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Economy Nepal	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. Textile and carpet production, accounteing for about 80% of foreign exchange earnings in recent years, contracted significantly in 2001 due to the overall slowdown in the world economy and pressures by Maoist insurgents on factory owners and workers. Security concerns in the wake of Maoist activity, the June massacre of many members of the royal family, and the September 11 terrorist attacks in the US led to a decrease in tourism, another key source of foreign exchange. 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 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, politica l 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.

Economy Nepal

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. Textile and carpet production, accounteing for about 80% of foreign exchange earnings in recent years, contracted significantly in 2001 due to the overall slowdown in the world economy and pressures by Maoist insurgents on factory owners and workers. Security concerns in the wake of Maoist activity, the June massacre of many members of the royal family, and the September 11 terrorist attacks in the US led to a decrease in tourism, another key source of foreign exchange. 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 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, politica l 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.

GDP: purchasing power parity - $35.6 billion (2001 est.)
GDP - real growth rate: 2.6% (2001 est.)
GDP - per capita: purchasing power parity - $1,400 (2001 est.)
GDP - composition by sector: agriculture: 41%
industry: 22%
services: 37% (2000 est.)
Population below poverty line: 42% (FY95/96 est.)
Household income or consumption by percentage share: lowest 10%: 3.2%
highest 10%: 29.8% (1995-96)
Distribution of family income - Gini index: 36.7 (1995-96)
Inflation rate (consumer prices): 2.1% (FY00/01 est.)
Labor force: 10 million (1996 est.)
note: severe lack of skilled labor
Labor force - by occupation: agriculture 81%, services 16%, industry 3%
Unemployment rate: 47% (2001 est.)
Budget: revenues: $665 million
expenditures: $1.1 billion, including capital expenditures of $NA (FY99/00 est.)
Industries: tourism, carpet, textile; small rice, jute, sugar, and oilseed mills; cigarette; cement and brick production
Industrial production growth rate: 8.7% (FY99/00)
Electricity - production: 1.454 billion kWh (2000)
Electricity - production by source: fossil fuel: 9.56%
hydro: 90.44%
other: 0% (2000)
nuclear: 0%
Electricity - consumption: 1.431 billion kWh (2000)
Electricity - exports: 95 million kWh (2000)
Electricity - imports: 174 million kWh (2000)
Agriculture - products: rice, corn, wheat, sugarcane, root crops; milk, water buffalo meat
Exports: $757 million (f.o.b., FY00/01 est.), but does not include unrecorded border trade with India
Exports - commodities: carpets, clothing, leather goods, jute goods, grain
Exports - partners: India 48%, US 26%, Germany 11% (FY00/01)
Imports: $1.6 billion (f.o.b., FY00/01 est.)
Imports - commodities: gold, machinery and equipment, petroleum products, fertilizer
Imports - partners: India 39%, Singapore 10%, China/Hong Kong 9%, (FY00/01)
Debt - external: $2.55 billion (FY00/01)
Economic aid - recipient: $424 million (FY00/01)
Currency: Nepalese rupee (NPR)
Currency code: NPR
Exchange rates: Nepalese rupees per US dollar - 76.675 (January 2002), 74.961 (2001), 71.094 (2000), 68.239 (1999), 65.976 (1998), 58.010 (1997)
Fiscal year: 16 July - 15 July

Communications Nepal	Telephones - main lines in use: 236,816 (January 2000) Telephones - mobile cellular: Just started Telephone system: general assessment: poor telephone and telegraph service; fair radiotelephone communication service and mobile cellular telephone network domestic: More than 1.2 million(app.) international: radiotelephone communications; microwave landline to India; satellite earth station - 1 Intelsat (Indian Ocean) Radio broadcast stations: AM 6, FM 5, shortwave 1 (January 2000) Radios: 18.40,000 (2003) Television broadcast stations: 1 (plus 9 repeaters) (1998) Televisions: 130,000 (1997) Internet country code: .np Internet Service Providers (ISPs): 6 (2000) Internet users: 50,000 (2001)

Communications Nepal

Telephones - main lines in use: 236,816 (January 2000)
Telephones - mobile cellular: Just started
Telephone system: general assessment: poor telephone and telegraph service; fair radiotelephone communication service and mobile cellular telephone network
domestic: More than 1.2 million(app.)
international: radiotelephone communications; microwave landline to India; satellite earth station - 1 Intelsat (Indian Ocean)
Radio broadcast stations: AM 6, FM 5, shortwave 1 (January 2000)
Radios: 18.40,000 (2003)
Television broadcast stations: 1 (plus 9 repeaters) (1998)
Televisions: 130,000 (1997)
Internet country code: .np
Internet Service Providers (ISPs): 6 (2000)
Internet users: 50,000 (2001)

Transportation Nepal	Railways: total: 59 km narrow gauge: 59 km 0.762-m gauge note: all in Kosi close to Indian border (2001) Highways: total: 13,223 km paved: 4,073 km unpaved: 9,150 km (April 1999) Waterways: none Ports and harbors: none Airports: 45 (2001) Airports - with paved runways: total: 8 over 3,047 m: 1 1,524 to 2,437 m: 1 914 to 1,523 m: 6 (2001) Airports - with unpaved runways: total: 37 1,524 to 2,437 m: 1 914 to 1,523 m: 7 under 914 m: 29 (2001)

Transportation Nepal

Railways: total: 59 km
narrow gauge: 59 km 0.762-m gauge
note: all in Kosi close to Indian border (2001)
Highways: total: 13,223 km
paved: 4,073 km
unpaved: 9,150 km (April 1999)
Waterways: none
Ports and harbors: none
Airports: 45 (2001)
Airports - with paved runways: total: 8
over 3,047 m: 1
1,524 to 2,437 m: 1
914 to 1,523 m: 6 (2001)
Airports - with unpaved runways: total: 37
1,524 to 2,437 m: 1
914 to 1,523 m: 7
under 914 m: 29 (2001)

Military Nepal	Military branches: Royal Nepalese Army (includes Royal Nepalese Army Air Service), Nepalese Police Force Military manpower - military age: 17 years of age (2002 est.) Military manpower - availability: males age 15-49: 6,484,343 (2002 est.) Military manpower - fit for military service: males age 15-49: 3,369,454 (2002 est.) Military manpower - reaching military age annually: males: 292,589 (2002 est.) Military expenditures - dollar figure: $51.5 million (FY01) Military expenditures - percent of GDP: 1% (FY01)

Military Nepal

Military branches: Royal Nepalese Army (includes Royal Nepalese Army Air Service), Nepalese Police Force
Military manpower - military age: 17 years of age (2002 est.)
Military manpower - availability: males age 15-49: 6,484,343 (2002 est.)
Military manpower - fit for military service: males age 15-49: 3,369,454 (2002 est.)
Military manpower - reaching military age annually: males: 292,589 (2002 est.)
Military expenditures - dollar figure: $51.5 million (FY01)
Military expenditures - percent of GDP: 1% (FY01)

Transnational Issues Nepal	Disputes - international: formed Joint Border committee with India in 2001 to resolve 53 disputed sections of boundary covering an area of 720 sq km; approximately 100,000 Bhutanese refugees living in Nepal, 90% of whom reside in seven UN Office of the High Commissioner for Refugees camps, place decades-long strains on Nepal Illicit drugs: illicit producer of cannabis for the domestic and international drug markets; transit point for opiates from Southeast Asia to the West

Transnational Issues Nepal

Disputes - international: formed Joint Border committee with India in 2001 to resolve 53 disputed sections of boundary covering an area of 720 sq km; approximately 100,000 Bhutanese refugees living in Nepal, 90% of whom reside in seven UN Office of the High Commissioner for Refugees camps, place decades-long strains on Nepal
Illicit drugs: illicit producer of cannabis for the domestic and international drug markets; transit point for opiates from Southeast Asia to the West

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