trade balance is skewed towards imports, partly because the demand for industrial inputs and consumer goods has grown while local production has not. In 1998, Nepal imported US$1.2 billion in goods while exporting just US$474 million. India, Hong Kong, and Singapore are the country's major import partners. Governments have attempted to increase export earnings by diversifying products, and also to reduce import costs by substituting imports with local production. Policies such as the Exporter's Exchange Entitlement Scheme and both a Dual Exchange Rate and a Single Exchange Rate were formulated to facilitate these objectives. To its credit, Nepal has obtained favorable agreements with its trade partners to offset its landlocked status. But the treaty crisis with India and the failure to agree on Bangladeshi access highlight the country's limited bargaining power. Still very much a developing nation, Nepal is unable to influence the global market to which it exports primary goods at prices that are generally both low and unpredictable; the geographical diversification of its trade needs to include a shift towards a wider array of manufactured products.


With the establishment of the central Nepal Rastra Bank, Nepal began to gain control of its foreign exchange reserves , which until 1960 were channeled through the Central Bank of India. Indian currency, prevalent throughout the country and freely convertible, was separated from other foreign currencies. In 1983, in order to counter economic instability and increased inflation, the exchange rate of the Nepalese rupee was weighted against a basket of important currencies such as the U.S. dollar. In reality, the Nepalese currency is quite strongly influenced by fluctuations of the Indian rupee. The value of the Nepalese rupee has been in decline for years; as of June 2001, US$1 was equivalent to 74.66 Nepalese rupees. Inflation was moderate at 11.8 percent in 1999, but imported goods are still beyond the reach of many Nepalese. While economic growth was strong in the late 1980s, the temporary breakdown of the trade treaty with India significantly damaged the economy.

In 1993, the Nepal Stock Exchange was born out of the Securities Exchange Centre. Interest has exceeded expectations, though only a minority of the urban population is involved in the stock market. The minimal development of the industrial sector limits opportunities for investment.


Nepal's largely rural population depends on subsistence agriculture for a living. As this is outside the realm of the quantifiable modern economy, the low GDP per capita of US$217 in 1998 may be misleading. Nonetheless, 42 percent of the population lives below the poverty

Exchange rates: Nepal
Nepalese rupees per US$1
Jan 2001 74.129
2000 71.104
1999 68.239
1998 65.976
1997 58.010
1996 56.692
SOURCE: CIA World Factbook 2001 [ONLINE].
GDP per Capita (US$)
Country 1975 1980 1985 1990 1998
Nepal 149 148 165 182 217
United States 19,364 21,529 23,200 25,363 29,683
China 138 168 261 349 727
Bhutan N/A 232 292 387 493
SOURCE: United Nations. Human Development Report 2000; Trends in human development and per capita income.

line (1996), and patterns of income and resource distribution reveal chronic inequalities within a population separated along the lines of the caste system (a hierarchical class system), gender, and place of residence.

Hindus fleeing Muslim invaders in India hundreds of years ago brought the caste system to Nepal. The educational and technological superiority of the Indo-Nepalese migrants allowed them to dominate both the indigenous and Tibeto-Nepalese ethnic groups. The caste system with its notions of hereditary superiority and traditional rights to power, access, and livelihoodwas imposed upon Hindus and non-Hindus. In order of status, the Brahmins (priests) were followed by Chhetris (administrators), Vaishyas (merchants), Sudras (farmers, artisans, and laborers), and untouchables (outcasts and the socially polluted). These divisions are not as sharply defined in the changing Nepal of today where caste has no legal justification, but a 1991 study revealed that 80 percent of civil service, army, and police posts were held by Brahmins and Chhetris of the hills (less than 50 percent of the population). The Newars of the Kathmandu Valley have also occupied an important niche in the political and economic culture of Nepal relative to their numbers.

Not surprisingly, land and income distribution is skewed. A 1983 study indicated that more than 50 percent of landholdings in the Hill region were smaller than half a hectare. In 1990, 75 percent of the families in Nepal earned less than 35 percent of the total national income. The harsh reality behind these figures has forced many in the Hill and Mountain regions to migrate to urban centers, the Tarai, and abroad to seek employment as soldiers, laborers, and domestic help. The burden of poverty is particularly hard on women, and a growing population of Nepalese sex workers in the brothels of India is sad testimonial to this problem.

Although government planning has channeled resources into the health and education sectors, doctors and health care centers are concentrated in urban areas, and rural services are still inadequate. Health services barely cope with widespread malnutrition, gastrointestinal diseases, tuberculosis, and polio. There is a rising incidence of cardiovascular disease in urban centers and a shortage

Distribution of Income or Consumption by Percentage Share: Nepal
Lowest 10% 3.2
Lowest 20% 7.6
Second 20% 11.5
Third 20% 15.1
Fourth 20% 21.0
Highest 20% 44.8
Highest 10% 29.8
Survey year: 1995-96
Note: This information refers to expenditure shares by percentiles of the population and is ranked by per capita expenditure.
SOURCE: 2000 World Development Indicators [CD-ROM].

of trained medical personnel and supplies. Those who can afford it prefer to be treated for serious illnesses abroad. Though many Nepalese are aware of the link between education and socio-economic betterment, regular attendance at school (conventional school is usually the only option; there are no distance/part-time/private tuition type educational courses in the villages) means time away from vital household and farming chores. Primary education is free, but standards in public schools are low, and literacy was still only 45 percent in 1999 among those over the age of 15. A college education abroad is much coveted, and is the prerogative of the rich or the fortunate few who secure scholarships.

So far, government policies have not significantly improved the lot of the poor Nepalese peasant. Programs targeting rural areas often end up enriching local officials and prosperous farmers. Ironically, the "development industry," fueled by foreign aid, has provided income for many in Kathmandu, while conditions remain bleak in the countryside. Governmental neglect of rural areas and ongoing political instability only add to the resentments that are manifest in the violence surrounding the Maoist "People's War" in the country.


A rural family often lives under precarious conditions. In a typical village in the hills, a poor household relies on the produce from a small plot of land that has no irrigation facilities and is subject to erosion every year. A woman usually lives in her husband's house with his parents and siblings. The family house is made of stone and provides only 1 or 2 shared rooms. Cooking is done over an open stove in the main room. If they are fortunate, the family might own livestock such as cattle or chickens. Very little can be set aside from year to year, so they are unable to afford basic necessities. Such pleasures as a varied diet, clean water, fuel, medicines, decent clothing, and electricity may not be available. Education is considered a luxury that detracts from the time the children, especially the girls, can spend working. Water is drawn from the

Household Consumption in PPP Terms
Country All food Clothing and footwear Fuel and power a Health care b Education b Transport & Communications Other
Nepal 44 9 7 5 14 5 15
United States 13 9 9 4 6 8 51
China N/A N/A N/A N/A N/A N/A N/A
Bhutan N/A N/A N/A N/A N/A N/A N/A
Data represent percentage of consumption in PPP terms.
aExcludes energy used for transport.
bIncludes government and private expenditures.
SOURCE: World Bank. World Development Indicators 2000.

local stream. Dependence on firewood has led to severe deforestation in the hills, and the women have to walk hours to forage. Health facilities are limited. If a member of the family falls sick, they may be carried along treacherous mountain paths for hours to reach a health post. Often, the men in the household leave the village in search of jobs to help support the family.

A prosperous family in Kathmandu may derive its wealth from an aristocratic legacy, or modern occupations such as business, law, or medicine. They may have houses in the urban center that can be rented out, and also own land worked by tenant farmers outside the Kathmandu Valley. Together, a wealthy married couple can earn upwards of US$6,000 a year. The easy availability of domestic workers from rural villages allows the wife to delegate household chores. The education of the children is perceived as fundamentally important in securing a future in modern Nepal. They study in private English-medium boarding schools and go on to complete college degrees abroad. Health services in Kathmandu are good in comparison to the rest of the country, but serious problems such as cardiovascular disease are entrusted to doctors in India or Thailand. Despite the irregular supply of electricity in the Valley, the family will have a range of electrical appliances and might have invested in a computer with Internet access. Their lives in Kathmandu are very comfortable, but they share with the poor the common problems of water and electricity shortages, frequent strikes, and the threat of political violence.


Working conditions in Nepal are largely unregulated. For the minority of the population working in the formal economy, labor laws allow for a 6-day, 48-hour week with 30 days of annual leave, 15 days of sick leave, basic health and safety standards, and some benefits. The amended Factories and Factory Workers' Act 1977, which set out these standards, was revised following the democratic transition in 1990. In the Kathmandu Valley, a 5-day, 40-hour week with 25 days of annual leave has been implemented. In 2000, unemployment was 14 percent, and underemployment 47.5 percent. The latter is a common feature of the agricultural sector, where work patterns are determined by the planting and harvest seasons, and alternate opportunities may be either unavailable or culturally unattractive. Skilled labor is severely limited in Nepal, and a quarter of the labor force is composed of Indians. This shortage has hampered the development of the industrial economy.

In practice, laws passed to protect workers have hardly been implemented. Working conditions in the family-run farms and businesses that drive the economy retain both positive and negative features of power structures within the family. So while arrangements may be more cooperative, women and girls bear the brunt of the drudgery, leaving the men to reap the benefits and have time for leisure. This is particularly true of rural Nepal. Larger farms which employ tenant farmers often maintain feudalistic structures of patronage. Safety and health standards in industry are also widely neglected.

The democratic change in 1990, especially in the light of communist success, has altered the dynamics of labor in Nepal. Labor unions, restricted prior to 1991 along with political parties, now operate nationally, over-seen by the General Federation of Nepalese Trade Unions (GEFONT). In 1991, labor union membership included 30 percent of non-agricultural workers. Workers regularly carry out strikes, and deadlocks in negotiations with government and industry have caused great inconvenience in urban centers such as Kathmandu. Strikes in recent years by public transport drivers and trash collectors are examples of this disruption. In early 2001, a dispute between workers in the tourist industry and the hotel association concerning the inclusion of service charges led to a temporary breakdown in services. Nepal's export-oriented industries have also had to adjust to the demands of Western consumers. In 1994, the Nepalese government responded to negative publicity in Europe over the prevalence of child labor in the carpet industry, and continues to work with non-governmental organizations to eliminate this problem.


c. 563 B.C. The Buddha (Prince Siddhartha) is born in Lumbini, in the Tarai region of Nepal.

c. 400-750 A.D. Licchhavi kingdom in power in Kathmandu.

1100-1484. Khasa Malla kings rule in western Nepal.

1484. Malla kingdom divided; the 3 kingdoms of Kathmandu, Bhadgaon, and Patan are established.

1769. Nepal emerges as a unified state under the leadership of Prithivi Narayan Shah, who has waged his campaign from Gorkha in midwest Nepal. For the next half century, the economy is geared towards military expansion pursued by successive Shah rulers and their administrators.

1791-92. War between Nepal and China.

1814-16. Nepal is at war with Britain; hostilities are ended with the Treaty of Sugauli, which reduces the territory of Nepal.

1846. Jang Bahadur establishes hereditary Rana rule.

1854. The country's first legal code is proclaimed.

1855. Nepal goes to war with Tibet, which results in duty-free privileges for Nepalese traders and payment of tribute from Tibet.

1923. Treaty of Friendship is signed with Britain, confirming the independence of Nepal and a special relationship with the British Empire.

1950-51. The first democratic revolution takes place in Nepal, leading to the end of the Rana regime and the rehabilitation of the Shah dynasty. The government signs the Treaty of Trade and Commerce with India.

1955. Nepal is admitted to the United Nations.

1956. The first 5-year plan of economic development is drawn up.

1959. The first general elections are held in Nepal. The Nepali Congress Party is elected to government with Bishweswor Prasad Koirala as prime minister.

1960. Important revisions are made to the Trade and Transit Treaty with India. King Mahendra dismisses the elected Nepalese government and imprisons political leaders.

1962. The Panchayat system is established. The Land Reorganization Act and a new legal code are established.

1972. King Mahendra dies and is succeeded by King Birendra.

1980. A national referendum votes to support the Panchayat system.

1985. Nepal becomes a founding member of the South Asian Association for Regional Cooperation (SAARC).

1989. Failure to renegotiate the trade and transit treaties with India results in economic disruption.

1990. Popular protests led by the Nepali Congress and the United Left Front Coalition lead to the establishment of multiparty democracy.

1991. General elections are won by the Nepali Congress. Girija Prasad Koirala becomes prime minister.

1994. The Communist Party of Nepal (UML) wins mid-term elections and forms a minority government under Man Mohan Adhikari.

1995. A coalition government is formed under Sher Bahadur Deuba of the Nepali Congress.

1997-98. Successive coalition governments take power following the collapse of the Deuba government.

1999. General elections bring a new government under Krishna Prasad Bhattarai of the Nepali Congress. He is replaced by Girija Prasad Koirala the following year.

2001. The Crown Prince Dipendra opens fire on a family gathering at the royal palace, killing 9 members of the royal family, including the king and the queen. Dipendra dies of a self-inflicted wound. Widespread mourning and rioting accompanies the ascension to the throne of Gyanendra, the surviving brother of the late king.


Many observers have characterized Nepal as a country spanning the medieval and modern ages. The urban-rural divide illustrates this split. Nepal is in limbo, a condition that has managed to perpetuate itself through half a century of development planning and massive infusions of foreign aid. Undeniably, the country has made great progress since it opened up to the world, particularly in establishing a basic infrastructure in transport, communications, health, and education. However, its difficult topography, coupled with inefficiencies that are the legacy of an enduring system of feudalistic patronage in society and government, mean that the results of development plans rarely match expectations.

Economic gains in various sectors have been offset by population growth and environmental degradation, both poised to become even more problematic in the future. The disparity between rich and poor is growing, and discontent in the countryside bodes ill for the stability of a country that depends heavily on tourism. While Nepal has continued to prioritize liberalization and privatization of its economy in order to encourage growth and attract investment, the political problems of the last decade have hardly fostered a conducive environment. Until these policies are allowed to bear fruit, Nepal will not be able to break out of the shackles of its subsistence agriculture economy and develop industrially.

Cottage industries exporting goods such as carpets and garments will continue to grow. Tourism, as long as visitors remain safe from internal instability, will remain crucial to the economy. Foreign aidso far mismanaged, underutilized, and responsible for a debt burden that demands servicingis set to provide the bulk of development funds in the years to come. The development of large hydroelectricity projects could bring considerable benefits, but these carry inevitable social and environmental consequences. Ultimately, until Nepal achieves democratic stability and the institutional culture demonstrates that it is prepared to deal with corruption at every level, it will fail to achieve economic prosperity. The emigration of peasants and highly educated urbanites will also continue, draining Nepal of valuable population resources. The benefits of development have accrued to the rich, privileged, and educated; as in olden times, the country lives in the shadow of the Kathmandu Valley.


Nepal has no territories or colonies.


Economist Intelligence Unit. Country Profile: Nepal. London: Economist Intelligence Unit, 2000.

Pant, Y. P., and G. P. Pant. Some Aspects of Economic Planning: A Case Study of Nepal. New Delhi, India: Vikas Publishing House, 1999.

Pant, Y.P. Economic Development of Nepal. Allahabad, India:Kitab Mahal, 1982.

Savada, A.M., editor. Nepal and Bhutan Country Studies. ThirdEdition. Washington D.C.: Library of Congress, 1993.

Statistical Yearbook of Nepal 1999. Kathmandu, Nepal: CentralBureau of Statistics, 1999.

U.S. Central Intelligence Agency. World Factbook 2000. <http://>. Accessed July 2001.

Zivetz, L. Private Enterprise and the State in Modern Nepal. Madras, India: Oxford University Press, 1992.

Rabi Thapa




Nepalese rupee (NR). One Nepali rupee is made up of 100 paisa. Rupee notes come in denominations of NR1, 2, 5, 10, 20, 25, 50, 100, 250, 500, and 1,000. Coins are denominated as 5, 10, 25, and 50 paisa and NR1, 2, and 5.


Carpets, clothing, leather goods, jute goods, grain.


Gold, machinery and equipment, petroleum products, fertilizer.


US$27.4 billion (purchasing power parity, 1999 est.).


Exports: US$485 million (f.o.b., 1998). Imports: US$1.2 billion (f.o.b., 1998).

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Basic Data
Official Country Name: Kingdom of Nepal
Region: East & South Asia
Population: 24,702,119
Language(s): Nepali
Literacy Rate: 27.5%
Number of Primary Schools: 22,218
Compulsory Schooling: 5 years
Public Expenditure on Education: 3.2%
Educational Enrollment: Primary: 3,447,607
  Secondary: 1,121,335
  Higher: 105,694
Educational Enrollment Rate: Primary: 113%
  Secondary: 42%
  Higher: 5%
Teachers: Primary: 89,378
  Secondary: 36,127
Student-Teacher Ratio: Primary: 39:1
Female Enrollment Rate: Primary: 96%
  Secondary: 33%

History & Background

Nepal is a small landlocked South Asian country of 140,800 square kilometers located between China and Himalayan ranges in the north, and India and the plains of the river Ganges in the south. The country contains 8 of the world's 10 highest peaks with 85 percent of the country being mountainous. The country is organized into 5 development regions consisting of 14 anchals (zones) with 75 districts and 3,995 village development committees (VDCs). Nepal is the only official Hindu country in the world with more than 90 percent of its population following the Hindu religion. In the year 2000, Nepal was a densely populated country with a population of about 25 million people with 41 percent 14 years or younger. The population growth rate was 2.3 percent with a life expectancy of about 58 years. Nepal continues to be among the poorest countries in the world with nearly half of its population living under the poverty line. More than 80 percent of the population is engaged in agriculture that accounts for 41 percent of the Gross Domestic Product (GDP). Only 17 percent of the country is arable; therefore, the majority of the rural people are engaged in subsistence farming or below subsistence farming. In 1999, Nepal had an outstanding debt of close to 3 billion U.S. dollars in foreign loans.

The modern history of Nepal can be traced to the eighteenth century when the Gurkha Shah family assumed power and established its capital in Kathmandu. In the nineteenth century, the Ranas, who were ministers to the kings, assumed real power, and the Shahs became puppet rulers. In 1860, the British government assumed a guiding rule in Nepal and heavily recruited the famous Gurkha units into the British army that assisted the British in suppressing Indian revolts (1857-1959), World War I (1914-1918), and World War II (1939-1945).

The Rana-British autocracy ended in 1951, when Maharaja Mohan Shamsher Rana was removed from power and the Nepali Congress Party (NCP) formed a government headed by Matrika Prasad Koirala. However, the political parties, in the 1950s, were not very effective, and King Mahendra, crowned in 1955, seized complete control of the government in 1960. He declared a new constitution in 1962 that banned political parties and allowed monarchy through a nonparty system of panchayats (village councils). In the 1970s, after Mahendra's death, his son, Birendra Bir Bikram, became the king who initially continued with repression of the democratic movement. However, he finally gave way, which led to the 1980 referendum and then the new constitution with the adoption of the multiparty system in 1990. In 1991, Girija Prasad Koirala became the first elected Prime Minister with the titular chief of state being the King. The 1990s witnessed problems in the parliamentary democratization of the nation: political instability, several governmental topples and changes, governmental corruption allegations, public demonstrations, coalition formations, and frequent elections. Since March 2000, Girija Prasad Koirala of NCP has once again become the Prime Minister.

In the eighteenth and nineteenth century, Sanskrit was the main field of teaching and learning. Pradhan Pathshala (Sanskrit primary schools) were established in Dang, Dingla, Janakpur, and Kathmandu. Graduates from these schools used to travel to universities at Darbhanga and Kashi in India to complete further studies in Uttar Madhyama (Intermediate), Shastri (Bachelor), and Acharaya (Master) levels.

Under the Rana-British rule, between 1846 and 1951, access to education was confined to the higher castes and wealthier economic stratum of the population; the Ranas were opposed to giving education to the masses. They chose to educate their own children through English tutors. In 1854, Rana Jung Bahadur opened the Durbar School in Kathmandu to serve the needs of the Rana family and other Nepalese elite. This preference established the supremacy of the English education over the traditional Sanskrit-based education, a trend that has since continued. The School Leaving Certificate (SLC or grade 10) examination for Durbar School used to be conducted by the University of Calcutta, India until 1934 when the Nepal SLC examination board was founded. In the early 1950s, the average literacy rate was 5 percent. Literacy among males was 10 percent, while female literacy was 1 percent. Only 1 child out of 100 children attended school.

Since the democratization of Nepal, the country is committed to universal education and is slowly moving toward achieving that goal. In 1990, Nepal launched a massive literacy campaign targeting 8 million people between the ages of 6 and 45 years of age. Since then education in grades 1-10 is also being offered "tuition free" throughout the country.

Constitutional & Legal Foundations

Nepal is a parliamentary democracy, with the head of the government being the Prime Minister and the nominal chief of state being the King. The legislative branch of the government consists of a bicameral Parliament. The lower branch of the Parliament is the House of Representatives that has 205 seats with members elected by popular vote to serve 5-year terms. The upper branch of the Parliament is the National Council that has 60 seats of which 35 are appointed by the House of Representatives, 10 by the King, and 15 are elected by an electoral college with a 6-year term with one-third being elected every 2 years. The Supreme Court heads the judicial branch of the Government, with the chief justice being appointed by the monarch upon the recommendation of the Constitutional Council.

Nepal is a signatory to the policy of Education for All (in 1990 at Jomtien, Thailand) and the Convention of the Rights of the Child (in 1991 at New Delhi, India) and is committed to free and universal education. Since 1951, the government has constituted education commissions at periodic intervals to develop basic policy guidelines. Subsequently, the cabinet decisions and parliament acts have included these policy guidelines into five-year national plans. The Eighth Five-Year Plan concluded in June 1997. In the Ninth Five-Year Plan (1997-2002), since the country continued to struggle with poverty, the primary national development objectives are focused on poverty alleviation and the chosen strategy for accomplishing these objectives is through education. The Ninth Five-Year Plan describes educational priorities that include improving school facilities, enhancing teacher training, and expanding secondary, vocational, and technical institutions. The Ninth Five-Year Plan also emphasizes enhancement of the quality of general education, female participation in education, and access to education for disabled and socially disadvantaged communities. The Ninth Five-Year Plan envisages a growth of the net primary school enrollment to 90 percent by the end of its period in 2002 and 100 percent by the end of the Twelfth Five-Year Plan in 2017.

Educational SystemOverview

Since 1951, the country established an education system with free primary education to all children. In 2000, while the education was not compulsory throughout Nepal, the country was committed to providing free universal education from grades 1-10. Under the Ninth Five-Year Plan, compulsory primary education was implemented in five districts of Chitwan, Ilam, Surkhet, Syangja, and Kanchanpur with the policy of extending free compulsory primary education all over the country gradually.

Despite these strong commitments, in 2000, various estimates of literacy in Nepal placed the rates between 23 and 41 percent of the adult population with a large gap between male and female rates. The Central Bureau of Statistics has been collecting literacy statistics since the first census in 1952-1954. For the censuses in 1952-1954, 1961, and 1971, literacy was defined as the ability to read and write in any language. For the census in 1981, the definition was expanded as the ability to read and write in any language with understanding. For the census in 1991, the definition was further expanded to add performance of simple arithmetic calculations. However, no functional testing was done in collecting the data that is estimated to be inflated by 10 to 25 percent. In 1996, the literacy rates in the eastern development region were 54.20 percent for males and 29.57 percent for females; in the central region, 50.19 percent for males and 20.75 percent for females; in the western region, 58.24 percent for males and 32.82 percent for females; in the mid-west region, 46.94 percent for males and 17.60 percent for females; and in the far west region, 48.98 percent for males and 14.85 percent for females. These statistics point at the dismal situation of female literacy rates in Nepal, which are among the lowest in the world. The literacy rates also vary according to ethnic grouping. The economically advantaged high caste ethnic groups like Marwari, Kayastha, Brahmin, Thakali, and Newari have literacy rates between 60 and 95 percent. While lower castes such as Dhobhi, Dusadh, and Chamar have rates below 25 percent.

Primary education (grades one to five) typically begins at the age of 6 years and lasts until the age of 10 years. The second official level of education is the lower secondary level, which comprises grades 6-8 (three years). The secondary level is comprised of grades 9 and 10 (two years). The School Leaving Certificate (SLC) examinations are held nationally at the end of grade 10. Since 1992, the higher secondary level of grades 11 and 12 has also been initiated primarily through private schools. The academic year typically starts in Srawan (July-August) when the government's financial year starts. The Nepali calendar year is based on Bikrami Samwat (BS), which is different from the English calendar. For example the year 2001 A.D. was 2057 BS until March 2001 and then changed to 2058 BS in mid March. There is some pressure to start the school year in Baisakh (April-May) to allow the tenth grade students to have one complete year before their SLC examinations. Education in grades 1-10 is free in Nepal and available to all. In 1996, the school system in Nepal had an overall enrollment of over 4 million students of which 77 percent were primary students, 17 percent were lower secondary students, and 6 percent were secondary students. The language of instruction in public schools is in Nepali, which is the mother tongue of slightly over one-half of the population.

Nepal has a dualistic system of schools with both public and private schools. Education in private schools is expensive and typically affordable only by the elite. Most private schools have English as the language of instruction, and many also utilize computers in the curricula. In 1995, there were 3,077 private primary schools, 2,417 private lower secondary schools, 1,370 private secondary schools, 332 private higher secondary schools, and 132 private tertiary schools. At the lower secondary and secondary levels the numbers were proportional to the public schools.

Preprimary & Primary Education

Until 1992, there was no official preprimary level of schooling and the very few private nursery schools that existed were mainly in the urban areas. Under the Eighth Five-Year Plan (1992-1997), Ministry of Education introduced a total of 781 Shishu Kakshyas (nurseries) in 40 districts. The Ninth Five-Year Plan has a lofty goal to increase the number of Shishu Kakshyas to 10,000 by the end of 2002.

Primary education typically starts in the first grade with the minimum age of entry being six years. Completion of primary level ordinarily requires five years of schooling. However, entry at minimum age and five of years of schooling are not mandatory requirements to complete primary school. Children who could not attend primary school at the age of six years can enter into the third grade through completion of a nine-month course of a nonformal primary education program, popularly known as Shiksha Sadan or OSP (out-of-school program). The Nepalese government has formulated this plan under the "Basic and Primary Education Project" (BPEP) and given it the top priority in its Education Policy as a means to reach girls and other disadvantaged children. In 1996, there were a total of 21,473 primary schools with an enrollment of over 3 million primary students and 82,645 primary school teachers. In 2000, the enrollment in grade one was almost universal for boys, but only 84 percent girls were enrolled. The enrollment starts to decline in later years of primary school, many repeat each grade, and the completion rates of primary school remain dismal. Almost 63 percent of the students enrolled in first grade drop out during primary education. Only about 37 percent complete their primary education between the ages of 5 and 13 years. Only 10 percent of children who are enrolled in first grade are expected to complete primary school without repeating any grade. The reasons for high dropout and repetition rates include the workload of household chores, particularly on girls; irregularity of school functioning; poverty; physical distance; low perceived relevance of education to daily work and social lives; caste and ethnic discrimination; neglect of mother tongue for many communities; and under-aged children, particularly in the first grade.

Secondary Education

The second official level of education is the lower secondary level that typically begins at age 10 in the sixth grade and lasts through the eighth grade. Earlier, between 1951 and 1971, this was known as the middle level and consisted of sixth and seventh grades. The National Education Commission in 1992 defined the objective of the lower secondary level as "preparing morally and ethically upright citizens possessed of an appropriate level of knowledge in subject matters such as Nepali language, mathematics, and science." In 1996, the total number of lower secondary schools in Nepal was 5,041 with 726,300 students and 16,821 teachers. In 1996, only 26 percent of all children aged 11-13 were enrolled at the lower secondary level with the enrollment of girls being a little less than 19 percent. In 1996, the promotion rates at this level were fairly good with over three-fourths being promoted to next level each year. Repetition rates were below 20 percent at all the three grade levels and dropout rates were below 12 percent.

Until 1992, the secondary level, comprised of the grades 9 and 10, was the final level of schooling in Nepal. The secondary school enrollment in 1996 was 290,143 with 2,654 schools and 14,585 teachers. At the end of grade 10, a national level SLC examination is conducted by the Higher Secondary Education Board (HSEB) based at Sano Thimi. The net enrollment rate in secondary school in 1996 was a little over 17 percent. This implied that among all 14- and 15-year-old children only about one-sixth enjoyed the privilege of education.

Since 1992, Nepal has started the higher secondary school education system consisting of the grades eleventh and twelfth. The Higher Secondary Education Board (HSEB) conducts the national examinations. The higher secondary level is available in specialized areas such as science, management, humanities, and education. The system is based on the system prevalent in India and is popularly known as the ten-plus-two system. In 2000, there were 657 higher secondary education institutions, a large number of which were based in relatively affluent urban areas and were managed by the private sector. The National Education Commission (NEC) had recommended the opening of such institutions in remote and rural areas and focusing on five areas of general, professional, technical, polytechnic, and Sanskrit education. However, these recommendations remained largely elusive as late as 2001. In 2000, there were 42,000 students enrolled at the plus-two level.

In the 1950s, vocational training was introduced in the lower secondary classes, and it was described as prevocational education. At the secondary level, almost 25 percent of the curriculum consisted of vocational training. In addition, a vocational branch was also introduced to facilitate secondary school graduates to directly enter into the job market after SLC. The vocational subjects included agriculture, agronomy, horticulture, poultry, animal husbandry, dairy science, fishery, industrial electrical installation, furniture and metal work, building construction, and bamboo work. In the early 1980s, vocational education in secondary schools began to be curtailed and secondary schools were no longer viewed as terminal institutions for vocational training. In 2000, vocational instruction through secondary schools was treated as one subject with a weight of about 14 percent and minimal emphasis on skill acquisition.

Since the 1980s, the government has established technical schools in different regions of the country. Initially there were seven such technical schools, six in the public sector and one in the private sector. The courses offered at these schools were at the lower secondary (those who have completed grade one through five and are above 15 years of age) and secondary levels (those who have completed seventh grade and are over 15 years of age). The courses offered were for three years duration, followed by one year of on-the-job training. The six public sector schools were: a mechanical training center at Kathmandu that focused on general mechanics, electrician, and sanitary fitting; a technical school at Jumia that focused on building construction, health, and agriculture; and a uttarpani technical school at Dhankuta that focused on agriculture. There was also a technical school at Jiri that focused on agriculture, building construction, and health; a technical school at Lahan that focused on agriculture and building construction; and a technical school at Sano Thimi that focused on motor mechanics, general mechanics, general fitting, agriculture, cutting, and tailoring.

Since 1990s, the technical education at the secondary level became the responsibility of the Council for Technical Education and Vocational Training (CTEVT). International assistance further strengthened the infrastructure in nine technical schools and a tenth grade SLC diploma was required to enroll in these schools. In 1998, stipends were being paid at seven of these schools that ranged between NR 300 and 475 per month. In addition, the CTEVT also has trade schools and 118 private technical training institutes. The trade schools offer courses of as short as one year, and as long as two and a half years. The trade and affiliated technical schools also conduct skill-oriented short-term training courses and these last between two and eight weeks. Besides the Ministry of Education and NGOs, other ministries such as labor, women and social welfare, industries, tourism, communications, and water resources also provide vocational training in related sectors.

Higher Education

Prior to the ten-plus-two (or the higher secondary education) system, students would continue their studies at the Proficiency Certificate Level (PCL) at the Tribhuvan University in Nepal and its affiliated colleges after passing the SLC examination. The PCL program is still being run in 2001, but is slated to be phased out because all students were going through the ten-plus-two system of post secondary education.

The first institution of higher education to be established in Nepal was the Tribhuvan Chandra Intermediate College (later renamed Tri-Chandra College) in 1918. The Rana Prime Minister, Chandra Shamsher, was opposed to higher education and saw it as a threat to monarchy. Nonetheless, he yielded to the growing pressure from Nepalese people in the formation of this college and remarked at its inauguration, "With the opening of this college, I have hacked my own leg." The establishment of Tri-Chandra College paved way for higher education in Nepal. Gradually more colleges were built. Two of the reputable colleges were Nepal National College, also known as Shanker Dev Campus, in Kathmandu and Thakur Ram College in Birgunj.

Tribhuvan University was Nepal's first university and was established in 1959. The Queen mother, Kanti Rajyalaxmi Devi Shah, was the first Chancellor of the university. The Academic Council is the supreme academic body of the university and the Board of Studies designs the curricula. Initially, postgraduate courses were offered in some humanities and social sciences and were based on the curricula of Patna University in India that also conducted examinations until 1962. In 1991, only 1.73 percent of the population had acquired a bachelor's degree of which only 0.44 percent were women and 1.29 percent were men.

On December 11, 1991, Kathmandu University was established as a private university. In 1993, the School of Management was established at its campus in collaboration with the Indian Institute of Management in Calcutta (IIMC) and the first batch of Master of Business Administration (MBA) students were enrolled. The school of Engineering and School of Science opened in 1994 and offered several undergraduate programs. The School of Education and Arts was established in 1996. In 1997, the Master of Philosophy (M.Phil) and Doctor of Philosophy (Ph.D.) were launched.

In the late 1980s and 1990s, Mahendra Sanskrit University, Purbanchal University, Siddhartha University, and Pokhra University were also established. Many of these are private ventures. In 1998, Tribhuvan University was the largest university with 150,000 students and 62 constituent and 132 affiliated campuses. The costs of tertiary education are very low at Tribhuvan University, while they are very high at the private Kathmandu University.

The Bachelor's level of university education after grade 12 is a three-year duration with yearly examinations. The Bachelor's Degree courses in technical institutes like Engineering and Medicine take four years to complete. The Master's Degree follows the Bachelor's Degree and takes two years with yearly examinations. In the technical arena, only the Institute of Science and Technology and, in some selected fields, the Institute of Engineering offers Master's level programs. The university education also includes a Doctor of Philosophy degree in some disciplines and subject areas.

At the tertiary level, in the 1960s, all programs of vocational education were brought under the umbrella of Tribhuvan University and five technical institutes were formed. They initially offered programs at the PCL level. These institutes were: the Institute of Engineering that focused on civil engineering related training such as road building, drafting, surveying, electrical engineering related training, and mechanical engineering related training; the Institute of Medicine that focused on Ayurvedic related training, nursing, and laboratory technician courses; the Institute of Agriculture and Animal Science; the Institute of Forestry; and the Institute of Applied Science and Technology. The Institute of Applied Science and Technology has since been turned into a research center. The other four institutes that started their programs at certificate level now offer Diploma (Bachelor of Technology) and Degree (Master of Technology) and are gradually moving toward autonomous status.

Administration, Finance, & Educational Research

In 2001, the Ministry of Education and Sports (previously known as Ministry of Education and Culture) was the governmental division looking after the education sector. A Minister of the Cabinet Rank heads the Ministry. On April 11, 2000, the Minister was Tarani Dutta Chataut. In the Ministry, the Department of Education (DOE) at Keshar Mahal, headed by a Director General, formulates the medium term and annual policies, plans, objectives, and targets in the education sector. Public or government-aided schools are managed by School Management Committees (SMCs), according to education regulations of the DOE. The composition of SMCs, academic content, textbooks, and examination systems are uniform throughout the country. The primary source of revenue for schools is governmental grants, which are based on the number of the students in each school.

The teachers, including the headmasters, are appointed by the DOE. The District Education Committee (DEC), which is nominated by DOE, nominates the SMCs. The government District Education Office, within the DEC, is headed by a District Education Officer. This is the most influential unit and designates tasks for each school to implement. Each of the 75 districts has a District Education Officer. The DEC sets the school calendar, provides teacher salaries, organizes teachers training programs, carries out inspections, and audits the school accounts. The autonomy of teachers in changing the educational procedures is often cited as a reason for limited operation of the schools, low academic quality, lack of accountability, and lack of local participation. The technical and vocational schools of the CTEVT are also managed on a similar basis by SMCs.

The universities are managed by Senate Council consisting of the Chancellor, Pro-Chancellor, Rector, Registrar, and senate members representing various academic, economic, political, private, social, and student groups. The university senate is the apex body and is responsible for making policy decisions. The University Grants Commission (UGC) assists the government in managing the fiscal aspects and funding policies. The UGC also coordinates and disburses financial grants to the universities.

From 1975-1990, Nepal spent about 10 percent of its annual budget on education and raised it to 13 percent in the Eighth Five-Year Plan during 1992-1997. As a percentage of the Gross Domestic Product (GDP), this spending ranged between 1.3 percent and 2.0 percent between 1975 and 1990. The government, in its Eighth Five-Year Plan, spent 2.6 percent of its GDP on education. In 1997, the foreign aid in the education sector accounted for 52 percent of the total budget. The large amount of financial dependence on foreign donors undermines self-sustenance, increases foreign debt with heavy interest repayments, and also leads to pursuance of donor-driven agendas. A report prepared for the Ministry by the Danish University in 2000 found that 71 percent of the suggestions from the donor agencies were ratified by the government, as opposed to only 31 percent of the suggestions by the Parliamentarians.

In 1995, per capita expenditure by the government on primary education in public schools was NR 970.30, which was about half of what was being spent in private schools. Further the household expenditure on education for a child attending was NR 362.16, while the expenditure on education for a private school was NR 4,699.08. The disproportionate expenditures partly account for differences in the quality of private and public education.

The major portion of government expenditure for school education is spent on teacher and staff salaries and fringe benefits. A study done by Center for Educational Research, Innovation, and Development (CERID) in 1996 found that in public primary schools the expenditure on teacher and staff salaries was 86 percent, as compared to 63 percent in private primary schools. Likewise, in public secondary schools this expenditure on salaries was 76 percent in public sector, while only 52 percent in the private sector.

Two major problems facing the financing of the educational system in Nepal are inadequate resources and low administrative efficiency. Inadequate resources affect the physical facilities, teachers, and equipment. The physical infrastructure in the schools is often inadequate. Communities are mainly responsible for building the physical facilities that are often in dilapidated conditions due to a deficiency of funds. The government provides the salary of teachers. There is a scarcity of trained teachers and the cost of continuing teacher training is also primarily the responsibility of the government. Therefore, upgrading the skills of the teachers is a constant struggle. The teaching-learning materials are usually deficient. The government also tries to provide materials for science education in secondary schools, but often these are not adequate. The government has made a commitment to provide education up to grade 10 without tuition fees. This has forced many schools to charge students "non-tuition" fees to sustain their programs; this nullifies the government's intention to provide free education. The government also supports higher education, and the student's fees are minimal. This adds to the burden on governmental resources. Tribhuvan University was able to generate only 9 percent of its budget from outside resources and depended on the government for the large bulk of its funding.

The apex institution for conducting educational research in Nepal is the Center for Educational Research, Innovation, and Development (CERID), which is affiliated with Tribhuvan University. CERID is headed by an Executive director and has completed several educational research projects, including collaborations with several foreign institutions.

Nonformal Education

Nonformal education in Nepal began in 1951 when activities for literacy enhancement began as part of the national development. These efforts were regularized in the First Five-Year Plan (1956-1961). With the increasing foreign aid through international organizations and subsequent mushrooming of the nongovernmental organizations (NGOs) between the 1970s and 1990s, the nonformal education movement has picked up momentum. In 1997, there were about 6,000 registered NGOs that were working in the area of education.

In 1974, CERID launched a community-based education program, "Education for Rural Development," in Lahachauk. The program tested and compared the efficacy of a uni-message literacy program with multi-message functional literacy programs. This pilot project paved the way for the national functional literacy program in 1978, which was funded by the Ministry of Education.

In 1981, in the four districts of the Seti anchal, the Chelibeti program focusing on the education of female children was developed. The Ministry of Education launched the Primary Education Project (PEP) in 1984 with a loan from World Bank. By 1987, this program included nonformal education components such as Shiksha Sadan (out-of-school programs), women's education programs, adult education programs, school environment improvement programs, and a community reading center.

Between 1991 and 1996, the United States Agency for International Development (USAID) assisted CERID in training and supporting literacy providers through higher education institutions in United States. In addition, USAID funded World Education/Nepal project aimed at improving women's literacy.

In 1990, at the governmental level, the National Education Commission was formed to strengthen the nonformal education sector. Subsequently, the National Non-Formal Education Council was also formed.

Distance education in Nepal employs a radio broadcast approach and is used mainly to support teachertraining activities. The Institute of Education affiliated to Tribhuvan University started a distance-learning program in 1976. This was discontinued in 1980 and replaced with the Radio Education Teacher Training (RETT) Project that offers a basic teacher training primary education certificate/diploma course in Nepali language. In 1998, there were 1,800 students enrolled in this course.

Teaching Profession

In 1996 there were a total of 114,051 teachers in the public sector; 82,645 were primary level teachers, 16,281 were lower secondary level teachers, and 14,585 were secondary level teachers. The teachers at the primary level must complete proficiency certificate level (PCL) in education, and a two-year program offered from Tribhuvan University or its equivalent. The courses taught include English language education, Nepali language education, mathematics education, science education, health and physical education, population education, history education, geography education, economics education, political science education, and vocational education. Teachers at the lower secondary and secondary level must complete a Bachelor of Education (B.Ed.), which is a three-year program with one additional year of practical training. The program covers, in addition to the subjects of PCL, educational management, primary education, nonformal education, educational technology, early childhood education, special education, educational planning, and curriculum evaluation. For administrative positions, completion of a Master of Education (M.Ed.) is usually required. The National Center for Education Development (NCED) provides in-service training for primary school teachers through its nine primary training centers. Some private teacher training centers affiliated to NCED conduct pre-service teacher training. The salaries for teachers in the public primary schools in 2000 were between NR 4,000 to 6,000 per month, and for secondary teachers, between NR 5,000 to 10,000 per month.

Several groups and unions of teachers have emerged over the past few decades. These groups have held close alliance with political parties. Two major teachers associations are the National Teachers Organization (NTO), affiliated with Communist Party of Nepal/United Marxist-Leninist (CPN/UNL), and the Nepal Teachers Association (NTA), affiliated with Nepali Congress Party (NCP). In addition there are smaller associations affiliated with the Rashtriya Prajatantra Party (RPP) and the Nepal Sadbhavna Party (NSP).


Education is vital to human development, and Nepal recognizes this fact and is committed to making education universal. Despite the fact that substantial progress has been made in this direction, much still remains to be done. The country is still caught in the vicious cycle of poverty, lethargy of illiteracy, and tradition. Three-fifths of the country is still illiterate, with three-fourths of women being illiterate. In the 1990s, the country clearly moved toward democratization; however, the unstable governments and tenuous leadership have not yet yielded clear benefits for the masses. The education system is plagued by a lack of financial support, deficiency of trained human resources, inadequate physical infrastructure, and managerial inefficiency. As a consequence, the country is heavily dependent on foreign aid. Self-reliance in the education sector seems to be elusive with more than half of the funding coming from foreign donors. The international influence continues to shape the priorities for the country, while at the same time increasing the burden of debt. Efforts to broaden taxation, making the revenue administration more effective and efficient, and increasing taxation on private school incomes might be some measures that could be taken to boost local funding of education.

Universal access to literacy and primary education is emphasized in policy statements and political manifestos. However, the literacy and primary education efforts are confronted with barriers such as poverty, dropouts, burden of work on children, irregularity of school operation, physical distance to schools, low perceived importance of education by masses, caste and ethnic discriminations, centralized curricula, differential dialects and languages, and failure of local planning. The curricula are centralized with governmental control that does not allow teachers and local communities to take ownership of education. Political will and sustained efforts at addressing the barriers will assist in achieving this goal.

The secondary education system suffers from poor net enrollment ratios, lack of infrastructure, inadequate equipment, poor quality of education, lack of trained teachers, and financial constraints. The higher secondary level in Nepal is in its infancy stages and is completely in private hands for its implementation. Therefore it is confined mainly in the urban areas and to the sections of population that can afford it. More efforts are needed to extend its reach into remote and rural areas.

Finally, the philosophical direction of Nepalese education is being shaped rather blindly on borrowed models primarily from the West. Nepal has failed to build on its rich heritage of Sanskrit-based education that emphasized the importance of experiential learning. The experiential learning concepts have somehow been lost and education from books that emphasize rote memorization has gained eminence. The situation has been further compounded by blind emphasis on the English education system and failure to incorporate problem-based, analytical approaches inherent in the Western models. As a result, the quality of education has left much to be desired. There is vast scope for improving the quality, a challenge that Nepalese educators and planners must accept.


Asian Development Bank. Review Mission report on Technical Education and Vocational Training Development Project. Manila: 1996.

Central Bureau of Statistics. Statistical Year Book. Kathmandu: 1997.

Central Intelligence Agency. Nepal in The World Fact-book 2000. Washington, DC: CIA, 1999. Available from

Centre for Educational Research, Innovation, and Development (CERID). A Review of the Education Sector in the Eighth Five-Year Plan and the Proposed Approach for Education in the Ninth Five-Year Plan. Kathmandu: 1996.

Karan, Pradyumna P, and Ishii Hiroshi. Nepal: A Himalayan Kingdom in transition. New York: United Nations Publications, 1996.

Lohani, Bhola. "The Higher education in Nepal." National Daily The Rising Nepal (11 January 2001): 4.

Microsoft Encarta Online Encyclopedia 2000. Nepal, 2000. Available from

Poudel, Keshab. "Higher Secondary Education. An Alternative Approach." The National Newsmagazine 20 (4 August 2000): 30-36.

Savada, Andrea M, ed. Nepal Country Study. Washington, DC: Federal Research Division. Library of Congress, 1993.

Sharma, Akshay. "Teaching the Teachers." The National Newsmagazine 20 (7 July 2000): 67.

Thapa, Shyam. "The Human Development and the Ethnic Population Sub-Groups in the 75 Districts of Nepal." Contributions to Nepalese Studies 22 (1995): 3-14.

United Nations Children's Fund (UNICEF). Nepal. New York, 2000. Available from

. State of the World's Children 2000. New York: 2000.

United Nations Development Program (UNDP). Nepal Human Development Report, 1998. Available from

United Nations Educational, Scientific, and Cultural Organization (UNESCO). Annual statistical yearbook 1999. Paris: UNESCO Publishing Office, 1999.

World Bank Group. "Nepal at a glance." World Development Indicators 1999. Washington, DC: The World Bank, 2000. Available from

Manoj Sharma

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Nepal (nəpôl´), independent nation (2005 est. pop. 27,677,000), c.54,000 sq mi (139,860 sq km), central Asia. Landlocked and isolated by the Himalayas, Nepal is bordered on the west, south, and east by India, and on the N by the Tibet region of China. Katmandu is the capital.

Land and People

Geographically, Nepal comprises three major areas. The south, known as the Terai, is a comparatively low region of cultivable land, swamps, and forests that provide valuable timber. In the north is the main section of the Himalayas, including Mt. Everest (29,029 ft/8,848 m), the world's highest peak. Nepal's major rivers, which rise in Tibet, rush through deep Himalayan gorges. Central Nepal, an area of moderately high mountains, contains the Katmandu valley, or Valley of Nepal, the country's most densely populated region and its administrative, economic, and cultural center. Nepal's railroads, connecting with lines in India, do not reach the valley, which is served by a highway and a bridgelike cable line. There are a few other modern highways.

The population of Nepal is the result of a long intermingling of Mongolians, who migrated from the north (especially Tibet), and peoples who came from the Ganges plain in the south. The chief ethnic group, the Newars, were probably the original inhabitants of the Katmandu valley. Other groups include the Chettris, Brahmans, Magars, Tharus, and Gurungs. Several ethnic groups are classified together as Bhotias; among them are the Sherpas, famous for guiding mountain-climbing expeditions, and the Gurkhas, a term sometimes loosely applied to the fighting castes, who achieved fame in the British Indian army and continue to serve as mercenaries in India's army and in the British overseas forces. Nepali, the country's official language, is an Indo-European language and has similarities to Hindi. Tibeto-Burman languages, Munda languages, and various Indo-Aryan dialects are also spoken. About 80% of the people are Hindu, about 10% are Tibetan Buddhists (see Tibetan Buddhism), and there are smaller groups of Muslims and others. Tribal and caste distinctions are still important. The royal family is Hindu, and until 2006 the country was officially a Hindu kingdom. The entrenched caste system and rural poverty provided fertile ground for the Maoist insurgency that began in the 1990s.


Some 75% of Nepal's people engage in agriculture, which contributes about 40% of the GDP. In the Terai, the main agricultural region, rice is the chief crop; other food crops include pulses, wheat, barley, sugarcane, and oilseeds. Jute, tobacco, cotton, indigo, and opium are also grown in the Terai, whose forests provide sal wood and commercially valuable bamboo and rattan. In the lower mountain valleys, rice is produced during the summer, and wheat, barley, oilseeds, potatoes, and vegetables are grown in the winter. Corn, wheat, and potatoes are raised at higher altitudes, and terraced hillsides are also used for agriculture. Medicinal herbs, grown on the Himalayan slopes, are sold worldwide. Livestock raising is second to farming in Nepal's economy; oxen predominate in the lower valleys, yaks in the higher, and sheep, goats, and poultry are plentiful everywhere.

Transportation and communication difficulties have hindered the growth of industry and trade. Biratnagar and Birganj, in the Terai, are the main manufacturing towns, and Katmandu also has some industry. There are rice, jute, sugar, and oilseed mills; other products include carpets, textiles, cigarettes, and building materials. Wood and metal handicrafts are also important. Significant quantities of mica and small deposits of ochre, copper, iron, lignite, and cobalt are found in the hills of Nepal. Hydropower is the main source of electricity in Nepal, and there are plans to further develop the potential of the nation's rivers.

Tourism, a chief source of foreign exchange (along with international aid and Gurkha pensions), was hurt during the conflict with the country's Maoist rebels. Carpets, clothing, leather and jute goods, and grain are exported; imports include gold, machinery and equipment, petroleum products, and fertilizer. Nepal's trade is overwhelmingly with India. In recent years, significant deforestation and a growing population have greatly affected the country.


An interim constitution adopted in Jan., 2007, transferred the executive power of the Nepalese monarch to the prime minister and established a 330-seat Interim Parliament, which was replaced by an elected 601-seat Constituent Assembly in 2008. The assembly, which is also an interim body, is responsible for both acting as Nepal's legislature and writing a new constitution. Administratively, the country is divided into 14 zones.


To the Mid-Twentieth Century

By the 4th cent. AD the Newars of the central Katmandu valley had apparently developed a flourishing Hindu-Buddhist culture. From the 8th–11th cent. many Buddhists fled to Nepal from India, and a group of Hindu Rajput warriors set up the principality of Gurkha just west of the Katmandu valley. Although a Newar dynasty, the Mallas, ruled the valley from the 14th–18th cent., there were internecine quarrels among local rulers. These were exploited by the Gurkha king Prithvi Narayan Shah, who conquered the Katmandu valley in 1768.

Gurkha armies seized territories far beyond the present-day Nepal; but their invasion of Tibet, over which China claimed sovereignty, was defeated in 1792 by Chinese forces. An ensuing peace treaty forced Nepal to pay China an annual tribute, which continued until 1910. Also in 1792, Nepal first entered into treaty relations with Great Britain. Gurkha expansion into N India, however, led to a border war (1814–16) and to British victory over the Gurkhas, who were forced by treaty to retreat into roughly the present borders of Nepal and to receive a British envoy at Katmandu.

The struggle for power among the Nepalese nobility culminated in 1846 with the rise to political dominance of the Rana family. Jung Bahadur Rana established a line of hereditary prime ministers, who controlled the government until 1950, and the Shah dynasty kings were mere figureheads. In 1854, Nepal again invaded Tibet, which was forced to pay tribute from then until 1953.

Under the Ranas, Nepal was deliberately isolated from foreign influences; this policy helped to maintain independence during the colonial period but prevented economic and social modernization. Relations with Britain were cordial, however, and in 1923 a British-Nepalese treaty expressly affirmed Nepal's full sovereignty. Nepal supplied many troops for the British army in both world wars.

Recent History

The successful Indian movement for independence (1947) stimulated democratic sentiment in Nepal. The newly formed Congress party of Nepal precipitated a revolt in 1950 that forced the autocratic Ranas to share power in a new cabinet. King Tribhuvan Bir Bikram, who sympathized with the democratic movement, took temporary refuge in India and returned (1951) as a constitutional monarch. In 1959 a democratic constitution was promulgated, and parliamentary elections gave the Congress party a clear majority.

The following year, however, King Mahendra (reigned 1956–72) cited alleged inefficiency and corruption in government as evidence that Nepal was not ready for Western-style democracy. He dissolved parliament, detained many political leaders, and in 1962 inaugurated a system of "basic democracy," based on the elected village council (panchayat) and working up to district and zonal panchayats and an indirectly elected national panchayat. Political parties were banned, and the king was advised by a council of appointed ministers. King Mahendra carried out a land reform that distributed large holdings to landless families, and he instituted a law removing the legal sanctions for caste discrimination. Crown Prince Birenda succeeded to the throne (1972) upon his father's death; like previous Nepalese monarchs, he married a member of the Rana family in order to ensure political peace.

Prior to 1989, Nepal maintained a position of nonalignment in foreign affairs, carefully balancing relationships with China, the USSR, the United States, and India. The USSR and the United States were major aid donors. A 1956 treaty with China recognized Chinese sovereignty over Tibet and officially terminated the century-old Tibetan tribute to Nepal; all Nepalese troops left Tibet in 1957. The Sino-Nepalese border treaty of 1961 defined Nepal's Himalayan frontier.

India's geographical proximity, cultural affinity, and substantial economic aid render it the most influential foreign power in Nepal, but its military and political interference in Nepal's affairs has been a constant source of worry for the government. In 1969, Nepal canceled an arms agreement with India and ordered the Indians to withdraw their military mission from Katmandu and their listening posts from the Tibet-Nepal frontier. In 1989 the Indian government closed its borders with Nepal to all economic traffic, bringing Nepal's economy to a standstill. During the early 1990s, Nepal developed closer ties with China. In the 1980s and 1990s thousands of ethnic Nepalese from Bhutan were forced to take up residence in UN refugee camps in Nepal. In 2003 an agreement was reached that allowed some of the refugees to return to Bhutan, but most remained in camps in Nepal. Some began being resettled overseas in 2008, and by the end of 2010 more than 40,000 had left.

Weeks of street protests and general strikes forced King Birenda to proclaim (Nov., 1990) a new constitution that legalized political parties, asserted human rights, abolished the panchayat system, and vastly reduced the king's powers in a constitutional monarchy. In the 1991 parliamentary elections, the centrist Nepali Congress party won a slim majority and formed a government, which collapsed in 1994. Following a succession of failed coalition governments, the Congress party once again won a majority in the 1999 legislative elections, and Krishna Prasad Bhattarai became prime minister. Meanwhile, a Maoist insurgency began in rural Nepal during the mid-1990s.

In Mar., 2000, concern within the Congress party over Bhattarai's administration forced his resignation, and Girija Prasad Koirala became prime minister, holding the office for the fourth time. The king and many members of the royal family were killed in June, 2001, by the crown prince, apparently because of his parents' objection to his proposed marriage; the prince committed suicide. The king's brother, Prince Gyanendra, succeeded to throne; Gyanendra, unlike Birenda, had opposed the 1990 constitution.

In July, 2001, Koirala resigned and Sher Bahadur Deuba, also of the Nepali Congress party, became prime minister. In November negotiations with the Maoist rebels broke down and serious fighting began; the rebels won control of a significant portion of Nepal. In May, 2002, Congress party infighting led Deuba to dissolve parliament and seek new elections, which prompted the party to expel him and call for his cabinet to resign, which mostly did not. When Dueba called (Oct., 2002) for the postponement of elections for a year, the king removed him from office and named Lokendra Bahadur Chand, a former prime minister and monarchist, to the post. Elections were postponed indefinitely.

In Jan., 2003, a cease-fire was signed with the rebels, and negotiations began, although there were occasional violations of the cease-fire. In May growing opposition demonstrations against the government led Chand to resign, but hopes for a compromise with the opposition were dashed when the king named Surya Bahadur Thapa, a royalist, as prime minister and effectively brought all of the country's administrative powers under control of the crown. The rebels withdrew from the inconclusive negotiations in Aug., 2003, and fighting between government troops and rebel forces soon resumed. Neither the army nor the Maoists gained full control of the countryside, parliament remained dissolved, and there were increasing public protests against the king.

In Apr., 2004, the king promised to hold parliamentary elections in 2005. The following month the prime minister resigned, and in June the king appointed Deuba to the post. Deuba subsequently formed a broad-based coalition government. Despite government offensives against the rebels, they remained strong enough to enforce their will. In August and December the rebels again called successful blockades of the capital; they also began forcing the closure of a number of businesses.

Declaring that the cabinet had failed, the king dismissed the government in Feb., 2005, and declared a state of emergency, placing opposition figures under arrest. He assumed direct control of the government as chairman of a new cabinet. Many political prisoners were released in April, and the emergency ended in May, but the king retained the powers he had assumed. In July, 2005, Deuba and several others were convicted and sentenced on corruption charges by an anticorruption commission established by the king.

Nepal's two largest parties, the Congress and the Communist (United Marxist-Leninist), subsequently ended their support for a constitutional monarchy, and in September the Maoist rebels declared a three-month cease-fire. Nepal's opposition parties and the rebels agreed in Nov., 2005, jointly to support the reestablisment of constitutional democracy in the country, and the rebels then extended their cease-fire for a month. In Jan., 2006, however, the rebels announced the cease-fire would end because the government had continued its operations against them. By April, when the king offered to restore a democratic government, the situation in the country had become even more troubled, with the prodemocracy demonstrations and the government response to them increasingly confrontational and violent.

The reinstatement of parliament in April ushered in a rapid series of governmental changes. Koirala again became prime minister, and his government respond to the rebels' three-month cease-fire with an indefinite one. The monarchy was stripped of its powers and privileges, although not abolished, and Nepal was declared a secular nation. The government began talks with the rebels, who in June agreed in principle to join an interim government. Some 16,000 people are believed to have died in the country's decade-long civil war.

A Nov., 2006, accord called for the rebels to join the government and assemble in camps and place their weapons under UN supervision, and the following month an interim constitution under which the monarch was not head of state was agreed to. The question of the ultimate abolition of the monarchy was left to a constituent assembly that would be elected in 2007. Human-rights groups accused the rebels, however, of continuing to engage in extortion and conscription. In Jan., 2007, the rebels joined the interim parliament and the interim constitution came into effect; in April they joined a new interim government. Although some 31,000 rebels were in camps by late February, far fewer numbers of weapons had been sequestered. Also in January, long-simmering resentment of the native peoples of the Terai, known as Madhesis, led to protests and violence in S Nepal as the Madhesis pressed their demands for autonomy for the Terai. Although the government subsequently reached an agreement with the Madhesis, violence in the region continued throughout the year.

The government and the Maoists agreed to hold elections for the assembly in late 2007, and in June, 2007, parliament passed a constitutional amendment giving it the power to abolish the monarchy. The government later voted to nationalize the royal palaces and other royal property. The rebels withdrew from the government in Sept., 2007, demanding the monarchy be abolished before any elections, and the assembly elections were subsequently postponed into 2008. In Dec., 2007, the parliament voted to abolish the monarchy and establish a republic in Apr., 2008, after the constituent assembly elections; the Maoists then returned to the government.

In Feb., 2008, resurgent unhappiness in the Terai with the government led to a Madhesi strike and blockade that kept fuel and other supplies from Katmandu. The Maoists were accused of intimidating both voters and opposing candidates in rural areas in the campaigning for the April vote, but in the balloting for assembly members the Maoists led all other parties, doing well in both rural and urban areas and winning more than a third of the seats. At the constituent assembly's first meeting (May, 2008) its members voted to abolish the monarchy. The following month, after Maoists resigned from their cabinet seats, Prime Minister Koirala resigned.

In July, Nepal's first president, Ram Baran Yadav, was elected by the assembly with the support of Nepal's major non-Maoist parties. Yadav, a Madhesi and member of the Congress party, defeated the Maoist-backed candidate when Madhesi Janaadhikar Forum switched its support to Yadav. However, the Maoist leader Pushpa Kamal Dahal, better known by his nom de guerre, Prachanda, was elected prime minister with the support of most of the major parties in Aug., 2008. Prachanda resigned as prime minister in May, 2009, when the president reversed Prachanda's firing of the army chief, who was accused of disobeying government orders; Madhav Kumar Nepal, a Communist, subsequently became prime minister.

The Maoists mounted protests and strikes against the president, calling for an apology, but the government refused to negotiate. In the months following, progress toward drafting and adopting a new constitution was slow, and the timetable was extended several times. In June, 2010, the prime minister resigned in an unsuccessful attempt to resolve the political deadlock, but the parties were unable to agree on a new prime minister. Jhalanath Khanal, a Communist, was finally elected prime minister in Feb., 2011; in March the Maoists joined the new government.

Failure to reach an agreement on integrating rebel forces into the military led Khanal to resign in August, and Maoist party vice chairman Baburam Bhattarai was elected to succeed him. In November, the parties finally agreed to merge some 6,500 rebels into the armed forces. After the supreme court refused to extend the deadline for writing a constitution further, the government collapsed in May, 2012, after several parties withdrew. No agreement on a constitution was reached, and the assembly was dissolved.

Elections were called for Nov., 2012, but they were postponed after opposition parties refused to participate unless the prime minister resigned first. In Mar., 2013, an interim election government headed by the supreme court's chief justice, Khilray Regmi, was established. The constituent assembly elections were finally held in Nov., 2013, and resulted in significant gains for the Congress and Communist parties; the Maoists placed third. The Maoists asserted that the results were due to fraud, but agreed to join the assembly on condition that a parliamentary investigation into the election was conducted. Congress party leader Sushil Koirala, G. P. Koirala's cousin, became prime minister in Feb., 2014.

In early 2015, government attempts to bring a constitution to a vote, over objections by Maoists and opposition ethnic parties who called for a federal structure with ethnically based provinces, led to demonstrations and to general strikes enforced by violence. Parts of the country, including the capital, suffered severe damage from two earthquakes (April, May) in 2015, and nearly 9,000 people were killed.


See D. R. Regni, Medieval Nepal (4 vol., 1965–66); N. B. Thapa and D. P. Thapa, Geography of Nepal (enl. and rev. ed. 1969); I. R. Aryal and T. P. Dhungyal, A New History of Nepal (1970); R. S. Chauhan, The Political Development in Nepal, 1950–70 (1972) and Society and State Building in Nepal (1988); J. Whelpton, Nepal (1990); B. Crossette, So Close to Heaven: The Vanishing Buddhist Kingdoms of the Himalayas (1995); S. B. Ortner, Life and Death on Mt. Everest (1999); J. Gregson, Massacre at the Palace: The Doomed Royal Dynasty of Nepal (2002).

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Basic Data

Official Country Name: Kingdom of Nepal
Region (Map name): East & South Asia
Population: 25,284,463
Language(s): Nepali (official), English
Literacy rate: 27.5%
Area: 140,800 sq km
GDP: 5,497 (US$ millions)
Number of Television Stations: 1
Number of Television Sets: 130,000
Television Sets per 1,000: 5.1
Number of Cable Subscribers: 66,700
Cable Subscribers per 1,000: 2.9
Number of Radio Stations: 12
Number of Radio Receivers: 840,000
Radio Receivers per 1,000: 33.2
Number of Individuals with Computers: 70,000
Computers per 1,000: 2.8
Number of Individuals with Internet Access: 50,000
Internet Access per 1,000: 2.0

Background & General Characteristics

The Nepalese government rigidly controls the press. Laws regulate press activity and copyright stipulations, which are specific to the kingdom of Nepal because it did not sign the international Berne Convention regarding copyright. By the twenty-first century, Nepal had 2048 Constitutional provisions dictating how the press should publish news and information. Media often presents conflicting perspectives because of the varied policies and agendas constraining journalists.

In the early twenty-first century, the Department of Information said that Nepal has approximately 1,550 news publications of which 185 are published on a regular basis. Half of the publications are based in Kathmandu. Approximately 60 daily newspapers are published in Nepal; about 80 percent of Nepalese newspapers are weeklies. The Rastriya Samachar Samiti (RSS) National News Agency posts a reporter in each of Nepal's seventy-five districts in addition to a main office in Kathmandu and releases mostly government speeches. Two-thirds of the districts of the kingdom have newspapers and journals, which have low circulation rates. Although 85 percent of Nepalis live in rural areas, most mainstream Nepalese media published in the Kathmandu Valley ignores issues specific to those areas. Fifty-five percent of Nepal's 24 million population are illiterate, and poor roads and infrastructure limit print media distribution.

In 1898, Sudhasagar was the first newspaper published in Nepal. Gorkhapatra (Nepalese), published in Kathmandu since 1901, is Nepal's oldest newspaper still in circulation. Founder Maharaja Dev Shamsher Rana intended this newspaper to voice the Nepalese people's opinions and concerns. Instead, this government-owned periodical prints mostly speech texts and official pronouncements. Gorkhapatra became a daily in 1960 and had the largest circulation in Nepal with an estimated 75,000 copies. The language used in this newspaper is a complex version of Nepalese that is often difficult even for natives to comprehend. The contents of Gorkhapatra are similar to Rising Nepal, an English daily published by the government's Gorkhapatra Corporation that is intended for a tourist and expatriate readership. A Nepalese edition of Rising Nepal is also issued. Some news obtained from foreign press agencies is translated into Nepalese.

The Nepal media frequently features the royal family and palace events. King Birenda contributed a daily saying for editorial pages. Attempts to privatize the Gorkhapatra Publication Corporation have been unsuccessful. In the early 1980s, journalists became more vocal against government involvement with the media. Keshab Raj Pindali founded the influential independent Saptahik Bi-marsha (Weekly Review) in 1982. Prime Minister Surya Bahadur Thapa provided funds for Nepalese Awaj (Nepalese Voice) but did not force that newspaper to endorse only his liberal agenda. Nepalese Awaj advocated establishment of a multi-party government and denounced the politically corrupt bhumigat giroh (underground gang). After the April 1990 pro-democracy revolution, Rising Nepal and other newspapers began carrying news about the new political parties permitted to function in Nepal. Founded in 1993 as the first private morning daily, Kantipur newspaper had the largest circulation by the twenty-first century.

Many Nepalese magazines are printed in English. The Nepal Traveler is designed for distribution to tourists, hotels, and airports and features cultural stories such as events related to festivals and holidays. The weekly Nepal Press Digest was first published in Kathmandu in 1956 and prints news from foreign newspapers as well as political parties' information which official government papers either refuse to include or discuss with bias. Himal is a bimonthly prepared by the Kathmandu Himal Associates since 1988 that includes environmental essays, book reviews, and news concerning the region around the Himalayas. Alternative media includes Asmita Monthly, a feminist magazine published since 1989 with a circulation of 10,000 and an estimated readership ten times that number, which explores gender and human rights issues and promotes social responsibility.

Press Laws

In 1960, after King Mahendra Bir Bikram overthrew Nepal's parliamentary government and established the non-political party system Panchayat, media conformity was demanded by the dictatorial monarchy. The 1962 RSS Act specified that only the government news agency could exist. The Press and Publication Act of 1965 stated in section 30 that the government could order cessation of media considered harmful to public interests. A Press Advisory Council was established in 1967 as a means to ease relations with frustrated media professionals, but journalists had minimal input. Four years later, the National Communication Plan encouraged improvements of government-sanctioned media for Nepal's development. The government envisioned using radio to educate rural teachers. In 1975, a second Press and Publication Act forbade criticism of Nepalese royalty and government.

King Birenda Bir Bikram perpetuated his father's press policies until the 1990 democratic revolution, which the private press supported. The ban on political parties was lifted, and a multiparty coalition government was developed. The next year, the Nepalese Congress party won the first democratic election held in thirty-two years. This democratic revolution reduced some of the strict media controls because the new constitution addressed the right to distribute information. However, journalists were still controlled if they attempted to investigate and report on issues the government considered controversial.

State-Press Relations

Each publication or station in Nepal presents accounts based on their political affiliations. Ninety percent of Nepalese newspapers do not sell advertisements and rely on sponsors, usually politically related. Journalists often are active members of political parties and use the media to advance their political careers. Many editors and publishers gain their positions through political appointments and lack journalistic education and experience. As a result, reports tend to favor partisan agendas.

Representatives of independent media are usually unable to convince political parties to share news with them. Reporters risk losing their jobs if they attempt to write or broadcast pieces contrary to government media dictates. Nepal's constitution includes the right for Nepalis to have access to information, but the Nepalese government resists cooperating with independent media and risking the release of news which might be embarrassing for officials. The lack of credibility of many journalists causes Nepalis to be skeptical about news.

Reporters often describe journalism as one of Nepal's most dangerous professions. Many Nepalese journalists are afraid to report accurately about government corruption, especially concerning judiciary or police abuse of power, because they might be arrested and charged with contempt of court. Targeted journalists often have their offices raided or homes ransacked. In 1994, Harihar Birahi, editor of the weekly Bimarsha Nepalese, was fined and jailed for printing a cartoon depiction of Nepal's Supreme Court. Journalists Mathbar Singh Basnet and Sarachchandra Osti published a photograph of Princess Shruti Shah posed with an Indian actor in the weekly Punarjagaran Nepalese and were punished for implied criticism of the royal family. Om Sharma was imprisoned for 89 days in 1997 without a trial on charges that he had supported Maoist guerillas.

On June 7, 2001, the Kathmandu Post reported that the government had arrested Kantipur 's editor Yubaraj Ghimire and Kantipur Publications directors Kailash Sirohiya and Binod Raj Gyawali. The police officers claimed the journalists were guilty of printing rebel Maoist leader Dr. Baburam Bhattarai's editorial, which blamed a conspiracy for the June 1, 2001, massacre of King Birendra and his family. High-ranking Nepal authorities refused to answer reporters' questions concerning the charges. The Nepalese government had previously monitored the Kantipur Publications' investigative reports that focused on government corruption and scandals. Reporters speculated that media scrutiny and criticism had enraged government officials such as Prime Minister Girija Prasad Koirala who wanted to eliminate any freedom of the press. Both the Federation of Nepal Journalists Association and the Working Journalists' Association protested the arrest and noted that Nepalese journalists had long resisted efforts to silence media and resented psychological techniques intended to intimidate reporters, editors, and publishers. The groups also criticized the government for not publicizing facts about the royal killings. Nepalese and international media, human rights groups, and diplomats denounced the arrests and demanded that the prisoners be released. Former Prime Minister Sher Bahadur Deuba supported the media and stressed that freedom of the press was essential for democracy to thrive.

Minister for Information and Communication Shiva Raj Joshi justified the government's actions for intervening as reaction to anti-monarchy essays. At a press conference, Nepal officials requested that the media refrain from issuing material that might instigate national disunity and damage the government's integrity. The government established a branch for information to transmit approved news releases about the palace massacre to the media. Minister of State for Information and Communication, Puskar Nath Ojha urged the press to not antagonize the government.

Broadcast Media

Most Nepalese have access to information via radio. Established in 1950, the state-owned Radio Nepal broadcasts to all of Nepal except the Himalayas. The Radio Nepal meeting hall is the occasional site of government press conferences. The 1993 Communication Policy Act encouraged independent radio transmissions. By 1995, Radio Nepal began selling airtime to private investors for commercial broadcasts. Three years later, the government began issuing licenses to private FM radio stations. Approximately one dozen stations have been licensed, but they are not permitted to air news and political bulletins. Most stations are concentrated in the Kathmandu Valley, but some are located in other parts of Nepal. Radio Sagarmatha, established in 1998, was the first independent FM station, and operates from the base of Mount Everest. The BBC Nepalese Service has broadcast since 1994.

Beginning in December 1985, the state-owned Nepal Television Corporation began airing programs several hours daily. By the twenty-first century, there were 79,000 televisions in Nepal. Viewers often use satellite dishes to receive international broadcasts from CNN and the BBC in addition to Indian and foreign programs. Television is limited because only 15 percent of homes have electricity. Much broadcast media consists of entertainment rather than news.

Internet access is Nepal is limited by lack of equipment and related expenses. Journalists do not regularly use the Internet to research. Some sites post articles from the Rising Nepal and The Kathmandu Post online. The Nepal Photojournalists Association initiated a digital photograph service to make delivery more efficient.

Education & Training

Some Nepalese journalists are educated at foreign universities because of limited opportunities in Nepal. Journalism courses are offered at Tribhuvan and Purvanchal Universities, which have limited media equipment. The Nepal Association of Media Educators aspires to develop graduate programs for journalists to earn master's degrees in mass communication at Nepalese colleges. Reporters can also train at the Nepal Press Institute or Media Point, a journalism center in Kathmandu.

Professional media organizations include the Nepal Press Union, Journalism Research and Training Society of Nepal, and Nepal Forum of Environmental Journalists. Those groups present seminars and workshops to encourage professionalism and sponsor investigative journalism competitions.


Amatya, Purna P. Cumulative Index to Selected Nepalese Journals. Kathmandu: Centre for Nepal and Asian Studies, 1989.

Baral, Lok Raj. "The Press in Nepal, 1951-1974." Contributions to Nepalese Studies, 2. (February 1975): 169-186.

Belknap, Bruce J. A Selected Index of Articles from The Rising Nepal from 1969-1976. Kathmandu: Doumentation Centre, Centre for Nepal and Asian Studies, 1978.

Karmacharya, Madhav Lal. The Publishing World in Nepal. Kathmandu: Laligurans, 1985.

Kharel, P., ed. Media Nepal 2000. Kathmandu: Nepal Press Institute, 2000.

ed. Media Practices in Nepal. Kathmandu: Published by Nepal Press Institute with the support of DANIDA, 2001.

Malla, B.C. "Mass-media, Tradition and Change (an Overview of Change in Nepal)." Contributions to Nepalese Studies, vol. 10, nos. 1-2 (December 1982/June 1983): 69-79.

Pokhrel, Gokul Prasad, and Bharat Dutta Koirala, compilers. Mass Media Laws and Regulations in Nepal. Kathmandu: Nepal Press Institute, and Asian Mass Communication Research and Information Centre, Singapore, 1995.

Elizabeth D. Schafer

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Official name: Kingdom of Nepal

Area: 140,800 square kilometers (54,363 square miles)

Highest point on mainland: Mount Everest (8,850 meters/29,035 feet)

Lowest point on land: Kanchan Kalan (70 meters/230 feet)

Hemispheres: Northern and Eastern

Time zone: 5:45 p.m. = noon GMT

Longest distances: 885 kilometers (550 miles) from southeast to northwest; 201 kilometers (125 miles) from northeast to southwest

Land boundaries: 2,926 kilometers (1,818 miles) total boundary length; China 1,236 kilometers (768 miles); India 1,690 kilometers (1,050 miles)

Coastline: None

Territorial sea limits: None


Nepal is a mountainous, landlocked South Asian country situated on the southern slopes of the Himalayas between China's Tibet region to the north and India to the south. Nepal has a total area of 140,800 square kilometers (54,363 square miles), or slightly more than the state of Arkansas.


Nepal has no territories or dependencies.


Nepal has four seasons: Winter from December through February is cold and clear, with some snow; spring from March through May is warm, with some rain showers; summer from June through August is the season of the monsoon rains; and autumn from September through November is cool and clear. Nepal's climate also varies by elevation. Above 4,877 meters (16,000 feet), the temperature stays below freezing, and there is permanent snow and ice. The average January temperature in the Kathmandu Valley ranges from 2°C to 18°C (36° to 64°F); in July, it warms to 20°C to 29°C (68°F to 84°F). In the Tarai the annual temperatures range from 7°C to 40°C (44°F to 104°F). Roughly 80 percent of Nepal's precipitation happens during the summer monsoon season. Annual rainfall in the Kathmandu Valley averages 130 centimeters (51 inches), from as little as 25 centimeters (10 inches) to as much as 600 centimeters (236 inches).


Nepal can be divided into three distinct geographic regions, each of which forms an east-west horizontal band across the rectangle-shaped country: the Mountain Region, which constitutes almost three-fourths of the total area; the central hill area, which includes the Kathmandu Valley; and the Tarai, a narrow, flat belt that extends along the boundary with India in the northern part of the Gangetic Plain.


Nepal is a landlocked country. The nearest sea access is 644 kilometers (400 miles) to the southeast on the Indian Ocean's Bay of Bengal.


Rara Lake is Nepal's largest body of water, with an area of approximately 11 square kilometers (4 square miles). It is located at an elevation of 2,990 meters (9,600 feet) in the remote northwest of the country. The world's highest lake, Tilicho, is located in eastern Nepal, at an elevation of 4,919 meters (16,140 feet). A 1999 survey found 2,323 glacial lakes in Nepal.


Numerous streams and rivers flow generally southward out of Nepal's northern mountains, then meander across the Tarai Plain and finally join the Ganges in northern India. Three separate river systems, each having its headwaters on the Tibetan plateau, drain almost all of Nepal. The Kosi River drains the Eastern Mountains; the Narayani, the Western Mountains; and the Karnali, the Far Western Mountains. The Narayani's Kali Gandak tributary flows between the region's highest peaks, Dhaulagiri and Annapurna. The Kosi River has seven major tributaries; the principal one, the Arun, rises almost 160 kilometers (100 miles) inside the Tibetan plateau. The Karnali River is noted for its deep gorges and rapid current.


There are no deserts in Nepal.


The Tarai region, with a total area of 23,220 square kilometers (8,969 square miles), consists mainly of an alluvial plain along the boundary with India. A northern extension of the Gangetic Plain, the Tarai varies between 46 and 183 meters (150 and 600 feet) in altitude and between 8 and 88 kilometers (5 and 55 miles) in width.

Nepal's central hill region is north of the Tarai, and south of the Great Himalayas; its hills are called the Pahar complex. At 600 to 4,000 meters (1,968 to 13,123 feet), these two ranges of hills, the Siwalik and the Mahabharat, exceed the heights of mountains in many other countries. Siwalik range (sometimes called the Churia Hills or Churia range), on the northern edge of the Tarai, rises to nearly 1,524 meters (5,000 feet). The narrow Mahabharat range parallels the Siwalik some 32 kilometers (20 miles) to the north; summits in the Mahabharat reach elevations above 3,048 meters (10,000 feet). The hill region also includes the populous Kathmandu Valley, just south of the junction between the Eastern and Western Mountains. This circular basin of only 565 square kilometers (218 square miles) contains some of Nepal's largest cities, including the nation's capital, Kathmandu.

Wetlands are estimated to cover about 5 percent of Nepal. Nepal has four wetlands of particular importance. Koshi Tappu, covering 175 square kilometers (68 square miles) of the Tarai, is a nature reserve on the flood plain of the Sapta Kosi River. A mixture of marshes, mud flats, and reed beds, it provides a habitat for water birds as well as the last wild herds of water buffalo in Nepal. Three other wetlands designated as significant by Nepal's government are Ghodaghodi Tal, Beeshazar Tal, and the Jagdishpur Reservoir. All three are biodiverse habitats for birds, fish, and reptiles.


The complex mountain mass within Nepal's borders contains seven of the world's ten highest peaks. Six of them are more than 7,924 meters (26,000 feet) above sea level. Nepal's Mountain Region is part of the Himalayas, formed by the collision of the Indian subcontinent with the Asian landmass around twenty-five million years ago. The Great Himalayas are in the north. In northeastern Nepal, the Great Himalayas generally define the country's boundary with Tibet; in the northwest, they lie just to the south of the boundary. South of the Great Himalayas are the Lesser Himalayas, which in Nepal form the Mahabharat range. South of this system is the Siwalik range, part of the Outer Himalayas. Much lower than the Great Himalayas, the Mahabharat and the Siwalik belong to Nepal's Hill Region, although in most other countries they would be considered mountains.

Nepal's Mountain Region may be subdivided into three areas by two lines, one running generally northward from Kathmandu and the other about 241 kilometers (150 miles) to the west, extending northward from the foothills near the boundary with India. From east to west, these subdivisions are designated the Eastern Mountains, the Western Mountains and the Far Western Mountains. The whole Mountain Region is marked by a series of parallel north-south ridges flanking deep, narrow, southward-sloping valleys.

The Eastern Mountains contain five of the seven highest peaks in the world. The most famous of these is the world's highest summit, Mount Everest (Sagarmatha in Nepalese), at 8,850 meters (29,035 feet). It is located on the border with China. The world's third-tallest mountain, Kanchenjunga (8,585 meters/28,169 feet), towers along Nepal's eastern border with India. Among the tallest remaining peaks are Mount Lhotse (8,500 meters/27,890 feet); Mount Makalu (8,480 meters/27,824 feet); and Mount Cho Oyu (8,189 meters/26,867 feet).

The Western Mountains hold a jumble of ridges and deep valleys projecting at various angles from the main Himalayan range. Two mountains dominate the area: Dhaulagiri (8,172 meters/26,813 feet) and Annapurna at (8,077 meters/26,502 feet). The Far Western Mountain area is the driest and most sparsely inhabited section of the Mountain Region. Its scattered settlements are generally confined to its river valleys. Three passes in this area lead into Tibet.


Nepal has numerous deep canyons and river gorges. The world's deepest river gorge is said to be Kali Gandak (6,967 meters/22,860 feet deep), situated between the peaks of Dhaulagiri and Annapurna in north-central Nepal. The high-altitude valley of Mustang, north of the Himalayas, contains many dry, eroded canyons. Nepal's rivers carve mazes of canyons into the terrain, especially along the courses of the Bhote Koshi and the Karnali.


Dolpo is a 5,439-square-kilometer (2,100-square-mile) plateau bordering Tibet in Nepal's northwest. It includes Shey-Phoksumdo National Park, which is a habitat for the rare snow leopard. In the far west, the Khaptad Plateau, which rises to 3,000 meters (9,842 feet), is a national park with grasslands and forests.


The wild yak, still found in the mountains of Nepal, can survive at higher altitudes than any other mammal. Thanks to their large lung capacity, they can exist at altitudes of up to 6,096 meters (20,000 feet); however, this endangered species has difficulty surviving below 3,048 meters (10,000 feet).


Several large hydropower dams, intended to provide energy to India as well as to Nepal, have been built on Nepal's rivers and even more have been proposed, causing environmental controversies. The Karnali-Chisapani Bridge, which links western Nepal with a major east-west highway, is considered one of the most sophisticated engineering projects completed on the Asian continent.



Kelly, Thomas, and V. Carroll Dunham. The Hidden Himalayas. New York: Abbeville Press, 2001.

Krakauer, Jon. Into Thin Air: A Personal Account of the Everest Disaster. New York: Anchor Books, 1998.

Matthiessen, Peter. The Snow Leopard. New York: Penguin USA, 1996.

Web Sites

Nepal Internet Users Group: Nepal Net. (accessed March 20, 2003).

WelcomeNepal. (accessed March 20, 2003).

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140,800sq km (54,363sq mi)



capital (population):

Katmandu (696,852)




Nepalese rupee = 100 paisa

Independent kingdom in central Asia, between India (s) and China (n); the capital is Katmandu.

Land and climate

Nepal comprises three distinct regions. A s lowland area (terai) of grassland, forests, and national park is the location of Nepal's agriculture and timber industry. The central Siwalik mountains and valleys are divided between the basins of the Ghaghara, Gandak, and Kosi rivers. Between the Gandak and Kosi lies Katmandu valley, Nepal's most populous area and centre for its greatest source of foreign currency – tourism. The last region is the main section of the Himalayas and includes Mount Everest.

History and politics

In 1768, Nepal united under Gurkha rule. Gurkha expansion into n India led to conflict with Britain, and British victory led Nepal to ratify its present boundaries and accept permanent British representation in Katmandu. From 1846 to 1951, hereditary prime ministers from the Rana family ruled Nepal. In 1923, Britain recognized Nepal as a sovereign state. Gurkha soldiers fought in the British Army during both World Wars. In 1951, the Rana government was overthrown and the monarchy re-established. The first national constitution was adopted in 1959, and free elections were held. In 1960, King Mahendra dissolved parliament and introduced a political system based on village councils (panchayat). In 1972, Birendra succeeded his father as King. In 1990, after mass protests, a new constitution limited the power of the monarchy. In 1991 the Nepali Congress Party (NCP), led by G. P. Koirala, won multiparty elections. Despite frequent splits, the NCP dominated the unstable political in the 1990s, and Koirala led nine governments in ten years. Since 1975 a Maoist insurgency has claimed more than 2000 lives. In 2001, many of the royal family, including the King, were shot and killed by Crown Prince Dipendra, who then killed himself. Prince Gyanendra, brother of King Birendra, became king.


The most important economic activity is livestock farming (especially yaks) and the growing of herbs. Nepal is an undeveloped rural country, reliant on Indian trade and cooperation (2000 GDP per capita, US$1360).

Political map

Physical map


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NEPAL. A country in South Asia. Languages: Nepali/Gurkhali (official), the mother tongue of 58% of the people; other languages such as Bhojpuri and Gurung; English, the primary foreign language, but more prevalent than this status suggests. Although influenced by Britain and providing Gurkha soldiers for both the British and Indian armies, Nepal was never part of the British Empire. English in Nepal is unique in that it was introduced neither by colonization nor by missionaries. Until 1950, Nepal was a closed society ruled by hereditary prime ministers, but a tradition of English instruction came primarily from India, in whose universities most Nepalese teachers were educated. Since the 1960s, Nepal has had an open-door policy and English has become a major language of travel, tourism, and regional communication. In 1951, as part of a process of democratization, use of English in the media received some support. In 1985, there were 417 Nepali- and 32 English-language periodicals. English is widely used in advertising and there is a small body of creative writing. Radio and television have contributed to the diffusion of English and are used for teaching it. CODE-MIXING AND CODE-SWITCHING with English are as common as in other parts of South Asia; Nepalese English has much in common with that of northern India. See SOUTH ASIAN ENGLISH.

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Culture Name


Alternative Name



Identification. Nepal is named for the Kathmandu Valley, where the nation's founder established a capital in the late eighteenth century. Nepali culture represents a fusion of Indo-Aryan and Tibeto-Mongolian influences, the result of a long history of migration, conquest, and trade.

Location and Geography. Nepal is a roughly rectangular country with an area of 147,181 square miles (381,200 square kilometers). To the south, west, and east it is bordered by Indian states; to the north lies Tibet. Nepal is home to the Himalayan Mountains, including Mount Everest. From the summit of Everest, the topography plunges to just above sea level at the Gangetic Plain on the southern border. This drop divides the country into three horizontal zones: the high mountains, the lush central hills, and the flat, arid Terai region in the south. Fast-moving, snow-fed rivers cut through the hills and mountains from north to south, carving deep valleys and steep ridges. The rugged topography has created numerous ecological niches to which different ethnic groups have adapted. Although trade has brought distinct ethnic groups into contact, the geography has created diversity in language and subsistence practices. The result is a country with over thirty-six ethnic groups and over fifty languages.

Demography. The population in 1997 was just over 22.6 million. Although infant mortality rates are extremely high, fertility rates are higher. High birth rates in rural areas have led to land shortages, forcing immigration to the Terai, where farmland is more plentiful, and to urban areas, where jobs are available. Migration into cities has led to over-crowding and pollution. The Kathmandu Valley has a population of approximately 700,000.

Linguistic Affiliation. After conquering much of the territory that constitutes modern Nepal, King Prithvi Narayan Shah (17431775) established Gorkhali (Nepali) as the national language. Nepali is an Indo-European language derived from Sanskrit with which it shares and most residents speak at least some Nepali, which is the medium of government, education, and most radio and television broadcasts. For many people Nepali is secondary to the language of their ethnic group or region. This situation puts certain groups at a disadvantage in terms of education and civil service positions. Since the institution of a multiparty democracy in 1990, linguistic issues have emerged as hotly debated topics.

Symbolism. The culture has many symbols from Hindu and Buddhist sources. Auspicious signs, including the ancient Hindu swastika and Shiva's trident, decorate buses, trucks, and walls. Other significant symbols are the emblems (tree, plow, sun) used to designate political parties.

Prominent among symbols for the nation as a whole are the national flower and bird, the rhododendron and danfe; the flag; the plumed crown worn by the kings; and the crossed kukhris (curved knives) of the Gurkhas, mercenary regiments that have fought for the British Army in a number of wars. Images of the current monarch and the royal family are displayed in many homes and places of business. In nationalistic rhetoric the metaphor of a garden with many different kinds of flowers is used to symbolize national unity amid cultural diversity.

History and Ethnic Relations

Emergence of the Nation. Mongolian tribes from the east called Kiratis brought Buddhism in the seventh or eighth century b.c.e. Hinduism flourished in the third and fourth centuries c.e. under the Licchavis, an Indo-Aryan people from northern India, and after the migration of Hindus from India during the Mughal period. The Hindu Malla dynasties reigned in the Kathmandu Valley between the thirteenth and fifteenth centuries, encouraging tolerance toward Buddhism and an orthodox, caste-oriented form of Hinduism. Since unification in the late eighteenth century and through the hundred-year period of Rana rule, the culture of hill Hindus, Parbatiya, has been dominant.

The birth of the nation is dated to Prithvi Narayan Shah's conquest of the Kathmandu Valley kingdoms in 1768. The expansionist reigns of Shah and his successors carved out a territory twice the size of modern Nepal. However, territorial clashes with the Chinese in the late eighteenth century and the British in the early nineteenth century pushed the borders back to their current configuration.

National Identity. To unify a geographically and culturally divided land, Shah perpetuated the culture and language of high-caste Hindus and instituted a social hierarchy in which non-Hindus as well as Hindus were ranked according to caste-based principles. Caste laws were further articulated in the National Code of 1854.

By privileging the language and culture of high-caste Hindus, the state has marginalized non-Hindu and low-caste groups. Resentment in recent years has led to the organization of ethnopolitical parties, agitation for minority rights, and talk about the formation of a separate state for Mongolian ethnic groups.

Despite ethnic unrest, Nepalis have a strong sense of national identity and pride. Sacred Hindu and Buddhist sites and the spectacular mountains draw tourists and pilgrims and give citizens a sense of importance in the world. Other natural resources, such as rivers and flora and fauna are a source of national pride.

Ethnic Relations. The population consists of numerous racial, cultural, and linguistic groups that often are divided into three broad categories: Indo-Nepalese, Tibeto-Nepalese, and indigenous Nepalese. The Indo-Nepalese migrated from India over several centuries; they practice Hinduism, have Caucasian features, and speak Indo-Aryan languages. They have settled primarily in the lower hills and river valleys and the Terai. The Tibeto-Nepalese have distinctively Mongolian features and speak Tibeto-Burmese languages; these groups occupy the higher hills and mountainous areas. Different groups within this category practice Buddhism, animism, or Hinduism. There are scattered tribes of indigenous Nepalis, whose origins probably predate the arrival of Indo- and Tibeto-Nepalese peoples.

Hindu castes and Buddhist and animist ethnic groups were historically collapsed into a single caste hierarchy. At the top are high-caste Hindus. Below them are alcohol-drinking (matwali ) castes, which include Mongolian ethnic groups. At the bottom are untouchable Hindu castes that have traditionally performed occupations considered defiling by higher castes. The Newars of the Kathmandu Valley have a caste system that has been absorbed into the national caste hierarchy.

Historically, members of the highest castes have owned the majority of land and enjoyed the greatest political and economic privileges. Members of lower castes have been excluded from political representation and economic opportunities. The untouchable castes were not permitted to own land, and their civil liberties were circumscribed by law. Caste discrimination is officially illegal but has not disappeared. In 1991, 80 percent of positions in the civil service, army, and police were occupied by members of the two highest castes.

Urbanism, Architecture, and the Use of Space

Nepal historically was one of the least urbanized countries in the world, but urbanization is accelerating, especially in the capital, and urban sprawl and pollution have become serious problems. Kathmandu and the neighboring cities of Patan and Bhaktapur are known for pagoda-style and shikhara temples, Buddhist stupas, palaces, and multistory brick houses with elaborately carved wooden door frames and screened windows. Although the largest and most famous buildings are well maintained, many smaller temples and older residential buildings are falling into disrepair.

At the height of British rule in India, the Rana rulers incorporated Western architectural styles into palaces and public buildings. Rana palaces convey a sense of grandeur and clear separation from the peasantry. The current king's palace's scale and fortress-like quality illustrate the distance between king and commoner.

Rural architecture is generally very simple, reflecting the building styles of different caste and ethnic groups, the materials available, and the climate. Rural houses generally have one or two stories and are made of mud brick with a thatched roof. Village houses tend to be clustered in river valleys or along ridge tops.

Food and Economy

Food in Daily Life. Many Nepalis do not feel that they have eaten a real meal unless it has included a sizable helping of rice. Most residents eat a large rice meal twice a day, usually at midmorning and in the early evening. Rice generally is served with dal, a lentil dish, and tarkari, a cooked vegetable. Often, the meal includes a pickle achar, made of a fruit or vegetable. In poorer and higher-altitude areas, where rice is scarce, the staple is dhiro, a thick mush made of corn or millet. In areas where wheat is plentiful, rice may be supplemented by flat bread, roti. Most families eat from individual plates while seated on the floor. Though some urbanites use Western utensils, it is more common to eat with the hands.

Conventions regarding eating and drinking are tied to caste. Orthodox high-caste Hindus are strictly vegetarian and do not drink alcohol. Other castes may drink alcohol and eat pork and even beef. Traditionally, caste rules also dictate who may eat with or accept food from whom. Members of the higher castes were particularly reluctant to eat food prepared by strangers. Consequently, eating out has not been a major part of the culture. However, caste rules are relaxing to suit the modern world, and the tourist economy is making restaurants a common feature of urban life.

Food Customs at Ceremonial Occasions. At weddings and other important life-cycle events, feasts are generally hosted by the families directly involved, and numerous guests are invited. At such occasions, it is customary to seat guests on woven grass mats on the ground outside one's home, often in lines separating castes and honoring people of high status. Food is served on leaf plates, which can be easily disposed of. These customs, however, like most others, vary by caste-ethnic groups, and are changing rapidly to suit modern tastes.

Basic Economy. The large majority of the people are subsistence farmers who grow rice, maize, millet, barley, wheat, and vegetables. At low altitudes, agriculture is the principal means of subsistence, while at higher altitudes agropastoralism prevails. Many households maintain chickens and goats. However, few families own more than a small number of cows, water buffalo, or yaks because the mountainous topography does not provide grazing land for large animals.

Nepal is one of the poorest countries in the world. This poverty can be attributed to scarce natural resources, a difficult terrain, landlocked geography, and a weak infrastructure but also to feudal land tenure systems, government corruption, and the ineffectiveness of development efforts. Foreign aid rarely goes to the neediest sectors of the population but is concentrate in urban areas, providing jobs for the urban middle class. The name of the national currency is rupee.

Land Tenure and Property. Historically, a handful of landlords held most agricultural land. Civil servants often were paid in land grants, governing their land on an absentee basis and collecting taxes from tenant-farming peasants. Since the 1950s, efforts have been made to protect the rights of tenants, but without the redistribution of land.

Overpopulation has exacerbated land shortages. Nearly every acre of arable land has been farmed intensively. Deforestation for wood and animal fodder has created serious erosion.

Commercial Activities. The majority of commercial activity takes place at small, family-owned shops or in the stalls of sidewalk vendors. With the exception of locally grown fruits and vegetables, many products are imported from India and, to a lesser extent, China and the West. Jute, sugar, cigarettes, beer, matches, shoes, chemicals, cement, and bricks are produced locally. Carpet and garment manufacturing has increased significantly, providing foreign exchange. Since the late 1950s, tourism has increased rapidly; trekking, mountaineering, white-water rafting, and canoeing have drawn tourists from the West and other parts of Asia. The tourism industry has sparked the commercial production of crafts and souvenirs and created a number of service positions, such as trekking guides and porters. Tourism also has fueled the black market, where drugs are sold and foreign currency is exchanged.

Major Industries. There was no industrial development until the middle of the twentieth century. Much of earliest industrial development was accomplished with the help of private entrepreneurs from India and foreign aid from the Soviet Union, China, and the West. Early development focused on the use of jute, sugar, and tea; modern industries include the manufacturing of brick, tile, and construction materials; paper making; grain processing; vegetable oil extraction; sugar refining; and the brewing of beer.

Trade. Nepal is heavily dependent on trade from India and China. The large majority of imported goods pass through India. Transportation of goods is limited by the terrain. Although roads connect many major commercial centers, in much of the country goods are transported by porters and pack animals. The few roads are difficult to maintain and subject to landslides and flooding. Railroads in the southern flatlands connect many Terai cities to commercial centers in India but do not extend into the hills. Nepal's export goods include carpets, clothing, leather goods, jute, and grain. Tourism is another primary export commodity. Imports include gold, machinery and equipment, petroleum products, and fertilizers.

Division of Labor. Historically, caste was loosely correlated with occupational specialization. Tailors, smiths, and cobblers were the lowest, untouchable castes, and priests and warriors were the two highest Hindu castes. However, the large majority of people are farmers, an occupation that is not caste-specific.

Social Stratification

Classes and Castes. Historically, caste and class status paralleled each other, with the highest castes having the most land, capital, and political influence. The lowest castes could not own property or receive an education. Although caste distinctions are no longer supported by law, caste relations have shaped present-day social stratification: Untouchables continue to be the poorest sector of society, while the upper castes tend to be wealthy and politically dominant. While land is still the principal measure of wealth, some castes that specialize in trade and commerce have fared better under modern capitalism than have landowning castes. Changes in the economic and political system have opened some opportunities for members of historically disadvantaged castes.

Symbols of Social Stratification. Caste and ethnic groups are often identifiable by both physical traits and styles of dress and ornamentation. These symbols of ethnic identity along with distinctive forms of music, dance, and cuisine, continue to be important. The culture of caste Hindus is the national "prestige culture." In a process of "Sanskritization," members of diverse groups have acquired the customs, tastes, and habits of the ruling elite. Westernization is vying with Sanskritization as a cultural influence, and the ability to speak English is a mark of prestige and an asset in the job market. In cities, most men and an increasing number of women wear Western clothes. In the past, status was vested in the ownership of land and livestock; modern status symbols include motorcycles, cars, fashionable clothing, televisions, and computers.

Political Life

Government. The Shah dynasty has ruled the country since its unification, except during the Rana period from the mid-nineteenth to the mid-twentieth century. During the Rana administration, the Shah monarchs were stripped of power and the country was ruled by a series of prime ministers from the Rana noble family. In 1950, the Shah kings were restored to the throne and a constitutional monarchy was established that eventually took the form of the panchayat system. Under this system, political parties were illegal and the country was governed by local and national assemblies controlled by the palace. In 1990, the Movement for the Restoration of Democracy (People's Movement) initiated a series of popular demonstrations for democratic reforms, eventually forcing the king to abolish the panchayat system and institute a multiparty democracy.

The country is divided administratively into fourteen zones and seventy-five districts. Local and district-level administers answer to national ministries that are guided by policies set by a bicameral legislature made up of a House of Representatives and a National Council. The majority party in the House of Representatives appoints the prime minister. The executive branch consists of the king and the Council of Ministers.

Leadership and Political Officials. The government is plagued by corruption, and officials often rely on bribes to supplement their income. It is widely believed that influence and employment in government are achieved through personal and family connections. The king is viewed with ambivalence. He and his family have been criticized for corruption and political repression, but photos of the royal family are a popular symbol of national identity and many people think of the king as the living embodiment of the nation and an avatar of the god Vishnu.

Social Problems and Control. International attention has focused on the plight of girls who have been lured or abducted from villages to work as prostitutes in Indian cities and child laborers in carpet factories. Prostitution has increased the spread of AIDS. Foreign boycotts of Nepali carpets have helped curb the use of child labor but have not addressed the larger social problems that force children to become family wage earners.

Military Activity. The military is small and poorly equipped. Its primary purpose is to reinforce the police in maintaining domestic stability. Some Royal Nepal Army personnel have served in United Nations peacekeeping forces. A number of Nepalis, particularly of the hill ethnic groups, have served in Gurkha regiments. To many villagers, service in the British Army represents a significant economic opportunity, and in some areas soldiers' remittances support the local economy.

Nongovernmental Organizations and Other Associations

Aid organizations are involved in health care, family planning, community development, literacy, women's rights, and economic development for low castes and tribal groups. However, many projects are initiated without an understanding of the physical and cultural environment and serve the interests of foreign companies and local elites.

Gender Roles and Statuses

Division of Labor by Gender. Only men plow, while fetching water is generally considered women's work. Women cook, care for children, wash clothes, and collect firewood and fodder. Men perform the heavier agricultural tasks and often engage in trade, portering, and other work outside the village. Both men and women perform physically demanding labor, but women tend to work longer hours, have less free time, and die younger. In urban areas, men are far more likely to work outside the home. Increasingly, educational opportunities are available to both men and women, and there are women in professional positions. Women also frequently work in family businesses as shopkeepers and seamstresses.

Children and older people are a valuable source of household labor. In rural families, young children collect firewood, mind animals, and watch younger children. Older people may serve on village councils. In urban areas and larger towns, children attend school; rural children may or may not, depending on the proximity of schools, the availability of teachers, and the work required of them at home.

The Relative Status of Women and Men. Women often describe themselves as "the lower caste" in relation to men and generally occupy a subordinate social position. However, the freedoms and opportunities available to women vary widely by ethnic group and caste. Women of the highest castes have their public mobility constrained, for their reputation is critical to family and caste honor. Women of lower castes and classes often play a larger wage-earning role, have greater mobility, and are more outspoken around men. Gender roles are slowly shifting in urban areas, where greater numbers of women are receiving an education and joining the work force.

Marriage, Family, and Kinship

Marriage. Nepal is overwhelmingly patrilineal and patrilocal. Arranged marriages are the norm in the mainstream culture. Because marriages forge important social bonds between families, when a child reaches marriageable age, the family elders are responsible for finding a suitable mate of the appropriate caste, education level, and social stratum. The bride's family generally provides a substantial dowry to the groom's family, while the groom's family furnishes a much smaller gift of clothing, jewelry, and personal items to the bride. Both families are expected to host a feast during the wedding festivities, which generally last three days. The cost of a wedding, especially to the bride's family, is high and often puts families into debt.

Hindu castes do not generally approve of cross-cousin marriage, which is preferred among some Mongolian ethnic groups. Among some groups, a brideprice substitutes for a dowry. In others, clan exogamy is an important feature of marriages. Until recently, polygyny was legal and relatively common. Now it is illegal and found only in the older generation and in remote areas. Child marriages were considered especially auspicious, and while they continue to be practiced in rural areas, they are now prohibited by law. Love marriage is gaining in popularity in the cities, where romantic films and music inform popular sentiment and the economy offers younger people economic independence from the extended family.

Domestic Unit. Among landholding Hindu castes, a high value is placed on joint family arrangements in which the sons of a household, along with their parents, wives, and children, live together, sharing resources and expenses. Within the household, the old have authority over the young, and men over women. Typically, new daughters-in-law occupy the lowest position. Until a new bride has produced children, she is subject to the hardest work and often the harshest criticism in her husband's household. Older women, often wield a great deal of influence within the household.

The emphasis in joint families is on filial loyalty and agnatic solidarity over individualism. In urban areas, an increasing number of couples are opting for nuclear family arrangements.

Inheritance. Fathers are legally obligated to leave equal portions of land to each son. Daughters do not inherit paternal property unless they remain unmarried past age thirty-five. Although ideally sons manage their father's land together as part of a joint family, familial land tends to be divided, with holdings diminishing in every generation.

Kin Groups. Patrilineal kin groups form the nucleus of households, function as corporate units, and determine inheritance patterns. A man belongs permanently to the kinship group of his father, while a woman changes membership from her natal kin group to the kin group of her husband at the time of marriage. Because family connections are critical in providing access to political influence and economic opportunities, marriage alliances are planned carefully to expand kinship networks and strengthen social ties. Although women join the husband's household, they maintain emotional ties and contact with their families. If a woman is mistreated in her husband's household, she may escape to her father's house or receive support from her male kin. Consequently, women often prefer to marry men from the same villages.


Infant Care. Infants are carried on the mothers' back, held by a shawl tied tightly across her chest. Babies are breast-fed on demand, and sleep with their mothers until they are displaced by a new baby or are old enough to share a bed with siblings. Infants and small children often wear amulets and bracelets to protect them from supernatural forces. Parents sometimes line a baby's eyes with kohl to prevent eye infections.

Child Rearing and Education. Mothers are the primary providers of child care, but children also are cared for and socialized by older siblings, cousins, and grandparents. Often children as young as five or six mind younger children. Neighbors are entitled to cuddle, instruct, and discipline children, who are in turn expected to obey and defer to senior members of the family and community. Children address their elders by using the honorific form of Nepali, while adults speak to children using more familiar language. Because authority in households depends on seniority, the relative ages of siblings is important and children are often addressed by birth order.

Certain household rituals mark key stages in child's development, including the first taste of rice and the first haircut. When a girl reaches puberty, she goes through a period of seclusion in which she is prohibited from seeing male family members. Although she may receive special foods and is not expected to work, the experience is an acknowledgment of the pollution associated with female sexuality and reproductivity.

From an early age, children are expected to contribute labor to the household. The law entitles both girls and boys to schooling; however, if a family needs help at home or cannot spare the money for uniforms, books, and school fees, only the sons are sent to school. It is believed that education is wasted on girls, who will marry and take their wage-earning abilities to another household. Boys marry and stay at home, and their education is considered a wise investment.


The customary greeting is to press one's palms together in front of the chest and say namaste ("I greet the god within you"). Men in urban areas have adopted the custom of shaking hands. In the mainstream culture, physical contact between the sexes is not appropriate in public. Although men may be openly affectionate with men and women with women, even married couples do not demonstrate physical affection in public. Some ethnic groups permit more open contact between the sexes.

Hospitality is essential. Guests are always offered food and are not permitted to help with food preparation or cleaning after a meal. It is polite to eat with only the right hand; the hand used to eat food must not touch anything else until it has been thoroughly washed, for saliva is considered defiling. When drinking from a common water vessel, people do not touch the rim to their lips. It is insulting to hit someone with a shoe or sandal, point the soles of one's feet at someone, and step over a person.


Religious Beliefs. Eighty-six percent of Nepalis are Hindus, 8 percent are Buddhists, 4 percent are Muslims, and just over 1 percent are Christians. On a day-to-day level, Hindus practice their religion by "doing puja, " making offerings and prayers to particular deities. While certain days and occasions are designated as auspicious, this form of worship can be performed at any time.

Buddhism is practiced in the Theravadan form. There are two primary Buddhist traditions: the Buddhism of Tibetan refugees and high-altitude ethnic groups with cultural roots in Tibet and the Tantric form practiced by Newars.

There is a strong animistic and shamanic tradition. Belief in ghosts, spirits, and witchcraft is widespread, especially in rural areas. Spiteful witches, hungry ghosts, and angry spirits are thought to inflict illness and misfortune. Shamans mediate between the human and supernatural realms to discover the cause of illness and recommend treatment.

Religious Practitioners. Many forms of Hindu worship do not require the mediation of a priest. At key rites of passage such as weddings and funerals, Brahmin priests read Vedic scriptures and ensure the correct performance of rituals. At temples, priests care for religious icons, which are believed to contain the essence of the deities they represent. They are responsible for ensuring the purity of the temple and overseeing elaborate pujas.

Buddhist monasteries train young initiates in philosophy and meditation. Lay followers gain religious merit by making financial contributions to monasteries, where religious rites are performed on behalf of the general population. Within Buddhism there is a clerical hierarchy, with highly esteemed lamas occupying the positions of greatest influence. Monks and nuns of all ranks shave their heads, wear maroon robes, and embrace a life of celibacy and religious observance.

Rituals and Holy Places. Nepal occupies a special place in both Hindu and Buddhist traditions. According to Hindu mythology, the Himalayas are the abode of the gods, and are specifically associated with Shiva, one of the three principal Hindu deities. Pashupatinath, a large Shiva temple in Kathmandu, is among the holiest sites in Nepal and attracts Hindu pilgrims from all over South Asia. Pashupatinath is only one of thousands of temples and shrines scattered throughout Nepal, however. In the Kathmandu Valley alone, there are hundreds of such shrines, large and small, in which the major gods and goddesses of the Hindu pantheon, as well as local and minor divinities, are worshiped. Many of these shrines are constructed near rivers or at the base of pipal trees, which are themselves considered sacred. For Buddhists, Nepal is significant as the birthplace of Lord Buddha. It is also home to a number of important Buddhist monasteries and supas, including Boudha and Swayambhu, whose domeshaped architecture and painted all-seeing eyes have become symbols of the Kathamandu Valley.

Death and the Afterlife. Hindus and Buddhists believe in reincarnation. An individual's meritorious actions in life will grant him or her a higher rebirth. In both religions the immediate goal is to live virtuously in order to move progressively through higher births and higher states of consciousness. Ultimately, the goal is to attain enlightenment, stopping the cycle of rebirth.

In the Hindu tradition, the dead are cremated, preferably on the banks of a river. It is customary for a son to perform the funeral rites. Some Buddhists also cremate bodies. Others perform what are called "sky burials," in which corpses are cut up and left at sacred sites for vultures to carry away.

Medicine and Health Care

Infant mortality is high, respiratory and intestinal diseases are endemic, and malnutrition is widespread in a country where life expectancy is fifty-seven years. Contributing to this situation are poverty, poor hygiene, and lack of health care. There are hospitals only in urban areas, and they are poorly equipped and unhygienic. Rural health clinics often lack personnel, equipment, and medicines. Western biomedical practices have social prestige, but many poor people cannot afford this type of health care. Many people consult shamans and other religious practitioners. Others look to Ayurvedic medicine, in which illness is thought to be caused by imbalances in the bodily humors. Treatment involves correcting these imbalances, principally through diet. Nepalis combine Ayurvedic, shamanic, biomedical, and other systems.

Although health conditions are poor, malaria has been eradicated. Development efforts have focused on immunization, birth control, and basic medical care. However, the success of all such projects seems to correlate with the education levels of women, which are extremely low.

The Arts and Humanities

Literature. Nepal's literary tradition dates only to the nineteenth century with Bhanubhakta Acharya's adaptation of the Hindu epic, Ramayana, for a Nepali readership. The development of literature in Nepal has been hindered by heavy government control and censorship, which led Nepali authors and poets to seek publication outside of Nepal until the 1930s, when Nepal's first literary journal, Sharada, created a more open venue for literary expression. Among Nepal's greatest writers and poets are Lakshmi Prasad Devkota, Lekhnath Paudyal, Balkrishna Sama, and Guruprasad Mainali.

Graphic Arts. Much of Nepali art is religious. Newari artisans create cast-bronze statuary of Buddhist and Hindu deities as well as intricately painted tangkas that describe Buddhist cosmology. The creation and contemplation of such art constitutes a religious act.

Performance Arts. Dramatic productions often focus on religious themes drawn from Hindu epics, although political satire and other comedic forms are also popular. There is a rich musical heritage, with a number of distinctive instruments and vocal styles, and music has become an marker of identity for the younger generation. Older people prefer folk and religious music; younger people, especially in urban areas, are attracted to romantic and experimental film music as well as fusions of Western and Asian genres.

The State of the Physical and Social Sciences

Universities are underfunded, faculties are poorly paid, and library resources are meager. Nepalis accord less respect to degrees from universities than to degrees obtained abroad and many scholars seek opportunities to study overseas or in India. Despite these limitations, some fine scholarship has emerged, particularly in the social sciences. In the post-1990 period, political reforms have permitted a more open and critical intellectual environment.


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Marie Kamala Norman

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Nepal, a kingdom in the Himalayas, was formed in the 18th cent. out of the expansion of the Gurkha clans of the Kathmandu valley. It is extremely diverse—embracing mountains and valleys and Indo-Aryan- and Tibetan-Burman-speaking peoples. In 1814–16 the kingdom was defeated by Lord Hastings and brought into tributary relations with British India. Its dynasty, a sacral Hindu kingship, has survived and has only recently accepted constitutional forms of monarchy. The country is among the poorest in the world and has long been dependent on the earnings of its famous Gurkha soldiers from service in British-Indian armies.

David Anthony Washbrook

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The people of Nepal are called Nepalis or Nepalese. Sherpas, the people who live in the Himalaya Mountains, have become well known as guides for mountain-climbing expeditions.

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Nepalall, appal (US appall), awl, Bacall, ball, bawl, befall, Bengal, brawl, call, caul, crawl, Donegal, drawl, drywall, enthral (US enthrall), fall, forestall, gall, Galle, Gaul, hall, haul, maul, miaul, miscall, Montreal, Naipaul, Nepal, orle, pall, Paul, pawl, Saul, schorl, scrawl, seawall, Senegal, shawl, small, sprawl, squall, stall, stonewall, tall, thrall, trawl, wall, waul, wherewithal, withal, yawl •carryall • blackball • handball •patball • hardball • netball • baseball •paintball • speedball • heelball •meatball • stickball • pinball • spitball •racquetball • basketball • volleyball •eyeball, highball •oddball • softball • mothball •korfball • cornball •lowball, no-ball, snowball •goalball •cueball, screwball •goofball • stoolball • football •puffball • punchball • fireball •rollerball • cannonball • butterball •catchall • bradawl • holdall • Goodall

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