U.S. DEPARTMENT OF STATE BACKGROUND NOTE: NEPAL JANUARY 1995 Official Name: Kingdom of Nepal PROFILE Geography 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. People Nationality: Noun--Nepalese (sing. and pl.). Adjective--Nepalese or Nepali. 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 12 others. 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-- 5%. Government 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. Political parties (Lower House representation): United Marxist-Leninist (Communist Party of Nepal), Nepali Congress Party, National Democratic Party, others. 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. Economy 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 fertile 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. Major supplier--India. Official exchange rate (December 1994): 49 Nepalese rupees=US$1.00. Fiscal Year: July 16-July 15. n PEOPLE 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 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. HISTORY 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 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 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. Democracy Develops 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 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 victory. 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 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 minister. 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 Commission. 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 Cabinet Ministers-- 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 Management--Radha Krishna Mainali 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. ECONOMY 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 economic liberalization: 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 been emphasized. 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 network. 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 cobalt. DEFENSE 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 exist. HUMAN RIGHTS 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. FOREIGN RELATIONS 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 transit terms. 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 Bank. U.S.-NEPALESE RELATIONS 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 poverty. 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 Ambassador--Sandy Vogelgesang 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: [977] (1) 411179. Fax: [977] (1) 419963). The U.S. Agency for International Development is located at the embassy (tel: [977] (1) 411179. Fax: [977] (1) 272357. FURTHER INFORMATION 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. Weekly magazine. 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 three ways: Gopher: dosfan.lib.uic.edu URL: gopher://dosfan.lib.uic.edu/ WWW: http://dosfan.lib.uic.edu/dosfan.html. 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: [977] (1) 411179. Fax: [977] (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. (BOX) Travel 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 standard settings. 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 altitude. 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 information. (###) 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. (###)
