Background: In 1951 the Nepalese monarch ended the century-old system of rule by hereditary premiers and instituted a cabinet system of government. Reforms in 1990 established a multiparty democracy within the framework of a constitutional monarchy.
Environment Current issues: deforestation (overuse of wood for fuel and lack of alternatives); contaminated water (with human and animal wastes agricultural runoff and industrial effluents); wildlife conservation; vehicular emissions
Legislative branch: bicameral Parliament consists of the National Council (60 seats; 35 appointed by the House of Representatives 10 by the king and 15 elected by an electoral college; one-third of the members elected every two years to serve six-year terms) and the House of Representatives (205 seats; members elected by popular vote to serve five-year terms)
Judicial branch: Supreme Court (Sarbochha Adalat) chief justice is appointed by the monarch on recommendation of the Constitutional Council the other judges are appointed by the monarch on the recommendation of the Judicial Council
Political parties and leaders: Communist Party of Nepal/United Marxist-Leninist or CPN/UML [Madhav Kumar NEPAL general secretary]; Marxist-Leninist [Sahana PRADHAM chairman Bam Dev GAUTAM general secretary]; National Democratic Party or NDP (also called Rastriya Prajantra Party or RPP) [Surya Bahadur THAPA]; Nepal Sadbhavana (Goodwill) Party or NSP [Gajendra Narayan SINGH president]; Nepal Workers and Peasants Party or NWPP [Narayan Man BIJUKCHHE party chair]; Nepali Congress or NC [Girija Prasad KOIRALA party president Sushil KOIRALA general secretary]; Rastriya Jana Morcha [Chitra Bahadur K. C. chairman]; Samyukta Janmorcha Nepal [Lila Mani POKHAREL general secretary]
International organization participation: AsDB CCC CP ESCAP FAO G-77 IBRD ICAO ICFTU ICRM IDA IFAD IFC IFRCS ILO IMF IMO Intelsat Interpol IOC ISO (correspondent) ITU MONUC NAM OPCW SAARC UN UNCTAD UNESCO UNIDO UNIFIL UNMIBH UNMIK UNMOP UNMOT UNTAET UPU WFTU WHO WIPO WMO WToO WTrO (applicant)
Flag description: red with a blue border around the unique shape of two overlapping right triangles; the smaller upper triangle bears a white stylized moon and the larger lower triangle bears a white 12-pointed sun
Economy overview: Nepal is among the poorest and least developed countries in the world with nearly half of its population living below the poverty line. Agriculture is the mainstay of the economy providing a livelihood for over 80% of the population and accounting for 41% of GDP. Industrial activity mainly involves the processing of agricultural produce including jute sugarcane tobacco and grain. Production of textiles and carpets has expanded recently and accounted for about 80% of foreign exchange earnings in the past three years. Agricultural production is growing by about 5% on average as compared with annual population growth of 2.3%. Since May 1991 the government has been moving forward with economic reforms particularly those that encourage trade and foreign investment e.g. by reducing business licenses and registration requirements in order to simplify investment procedures. The government has also been cutting expenditures by reducing subsidies privatizing state industries and laying off civil servants. More recently however political instability - five different governments over the past few years - has hampered Kathmandu's ability to forge consensus to implement key economic reforms. Nepal has considerable scope for accelerating economic growth by exploiting its potential in hydropower and tourism areas of recent foreign investment interest. Prospects for foreign trade or investment in other sectors will remain poor however because of the small size of the economy its technological backwardness its remoteness its landlocked geographic location and its susceptibility to natural disaster. The international community's role of funding more than 60% of Nepal's development budget and more than 28% of total budgetary expenditures will likely continue as a major ingredient of growth.
Exports: $485 million (f.o.b. 1998) but does not include unrecorded border trade with India Commodities: carpets clothing leather goods jute goods grain Partners: India 33% US 26% Germany 25% (FY97/98)
Imports: $1.2 billion (f.o.b. 1998) Commodities: gold machinery and equipment petroleum products fertilizer Partners: India 31% China/Hong Kong 16% Singapore 14% (FY97/98)