For the most current version of this Note, see Background Notes A-Z.

The Nepal flag is red with a blue border around the unique shape of two overlapping right triangles; the smaller, upper triangle bears a white stylized moon and the larger, lower triangle bears a white 12-pointed sun.

PROFILE

Official Name:
Kingdom of Nepal

Geography
Area: 147,181 sq. km. (56,136 sq. mi.); about the size and shape of Tennessee, bordering China and India.
Cities: Capital--Kathmandu municipality (5 districts) (pop. l.5 million). 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: 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.
Time zone: Nepal is 10 hours and 45 minutes ahead of Eastern Standard Time and does not observe daylight saving time.

People
Nationality: Noun--Nepali (sing.). Adjective--Nepalese or Nepali.
Population (July 12, 2004 census update): 24.8 million.
Annual growth rate: 2.25%.
Population breakdown/distribution: Rural (85.8%); female (50.1%); in the southern Terai region (49.1%); in the hills (49.1 %); in the mountains (7%).
Ethnic groups (caste and ethnicity are often used interchangeably): Brahman, Chetri, Newar, Gurung, Magar, Tamang, Rai, Limbu, Sherpa, Tharu, and others.
Religions: Hinduism (80.6%), Buddhism (10.7%), Islam (4.2%), and others (4.2%).
Languages: Nepali and more than 12 others.
Education: Years compulsory--0. Attendance--primary 80.4%, secondary 20%. Literacy--53.7% (65.1% male, 42.5% female).
Health: Infant mortality rate--64.2/1,000. Life expectancy--58.3 yrs. (male), 42.5 yrs. (female).
Work force: Agriculture--85%; industry--3%; services--11%; other--1%.

Government
Type: Constitutional monarchy.
Constitution: November 9, 1990.
Branches: Executive--prime minister (head of government), king (head of state). Legislative--Parliament consisting of House of Representatives (205-member lower house) and National Assembly (60-member upper house). Judicial--Supreme Court, 11 appellate courts, 75 district courts.
Subdivisions: 5 development regions, 14 zones, and 75 districts. 75 district development committees, 58 municipalities, 3,913 village development committees, and 335,217 ward committees.
Political parties (lower house representation): Nepali Congress Party, Communist Party of Nepal/United Marxist-Leninist, National Democratic Party (RPP), Nepal Goodwill Party (NSP), National People's Front, others.
Elections: No national elections in the last few years.
Suffrage: Universal over 18.
Defense/police (2002): $176 million.
National Day: Democracy Day, Falgun 7 (mid-February). The King's birthday July 7th.

Economy
GDP (2003): $5.82 billion.
Annual growth rate: 2.6%.
Per capita income: $242.
Avg. inflation rate (Consumer Price Index): 4.8%.
Natural resources: Water, hydropower, scenic beauty, limited but fertile agricultural land, timber.
Agriculture (38% of GDP): Products--rice, wheat, maize, sugarcane, oilseed, jute, millet, potatoes. Cultivated land--25%.
Industry (20% of GDP): Types--carpets, pashmina garments, cement, cigarettes, bricks, sugar, soap, matches, jute, hydroelectric power.
Trade (2002-2003): Exports--$655.77 million: carpets, pashmina, garments. Major markets--Germany, U.S. Imports--$1.69 billion: manufactured goods. Major supplier--India.
Central gov. budget (FY 2004/2005): $1.5 billion; military allocation $108 million.
Average official exchange rate (July 2004): 74.9 Nepalese rupees=U.S. $1.00.
Fiscal year: July 16-July 15.

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 Nepal's 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 alone has more than 2,700 religious shrines. Nepal is about 81% Hindu. The constitution describes the country as a "Hindu Kingdom," although it does not establish Hinduism as the state religion. Buddhists account for about 11% of the population. 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

Early 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 Nepali 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 hierarchical 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 Party won 110 seats out of 205 to form the government.

In mid-1994, the Parliament was dissolved due to dissension within the Nepali Congress Party. The subsequent general election, held November 15, 1994, gave no party a majority. The 1994 elections resulted in a Nepali Congress Party defeat and a hung Parliament, with a minority government led by the United Marxist and Leninist Party (UML); this made Nepal the world's first communist monarchy, with Man Mohan Adhikary as Prime Minister. The next 5 years saw five successive unstable coalition governments and the start of a Maoist insurgency.

Following the May 1999 general elections, the Nepali Congress Party once again headed a majority government after winning a clear majority (113 out of 205). But the pattern of short-lived governments persisted. There were three Nepali Congress Party Prime Ministers after the 1999 elections: K.P. Bhattarai (5/31/99-3/17/00); G.P. Koirala (3/20/00-7/19/01); and Sher Bahadur Deuba (7/23/01-10/04/02).

On June 1, 2001, Crown Prince Dipendra reportedly shot and killed his father, King Birendra; his mother, Queen Aishwarya; his brother; his sister; his father's younger brother, Prince Dhirendra; and several aunts, before turning the gun on himself. After his death two days later, the late King's surviving brother Gyanendra was proclaimed King.

In February 1996 the leaders of the Maoist United People's Front had begun a violent insurgency, waged through killings, torture, bombings, kidnappings, extortion, and intimidation against civilians, police, and public officials in more than 50 of the country's 75 districts. Approximately 10,000 police, civilians, and insurgents have been killed in the conflict since 1996. The government and Maoists held peace talks in August, September, and November of 2001, but they were unsuccessful, and the Maoists resumed their violent insurgency. Shortly after the 2001 peace talks failed, King Gyanendra declared a state of emergency and the Parliament approved this declaration by a two-thirds vote. On the recommendation of Prime Minister Sher Bahadur Deuba, the King dissolved the House on May 22, 2002.

In a sudden turn of events on October 4, 2002, King Gyanendra removed Prime Minister Deuba and assumed executive power. The entire Council of Ministers was also dissolved, and the November 13, 2002 elections to the dissolved House of Representatives was stalled following the royal order. After a week-long consultation with the leaders of various political parties, on October 11, 2002 the King appointed Lokendra Bahadur Chand as Prime Minister with a five-point directive that included creating an environment of peace and security as well as holding elections to the local bodies and the House of Representatives.

In a major development after Chand assumed the premiership, the government and Maoists on January 29, 2003 declared a cease-fire. This marked the second cease-fire with the Maoists; the first cease-fire, in 2001, had been broken by the Maoists. The 2003 cease-fire included an agreement to undertake initiatives to resolve the Maoist problem through dialogue and bring the Communist Party of Nepal/Maoist back into mainstream politics. After the announcement of the 2003 cease-fire, the Chand government held two rounds of peace talks with the Maoists, in April and May. But in its effort to end the political instability, it failed to secure the support of the leading political parties. In the face of growing pressure from political parties and their mass movement, Chand resigned from his post on May 30, 2003, after more than 7 months in power.

The King appointed Surya Bahadur Thapa as the new Prime Minister on June 4, 2003 amidst opposition from the major political parties. Another round of peace talks was held in mid-August 2003, but on August 27, 2003 the Maoists broke the cease-fire. Thapa resigned in May 2004 as a result of political pressures. In June 2004, the King reinstated formerly dismissed Sher Bahadur Deuba as Prime Minister.

Citing a steady deterioration of conditions in the country, King Gyanendra dismissed the Cabinet and constituted a Council of Ministers under his chairmanship on February 1, 2005. He stated that the Council of Minister (i.e., Cabinet) would try to reactivate multi-party democracy within three years. The King subsequently declared a state of emergency and suspended almost all fundamental rights. His new government was sworn in on February 2, 2005.

GOVERNMENT AND POLITICAL CONDITIONS
According to the constitution, Nepal is a constitutional monarchy with a 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."). Under the constitution, the democratically elected parliament consists of the House of Representatives (lower house) and the National Assembly (upper house). International observers considered the 1999 parliamentary elections to be generally free and fair. King Gyanendra assumed the throne in June 2001, after the late Crown Prince Dipendra killed King Birendra and nine members of the royal family, including himself.

A Maoist insurgency, punctuated by a cease-fire in 2001 and another in 2003, has been ongoing since 1996. A nationwide state of emergency was in effect from November 2001 to August 2002 after Maoist insurgents broke a 4-month cease-fire with violent attacks. During that time, King Gyanendra, under the constitution's emergency provisions and on the advice of the Cabinet, suspended several constitutional rights, including freedom of expression, assembly, privacy, and property. In October 2002, the King dismissed Prime Minister Sher Bahadur Deuba after he recommended the dissolution of parliament but was subsequently unable to hold elections because of the ongoing insurgency. A Cabinet was royally appointed to govern the country until elections could be held at an unspecified future time.

On June 4, 2003 King Gyanendra appointed Surya Bahadur Thapa as Prime Minister after Lokendra Bahadur Chand resigned on May 30, 2003. The government and the Maoists declared another cease-fire on January 29, 2003 and held three rounds of talks on April 27, May 9, and August 17 to 19, 2003. The Maoists unilaterally broke the cease-fire on August 27, 2003 and resumed attacks against government, security, and civilian targets.

Prime Minister Thapa resigned in May 2004; on June 2, 2004, King Gyanendra reinstated formerly dismissed Sher Bahadur Deuba as Prime Minister. In February 2005, the King dismissed Prime Minister Deuba and dissolved the Cabinet.

Under the constitution, 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.

Human Rights
Some progress was 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 sometimes use excessive force in quelling violent demonstrations. In addition, there have been reports of torture under detention and widespread reports of custodial abuse. In 2000, the government established the National Human Rights Commission, a government-appointed commission with a mandate to investigate human rights violations. To date, the commission has investigated over 50 complaints. The government is sometimes slow to follow the commission's recommendations or to enforce accountability for recent and past abuses. The King's February 2005 dismissal of the government, subsequent imposition of emergency rule and suspension of many civil rights -- including freedom of expression, assembly, and privacy -- is a setback for human rights in Nepal. Censors were reportedly deployed to major newspapers, and many political leaders were kept under house arrest.

Both the Maoists and security personal have committed numerous human rights violations. The Maoists have continued and increased tactics of kidnapping, torture, bombings, intimidation, killings, and conscription of children. Within the Nepalese security force, violations ranging from disappearances to executions have been recorded.

There are three major daily English-language newspapers, "The Kathmandu Post", "The Himalayan Times" and "The Rising Nepal", of which the latter and its vernacular sister publication are owned by a government corporation. There are literally hundreds of smaller daily and other periodicals that are privately owned and of diverse journalistic quality. Views expressed since the 1990 move to democracy are varied and vigorous. Currently 25 radio and 3 television stations are privately owned and operated, due to liberalization of licensing regulations. Radio Nepal and Nepal Television are government-owned and operated. There are nearly 200 cable television operators nationwide, and satellite dishes to receive television broadcasts abound.

Some restrictions continue on freedom of expression. The law strictly forbidding the media to criticize or satirize the king or any member of the royal family is currently being enforced after the King's February 2005 dissolution of the Cabinet.

Trafficking in women and child labor remain serious problems. Discrimination against women and lower castes is prevalent.

Principal Government Officials
King--Gyanendra Bir Bikram Shah Dev
Queen--Komal Rajya Laxmi Devi Shah

Cabinet Ministers
Prime Minister, Royal Palace Affairs, Defense and Foreign Affairs--vacant
Deputy Prime Minister and Finance--Madhukar Shumsher Rana
Information and Communications--Tanka Dhakal
Forest and Soil Conservation--vacant
Science and Technology--vacant
Education & Sports--Radha Krishna Mainali
Physical Planning & Works--vacant
Health--vacant
Home--Dan Bahadur Shahi
Culture, Tourism and Civil Aviation--Buddhi Raj Bajracharya
Industry, Commerce and Supplies--vacant
Local Development--Karga Bahadur G.C.
Land Reform and Management--vacant
Agriculture and Cooperatives--vacant
Labor and Transport Management--Ram Narayan Singh
Population and Environment--vacant
Women, Children and Social Welfare--Mrs. Durga Shrestha
Law, Justice and Parliamentary Affairs--Dan Bahadur Shahi
General Administration--Krishna Lal Thakali

State Ministers
Water Resources--vacant
Foreign Affairs-- Ramesh Nath Pandey
Local Development--vacant
Education and Sports--vacant
Labor and Transport Management--vacant
Health--vacant
Science and Technology--vacant
Land Reform and Management--vacant

Assistant Ministers
Agriculture and Cooperatives--vacant
Population and Environment--vacant
Physical Planning and Works--vacant
Culture, Tourism and Civil Aviation--vacant

Ambassador to the United States--vacant
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 (tel (212) 370-3988/3989).

ECONOMY
Nepal ranks among the world's poorest countries with a per capita income of just over $240. Based on national calorie/GNP criteria, an estimated 38% of the population is below the poverty line. 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 a 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 launched its tenth (5-year) economic development plan in 2002; its currency has been made convertible, and 14 state enterprises have been privatized, 2 liquidated and 2 dissolved. Foreign aid accounts for more than half of the development budget. The Government of Nepal has shown increasing commitment to fiscal transparency, good governance, and accountability. Also in 2002 the government began to prioritize development projects and eliminate wasteful spending. In consultation with civil society and donors the government cut 160 development projects that were driven by political patronage.

Agriculture remains Nepal's principal economic activity, employing over 80% of the population and providing 38% of GDP. Only about 25% 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. Because of Nepal's dependence on agriculture, the annual monsoon rain, or lack of it, strongly influences economic growth.

Nepal's exports increased 14.5% during the first half of FY 2004 compared to a decline of 29% in FY 2003. Imports grew by 18.5% during the first half of FY 2004 compared with 3.5% in the first half of FY2003. The increase in exports is due to increased demand for woolen carpets, tanned skins, and silverware and jewelry and despite a slowdown in demand from abroad for readymade garments and pashmina products. The trade deficit for FY 2003 was $1.04 billion and is expected to widen in FY 2004 should it continue the current trend. Real GDP growth during 1996-2002 averaged less than 5%. Real growth experienced a one-time jump in 1999, rising to 6%, before slipping back to below 5%. In 2002 the GDP recorded a negative growth rate of 0.6%, largely because of the Maoist insurgency. In 2003 GDP grew 2.6% and is anticipated to grow about 4.0% in 2004, according to the Asian Development Bank.

Despite the growing trade deficit, Nepal's balance of payments has increased due to money sent home from Nepalis working abroad. In addition, Nepal receives substantial amounts of external assistance from India, the United Kingdom, the United States, Japan, Germany, and the Scandinavian countries. Several multilateral organizations--such as the World Bank, the Asian Development Bank, and the UN Development Program--also provide assistance. On April 23, 2004 Nepal began the 147th member of the World Trade Organization (WTO).

With eight of the world's ten highest mountain peaks--including Mt. Everest at 8,848 m (29,000 ft)--Nepal is a tourist destination for hikers and mountain climbers. Yet a worsening internal security situation and a global economic slowdown threaten the tourism industry. Figures from the Nepal Tourism Board show an increase in arrivals of 19.8% in 2003 but are well below numbers during 1999, the peak tourism year.

Swift rivers flowing south through the Himalayas have massive hydroelectric potential to service domestic needs and growing demand from India. Only about 1% of Nepal's hydroelectric potential is currently tapped. Several hydroelectric projects, at Kulekhani and Marsyangdi, were completed in the early to late 1980s. In the early 1990s, one large public sector project, the Kali Gandaki A (144 megawatts--MW), and a number of private projects were planned; some have been completed. The most significant privately financed hydroelectric projects currently in operation are the Khimti Khola (60 MW) and the Bhote Koshi (36 MW).

The environmental impact of Nepal's hydroelectric projects has been limited by the fact that most are "run-of-river," with only one storage project undertaken to date. Currently under construction is the private sector West Seti (750 MW) storage project that is dedicated to electricity exports. An Australian company is promoting the project for implementation along build-own-transfer lines and is presently negotiating a power purchase agreement with the Indian Power Trading Corporation. Negotiations with India for a power purchase agreement have been underway for several years, but agreement on pricing and capital financing remains a problem. Currently domestic demand for electricity is increasing at 8%-10% a year.

Population pressure on natural resources is increasing. Overpopulation 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. Additionally, water supplies within the Kathmandu Valley are not considered safe for consumption, and disease outbreaks are not uncommon. Although steep mountain terrain makes exploitation difficult, mineral surveys have found small deposits of limestone, magnesite, zinc, copper, iron, mica, lead, and cobalt.

Progress has been achieved in education, health, and infrastructure. A countrywide primary education system is under development, and Tribhuvan University has several campuses. Although eradication efforts continue, malaria has been controlled in the fertile but previously uninhabitable Terai region in the south. Kathmandu is linked to India and nearby hill regions by an expanding highway network.

DEFENSE
Nepal's military consists of approximately 70,000 Royal Nepalese Army (RNA) soldiers, who are organized into three divisions (Western, Central and Eastern), a Valley Command/Division, and separate Aviation, Parachute, and Royal Palace brigades. Equivalent brigade-sized directorates encompassing Air Defense, Artillery, Engineers, Logistics, and Signals also provide general support to the RNA. King Gyanendra Bir Bikram Shah Dev is the Supreme Commander of the RNA. The Right Honorable General Pyar Jung Thapa is Chief of the Army Staff (COAS).

The RNA has contributed more than 42,000 peacekeepers since 1958 to over 25 UN-sponsored peacekeeping missions, during which 39 RNA soldiers gave their lives and 47 were injured. These missions include the UN Interim Force in Lebanon (UNIFIL), the UN Protective Force (UNPROFOR) in the Former Yugoslavia, the UN Operational Mission in Somalia II (UNOSOMII), the UN Mission in Haiti (UNMIH), and the UN Mission of Support in East Timor (UNTAET). While concurrently fighting a growing Maoist insurgency within Nepal, RNA units are also currently serving in the UN Mission in Sierra Leone (UNAMSIL) and the United Nations Organization Mission in the Democratic Republic of the Congo (MONUC). The RNA also recently sent a reconnaissance team to Haiti to determine initial requirements. The world-famous Gurkha forces are not synonymous with the RNA; although of the same ethnic stock, approximately 3,400 Nepalese Gurkhas serve in the British Army and 40,000 serve in the Indian Army.

The U.S. Pacific Command (USPACOM) coordinates U.S. military engagement with Nepal through the Defense Attach� Office while the Office of Defense Cooperation administers the U.S. security assistance program. U.S. military assistance to the RNA consists of $20.925 million in grant Foreign Military Financing (FMF) since 2002, annual professional and technical training provided under the grant International Military Education and Training (IMET) program ($600,000 in FY 2004), additional training provided under Counterterrorism (CT) Fellowship funds ($200,000 for FY 2004), and approximately $2 million to date under Enhanced International Peacekeeping Capabilities (EIPC) funding to increase the pool of international peacekeepers and promote interoperability. Many RNA officers attend U.S. military schools, including the U.S. Army War College, the U.S. Army Command and General Staff College (CGSC), and various conferences and seminars including those provided by the National Defense University (NDU) and the Asia-Pacific Center for Strategic Studies (APCSS).

FOREIGN RELATIONS
As a small, landlocked country wedged between two much 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 close. India and Nepal restored trade relations in 1990 after a break caused by India's security concerns over Nepal's relations with China. A bilateral trade treaty was signed in 1996.

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. Nepal participates in a number of UN specialized agencies and is a member of the World Trade Organization, World Bank, International Monetary Fund, Colombo Plan, and the Asian Development Bank.

U.S.-NEPAL 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 alleviating poverty.

Since 1951, the United States has provided more than $791 million in bilateral economic assistance to Nepal through FY 2004. In recent years, annual bilateral U.S. economic assistance through the U.S. Agency for International Development (USAID) has averaged $40 million. USAID supports agriculture, health, family planning, environmental protection, democratization, governance, and hydropower development efforts in Nepal. The United States also contributes to international institutions and private voluntary organizations working in Nepal. U.S. contributions to multilateral organizations to date approach an additional $725 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 100 Peace Corps volunteers work in Nepal.

Principal U.S. Officials
Ambassador--James F. Moriarty
Deputy Chief of Mission--Elisabeth Millard
Counselor for Management Affairs--Michelle Esperdy
USAID Director--Donald B. Clark
Peace Corps Director--David O'Connor
Political and Economic Officer--Grace Shelton
Consular Officer--Robert Farquhar
Public Affairs Officer--Constance Colding Jones
Regional Security Officer--James W. Gayhart
Regional Environment Officer---Katharine E. Koch
Political/Military Officer--David V. Vacala
Defense Cooperation Officer--Maj. Randall C. Koehlmoos, USA
Defense Attach�--LTC. James E. Oxley IV

The U.S. Embassy in Nepal is located in Pani Pokhari, Kathmandu (tel: [977] (1) 441-1179; fax: [977] (1) 441-9963). The U.S. Agency for International Development is located in Rabi Bhawan, Kathmandu (tel: [977] (1) 427-0144; fax: [977] (1) 427-2357). The Peace Corps office is located in Kunja Niwas, Shiva Marga 186, Maharajgunj, Kathmandu, Nepal (tel: [977] (1) 441-9581; fax: [977] (1) 441-0075). The American Center (Public Affairs Section) is located in Gyaneshwor, Kathmandu (tel: [977] (1) 441-5845; fax: [977] (1) 441-5847).

[This is a mobile copy of Nepal (02/05)]