Nepal 2016 Country Review http://www.countrywatch.com Table of Contents Chapter 1 1 Country Overview 1 Country Overview 2 Key Data 3 Nepal 4 Asia 5 Chapter 2 7 Political Overview 7 History 8 Political Conditions 10 Political Risk Index 53 Political Stability 67 Freedom Rankings 82 Human Rights 94 Government Functions 97 Government Structure 100 Principal Government Officials 112 Leader Biography 113 Leader Biography 114 Foreign Relations 116 National Security 123 Defense Forces 127 Chapter 3 129 Economic Overview 129 Economic Overview 130 Nominal GDP and Components 132 Population and GDP Per Capita 134 Real GDP and Inflation 135 Government Spending and Taxation 136 Money Supply, Interest Rates and Unemployment 137 Foreign Trade and the Exchange Rate 138 Data in US Dollars 139 Energy Consumption and Production Standard Units 140 Energy Consumption and Production QUADS 142 World Energy Price Summary 143 CO2 Emissions 144 Agriculture Consumption and Production 145 World Agriculture Pricing Summary 147 Metals Consumption and Production 148 World Metals Pricing Summary 151 Economic Performance Index 152 Chapter 4 164 Investment Overview 164 Foreign Investment Climate 165 Foreign Investment Index 167 Corruption Perceptions Index 180 Competitiveness Ranking 192 Taxation 201 Stock Market 201 Partner Links 202 Chapter 5 203 Social Overview 203 People 204 Human Development Index 206 Life Satisfaction Index 210 Happy Planet Index 221 Status of Women 230 Global Gender Gap Index 232 Culture and Arts 242 Etiquette 242 Travel Information 243 Diseases/Health Data 253 Chapter 6 259 Environmental Overview 259 Environmental Issues 260 Environmental Policy 261 Greenhouse Gas Ranking 262 Global Environmental Snapshot 273 Global Environmental Concepts 284 International Environmental Agreements and Associations 299 Appendices 323 Bibliography 324 Nepal Chapter 1 Country Overview Nepal Review 2016 Page 1 of 336 pages Nepal Country Overview NEPAL Landlocked Nepal is located in the Himalayan Mountains of South Asia, between two giant neighbors – China and India. For most of its modern history from the 1700s, Nepal had been ruled by monarchs or a ruling family. A brief experiment with multi-party politics in 1959 ended with the king suspending parliament and taking sole charge in 1962. Reforms in 1990 established a multiparty democracy within the framework of a constitutional monarchy. An insurgency, led by Maoists demanding the abolition of the monarchy, broke out in 1996. A decade-long civil war between insurgents and government forces followed and resulted in the dissolution of the cabinet and parliament, as well as the assumption of absolute power by the king. As many as 15,000 people were killed in this period, while up to 150,000 were displaced by the fighting between the Maoist rebels and government forces. Mass protests in April 2006 were followed by several months of peace negotiations between the Maoists and government officials, culminating in a November 2006 peace accord and the promulgation of an interim constitution. Elections in April 2008 led to the abolition of a centuries-old monarchy, and a Maoist-dominated government took office in August. In the ensuing years, Nepal has been rocked by political instability and in- fighting. Political instability and the decade-long Maoist insurgency have dampened economic development of the country, and Nepal ranks among the poorest and least developed countries in the world. In 2015, the country was rocked by a devastating earthquake, adding to the country's woes. Nepal Review 2016 Page 2 of 336 pages Nepal Key Data Key Data Region: Asia Population: 31551304 Climate: Mild to severe winters, cool to subtropical summers Languages: Nepali (official); several other languages and numerous dialects Currency: 1 Nepalese rupee (NR) = 100 paisa Holiday: National Unity Day is 11 January Area Total: 147181 Area Land: 143351 Coast Line: 0 Nepal Review 2016 Page 3 of 336 pages Nepal Nepal Country Map Nepal Review 2016 Page 4 of 336 pages Nepal Asia Regional Map Nepal Review 2016 Page 5 of 336 pages Nepal Nepal Review 2016 Page 6 of 336 pages Nepal Chapter 2 Political Overview Nepal Review 2016 Page 7 of 336 pages Nepal History Besides sharing its geographical borders with India and China, Nepal also shares history with its two giant neighbors. It was influenced to a large extent by the same incidents that proved to be turning points in the history of India and China. The earliest recorded history of Nepal goes back over 2,800 years when a tribe of Mongolian people-the Kiratis-arrived in the Himalayan territory, across the Tibetan plateau. Little is known of this era other than that Buddhism was the dominant religion in Nepal at that time. The current tribes of Limbu and Rai are believed to be direct descendants of the Kiratis. The Nepalese history of the period is unclear and remains so for almost 1,000 years. Around 300 before the common era, or B.C.E., Nepal received its second round of migrations-this time from India. The Lichavis arrived in Nepal from the northern parts of India. The newcomers immediately overthrew the Kiratis descendants who were still believed to be in power. With this victory, Hinduism became the official religion of the country. The Lichavis ruled for three centuries and were displaced by the Thakuris in 600 B.C.E. It is from this era that ample recorded history is available. Ansuvarman, the founder of the Thakuri dynasty, was a very shrewd and wealthy king. In order to protect his northern borders from attacks by the Tibetan kings, he married his daughter to a Tibetan prince. Ansuvarman took particular liking to a valley in the eastern part of his kingdom and decided to found his capital city there. It was thus here in the 10th century that Kasthmandap (Holy Place of Wood) was founded, which over the centuries has come to be known as Kathmandu. It is at the same the location as Ansuvarman's palace, in Durbar Square, that the Nepalese monarch continues to stay and several buildings from the same period continue to decorate the modern day Kathmandu. The Thakuri dynasty ruled Nepal for three centuries. In the 12th century came the Malla dynasty, which is recognized as the most significant dynasty of Nepal. King Arideva started the dynasty at the beginning of the 13th century. His period was one of great wealth and prosperity for the Himalayan Kingdom. The Mallas, though Hindu, were tolerant of the other major religion, Buddhism, but were particularly strict on enforcing the caste system. However, the dynasty suffered a major reverse within a century and lost control over large parts of the country, which Nepal Review 2016 Page 8 of 336 pages Nepal was split into small city-states. At one point, there were as many as 48 such city-states. Partly responsible for this were the frequent invasions of India by Muslim armies from the northwest, which also invaded Nepal several times. It was nearly 100 years later that another Malla king took charge of the country. In 1372, Kathmandu's king, Jayasthiti Malla, took over the neighboring city-state of Patan, and, a decade later, the city-state of Bhaktapur. This unified the Kathmandu Valley once again into one large kingdom. The kingdom expanded tremendously during the reign of his successor, King Yaksha Malla. By the middle of the next century, Nepal's borders extended southwards to the Ganga River, and north deep into Tibet. After his death in 1482, Nepal once again split up into many small states. The situation lasted for almost two centuries. In the 18th century, a new dynasty came to power. The Shahs of the Gorkha Kingdom gradually extended their power and in 1768, they conquered the Kathmandu Valley. However, barely 20 years later, war broke out between Nepal and China over Tibet, which lasted for most of a decade. The Nepalese were defeated and forced to sign a treaty that obligated them to pay annual homage to the Chinese. This tribute continued for over a century and ended only in 1912. In the meantime, Nepal also had to battle the British, who had been conquering territory in India throughout the 18th century. Soon enough, the British were fighting Nepal for control over the southern parts of Nepal and the Ganga plains. Once again, Nepal lost and had to concede much of its territory to the British in the war of 1814-16. Throughout the tumultuous times, the Shahs continued to be the rulers of Nepal. In 1846, they lost power to the powerful Rana family, big landowners from the west. Jung Bahadur Rana, who massacred almost all the political leaders of Nepal in a coup, proclaimed himself prime minister and took over all the executive power from the monarchy and he made the position of prime minister a hereditary one. The Rana family continued to be in power for over a century, though the Shahs remained the nominal monarchs. It was only after the Indian independence in 1947 that the royal family, which was then led by King Tribhuvan Shah, could be restored to its earlier power. In 1950, King Tribhuvan fled to India. This was followed by an armed revolt and under pressure from India, the Ranas were deposed and Tribhuvan Shah took over as the all-powerful monarch once again. He, however, did not enjoy the reign for long, passing away in 1955; his son, Mahendra, succeeded him. Nepal was not eager to return to a totalitarian monarchy. Bowing to pressure, Mahendra Shah instilled a constitutional parliamentary system. The first elections under this system were held in 1959 and saw the installation of leader of the Nepali Congress, G.P. Koirala, as the first elected Nepal Review 2016 Page 9 of 336 pages Nepal prime minister of Nepal.