15 March 2010
Registered Charity no: 1098661
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Nepal    
Background information
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Nepal

 According to its Interim Constitution, Nepal, officially known as the State of Nepal (previously known as Kingdom of Nepal) is a landlocked nation in South Asia, bordering the People's Republic of China (Tibet) to the north and India to the south, east and west. Nepal previously had the distinction of being the world's only Hindu state, with over eighty percent of the people following this faith. However, in May 2006, Nepal was declared a secular state.

The Nepali landscape is diverse, ranging from the humid Terrai in the south to the impressive Himalayas in the north. Nepal has eight of the world's ten highest mountains, including Mount Everest (29,035 ft; 8,850 m) on the border with China. Kathmandu is the capital and largest city. The exact origin of the name Nepal is uncertain, but the most popular understanding is that it is derived from Ne (holy) and pal (cave).

After a long and rich history, during which the region has splintered and coalesced under a variety of absolute rulers, Nepal became a constitutional monarchy in 1990. This arrangement has been marked by increasing instability, both in the parliament and, since 1996, throughout large swathes of the country that have been fought over by Maoist insurgents. The Maoists have sought to overthrow the monarchy and establish their own form of republic; this has led to a civil war in which more than 12,000 people have died. On the pretext of quashing the insurgents, who now control about seventy percent of the country, the king unilaterally declared a "state of emergency" early in 2005, closing down the parliament and assuming all executive powers.

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Economy of Nepal
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Economy of Nepal

Agriculture sustains 76% of the population and accounts for about 39% of the GDP, services comprise 41%, and industry 22%. Hilly and mountainous terrain in the northern two-thirds of the country has made the building of roads and other infrastructure difficult and expensive. There were just over 8,500 km of paved roads, and one 59 km railway line in the south in 2003. Aviation is in a better state, with 48 airports, ten of them with paved runways.


There is less than one telephone per 19 people; landline services are not adequate nationwide but concentrated in cities and district headquarters; mobile telephony is in a reasonable state in most parts of the country with increased accessibility and affordability. There were around 175,000 Internet connections in 2005, but after the imposition of the "state of emergency", intermittent losses of service were reported. Uninterrupted Internet connections have resumed after the brief period of confusion as Nepal's second major people's revolution took place to overthrow the King's absolute power.


Its landlocked location and technological backwardness and the long-running civil war have also prevented Nepal from fully developing its economy. The country receives foreign aid from India, Japan, the United Kingdom, the United States, the European Union, China, Switzerland, and Scandinavian countries. The government's budget is about US$1.153 billion, with expenditures of $1.789bn (FY05/06). The inflation rate has dropped to 2.9% after a period of higher inflation during the 1990s. The Nepali Rupee has been tied to the Indian Rupee at an exchange rate of 1.6 for many years. Since the loosening of exchange rate controls in the early 1990s, the black market for foreign exchange has all but disappeared. A long-standing economic agreement underpins a close relationship with India.


The distribution of wealth among the Nepali is consistent with that in many developed and developing countries: the highest 10% of households control 39.1% of the national wealth and the lowest 10% control only 2.6%.


Nepal's workforce of about 10 million suffers from a severe shortage of skilled labour. Agriculture employs 81% of the workforce, services 16% and manufacturing/craft-based industry 3%. Agricultural produce——mostly grown in the Terrai region bordering India——includes rice, corn, wheat, sugarcane, root crops, milk, and water buffalo meat. Industry mainly involves the processing of agricultural produce, including jute, sugarcane, tobacco, and grain. The spectacular landscape and deep, exotic culture of Nepal represents considerable potential for tourism, but growth in this export industry has been stifled by recent political events.

The rate of unemployment and underemployment approaches half of the working-age population. Thus many Nepali citizens move to India in search of work, the Gulf countries and Malaysia being new sources of work. Poverty is acute. Nepal receives US$50 million a year through the Gurkha soldiers who serve in the Indian and British armies and are highly esteemed for their skill and bravery. The total remittance value is worth around 1 billion USD, including money sent from Persian Gulf and Malaysia, who combined employ around 700,000 Nepali citizens.


Nepal's GDP for the year 2005 is estimated at just over US$39 billion (adjusted to Purchasing Power Parity), making it the 83rd-largest economy in the world. Per-capita income is less than US$ 300. Nepal's exports of mainly carpets, clothing, leather goods, jute goods and grain total $822 million. Import commodities of mainly gold, machinery and equipment, petroleum products and fertilizer total US$2 bn. India (53.7%), the US (17.4%), and Germany (7.1%) are its main export partners. Nepal's import partners include India (47.5%), the United Arab Emirates (11.2%), China (10.7%), Saudi Arabia (4.9%), and Singapore (4%).


(Ref:  Wikipedia (The Free Encyclopedia)  http://en.wikipedia.org/wiki/Nepal )

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