U.S. DEPARTMENT OF STATE
BACKGROUND NOTE: NEPAL
Official Name: 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. 600,000).
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 ten 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 (30-60 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--Nepalese (sing. and pl.). Adjective--Nepalese or
Population (1993 est.): 19 million.
Annual growth rate: 2.5%.
Ethnic groups (caste and ethnicity are often used interchangeably):
Brahman, Chetri, Newar, Gurung, Magar, Tamang, Rai, Limbu, Sherpa,
Tharu, and others.
Religions: Hinduism (86.2%), Buddhism (7.8%), Islam (3.8%) and others
(2.2%). Languages: Nepali and more than
Education: Years compulsory--0. Attendance--primary 81%, secondary
30%. Literacy--38% (52% male, 18% female).
Health: Infant mortality rate--102/1,000. Life expectancy--54 yrs.
(male), 52 yrs. (female).
Work Force: Agriculture--81%. Industry--3%. Services--11%. Other--
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
Subdivisions: 5 development regions, 14 zones and 75 districts.
Political parties (Lower House representation): United Marxist-Leninist
(Communist Party of Nepal), Nepali Congress Party, National Democratic
Elections: At least every five years.
Suffrage: Universal over 18.
Central government budget (1994): $854 million.
Defense/Police (1994): $114 million
National Day: Democracy Day,
Falgun 7 (mid-February).
Flag: Two blue-edged red triangles pointing away from staff, with
symbols of the sun and moon in white.
GDP (1994-est.): $4.1 billion.
Annual growth rate: 6%.
Per capita income: $200.
Avg. inflation rate (1993-94): 9.6%.
Natural resources: Water, hydropower, scenic beauty, limited but
agricultural land, timber.
Agriculture (42% of GDP): Products--rice, wheat, maize, sugarcane,
oilseed, jute, millet, potatoes. Land--25% cultivated.
Industry (20% of GDP): Types--carpets, garments, cement, cigarettes,
bricks, sugar, soap, matches, jute, hydroelectric power.
Trade (1994-est. ): Exports--$460 million: carpets, garments. Major
markets--Germany, U.S. Imports--$1.3 million: manufactured goods.
Official exchange rate (December 1994):
49 Nepalese rupees=US$1.00.
Fiscal Year: July 16-July 15. n
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 90% Hindu, the official state
religion. Hinduism, however, has synthesized with Buddhism in Nepal.
As a result, 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
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 Nepalese 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
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 quasi-constitutional 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
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
free and fair in which the Nepali Congress won 110 seats out of 205 to
form the government. The largest opposition, the United Marxist and
Leninist Party (UML), won 69 seats. Girija Prasad Koirala became prime
minister and formed the government. In May/June of 1992 the structure
of Nepal's new democratic government was completed following local
elections in which the Nepali Congress Party scored a convincing
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
The 1994 election defeat of the Nepali Congress Party by the UML
has made Nepal the world's first Communist monarchy. The politically-
moderate UML also was a champion of multiparty democracy during the
years of struggle, and has supported the country's free-market reforms.
Man Mohan Adhikary, 72, the president of the Communist Party who spent
17 years in prison for fighting to restore democracy, is the new prime
The Communist Party formed a minority government in December
1994. The new Government's major policy statements call for continued,
if somewhat slower, economic liberalization and privatization of state
enterprises, land reform, and the establishment of a Human Rights
Political parties agreed in 1991 that the monarchy would remain to
enhance political stability and provide an important symbol of national
identity for the culturally diverse Nepali people.
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 hundreds of small privately-owned newspapers in addition
to the two state-owned newspapers. Views expressed since the 1990
move to democracy are extremely varied and vigorous. Radio and
television media remain state owned and normally follow the views of the
government. The law strictly forbids the media to criticize or satirize
the king or any member of the royal family.
Principal Government Officials
King--Birendra Bir Bikram Shah Devi
Queen--Aishwarya Rajya Laxmi Devi Shah
Prime Minister, Royal Palace Affairs--Man Mohan Adhikary
Deputy Prime Minister, Foreign Affairs and Defense--Madhav Kumar Nepal
Home Affairs--Khadga Prasad Sharma Oli
Finance--Bharat Mohan Adhikary
Local Development and Supply--Chandra Prakash Mainali
Agriculture, Land Reforms and
Education, Culture and Social Welfare--Modnath Prashit
Information and Communications--Pradip Kumar Nepal
Labour and Health--Padma Ratna Tuladhar
Ambassador to the United States--Pradeep Khatiwada, Charge d'Affairs
Ambassador to the United Nations--Vacant
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 under $200. 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
Nepal has completed seven economic development plans and began its
eighth in 1991; its currency was recently made convertible, and a number
of state enterprises have been earmarked for privatization. Government
priorities over the years have been the development of transportation
and communication facilities, agriculture, and industry. Since 1975,
improved government administration and rural development efforts have
Agriculture remains Nepal's principal economic activity, employing
81% of the population and providing almost half of the country's income.
Only about 20% of the total area is cultivable; another 33% is forested;
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.
Economic development in social services and infrastructure have
made progress. A countrywide primary education system is under
development and Tribhuvan University has several campuses. Although
eradication efforts continue, malaria had been controlled in the fertile
but previously uninhabitable Terai region in the south. Kathmandu is
linked to India and nearby hill regions by road and an expanding highway
Major towns are connected to the capital by telephone and domestic air
services. A system of internal finance and public administration has
been established. The export-oriented carpet and garment industries
have grown rapidly in recent years and together now account for some 80%
of merchandise exports.
Nepal's merchandise trade balance has improved somewhat in recent
years with the growth of the carpet and garment industries. The trade
deficit steadily rose in the early 1990s, fueled by the results of trade
disputes with India and erratic monsoons. Despite a rapid increase in
manufactured exports during the past five years, particularly carpets
and garments, imports have increased even faster and trade deficit has
accordingly climbed from $432 million in 1992 to $687 million in 1993
and may reach $840 million in 1994. The annual monsoon rain or lack of
it strongly influences economic growth. Real GDP growth fell from 6% in
1990 to 3% in 1992 and 1993 before recovering to 8% in 1994.
Strong export performance, including earnings from tourism, and
external aid have helped improve the overall balance of payments
situation and increase international reserves. Nepal receives
substantial amounts of external assistance from India, the People's
Republic of China, the United Kingdom, the United States, Japan, and
Germany. Several multilateral organizations, such as the World Bank,
the Asian Development Bank, and the UN Development Program also provide
assistance. By 1994, Nepal had foreign exchange reserves equal to eight
months of imports.
Progress has been made in exploiting Nepal's major economic
resources--tourism and hydroelectricity. With eight of the world's ten
highest mountain peaks--including Mt. Everest at 8,800 m (29,000 ft)--
hiking, mountain climbing, and other tourism is growing. Swift rivers
flowing south through the Himalayas have massive hydroelectricity
potential to service domestic needs and the growing demand from India.
The two countries have joint irrigation-hydroelectric projects on the
Kosi, Trisuli, and Gandaki rivers. Several other hydroelectric
projects, at Kulekhani and Marsyangdi, have been completed; still
others are planned.
The environmental impact of Nepal's hydroelectric projects (HEP) has
been limited by the fact that most are "run-of-river" with no water
storage. The largest under active consideration is the controversial
Arun III 201 megawatt project. A national electricity grid is in place
and consumption is increasing at 15% to 20% a year.
Population pressure on natural resources is increasing. At current
rates of growth, Nepal's population will reach 20-22 million by the turn
of the century. 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
Nepal's military consists of an army of about 35,000 troops organized
into a royal guards brigade, seven infantry brigades, a special forces
unit, an air wing, four support brigades (logistics, engineer, signal,
and artillery), and 44 independent infantry companies. Training
assistance is provided by India, Pakistan, Bangladesh, and the United
Kingdom. U.S. training assistance is provided via an annual $100,000
International Military Education and Training Program (IMET) grant.
The Royal Nepalese Army has served with distinction in numerous UN
peacekeeping missions and currently has contingents deployed with the UN
Interim Force in Lebanon (UNIFIL), the UN Protective Force (UNPROFOR),
and in Somalia with UNOSOM II. Nepalese troops have fought in the
British army since 1814 and for the Indian army since 1947, which
inherited some of the British army's regiments at independence.
Agreements allowing the British and Indians to recruit in Nepal still
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
often use indiscriminate force in quelling leftist-inspired protests. In
addition, there have been reports of torture under detention and
widespread reports of custodial abuse. The Government's unwillingness
to investigate or enforce accountability for recent and past abuses
remains a concern.
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 closer than with China.
India and Nepal restored trade relations in 1990, after a break caused
by India's security concerns over Nepal's relations with China. The two
countries have since undertaken renegotiations regarding trade and
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 non-aligned policy and often votes with the Non-aligned
Movement in the United Nations. The country also 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
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 the alleviation of
The United States has provided more than $500 million in bilateral
economic assistance to Nepal since 1951. In recent years, annual
bilateral U.S. economic assistance through the Agency for International
Development (AID) has averaged $15 million. AID supports agriculture,
health, family planning, environmental, democratization, and economic
liberalization efforts in Nepal. The United States also contributes to
international institutions and private voluntary organizations working
in Nepal. Multilateral contributions to date approagh an additional
$500 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 140 Peace Corps volunteers work in Nepal.
Principal U.S. Officials
Deputy Chief of Mission--Peter Bodde
Counselor for Administrative Affairs--William Campbell
AID Director--Frederick Machmer
Peace Corps Director--Donovan Russell
Political and Economic Officer--Peter S. Gadzinski
Economic and Commercial Officer--Craig Arness
Consular Officer--Rehka Arness
Public Affairs Officer--David A. Queen
The U.S. embassy in Nepal is located in Pani Pokhari, Kathmandu (tel:
(1) 411179. Fax:  (1) 419963). The U.S. Agency for International
Development is located at the embassy (tel:  (1) 411179. Fax:
Most of the following information resources are available free at public
and Federal depository libraries in the United States or for a fee from
the Superintendent of Documents, U.S. Government Printing Office, P.O.
Box 37194, Pittsburgh, PA 15250-7954. To order, call (202) 512-1800 or
fax: (202) 512-2250.
U.S. Department of State. U.S. Department of State Dispatch.
U.S. Department of State. Department of State Foreign Affairs Network
(DOSFAN). A new service on the Internet providing timely, global access
to official U.S. foreign policy information. Updated daily. Accessible
U.S. Department of State. U.S. Foreign Affairs on CD-ROM, 1990-1994.
New quarterly foreign policy library with more than 4,000 official
documents and publications.
U.S. Department of State. Consular Affairs Bulletin Board--a free
electronic bulletin board service, available by modem: (202) 647-9225.
American University. Area Handbook for Nepal, Bhutan, and Sikkim.
U.S. Embassy of Nepal. Doing Business in Nepal, December 1994.
Available directly from the Bureau of South Asian Affairs (SA/INS), U.S.
Department of State (tel. (202) 647-2351) and from the U.S. Embassy in
Kathmandu at Pani Pokhari, Kathmandu (tel:  (1) 411179. Fax:
 (1) 419963).
International Trade Administration. "Nepal." Country Commercial
Guides. Annual. Also available from the U.S. Department of Commerce.
U.S. Department of State. Key Officers of Foreign Service Posts: Guide
for Business Representatives. Biannual. U.S. Department of Commerce:
National Trade Data Bank on the Internet (gopher.stat-usa.gov) and on
CD-ROM. Call the NTDB Help-Line at (202)482-1986 for more information.
The U.S. Department of State's Consular Information Program provides a
variety of timely information of interest to travelers,
including Travel Warnings and Consular Information Sheets on all the
countries of the world plus helpful advice on enjoying your trip abroad.
The can be obtained at no cost by telephone at (202) 647-5225 or by fax
at (202) 647-3000. Travel information is also on-line: access the
Consular Affairs Bulletin Board at (202) 647-9225, by modem with
Travel Warnings are issued when the Department recommends that
Americans avoid travel to a certain country. Information Sheets exist
for all countries and cover immigration practices, currency regulations,
health conditions, areas of instability, crime and security information,
political disturbances, and the addresses of the U.S. embassies and
consulates in the country.
Health Information: Travelers can check the latest information on
health requirements and conditions in a country with the U.S. Centers
for Disease Control and Prevention in Atlanta, Georgia. Call the Hotline
at (404) 332-4559 for telephonic or fax information on the most recent
health advisories, immunization recommendations or requirements, and
other advice concerning your destination. No immunizations are required
for entry to Nepal. Gamma globulin is recommended for all areas.
Malaria suppressants are recommended for areas below 4,000 ft. in
Protection against polio, typhus, and meningitis is suggested.
Tourism: Contact your travel agent or the Embassy of Nepal at 2131
Leroy Place, NW, Washington, DC 20008 (tel. 202-667-4550) for further
Published by the United States Department of State -- Bureau of Public
Affairs in conjunction with the Bureau of South Asian Affairs -- Office
of Public Communication -- Washington, DC --January 1995--Managing
Editor: Peter Knecht. Editor: Deborah Guido-O'Grady.
Background Notes Series. This material is in the public domain and may
be reprinted without permision; citation of this source is appreciated.
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