Kingdom of Nepal
Area: 147,181 sq. km. (56,136 sq. mi.); about the size and shape of Tennessee, bordering China and India.
Cities: Capital--Kathmandu (pop. l.l million). Other cities--Biratnagar, Patan, Pokhara, Birganj, Dharan, Nepalganj.
Terrain: Flat and fertile in the southern Terai region; terraced cultivation and swiftly flowing mountain rivers in the central hills; and the high Himalayas in the north. Eight of the world's 10 highest peaks are in Nepal. Kathmandu, the capital, is in a broad valley at 1,310 meters (4,300 ft.) elevation.
Climate/Time Zone: Subtropical in the south to cool summers and severe winters in the northern mountains. The monsoon season is from June through September and brings 75 to 150 centimeters (30 in.-60 in.) of rain. Showers occur almost every day. Nepal is 10 hours and 45 minutes ahead of Eastern Standard Time and does not observe Daylight Saving Time.
Nationality: Noun--Nepali (sing.). Adjective--Nepalese or Nepali.
Population (2001 census): 23.1 million.
Annual growth rate: 2.24%.
Rural population (85.8%): female population--50.1 %; share of population in the terai 49.1%, share of population in the hills 49.1 %, and share of population in the mountains 7%.
Ethnic groups (caste and ethnicity are often used interchangeably): Brahman, Chetri, Newar, Gurung, Magar, Tamang, Rai, Limbu, Sherpa, Tharu, and others.
Religions: Hinduism (80.6%), Buddhism (10.7%), Islam (4.2%) and others (4.2%). Languages: Nepali and more than 12 others.
Education: Years compulsory--0. Attendance--primary 80.4%, secondary 20%. Literacy—53.7% (65.1% male, 42.5% female).
Health: Infant mortality rate--64.2/1,000. Life expectancy--58.3 yrs. (male), 42.5 yrs. (female).
Work force: Agriculture--85%; industry--3%; services--11%; other--1%.
Type: Parliamentary Democracy and Constitutional Monarchy.
Constitution: November 9, 1990.
Branches: Executive--prime minister (head of government), king (head of state). Legislative--Parliament consisting of House of Representatives (Lower House: 205 members) and National Assembly (Upper House: 60 members). Judicial--Supreme Court, 11 appellate courts, 75 district courts.
Subdivisions: 5 development regions, 14 zones, and 75 districts. 75 District Development Committees, 58 municipalities, 3,913 Village Development Committees, and 335,217 Ward Committees.
Political parties: Lower House representation--Nepali Congress Party, United Marxist-Leninist (Communist Party of Nepal), National Democratic Party (RPP), Nepal Goodwill Party (NSP), National People's Front, others. Elections--Every 5 years.
Suffrage: Universal over 18.
Central government budget (2003): $1.25 billion.
Defense/police (2002): $176 million.
National Day: Democracy Day, Falgun 7 (mid-February). The King's birthday, July 7.
GDP (2003 est.): $5.85 billion.
Annual growth rate: 2.25%.
Per capita income: $242.
Avg. inflation rate (FY 2002-03 for first 9 months): 8.1%.
Natural resources: Water, hydropower, scenic beauty, limited but fertile agricultural land, timber.
Agriculture (38% of GDP): Products--rice, wheat, maize, sugarcane, oilseed, jute, millet, potatoes. Land--25% cultivated.
Industry (20% of GDP): Types--carpets, pashmina, garments, cement, cigarettes, bricks, sugar, soap, matches, jute, hydroelectric power.
Trade (2002-03 available for the first 9 months est.): Exports--$493.11 million: carpets, pashmina, garments. Major markets--Germany, U.S. Imports--$1.2 billion: manufactured goods. Major supplier--India.
Central government budget (FY 2002-03): $1.22 billion, defense/police allocation $188.2 million. Official exchange rate (June 2003): 75.9 Nepalese rupees=U.S.$1. Fiscal Year: July 16-July 15.
Perched on the southern slopes of the Himalayan Mountains, the Kingdom of Nepal is as ethnically diverse as its terrain of fertile plains, broad valleys, and the highest mountain peaks in the world. The Nepalese are descendants of three major migrations from India, Tibet, and Central Asia.
Among the earliest inhabitants were the Newars of the Kathmandu Valley and aboriginal Tharus in the southern Terai region. The ancestors of the Brahman and Chetri caste groups came from India, while other ethnic groups trace their origins to Central Asia and Tibet, including the Gurungs and Magars in the west, Rais and Limbus in the east, and Sherpas and Bhotias in the north.
In the Terai, a part of the Ganges Basin with 20% of the land, much of the population is physically and culturally similar to the Indo-Aryan people of northern India. People of Indo-Aryan and Mongoloid stock live in the hill region. The mountainous highlands are sparsely populated. Kathmandu Valley, in the middle hill region, constitutes a small fraction of the nation's area but is the most densely populated, with almost 5% of the population.
Religion is important in Nepal; Kathmandu Valley has more than 2,700 religious shrines alone. Nepal is about 81% Hindu. The constitution describes the country as a "Hindu Kingdom," although it does not establish Hinduism as the state religion. Buddhists account for about 11% of the population. Buddhist and Hindu shrines and festivals are respected and celebrated by all. Nepal also has small Muslim and Christian minorities. Certain animistic practices of old indigenous religions survive.
Nepali is the official language, although a dozen different languages and about 30 major dialects are spoken throughout the country. Derived from Sanskrit, Nepali is related to the Indian language, Hindi, and is spoken by about 90% of the population. Many Nepalese in government and business also speak English.
Modern Nepal was created in the latter half of the 18th century when Prithvi Narayan Shah, the ruler of the small principality of Gorkha, formed a unified country from a number of independent hill states. The country was frequently called the Gorkha Kingdom, the source of the term "Gurkha" used for Nepali soldiers.
After 1800, the heirs of Prithvi Narayan Shah proved unable to maintain firm political control over Nepal. A period of internal turmoil followed, heightened by Nepal's defeat in a war with the British from 1814 to 1816. Stability was restored after 1846 when the Rana family gained power, entrenched itself through hereditary prime ministers, and reduced the monarch to a figurehead. The Rana regime, a tightly centralized autocracy, pursued a policy of isolating Nepal from external influences. This policy helped Nepal maintain its national independence during the colonial era, but it also impeded the country's economic development.
In 1950, King Tribhuvan, a direct descendant of Prithvi Narayan Shah, fled his "palace prison" to newly independent India, touching off an armed revolt against the Rana administration. This allowed the return of the Shah family to power and, eventually, the appointment of a non-Rana as prime minister. A period of quasiconstitutional rule followed, during which the monarch, assisted by the leaders of fledgling political parties, governed the country. During the 1950s, efforts were made to frame a constitution for Nepal that would establish a representative form of government, based on a British model.
In early 1959, King Mahendra issued a new constitution, and the first democratic elections for a national assembly were held. The Nepali Congress Party, a moderate socialist group, gained a substantial victory in the election. Its leader, B.P. Koirala, formed a government and served as prime minister.
Declaring parliamentary democracy a failure 18 months later, King Mahendra dismissed the Koirala government and promulgated a new constitution on December 16, 1962. The new constitution established a "partyless" system of panchayats (councils) which King Mahendra considered to be a democratic form of government closer to Nepalese traditions. As a pyramidal structure progressing from village assemblies to a Rastriya Panchayat (National Parliament), the panchayat system enshrined the absolute power of the monarchy and kept the King as head of state with sole authority over all governmental institutions, including the cabinet (Council of Ministers) and the Parliament.
King Mahendra was succeeded by his 27 year-old son, King Birendra, in 1972. Amid student demonstrations and anti-regime activities in 1979, King Birendra called for a national referendum to decide on the nature of Nepal's government--either the continuation of the panchayat system with democratic reforms or the establishment of a multiparty system. The referendum was held in May 1980, and the panchayat system won a narrow victory. The king carried out the promised reforms, including selection of the prime minister by the Rastriya Panchayat.
Movement To Restore Democracy
In 1990, the political parties again pressed the king and the government for change. Leftist parties united under a common banner of the United Left Front and joined forces with the Nepali Congress Party to launch strikes and demonstrations in the major cities of Nepal. This "movement to restore democracy" was initially dealt with severely, with more than 50 persons killed by police gunfire and hundreds arrested. In April, the king capitulated. Consequently, he dissolved the Panchayat system, lifted the ban on political parties, and released all political prisoners.
An interim government was sworn in on April 19, 1990, headed by Krishna Prasad Bhattarai as prime minister presiding over a cabinet made up of members of the Nepali Congress Party, the communist parties of Nepal, royal appointees, and independents.
The new government drafted and promulgated a new constitution in November 1990, which enshrined fundamental human rights and established Nepal as a parliamentary democracy under a constitutional monarch. International observers characterized the May 1991 elections as free and fair in which the Nepali Congress won 110 seats out of 205 to form the government. The 1994 elections resulted in a Nepali Congress defeat and a hung Parliament, with a minority government led by the United Marxist and Leninist Party (UML). The next 5 years saw five successive governments. Although the Nepali Congress won a clear majority (113 out of 205) in the latest parliamentary elections, held in 1999, the pattern of short-lived governments persists, with three different Nepali Congress Party Prime Ministers holding office from mid-1999 to mid-2001, before the King dissolved the House and dismissed the elected prime minister in the latter part of 2002.
GOVERNMENT AND POLITICAL CONDITIONS
Nepal is a constitutional monarchy with a democratic, parliamentary form of government that is multiethnic, multilingual, Hindu, and retains the king in the role of head of state. The former "partyless" panchayat system of government was abolished in April 1990 (see "Movement to Restore Democracy.").
The 1994 election defeat of the Nepali Congress Party by the UML made Nepal the world's first communist monarchy, with Man Mohan Adhikary prime minister. In mid-1994, the Parliament was dissolved due to dissension within the Nepali Congress Party. The subsequent general election, held November 15, 1994, gave no party a majority and led to several years of unstable coalition governments. As of the May 1999 general elections, the Nepali Congress Party once again heads a majority government. There have been three Nepali Congress Party Prime Ministers since the 1999 elections: K.P. Bhattarai (5/31/99-3/17/00); G.P. Koirala (3/20/00-7/19/01); and Sher Bahadur Deuba (7/23/01-10/04/02).
On June 1, 2001, Crown Prince Dipendra reportedly shot and killed his father, King Birendra; his mother, Queen Aishwarya; his brother; his sister; his father's younger brother, Prince Dhirendra; and several aunts, before turning the gun on himself. After his death 2 days later, the late King's surviving brother Gyanendra was proclaimed king.
In February 1996, the leaders of the Maoist United People's Front began a violent insurgency, waged through killings, torture, bombings, kidnappings, extortion, and intimidation against civilians, police, and public officials in more than 50 of the country's 75 districts. Approximately 7,000 police, civilians, and insurgents have been killed in the conflict since 1996. The Government and Maoists held peace talks in August, September, and November 2001, but they were unsuccessful, and the Maoist resumed their violent insurgency.
Shortly after the 2001 peace talks failed, the King declared at state of emergency, and the Parliament approved this declaration by a two-thirds vote. On the recommendation of Prime Minsiter Deuba, on May 22, 2002, the King dissolved the House and 6 months later dismissed the Prime Minister. The King retained full control of the army and government,. appointing Lokendra Bahadur Chand Prime Minister.
January 29, 2003 marked the second Maoist cease-fire. Peace talks between the Chand government and the Maoists were held in April and May 2003. In June 2003, as a result of political party demonstrations, Prime Minister Chand resigned, and the King appointed Surya Bahadur Thapa as Prime Minister.
Nepal's judiciary is legally separate from the executive and legislative branches and has increasingly shown the will to be independent of political influence. The judiciary has the right of judicial review under the constitution. The king appoints the chief justice and all other judges to the supreme, appellate, and district courts upon the recommendation of the Judicial Council. All lower court decisions, including acquittals, are subject to appeal. The Supreme Court is the court of last appeal. The king may grant pardons and may suspend, commute, or remit any sentence by any court.
There are three major daily English-language newspapers, The Kathmandu Post, The Himalayan Times, and The Rising Nepal, of which the latter and its vernacular sister publication are owned by a government corporation. There are literally hundreds of smaller daily and other periodicals that are privately owned and of diverse journalistic quality. Views expressed since the 1990 move to democracy are varied and vigorous. Currently 25 radio and 3 television stations--including Kantipur Television, set to begin transmission from July 7, 2003--are privately owned and operated due to liberalization of licensing regulations. Radio Nepal and Nepal Television are government-owned and operated. There are nearly 200 cable television operators nationwide, and satellite dishes to receive television broadcasts abound. The law strictly forbidding the media to criticize or satirize the king or any member of the royal family has not been enforced in recent months. Since the King's October 4, 2002 dissolution of the cabinet critical op-ed pieces have appeared, and negative commentary by civil society has been liberally reported in the media without repercussion.
Principal Government Officials
King--Gyanendra Bir Bikram Shah Dev
Queen--Komal Rajya Laxmi Devi Shah
Prime Minister; Royal Palace Affairs; Foreign Affairs; Defense; General Administration; Law and Justice; Parliamentary Affairs--Surya Bahadur Thapa
Home Affairs and Local Development--vacant
Finance--Prakash Chandra Lohani
Agriculture and Cooperatives--vacant
Education and Sports--Hari Bahadur Basnet
Information and Communications--Kamal Thapa
Labor and Transport Management--vacant
Physical Planning and Works--Buddhiman Tamang
Forest and Soil Conservation--vacant
Population and Environment--vacant
Health--Bijaya Raj Bhattarai
Culture, Tourism, and Civil Aviation--Shervendra Nath Shukla
Industry, Commerce, and Supplies--vacant
Women, Children, and Social Welfare--Renu Kumari Yadar
Science and Technology--vacant
Ambassador to the United States--Jaya Pratap Rana
Ambassador to the United Nations--Marari Raj Sharma
Nepal maintains an embassy in the United States at 2131 Leroy Place, NW, Washington, DC 20008 (tel. 202-667-4550; fax: 202-667- 5534). The Nepalese Mission to the United Nations is at 300 E. 46th Street, New York, NY 10017.
Nepal ranks among the world's poorest countries with a per capita income of just over $240. Based on national calorie/GNP criteria, an estimated 38% of the population is below the poverty line. An isolated, agrarian society until the mid-20th century, Nepal entered the modern era in 1951 without schools, hospitals, roads, telecommunications, electric power, industry, or civil service. The country has, however, made progress toward sustainable economic growth since the 1950s and is committed to a program of economic liberalization.
Nepal launched its 10th economic development plan in 2002; its currency has been made convertible, and 14 state enterprises have been privatized, 2 liquidated, and 2 dissolved. Foreign aid accounts for more than half of the development budget. The Government of Nepal has shown increasing commitment to fiscal transparency, good governance, and accountability. Also in 2002 the government began to prioritize development projects and eliminate wasteful spending. In consultation with civil society and donors, the government cut 160 development projects that were driven by political patronage.
Agriculture remains Nepal's principal economic activity, employing 81% of the population and providing 38% of GDP. Only about 25% of the total area is cultivable; another 33% is forested, and most of the rest is mountainous. Rice and wheat are the main food crops. The lowland Terai region produces an agricultural surplus, part of which supplies the food-deficient hill areas. Because of Nepal's dependence on agriculture, the annual monsoon rain, or lack of it, strongly influences economic growth.
Nepal's exports recorded a marginal 1% increase and a 5% increase in imports for the first 9 months of FY 2002-03. This limited increase in exports is due to a slow-down in demand from abroad for Nepali's main exports: readymade garments, pashmina products, and woolen carpets. Thus the trade deficit for the first 9 months of FY 2002-03 increased 27% from the previous year to $705 million. Real GDP growth during 1996-2002 averaged less than 5%. Real growth experienced a one-time jump in 1999, rising to 6% before slipping back to below 5%. In 2002 the GDP recorded a negative growth rate of 0.6%, largely because of the Maoist insurgency.
Despite the growing trade deficit, Nepal's balance of payments has increased due to money sent home from Nepalis working abroad. In addition, Nepal receives substantial amounts of external assistance from India, the United Kingdom, the United States, Japan, Germany, and the Scandinavian countries. Several multilateral organizations, such as the World Bank, the Asian Development Bank, and the UN Development Program, also provide assistance. In June 1998, Nepal submitted its memorandum on a foreign trade regime to the World Trade Organization and in May 2000 began direct negotiations on its accession.
With eight of the world's 10 highest mountain peaks--including Mt. Everest at 8,848 m (29,000 ft.)--Nepal is a tourist destination for hikers and mountain climbers. Yet with a worsening internal security situation and a global economic slow-down, tourism declined 34% in FY 2002. Swift rivers flowing south through the Himalayas have massive hydroelectric potential to service domestic needs and growing demand from India. Several other hydroelectric projects, at Kulekhani and Marsyangdi, were completed in the mid- to late 1980s. In the early nineties, one large public sector project and a number of private projects were planned; some have been completed. The most significant privately financed hydroelectric projects currently in operation are the Khimti Khola (60 MW) and the Bhote Koshi (36 MW).
The environmental impact of Nepal's hydroelectric projects has been limited by the fact that most are "run-of-river," with only one storage project undertaken to date. The largest under active consideration is the private sector West Seti (750 MW) storage project that is dedicated to electricity exports. An Australian company is promoting the project for implementation along build-own-transfer lines and is presently negotiating a power purchase agreement with the Indian Power Trading Corporation. Negotiations with India for a power purchase agreement have been underway for several years, but agreement on pricing and capital financing remains a problem. Currently domestic demand for electricity is increasing at 8%-10% a year.
Population pressure on natural resources is increasing. Over-population is already straining the "carrying capacity" of the middle hill areas, particularly the Kathmandu Valley, resulting in the depletion of forest cover for crops, fuel, and fodder and contributing to erosion and flooding. Although steep mountain terrain makes exploitation difficult, mineral surveys have found small deposits of limestone, magnesite, zinc, copper, iron, mica, lead, and cobalt.
Progress has been achieved in education, health, and infrastructure. A countrywide primary education system is under development, and Tribhuvan University has several campuses. Although eradication efforts continue, malaria has been controlled in the fertile but previously uninhabitable Terai region in the south. Kathmandu is linked to India and nearby hill regions by an expanding highway network.
Nepal's military consists of an army of about 70,000 troops. The army is organized into three divisions--eastern, central, and western--with 15 infantry brigades, including the Royal Palace, Artillery, Engineer, Signal, Parachute, Logistics, Transportation, and Air Transportation. There are 47 independent companies, 37 battalions, 15 brigades, and 3 divisions in the Royal Nepalese Army. U.S. training assistance is provided via an annual International Military Education and Training program (IMET) grant. Nepal also purchases U.S. military equipment through Foreign Military Financing (FMF) and Foreign Military Sales (FMS) programs. Other military hardware and training assistance is provided by India, China Pakistan, Bangladesh, and the United Kingdom.
His Majesty King Gyanendra Bir Bikram Shah Dev is the Supreme Commander of the Royal Nepal Army (RNA) while Prime Minister Surya Bahadur Thapa serves as Minister of Defense. Gen. Pyar Jung Thapa is the Chief of Army Staff. The RNA has contributed more than 39,000 peacekeepers to a variety of UN-sponsored peacekeeping missions such as UN Interim Force in Lebanon (UNIFIL), the UN Protective Force (UNPROFOR), UN Operational Mission Somalia II (UNOSOMII), and UN Mission in Haiti (UNMIH). Currently, RNA forces serve in the UN Mission of Support in East Timor (UNTAET) the UN Mission in Sierra Leone (UNAMSIL), and the United Nations Organization Mission in the Democratic Republic of the Congo (MONUC).
The U.S.-Nepali military relationship focuses on support for democratic institutions, civilian control of the military, and the professional military ethic, to include respect for human rights. Both countries have had extensive contact over the years. RNA units have served with distinction alongside American forces in places such as Haiti, Iraq, and Somalia.
U.S.- Nepali military engagement continues today through IMET, Enhanced International Peacekeeping Capabilities (EIPC), FMF, and various conferences and seminars. The U.S. military sends many RNA officers to America to attend military schooling such as the Command and General Staff School and the U.S. Army War College. The IMET budget for FY 2003 was $400,000.
The EIPC program is an interagency program between the Departments of Defense and State to increase the pool of international peacekeepers and to promote interoperability. To date, Nepal has received about $2.1 million in EIPC funding.
Commander Pacific coordinates military engagement with Nepal through the Defense Attach� Office. Security assistance programs are administered through the Office of Defense Cooperation. In FY 2002 Nepal received $14 million in FMF grants, and an additional $3 million was allocated in FY 2003.
Progress has been achieved in the transition to a more open society and greater respect for human rights since political reform began in 1990; however, substantial problems remain. Poorly trained police forces sometimes use excessive force in quelling violent demonstrations. In addition, there have been reports of torture under detention and widespread reports of custodial abuse. In 2000, the government established the Human Rights Commission, a government-appointed commission with a mandate to investigate human rights violations. To date, the Commission has investigated 51 complaints. The government is sometimes slow to follow the Commission's recommendations or to enforce accountability for recent and past abuses.
Before the cease-fire in 2002, both the Maoists and security personal committed numerous human rights violations. The Maoist continued and increased tactics of kidnapping, torture, bombings, intimidation, killings, and conscription of children. Within the Nepalese security force violations ranging from disappearances to executions are recorded.
Some restrictions continue on freedom of expression. Trafficking in women and child labor remain serious problems. Discrimination against women and lower castes is prevalent.
As a small, landlocked country wedged between two larger and far stronger powers, Nepal seeks good relations with both India and China. Nepal formally established relations with China in 1956, and since then their bilateral relations have generally been very good. Because of strong cultural, religious, linguistic, and economic ties, Nepal's association with India traditionally has been close. India and Nepal restored trade relations in 1990, after a break caused by India's security concerns over Nepal's relations with China. A bilateral trade treaty was signed in 1996.
Nepal has played an active role in the formation of the economic development-oriented South Asian Association for Regional Cooperation (SAARC) and is the site of its secretariat. On international issues, Nepal follows a nonaligned policy and often votes with the Nonaligned Movement in the United Nations. Nepal participates in a number of UN specialized agencies and is a member of the World Bank, International Monetary Fund, Colombo Plan, and the Asian Development Bank.
The United States established official relations with Nepal in 1947 and opened its Kathmandu embassy in 1959. Relations between the two countries have always been friendly. U.S. policy objectives toward Nepal include supporting democratic institutions and economic liberalization, promoting peace and stability in South Asia, supporting Nepalese independence and territorial integrity, and alleviating poverty.
The United States has provided more than $746 million in bilateral economic assistance to Nepal since 1951. In recent years, annual bilateral U.S. economic assistance through the Agency for International Development (USAID) has averaged $27 million. USAID supports agriculture, health, family planning, environmental, democratization, and hydropower development efforts in Nepal. The United States also contributes to international institutions and private voluntary organizations working in Nepal. U.S. contributions to multilateral organizations to date approach an additional $725 million, including humanitarian assistance. The Peace Corps operation in Nepal--established in 1962 and one of the largest in the world--has projects in agriculture, education, health, and other rural programs. About 100 Peace Corps Volunteers work in Nepal.
Principal U.S. Officials
Ambassador--Michael K. Malinowski
Deputy Chief of Mission--Robert K. Boggs
Counselor for Administrative Affairs--Michele I. Sprechman
USAID Director--Donald B. Clark
Peace Corps Director--David O'Connor
Political and Economic Officer--Patricia Mahoney
Consular Officer--Steven Brault
Public Affairs Officer--Constance Colding Jones
Regional Security Officer--James W. Gayhart
Regional Environment Officer--Katherine E. Koch
Political/Military Officer--David V. Vacala
Defense Cooperation Officer--Maj. Randall C. Koehlmoos, USA
The U.S. Embassy in Nepal is located in Pani Pokhari, Kathmandu and carries all the latest information for travelers as well as providing links to other U.S. Government sites--tel:  (1) 441-1179; fax:  (1) 441-9963.
The U.S. Agency for International Development (USAID) is located in Rabi Bhawan, Kathmandu (tel:  (1) 427-0144; fax:  (1) 427-2357).
The Peace Corps office is located in Kunja Niwas, Shiva Marga 186, Maharajgunj, Kathmandu, Nepal. (Tel:  (1) 441-9581; Fax:  (1) 441-0075). The American Center (Public Affairs Section) is located in Gyaneshwor, Kathmandu (tel:  (1) 441-5845; fax:  (1) 441-5847).