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Landlocked, lacking substantial resources for economic development, and hampered by an inadequate transportation network, Nepal is one of the least developed nations in the world. The economy is heavily dependent on imports of basic materials and on foreign markets for its forest and agricultural products. Nepal imports essential commodities, such as fuel, construction materials, fertilizers, metals, and most consumer goods, and exports such products as rice, jute, timber, and textiles.
The political and administrative system of Nepal has not made those changes in trade, investment, and related economic policies that would expedite economic development and attract foreign capital. The government’s development programs, which are funded by foreign aid, also have failed to respond directly to the needs of rural people.
Agriculture
Agriculture—primarily the cultivation of rice, corn (maize), and wheat—engages most of Nepal’s population and accounts for well over half of the country’s export earnings. Yet agricultural productivity is very low. The low yields result from shortages of fertilizers and improved seed and from the use of inefficient techniques. Because only a tiny percentage of Nepal’s cultivated land area is under irrigation, output depends upon the vagaries of the weather. Potatoes, sugarcane, and millet are other major crops. Cattle, buffalo, goats, and sheep are the principal livestock raised.
On the whole, Nepal has a small surplus in food grains. There are, however, major dislocations in supply and demand. Periods of shortage between harvests of various crops occur in the mountain areas. At the same time, substantial amounts of food grain are moved to India from the Tarai. Because of the lack of adequate transportation, surplus food grain from the Tarai does not move north into the food deficit areas of the mid-mountain region. Some food grains move northward from the Tarai and the mountain areas into Tibet, however, despite a shortage in the mountain regions.
The greatest potential for increases in agricultural production is in the Tarai. In the mid-mountain region the potential for increasing production is limited. Because of the high population concentration in this region, almost all land capable of cultivation is tilled. Increasing the cultivated land area by cutting into standing forests aggravates erosion and results in reduced yields and land losses by landslides. Major projects have been undertaken in an effort to halt soil erosion and deforestation.
Forestry
About one-third of Nepal’s total area is forested; most of this area is state-owned. In spite of overcutting and poor management, timber represents one of the country’s most valuable resources and is a major source of potential revenue. Exports of forest products constitute an important source of Indian rupees. Almost all timber is exported to India. The sawmills of the Timber Corporation of Nepal, a government-owned lumber-processing concern, supply Kathmandu Valley with construction and furniture wood.
Resources and power
Nepal’s mineral resources are small, scattered, and barely developed. There are known deposits of coal (lignite), iron ore, magnesite, copper, cobalt, pyrite (used for making sulfuric acid), limestone, and mica. Nepal’s great river systems provide immense potential for hydroelectric development. If developed and utilized within the country and exported to India (the principal market for power generated in Nepal), it could become a mainstay of the country’s economy.
Manufacturing
Industrial production represents a small but growing segment of economic activity. Most industries are small, localized operations based on the processing of agricultural products. The jute industry, centred in Birātnagar, is an important earner of foreign exchange. Sugar factories are located in Birātnagar, Birganj, and Bhairahawā. There are a sawmill and a meat-processing plant in Hitaura and a number of rice and oil mills in the Tarai. Other industries include brick and tile manufacture; processing of construction materials, paper, and food grain; cigarette manufacture; cement production; and brewing of beer. In general, there are more industrial enterprises in the private than in the public sector, although most of these are cottage industries. The main areas of manufacturing concentration are Birātnagar, the Birganj–Hitaura corridor, and the Kathmandu Valley.
Tourism
Tourism represents a small but expanding industry. Foreign tourism is primarily confined to the Kathmandu Valley, which is the only area equipped with the necessary hotels, food supplies, roads, and international transport services. There are, however, many areas outside the Kathmandu Valley with potential for the development of tourism; these include Pokharā, the Mount Everest area, and the Nārāyani area (where big game exists).
Trade
For geographic and historical reasons, most of Nepal’s trade is with India. China and the United States are also trade partners of some significance. Attempts have been made to diversify trade through agreements with such countries as China, Japan, South Korea, Pakistan, the United States, Germany, and Poland. The state trading agency, National Trading Limited, has expanded its activities by fostering the development of commercial entrepreneurial activity. Large-scale commercial activity has hitherto been in the hands of foreigners, primarily Indians.
Nepal’s foreign trade and balance of payments have suffered setbacks, and exports have not increased enough to pay for imports of consumer goods and basic supplies. Nepal’s dependence on the Indian market for most of its imports and exports and on the port of Kolkata for its access to the sea has been the source of periodic friction between the two countries.
Transportation
Transport facilities in Nepal are very limited; few independent nations in the world of comparable size have such little road mileage and so few motor vehicles. Construction of new roads has been undertaken since the 1970s with aid from India, China, Great Britain, and the United States. The main means of transportation has been the network of footpaths, which interlace the mountain terrain and valleys. Trails have evolved into main trade routes, which tend to follow the river systems.
The meagre road-transport facilities in Nepal are supplemented by only a few railway and air-transport links. Increased use of road transport has reduced the significance of the two narrow-gauge railroads that run from Amlekhganj to Raxaul (India) and from Janakpūr to Jaynagar (India). The Nepal Airline Corporation, an autonomous government agency, is the country’s flag carrier. Tribhuvan International Airport in Kathmandu is the primary hub for flights in and out of the country; Gautam Buddha International Airport was opened in Siddharthanagar (Bhairahawa) in 2022. The United States built the Kathmandu–Hitaura aerial ropeway in the 1950s, and it is still used for carrying goods into the capital.
Leo E. RoseGovernment and society
Constitutional framework
Although reforms in the 1950s began to move the kingdom toward a democratic political system, the crown dissolved parliament in 1960 and subsequently banned political parties. Thereafter, Nepal became only nominally a constitutional monarchy, and the constitution of 1962 (amended 1967, 1976, and 1980) effectively gave the king autocratic control over a multitiered system of panchayats (local bodies, or councils). In the 1980s, political restrictions were eased, and organizations such as the Nepali Congress Party, the Communist Party of Nepal, numerous small left-leaning student groups, and several radical Nepalese antimonarchist groups were allowed to operate more or less openly. Political parties, however, were not again legalized until 1990, when nationwide unrest forced King Birendra to accept the formation of a multiparty parliamentary system.
A new constitution promulgated on November 9, 1990, greatly reduced the power of the monarchy. The king remained the head of state, but effective executive power was given to the Council of Ministers, headed by the prime minister. Appointed by the king, the prime minister was required to be either the leader of the majority party in the House of Representatives (the lower house of parliament) or, if there was no majority party, a representative who could form a coalition majority.
The king was constitutionally also a part of parliament and was charged with giving assent to bills that had been passed by both legislative chambers—the House of Representatives and the National Council (the upper house). The House of Representatives consisted of 205 members popularly elected to five-year terms. The 60 members of the National Council held six-year terms; 10 were nominated by the king, 35 were elected by the House of Representatives (of which 3 had to be women), and 15 were selected by an electoral college. The constitution gave the House of Representatives considerably more power than the National Council.
All Nepalese citizens age 18 and older are eligible to vote. Because most voters in Nepal are illiterate, candidates largely have been chosen by party symbol (e.g., a tree for the Nepali Congress Party and a sun for the United Marxist-Leninist Party of Nepal). Some voters, moreover, have had to travel long distances, in some cases for hours along mountain paths, in order to reach a polling station.
Prior to 1990 the country was divided for administrative purposes into 5 development regions, 14 zones, and 75 districts; in addition there were corresponding regional, zonal, and district courts, as well as a Supreme Court. The 1990 constitution mandated the elimination of the regional and zonal courts, which were to be replaced by appellate courts. The administrative divisions themselves continued to exist as provisional units.
The early 21st century was a tumultuous yet transformative period in Nepal’s governmental history. A Maoist insurgency that had been gaining strength since the late 1990s demanded not only the election of a constituent assembly to draft a new constitution but also the abolition of the monarchy. As the insurgents negotiated with the government, tensions escalated into violence. Following intermittent peace talks, abortive cease-fires, dissolution and reconstitution of the House of Representatives, and major abrogation of the king’s authority, the Maoists and the government finally agreed to the drafting of an interim constitution—promulgated in January 2007—and the formation of an interim administration. Elections for a constituent assembly of some 600 members were held in April 2008, and the following month the monarchy was indeed dissolved and Nepal declared a republic.
The country continued to operate for several more years under an interim constitution that provided for a unicameral legislature and a Council of Ministers, with most of the power vested in the prime minister. Protracted negotiations finally produced a new permanent constitution in 2015, which was approved by the legislature and promulgated on September 20. The document established a secular federal-style republic consisting of seven administrative regions and a bicameral legislature. A president would be head of state, and the Council of Ministers, led by the prime minister, would continue as head of government.
The Editors of Encyclopaedia BritannicaSecurity
Nepal’s armed forces consist of the Royal Nepalese Army, predominantly an infantry force. The Army Flight Department operates all aircraft. Except for a few simple weapons, all military supplies are imported. Nepal is famous for the fighting qualities of its Gurkha soldiers; nearly 5,000 of them serve in British Gurkha units and 50,000 in Indian Gurkha units. The British maintain a recruiting centre at Pokharā. Gurkha veterans are a valuable human resource of Nepal.
For police purposes, the country is divided into three zones: eastern, central, and western, with headquarters at Birātnagar, Kathmandu, and Nepalganj, respectively. Each zonal headquarters, under a deputy inspector general of police, is responsible for several subsections composed of four to five police districts operating under a superintendent of police. A district superintendent is in charge of police stations in his area, and each station normally is supervised by a head constable.
Health and welfare
The Ministry of Health is responsible for the support and administration of public health services, including hospitals and health clinics. Although the government has taken steps to improve existing health centres and to establish new ones, health care remains inadequate. Malaria, tuberculosis, cholera, and typhoid are prevalent in spite of government projects to control or eradicate them. Ayurvedic medicine, the traditional Hindu system of medicine, is popular in Nepal.
Education
The Ministry of Education and Culture is responsible for administration and supervision of all elementary and secondary education. Higher education has developed relatively recently. The first college was established in 1918, and Tribhuvan University in Kathmandu, with faculties of arts, sciences, commerce, and education, was chartered in 1959. The University Senate has sole legal responsibility for higher education and the authority to grant academic recognition to colleges but is largely dependent upon the Ministry of Education for funds.
Cultural life
The relaxation of censorship that followed the overthrow of Rana rule in 1951 encouraged a revival of artistic and intellectual expression. In literature and poetry, Nepali works emphasize the cultural renaissance and national patriotism. King Mahendra, a poet whose Nepali lyrics have been published in English translation under the name of M.B.B. Shah (for Mahendra Bir Bikram Shah), did much to promote the revival of arts and literature.
The cultural heritage of Nepal, particularly contributions made by the Newar of Kathmandu Valley to sculpture, painting, and architecture, is a source of great pride. Hindu and Buddhist religious values have provided the basic source of inspiration to Newar artisans. The themes of most artistic works have been primarily religious; the lives of the gods, saints, and heroes and the relationship of man to society and to the universe are expounded in sculpture, architecture, and drama. In Kathmandu Valley some 2,500 temples and shrines display the skill and highly developed aesthetic sense of Newar artisans.
Music and dance are favourite pastimes among the Nepalese. Religious ceremonies require the use of drums and wind instruments preserved from ancient times. Important in most religious and family occasions are devotional songs that have elements of both classical and folk music and that have been used by some contemporary musical revivalists in their attempt to bridge the gap between the two. The government-owned Radio Nepal broadcasts programs in Nepali and English. The country’s first television station, at Kathmandu, began broadcasting in 1986.
Newspapers and periodicals are published in Nepali and in English. Newspapers are frequently sensational in tone and are poorly staffed and financed. Gorkha Patra, published by the government, occupies a commanding position in the Nepalese press. Nepalese newspaper readers rely on the foreign press, particularly Indian newspapers, which are flown daily into Kathmandu, for more sophisticated coverage of world and national news.
After 1960 King Mahendra required newspapers to obtain official clearance for all reports of political activity. Subsequently the government increased its censorship, and in 1985 the publication of many newspapers was suspended. In 1990, reflecting the change in the country’s political climate, freedom of the press was restored.
Pradyumna P. Karan