Nepal

I

INTRODUCTION

Nepal is an officially Kingdom of Nepal, constitutional monarchy in South Asia. Locked within the rugged ranges of the Himalayas, Nepal is bounded by the Tibet region of China on the north and India on the south, east, and west.

It was cut off from the rest of the world until the early 1950s, when a palace revolution and the subsequent overthrow of the autocratic Rana dynasty marked the beginning of Nepal’s emergence into the modern world. Kathmandu is the capital and largest city.

II

THE PEOPLE OF NEPAL

Nepal had a population of 18,462,081 at the time of the 1991 census. The average population density at the time was 125 persons per sq km (329 per sq mi), although nearly half the people were concentrated in the narrow Tarāi region. In contrast, the 2008 population estimate was 29,519,114. The population has grown rapidly since 1950, when there were only 9 million people. Although the government has sponsored family planning since the 1950s, these programs have been slow to affect Nepal’s population growth. In 2008 the population was increasing at an annual rate of 2.1 percent. Only 16 percent of the population lived in urban areas in 2005. Major cities include Kathmandu, Lalitpur (Patan), Bhaktapur, Birātnagar, and Bīrganj.

A

Ethnic Groups, Languages, and Religion

Nepal’s indigenous population consists of two major groups, the Indo-Nepalese, whose ancestors migrated into the country from the south, and the Tibeto-Nepalese, whose ancestors entered Nepal from the north. Although intermingling between the two groups has occurred, cultural, linguistic, and religious differences exist both between and within the two groups.

The Indo-Nepalese group comprises people who speak Sanskrit-derived languages and are strict adherents to Hinduism. Nepali, the official language, is derived from Sanskrit. Differences within the Indo-Nepalese group are marked more by caste (a system of social hierarchy) than by ethnicity. The Tibeto-Nepalese group comprises several different ethnic groups including Newar, Bhutia, Sherpa, Gurung, Magar, Tamang, Rai, and Limbu people. Although most of the Tibeto-Nepalese speak Nepali, each ethnic group also has its own language.

While the majority of Nepali people practice Hinduism, the official religion, a strong shamanist element remains in the religious practices of many Tibeto-Nepalese ethnic groups (see Shaman). Buddhism is also important within the country. Buddha, the founder of Buddhism, was born in Lumbinī, in present-day Nepal. There is also a small Muslim population mainly located in the Tarāi.

B

Education

Under the Rana dynasty, which ruled Nepal from 1846 to 1951, only the upper class had access to education. After the 1951 revolution, Nepal established an education system with free primary education for all children. Primary school begins at the age of 6 and lasts until age 10. Secondary education that follows lasts until the age of 15. Attendance of primary school was nearly universal in 2002–2003. Secondary school enrollment included only 45 percent (50 percent of the boys of that age group and 39 percent of the girls) in 2002–2003.

Formal schooling in Nepal is constrained by economic and cultural factors such as a bias against educating girls and a need for children to work at home or in the fields. In 2005 the literacy rate was estimated at 47 percent of the adult population, with a large gap between male and female literacy rates. Only 30 percent of the female population was literate in 2005 compared to 65 percent of the males. Urban areas have higher literacy rates than rural areas. In 1990 Nepal launched a 12-year literacy program targeting 8 million people between the ages of 6 and 45 years old.

Tribhuvan University, founded in Kathmandu in 1959, is the only doctoral-granting institution of higher education in Nepal. Nepal also has a number of colleges, all of which are either affiliated with, or follow standards set by, Tribhuvan University.

C

Way of Life

Nepal’s society is predominantly rural. Social life in the village revolves around the family, which is headed by the father. Extended families sometimes break apart as sons separate from parents and brothers from each other in search of additional land. Family property is divided equally among sons at the time of separation. Consequently, family land holdings are extremely fragmented. Villagers often pool resources and labor to implement village-level projects such as irrigation ditches or channels. Rice is the food staple in most parts of the country. Barley, millet, and potatoes are important food staples in the Himalayas.

In Nepal women are generally subordinate to men and have less access to education, economic resources, and political power. Their plight, however, varies from one ethnic group to another. Among Tibeto-Nepalese community’s female status is relatively better than in Indo-Nepalese communities. Generally, women work harder and longer than men, taking care of household chores, fetching water and animal fodder, and farming. Women in upper-class families, however, have maids who do household work and other menial chores.

A revival of artistic and intellectual expression occurred in Nepal after the overthrow of Rana rule in the early 1950s. Nepali works of poetry and literature emphasize patriotism and national pride. Hindu and Buddhist religious values inspire the expression of Nepali artists. The lives of gods, saints, and heroes and the relationship of the individual to society and the universe are explored in sculpture, architecture, and drama. Numerous temples and shrines in the Kathmandu Valley display the skill and highly developed aesthetic sense of Nepali artists. Favorite recreational activities of the Nepali include music and dance. Religious ceremonies involve the use of drums and musical instruments preserved since ancient times. In rural areas devotional songs are an important part of cultural life. Radio Nepal schedules folk music programs to foster the traditional culture of the country.

III

ECONOMY

The United Nations (UN) classifies Nepal as one of the least developed countries in the world. The country’s gross domestic product (GDP) was $8.9 billion in 2006, with an estimated per capita GDP of $323.40. Several factors have contributed to Nepal’s underdevelopment, including its landlocked geography, rugged terrain, lack of natural resources, and poor infrastructure. China, India, Japan, the United States, and several European nations have made large investments in Nepal’s economy through foreign aid since 1952. Still, the country’s economic growth has been slow.

Economy of Nepal

Gross domestic product (GDP in U.S.$)	$8.9 billion (2006)
GDP per capita (U.S.$)	$323.40 (2006)
Monetary unit	1 Nepalese rupee (NR), consisting of 100 paisa
Number of workers	10,835,579 (2006)
Unemployment rate	8.8 percent (2001)

Nepal’s economy is characterized by heavy dependence on foreign aid, a narrow range of exports, increasing economic disparity between the mountain areas and the more developed Tarāi region, excessive governmental control and regulation, and inefficient public enterprises and administration. In addition, the economy has not kept pace with the country’s high population growth. In particular, the slow growth of agriculture has resulted in food shortages and malnutrition for some of Nepal’s people.

A

Agriculture and Manufacturing

Agriculture dominates Nepal’s economy. It provides a livelihood for 79 percent of the population and contributes 34 percent of GDP. The Tarāi is the main farming region of the country. Rice and corn are major food crops; potato, oilseed, sugarcane, jute, and tobacco are major cash crops. Nepal’s industrial base is limited. Most industries are based on agricultural raw materials or dependent on various imported materials, mostly from India. Large manufacturing plants are owned and operated by the government. Major manufactured products include jute, sugar, cigarettes, beer, matches, shoes, cement, and bricks. Traditional cottage industries such as basket and carpet weaving are also important to Nepal’s economy.

B

Services

Tourism represents a growing sector of the economy. Foreign tourism is primarily confined to Kathmandu Valley and major national parks such as the Sagarmatha National Park (around the Mount Everest area), Annapūrna Conservation Area, and Royal Chitwan National Park. Tourism has created demands for services and materials that are slowly changing the ecology, environment, and economy of the Himalayan region. Sherpas, well known for assisting as guides on Himalayan treks and mountain-climbing expeditions benefit from Nepal’s growing popularity as a tourist destination.

A unique part of Nepal’s economy is the famous Gurkha mercenaries. Beginning with a treaty signed with British-controlled India in the early 1800s, young Nepali men served in the British, and later Indian, armies. Known for their brave fighting skills, these mercenaries have fought in nearly every major war, and with UN peacekeeping forces. Nepal receives more than $50 million in hard currency annually from soldiers’ salaries sent home, pensions, and other Gurkha-related payments.

C

Energy

Most of the energy consumed in Nepal comes from traditional sources such as fuelwood, the use of which contributes to deforestation. Tremendous potential exists for hydroelectric power development, but growth is inhibited by terrain, lack of infrastructure, and insufficient capital investment. Nepal has harnessed only a fraction of its potential hydropower; however, a major hydroelectric facility was under construction on the Kali Gandaki River in western Nepal in the early 2000s. The country is heavily reliant on India for imported, nonrenewable sources of power such as oil and kerosene.

D

Transportation and Communications

Nepal has a relatively underdeveloped network of roads. There are some main roads, which connect major cities and stretch to the borders of both India and China. However, the main means of transportation is the network of footpaths and trails that interlace the mountains and valleys. There is also a small railway along the Indian border. The government-owned Royal Nepal Airlines was the only commercial airline until 1992, when the government permitted other airlines to operate. Now a number of airlines provide domestic service between Nepal’s major cities as well as to its remote regions. International service is available to India, Singapore, Hong Kong, Thailand, Pakistan, and Japan. Tribhuvan International Airport outside Kathmandu is the main airport. There are also several smaller airstrips serving domestic air travel in Nepal.

Nepal has limited telecommunication services. Postal services have improved in recent years but are still inaccessible to many Nepalese. Few people own telephones, although most urban areas have public telephone services. Radio Nepal broadcasts programs in Nepali and English to more than 90 percent of the population. Television programming is limited, but programs from overseas are available via satellite in remote parts of the country. The major newspapers in Nepal include the Gorkhapatra, Kantipur, and Daily Times; freedom of the press was guaranteed under Nepal’s 1990 constitution.

E

Foreign Trade

For geographical and historical reasons, most of Nepal’s trade is with India. Attempts have been made to diversify trade by making new agreements with China, Pakistan, Bangladesh, the United States, the United Kingdom, Singapore, Thailand, Germany, and Japan. Nepal has a growing trade deficit with India. Major exports are clothing, carpets, grain, and leather goods. Major imports are petroleum products, fertilizer, and machinery.

F

Currency and Banking

Nepal’s monetary unit is the Nepalese rupee (72.80 Nepalese rupees equal U.S.$1; 2006 average). It is issued from the country’s central bank, Nepal Rastra Bank (founded in 1956). Indian rupees are still used in Nepal, although less widely than before trade disputes between the two countries in 1989.

VI				HISTORY
A			Rana Autocracy

In the first half of the 19th century, Nepal entered a short period of instability that culminated in the Kot Massacre, in which fighting broke out among military personnel and administrators after the assassination of a high-powered favorite of the queen. Jung Bahadur, a strong pro-British leader, prevailed during the massacre and seized control of the country. He declared himself prime minister and began the Rana dynasty of rulers. The Rana rulers monopolized power by making the king a nominal figure. They also made the office of the prime minister hereditary.

Nepal gave valuable assistance to the British during the Sepoy Rebellion (1857-1859) and during World War I (1914-1918). The British government reaffirmed the independence of Nepal through a treaty in 1923. A British resident (colonial official acting as an adviser to the ruler of a protected state), stationed in Kathmandu, controlled Nepal’s foreign relations. Nepal supported the Allied cause, with the contribution of Gurkha soldiers, during World War II (1939-1945). Nepal and the United States established diplomatic relations in 1948.

The Rana autocracy was increasingly criticized in the late 1940s, particularly by dissidents residing in India. The political-reform movement, which was approved by the Indian government and directed by the newly created Nepali Congress Party (NCP), won the support of King Bir Bikram Tribhuvana. Like his predecessors under the Ranas, he possessed purely nominal powers. His intervention in domestic politics deepened the crisis, however, and he was removed from the throne in 1950 by Prime Minister Maharaja Mohan Shumsher Rana. A few days later the king fled to India and NCP insurgents began military operations along the southern frontier. In 1951 Prime Minister Rana allowed a reorganization of the Nepalese government along democratic lines and the king was reinstalled. Friction between the Rana and Congress Party factions culminated in November 1951 when Prime Minister Rana was removed from power and the NCP formed a government headed by Matrika Prasad Koirala.

B

Absolute Monarchy

After the Rana autocracy ended, Nepal embarked on a mission of economic and social development. However, political parties organizing the government during the 1950s were not effective. King Mahendra, crowned in 1955, seized absolute control of the government in 1960 after a decade of political unrest. King Mahendra dismissed the government and suspended parliament, calling it corrupt and inefficient. Considering a parliamentary system unsuited to Nepal, the king proclaimed a new constitution in 1962 that banned the formation of political parties and allowed for the autocratic rule of the king through a nonparty system of councils, or panchayats. The government then instituted social reforms, including land reforms and modernization of the legal code, which helped alleviate some caste discrimination.

When the king died in 1972, he was succeeded by his son Birendra Bir Bikram, who was formally crowned in 1975. The young king initially exercised strong control over the government, attempting to repress the reform movement led by former prime minister Bisheswar Prasad Koirala. As antimonarchist sentiments grew in the late 1970s and serious riots challenged his authority, the king relaxed his control.

In a 1980 referendum on the form of government, the voters decided to retain the nonparty panchayat system with certain modifications. Among the reforms was a constitutional amendment providing for the king to appoint a prime minister upon the recommendation of the National Assembly. Elections under the new provisions were held in 1981 and 1986. Although all candidates ran as independents, reports indicated that Marxist-Leninist members of the Communist Party won a number of seats in parliament.

C

Constitutional Monarchy

Following a wave of pro-democracy protests spearheaded by Nepal’s banned political parties, Birendra agreed in 1990 to allow political activity. An interim government drafted a new constitution that provided for multiple political parties. In November 1990, with the adoption of a constitution stating the powers of the monarch, Nepal became a constitutional monarchy.

In 1991 the Nepali Congress Party (NCP) won the country’s first democratic election in 32 years, and the party’s general secretary, Girija Prasad Koirala, brother of former prime minister Bisheswar Prasad Koirala, became prime minister. Koirala resigned in 1994 after his coalition government lost its parliamentary majority. In new elections the Unified Marxist-Leninist (UML) branch of Nepal’s Communist Party won the majority of seats. The UML remained in power less than a year before a coalition government replaced it.

In 1996, a radical leftist party called the Communist Party of Nepal—Maoist (CPN-M), unhappy with the pace and direction of change, launched a “people’s war” aimed at overthrowing the government, abolishing the monarchy, and establishing a people’s republic. Incidents of violence were at first confined to remote mountain regions but by the late 1990s had spread to more than half the country.

C1

Political Instability

A period of political instability followed the declaration of the “people’s war” in 1996. One prime minister succeeded another in a series of unstable coalition governments. Internal fighting weakened the coalitions, as did their inability to control the Maoist rebellion.

C2

Royal Massacre

In early June 2001 King Birendra and eight other members of the royal family, including Queen Aiswarya, were fatally shot in the royal palace in Kathmandu. An official investigation of the massacre concluded that Crown Prince Dipendra had killed his family members in a drunken rage and then committed suicide. Birendra’s younger brother, Gyanendra Bir Bikram Shah, succeeded to the throne.

The Maoist insurgency intensified following the massacre, fueled in part by popular conspiracy theories surrounding the incident. Prime Minister Koirala, in office for the third time, was widely criticized for embarrassing setbacks at the hands of the rebels and for a perceived failure to provide adequate protection for the royal family. His government was also mired in a bribery scandal.

C3

Insurgency and Crisis

Koirala stepped down as prime minister in July 2001 and was succeeded by Sher Bahadur Deuba, a former prime minister known for his willingness to work with opposition parties. Deuba began a series of reforms, including distribution of land to the poor, and introduced plans to criminalize discrimination against Dalits (“Untouchables”) and to end the caste system. Deuba also initiated peace talks with the Maoist rebels, and both sides agreed to a ceasefire. But the ceasefire ended in November 2001 after Deuba rejected Maoist demands for a new constitution that would abolish the monarchy. Fighting renewed and as the violence continued, King Gyanendra declared emergency rule, which enabled him to send the royal army to fight the insurgency. In 2002 Gyanendra dismissed Deuba, dissolved parliament, and assumed full power over the government before appointing a new prime minister.

In January 2003 the government and the Maoists agreed to a ceasefire and renewed negotiations. However, the ceasefire collapsed in August, after seven months. Meantime, the political parties, which had been excluded from the government after the dissolution of parliament, led demonstrations in the capital, and in June 2003 Deuba was reappointed prime minister.

The Maoist rebels intensified their insurgency after the ceasefire collapsed in August 2003. They refused to enter peace negotiations with Deuba, insisting on direct talks with the king, and staged two week-long blockades of Kathmandu. In February 2005 Gyanendra again imposed a state of emergency. He assumed full executive power, dismissing Deuba and his government. The king also suspended many constitutional rights and freedoms, including freedom of speech and the press.

In April 2006 massive protests took place against direct rule by the king. In Kathmandu street demonstrations drew hundreds of thousands of people, and government forces responded by firing into crowds, killing more than a dozen people. The protests were spearheaded by a seven-party opposition alliance that included the Maoist insurgents. Faced with daily protests, a general strike, and road blockades that cut off Kathmandu from fuel and food supplies, Gyanendra announced that he would restore parliament, which he had dissolved four years earlier. On the recommendation of the seven-party alliance, Gyanendra named Koirala as prime minister. The newly reinstated parliament soon began to strip the king of his powers. The Maoist rebels declared a three-month truce and began talks with Koirala.

C4

Peace Agreement

The Maoist rebels reached a peace agreement with the Nepalese government in November 2006, ending a decade-long revolt during which an estimated 13,000 people were killed. Under United Nations supervision, the Maoists turned over their weapons and confined their troops in camps. As part of the agreement, a government commission was set up to investigate human rights abuses by both sides in the long conflict. Koirala assigned 5 of the 22 cabinet posts in the interim government to Maoists, who joined the government in April 2007. The government planned to nationalize the monarch’s assets while allowing Gyanendra to keep property he owned before he came to the throne.

Elections for a constituent assembly, chosen by the people, were scheduled for June 2007. The assembly was to rewrite Nepal’s constitution and decide whether Nepal would remain a monarchy or become a republic. The Maoists, who had been pushing for an end to the monarchy, agreed to abide by the constituent assembly’s decision. However, the elections were subsequently postponed due to two new demands made by the Maoists: the abolition of the monarchy ahead of the elections, and the implementation of a proportional system of voting for the elections. The new demands contradicted the earlier agreement and created a political deadlock. The Maoists withdrew from the governing coalition in September 2007, and the elections were further delayed. However, the Maoists rejoined the interim government after all of the main parties agreed to abolish the monarchy immediately after the elections, which were scheduled for April 2008.