Overview of Nepal: Economy

Economy - overview:

Nepal is among the poorest and least developed countries in the world, with about one-quarter of its population living below the poverty line. Agriculture is the mainstay of the economy, providing a livelihood for three-fourths of the population and accounting for a little over one-third of GDP. Industrial activity mainly involves the processing of agricultural products, including pulses, jute, sugarcane, tobacco, and grain. Nepal has considerable scope for exploiting its potential in hydropower, with an estimated 42,000 MW of feasible capacity, but political instability hampers foreign investment. Additional challenges to Nepal's growth include its landlocked geographic location, civil strife and labor unrest, and its susceptibility to natural disaster.

GDP (purchasing power parity):

$41.22 billion (2012 est.)

country comparison to the world: 102

$39.4 billion (2011 est.)
$37.93 billion (2010 est.)
note: data are in 2012 US dollars

GDP (official exchange rate):

$19.42 billion (2012 est.)

GDP - real growth rate:

4.6% (2012 est.)
country comparison to the world: 71
3.9% (2011 est.)
4.8% (2010 est.)

GDP - per capita (PPP):

$1,300 (2012 est.)
country comparison to the world: 207
$1,300 (2011 est.)
$1,300 (2010 est.)
note: data are in 2012 US dollars

GDP - composition, by end use:

household consumption: 76%
government consumption: 10.7%
investment in fixed capital: 20%
investment in inventories: 14.9%
exports of goods and services: 10%
imports of goods and services: -33.4%
(2012 est.)

GDP - composition, by sector of origin:

agriculture: 38.1%
industry: 15.3%
services: 46.6% (2012 est.)

Agriculture - products:

pulses, rice, corn, wheat, sugarcane, jute, root crops; milk, water buffalo meat

Industries:

tourism, carpets, textiles; small rice, jute, sugar, and oilseed mills; cigarettes, cement and brick production

Industrial production growth rate:

3% (2012 est.)
country comparison to the world: 87

Labor force:

18 million
country comparison to the world: 35
note: severe lack of skilled labor (2009 est.)

Labor force - by occupation:

agriculture: 75%
industry: 7%
services: 18% (2010 est.)

Unemployment rate:

46% (2008 est.)


country comparison to the world: 192
42% (2004 est.)

Population below poverty line:

25.2% (2011 est.)

Household income or consumption by percentage share:

lowest 10%: 3.2%
highest 10%: 29.5% (2011)

Distribution of family income - Gini index:

32.8 (2010)
country comparison to the world: 100
47.2 (2008 est.)

Budget:

revenues: $3.5 billion
expenditures: $4.7 billion (FY11/12)

Taxes and other revenues:

18% of GDP (FY11/12)
country comparison to the world: 177

Budget surplus (+) or deficit (-):

-6.2% of GDP (FY11/12)
country comparison to the world: 179

Fiscal year:

16 July - 15 July

Inflation rate (consumer prices):

9.5% (2012 est.)
country comparison to the world: 196
9.5% (2011 est.)

Central bank discount rate:

6% (31 December 2010 est.)
country comparison to the world: 51
6.5% (31 December 2009 est.)

Commercial bank prime lending rate:

8% (31 December 2012 est.)
country comparison to the world: 116
8% (31 December 2011 est.)

Stock of narrow money:

$3.105 billion (31 December 2012 est.)
country comparison to the world: 115
$2.723 billion (31 December 2011 est.)

Stock of broad money:

$12.12 billion (31 December 2011 est.)
country comparison to the world: 98
$12.14 billion (31 December 2010 est.)

Stock of domestic credit:

$11.88 billion (31 December 2012 est.)
country comparison to the world: 95
$10.67 billion (31 December 2011 est.)

Market value of publicly traded shares:

$4.529 billion (31 December 2011 est.)
country comparison to the world: 84
$4.843 billion (31 December 2010)
$5.485 billion (31 December 2009 est.)

Current account balance:

$93 million (2012 est.)
country comparison to the world: 53
$49 million (2011 est.)

Exports:

$1.066 billion (2012 est.)
country comparison to the world: 154
$998.9 million (2011 est.)

Exports - commodities:

clothing, pulses, carpets, textiles, juice, pashima, jute goods

Exports - partners:

India 55.7%, US 10.1%, Germany 4.4% (2012)

Imports:

$5.92 billion (2012 est.)
country comparison to the world: 121
$5.665 billion (2011 est.)

Imports - commodities:

petroleum products, machinery and equipment, gold, electrical goods, medicine

Imports - partners:

India 51%, China 34.5% (2012)

Reserves of foreign exchange and gold:

$3.631 billion (31 December 2011 est.)
country comparison to the world: 102
$2.925 billion (2010 est.)

Debt - external:

$3.956 billion (31 December 2011 est.)
country comparison to the world: 129
$3.673 billion (31 December 2010 est.)

Stock of direct foreign investment - at home:

$NA

Stock of direct foreign investment - abroad:

$NA

Exchange rates:

Nepalese rupees (NPR) per US dollar -
85.197 (2012 est.)
74.02 (2011 est.)
73.16 (2010 est.)
77.44 (2009)
65.21 (2008)

(Source: www.cia.gov)

Overview of Nepal: Government

Country name:

Conventional long form:
Federal Democratic Republic of Nepal
Conventional short form: Nepal
Local long form: Sanghiya Loktantrik Ganatantra Nepal
Local short form: Nepal

Government type:

Federal democratic republic

Capital:

Name: Kathmandu
Geographic coordinates: 27 43 N, 85 19 E
Time difference: UTC+5.75 (10.75 hours ahead of Washington, DC during Standard Time)

Administrative divisions:

14 zones (anchal, singular and plural); Bagmati, Bheri, Dhawalagiri, Gandaki, Janakpur, Karnali, Kosi, Lumbini, Mahakali, Mechi, Narayani, Rapti, Sagarmatha, Seti

Independence:

1768 (unified by Prithvi Narayan SHAH)

National holiday:

Republic Day, 29 May

Constitution:

15 January 2007 (interim Constitution); note - in April 2008, the Constituent Assembly (CA) was elected as an interim parliament to draft and promulgate a new constitution by May 2010; the deadline was extended four times, mostly recently until May 2012 when the CA was dissolved without completing a new constitution

Legal system:

English common law and Hindu legal concepts

International law organization participation:

has not submitted an ICJ jurisdiction declaration; non-party state to the ICCt

Suffrage:

18 years of age; universal

Executive branch:

chief of state: President Ram Baran YADAV (since 23 July 2008); Vice President Paramananda JHA (since 23 July 2008)

head of government: note: on 14 March 2013, the chief justice of Nepal's Supreme Court, Khil Raj REGMI, was sworn in as Chairman of the Interim Council of Ministers for Elections to lead an interim government and charged with holding Constituent Assembly elections by December 2013

cabinet: cabinet was formed in August-September 2011 by a majority coalition made up of the United Communist Party of Nepal-Maoist, Madhesi People's Rights Forum-Democratic, Madhesi People's Rights Forum-Republic, Madhesi People's Rights Forum-Nepal, Terai-Madhes Democratic Party, and several smaller parties

elections: president elected by Parliament; term extends until the new constitution is promulgated; president elected on 21 July 2008; date of next election NA
election results: Ram Baran YADAV elected president by the Constituent Assembly in a second round of voting on 21 July 2008; Ram Baran YADAV 308, Ram Jaja Prasad SINGH 282

Legislative branch:

note: in May 2012 Prime Minister Baburam BHATTARAI dissolved the previous unicameral Constituent Assembly
unicameral Constituent Assembly (601 seats; 240 members elected by direct popular vote, 335 by proportional representation, and 26 appointed by the Cabinet (Council of Ministers)

elections: last held on 10 April 2008; note - the Constituent Assembly failed to draft a new constitution by the 27 May 2012 deadline; as of early 2013, the parties were in negotiations to hold elections for a new Constituent Assembly

election results: percent of vote by party - CPN-M 38%, NC 19%, CPN-UML 18%, Madhesi People's Right Forum-Nepal 9%, other 11%; seats by party - CPN-M 229, NC 115, CPN-UML 108, Madhesi People's Rights Forum-Nepal 54, Terai Madhes Democratic Party 21, other smaller parties 74; note - 26 seats filled by the new Cabinet are included in the totals above

Judicial branch:

highest court(s): Supreme Court (consists of the chief justice and up to 14 judges
note - Nepal's judiciary was restructured under its 2007 Interim Constitution

judge selection and term of office: the Supreme Court chief justice appointed by the prime minister on the recommendation of the Constitutional Council; other judges are appointed by the prime minister on the recommendation of the Judicial Council; judges serve until age 65

subordinate courts: appellate and district courts

Political parties and leaders:

Chure Bhawar Rastriya Ekata Party [Himalaya Bhakta PRADHANGA]
Communist Party of Nepal-Marxist Leninist or CPN-ML [C.P. MAINALI]
Communist Party of Nepal-Marxist Leninist Samaibadi [Jaqat Bahadur BOGATI]
Communist Party of Nepal-Maoist or CPN-M [Mohan BAIDYA, also known as KIRAN]
Communist Party of Nepal-Unified [Raj Singh SHRIS]
Communist Party of Nepal-United [Chandra Dev JOSHI]
Communist Party of Nepal-Unified Marxist-Leninist or CPN-UML [Jhalanath KHANAL]
Dalit Janajati Party [Vishwendraman PASHWAN]
Federal Democratic National Forum [Khagendra MAKHAIM]
Federal Democratic National Forum - Tharuhat [Rukmini CHAUDHARY]
Federal Democratic National Party [Ravindra THING]
Federal Socialist Party [Ashok RAI]
Federal Sadbhayana Party [Anil JHAL]
Janta Dal United [Biswonath Prasad AGRAWAL]
Madhesi People's Rights Forum-Democratic [Bijay Kumar GACHHADAR]
Madhesi People's Rights Forum-Nepal [Upendra YADAV]
Madhesi People's Rights Forum-Republic [Raj Kishore YADAV]
National Madhes Socialist Party [Sharat Singh BHANDARI]
Nepal Loktantrik Samajbadi Dal [Laxmi Lal CHAUDBARY]
Nepal Pariwar Dal [Eknath DHAKAL]
Nepal Workers and Peasants Party [Narayan Man BIJUKCHHE]
Nepali Congress or NC [Sushil KOIRALA]
Nepali Janata Dal [Hari Charan SAH]
Newa Rastriya Party [Keshav Man SHAKYA]
Rastriya Janamorcha [Chitra Bahadur K.C.]
Rastriya Janamukti Party [Malwar Singh THAPA]
Rastriya Janashakti Party or RJP [Surya Bahadur THAPA]
Rastriya Prajantantra Party [Pashupati Shumsher RANA]
Rastriya Prajantantra Party Nepal [Kamal THAPA]
Sadbhavana Party [Rajendra MAHATO]
Sadbhavana Party-Anandi Devi [Sarita GIRI]
Samajbadi Prajatantrik Janata Party Nepal [Prem Bahadur SINGH]
Social Democratic Party [Chaitanya SUBBA]
Terai Madhes Democratic Party [Mahantha THAKUR]
Terai Madhes Democratic Party-Nepal [Mahendra YADAVI]
Unified Communist Party of Nepal (Maoist) [Pushpa Kamal DAHAL, also known as PRACHANDA]

Political pressure groups and leaders:

other: small armed groups along the southern border with India; a variety of groups advocating regional autonomy for individual ethnic groups

International organization participation:

ADB, BIMSTEC, CD, CP, FAO, G-77, IAEA, IBRD, ICAO, ICC, ICRM, IDA, IFAD, IFC, IFRCS, ILO, IMF, IMO, Interpol, IOC, IOM, IPU, ISO (correspondent), ITSO, ITU, ITUC (NGOs), MIGA, MINURSO, MINUSTAH, MONUSCO, NAM, OPCW, SAARC, SACEP, UN, UNAMID, UNCTAD, UNESCO, UNIDO, UNIFIL, UNISFA, UNMIL, UNMISS, UNMIT, UNOCI, UNTSO, UNWTO, UPU, WCO, WFTU (NGOs), WHO, WIPO, WMO, WTO

Diplomatic representation in the US:

chief of mission: Ambassador Shankar Prasad SHARMA
chancery: 2131 Leroy Place NW, Washington, DC 20008
telephone: [1] (202) 667-4550
FAX: [1] (202) 667-5534
consulate(s) general: New York

Diplomatic representation from the US:

chief of mission: Ambassador Peter W. BODDE
embassy: Maharajgunj, Kathmandu
mailing address: use embassy street address
telephone: [977] (1) 400-7200
FAX: [977] (1) 400-7272

Flag description:

Red with a blue border around the unique shape of two overlapping right triangles; the sma
ller, upper triangle bears a white stylized moon and the larger, lower triangle displays a white 12-pointed sun; the color red represents the rhododendron (Nepal's national flower) and is a sign of victory and bravery, the blue border signifies peace and harmony; the two right triangles are a combination of two single pennons (pennants) that originally symbolized the Himalaya Mountains while their charges represented the families of the king (upper) and the prime minister, but today they are understood to denote Hinduism and Buddhism, the country's two main religions; the moon represents the serenity of the Nepalese people and the shade and cool weather in the Himalayas, while the sun depicts the heat and higher temperatures of the lower parts of Nepal; the moon and the sun are also said to express the hope that the nation will endure as long as these heavenly bodies
note: Nepal is the only country in the world whose flag is not rectangular or square

National symbol(s):

Rhododendron blossom

National anthem:

name: "Sayaun Thunga Phool Ka" (Hundreds of Flowers)

New National Anthem of Nepal

lyrics/music: Pradeep Kumar RAI/Ambar GURUNG
note: adopted 2007; after the abolition of the monarchy in 2006, a new anthem was required because of the previous anthem's praise for the king

(Source: www.cia.gov)

Overview of Nepal: People and Society

People of Nepal - different communities

Newar Community Ladies

Nationality:

noun: Nepali (singular and plural)

adjective: Nepali

Ethnic groups:

Chhettri 15.5%, Brahman-Hill 12.5%, Magar 7%, Tharu 6.6%, Tamang 5.5%, Newar 5.4%, Muslim 4.2%, Kami 3.9%, Yadav 3.9%, other 32.7%, unspecified 2.8% (2001 census)

Languages:

Nepali (official) 47.8%, Maithali 12.1%, Bhojpuri 7.4%, Tharu (Dagaura/Rana) 5.8%, Tamang 5.1%, Newar 3.6%, Magar 3.3%, Awadhi 2.4%, other 10%, unspecified 2.5% (2001 census)

note: many in government and business also speak English (2001 est.)

Religions:

Hindu 80.6%, Buddhist 10.7%, Muslim 4.2%, Kirant 3.6%, other 0.9% (2001 census)

Population:

30,430,267 (July 2013 est.)

country comparison to the world: 41

Age structure:

0-14 years: 32.6% (male 5,045,989/female 4,859,274)

15-24 years: 22.6% (male 3,444,428/female 3,431,127)

25-54 years: 34.9% (male 5,015,145/female 5,593,248)

55-64 years: 5.5% (male 820,014/female 860,439)

65 years and over: 4.5% (male 630,853/female 729,750) (2013 est.)

Dependency ratios:

total dependency ratio: 66.1 %

youth dependency ratio: 57.6 %

elderly dependency ratio: 8.5 %

potential support ratio: 11.7 (2013)

Median age:

total: 22.4 years

male: 21.7 years

female: 23.2 years (2013 est.)

Population growth rate:

1.81% (2013 est.)

country comparison to the world: 66

Birth rate:

21.48 births/1,000 population (2013 est.)

country comparison to the world: 79

Death rate:

6.68 deaths/1,000 population (2013 est.)

country comparison to the world: 143

Net migration rate:

3.3 migrant(s)/1,000 population (2013 est.)

country comparison to the world: 31

Urbanization:

urban population: 17% of total population (2011)

rate of urbanization: 3.62% annual rate of change (2010-15 est.)

Major urban areas - population:

KATHMANDU (capital) 990,000 (2009)

Sex ratio:

at birth: 1.04 male(s)/female

0-14 years: 1.04 male(s)/female

15-24 years: 1 male(s)/female

25-54 years: 0.88 male(s)/female

55-64 years: 0.95 male(s)/female

65 years and over: 0.87 male(s)/female

total population: 0.96 male(s)/female (2013 est.)

Mother's mean age at first birth:

20.1

note: Median age at first birth among women 25-29 (2011 est.)

Maternal mortality rate:

170 deaths/100,000 live births (2010)

country comparison to the world: 61

Infant mortality rate:

total: 41.76 deaths/1,000 live births

country comparison to the world: 53

male: 41.8 deaths/1,000 live births

female: 41.71 deaths/1,000 live births (2013 est.)

Life expectancy at birth:

total population: 66.86 years

country comparison to the world: 165

male: 65.57 years

female: 68.19 years (2013 est.)

Total fertility rate:

2.36 children born/woman (2013 est.)

country comparison to the world: 93

Contraceptive prevalence rate:

49.7% (2011)

Health expenditures:

5.5% of GDP (2010)

country comparison to the world: 122

Physicians density:

0.21 physicians/1,000 population (2004)

Hospital bed density:

5 beds/1,000 population (2006)

Drinking water source:

improved:

urban: 93% of population

rural: 88% of population

total: 89% of population

unimproved: 

urban: 7% of population

rural: 12% of population

total: 11% of population (2010 est.)

Sanitation facility access:

improved:

urban: 48% of population

rural: 27% of population

total: 31% of population

unimproved: 

urban: 52% of population

rural: 73% of population

total: 69% of population (2010 est.)

HIV/AIDS - adult prevalence rate:

0.4% (2009 est.)

country comparison to the world: 72

HIV/AIDS - people living with HIV/AIDS:

64,000 (2009 est.)

country comparison to the world: 51

HIV/AIDS - deaths:

4,700 (2009 est.)

country comparison to the world: 39

Major infectious diseases:

degree of risk: high

food or waterborne diseases: bacterial diarrhea, hepatitis A and E, and typhoid fever

vectorborne disease: Japanese encephalitis, malaria, and dengue fever (2013)

Obesity - adult prevalence rate:

1.4% (2008)

country comparison to the world: 189

Children under the age of 5 years underweight:

29.1% (2011)

country comparison to the world: 18

Education expenditures:

4.7% of GDP (2010)

country comparison to the world: 86

Literacy:

definition: age 15 and over can read and write

total population: 57.4%

male: 71.1%

female: 46.7% (2011 est.)

School life expectancy (primary to tertiary education):

total: 9 years

male: 10 years

female: 8 years (2002)

Child labor - children ages 5-14:

total number: 2,467,549

percentage: 34 % (2008 est.)

(Source: www.cia.gov)

Overview of Nepal: Introduction & Geography

Background

National Flag of Nepal

Map of Nepal

In 1951, the Nepali monarch ended the century-old system of rule by hereditary premiers and instituted a cabinet system of government. Reforms in 1990 established a multiparty democracy within the framework of a constitutional monarchy. An insurgency led by Maoist extremists broke out in 1996. The ensuing 10-year civil war between insurgents and government forces witnessed the dissolution of the cabinet and parliament and assumption of absolute power by the king. Several weeks of mass protests in April 2006 were followed by several months of peace negotiations between the Maoists and government officials, and culminated in a November 2006 peace accord and the promulgation of an interim constitution. Following a nationwide election in April 2008, the newly formed Constituent Assembly (CA) declared Nepal a federal democratic republic and abolished the monarchy at its first meeting the following month. The CA elected the country's first president in July. Between 2008 and 2011 there have been four different coalition governments, led twice by the United Communist Party of Nepal-Maoist, which received a plurality of votes in the Constituent Assembly election, and twice by the Communist Party of Nepal-United Marxist-Leninist. In August 2011, Baburam BHATTARAI of the United Communist Party of Nepal (Maoist) became prime minister. After the CA failed to draft a constitution by the May 2012 deadline, BHATTARAI dissolved the CA and called for new elections. Months of negotiations failed to produce a new election date. Finally, in March 2013, the chief justice of Nepal's Supreme Court, Khil Raj REGMI, was sworn in as Chairman of the Interim Council of Ministers for Elections to lead an interim government and charged with holding Constituent Assembly elections by December 2013.

Geography

Location:

South Asia. Lies between China and India.

Geographic coordinates:

28 00 N, 84 00 E

Area:

Total: 147,181 sq km
Country comparison to the world: 94 (94th largest country in the world)
Land: 143,351 sq km
Water: 3,830 sq km

Area - comparative:

Slightly larger than Arkansas

Land boundaries:

Total: 2,926 km
Border countries: China 1,236 km, India 1,690 km

Coastline:

0 km (landlocked)

Maritime claims:

None (landlocked)

Climate:

Varies from cool summers and severe winters in north to subtropical summers and mild winters in south

Terrain:

Tarai or flat river plain of the Ganges in south, central hill region, rugged Himalayas in north

Elevation extremes:

Lowest point: Kanchan Kalan 70 m
Highest point: Mount Everest 8,850 m (highest point in World)

Natural resources:

quartz, water, timber, hydro power, scenic beauty, small deposits of lignite, copper, cobalt, iron ore

Land use:

cultivable land: 16%
permanent crops: 0.8%
other: 83.2% (2011)

Irrigated land:

11,680 sq km (2003)

Total renewable water resources:

210.2 cu km (2011)

Freshwater withdrawal (domestic/industrial/agricultural):

total: 9.5 cu km/yr (2%/0%/98%)
per capita: 334.7 cu m/yr (2006)

Natural hazards:

severe thunderstorms; flooding; landslides; drought and famine depending on the timing, intensity, and duration of the summer monsoons

Environment - current issues:

deforestation (overuse of wood for fuel and lack of alternatives); contaminated water (with human and animal wastes, agricultural runoff, and industrial effluents); wildlife conservation; vehicular emissions

Environment - international agreements:

party to: Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Endangered Species, Hazardous Wastes, Law of the Sea, Ozone Layer Protection, Tropical Timber 83, Tropical Timber 94, Wetlands
signed, but not ratified: Marine Life Conservation

Geography - note:

landlocked; strategic location between China and India; contains eight of world's 10 highest peaks, including Mount Everest and Kanchenjunga - the world's tallest and third tallest - on the borders with China and India respectively

(Source: www.cia.gov)

History of Nepal

History of Nepal

Ancient New Road in Kathmandu

Ancient Window in Nepal

The Gopalas and Mahishapalas believed to be the earliest rulers with their capital at Matatirtha, the south-west corner of the Kathmandu Valley. From the 7^th or 8^th Century B.C. the Kirantis are said to have ruled the valley. Their famous King Yalumber is even mentioned in the epic, ‘Mahabharat’. Around 300 A.D. the Lichhavis arrived from northern India and overthrew the Kirantis. One of the legacies of the Lichhavis is the Changu Narayan Temple near Bhaktapur, a UNESCO World Heritage Site (Culture), which dates back to the 5^th Century. In the early 7^th Century, Amshuvarma, the first Thakuri king took over the throne from his father-in-law who was a Lichhavi. He married off his daughter Bhrikuti to the famous Tibetan King Tsong Tsen Gampo thus establishing good relations with Tibet. The Lichhavis brought art and architecture to the valley but the golden age of creativity arrived in 1200 A.D with the Mallas.

Guruju Paltan

During their 550 year rule, the Mallas built numerous temples and splendid palaces with picturesque squares. It was also during their rule that society and the cities became well organized; religious festivals were introduced and literature, music and art were encouraged. After the death of Yaksha Malla, the valley was divided into three kingdoms: Kathmandu (Kantipur), Bhaktapur (Bhadgaon) and Patan (Lalitpur). Around this time, the Nepal as we know it today was divided into about 46 independent principalities. One among these was the kingdom of Gorkha with a Shah ruler. Much of Kathmandu Valley’s history around this time was recorded by Capuchin friars who lived in the valley on their way in and out of Tibet.

Jung Bahadur Rana

An ambitious Gorkha King named Prithvi Narayan Shah embarked on a conquering mission that led to the defeat of all the kingdoms in the valley (including Kirtipur which was an independent state) by 1769. Instead of annexing the newly acquired states to his kingdom of Gorkha, Prithvi Narayan decided to move his capital to Kathmandu establishing the Shah dynasty which ruled unified Nepal from 1769 to 2008.

Dharahara before earthquake - Kathmandu

The history of the Gorkha state goes back to 1559 when Dravya Shah established a kingdom in an area chiefly inhabited by Magars. During the 17^th and early 18^thcenturies, Gorkha continued a slow expansion, conquering various states while forging alliances with others. Prithvi Narayan dedicated himself at an early age to the conquest of the Kathmandu Valley. Recognizing the threat of the British Raj in India, he dismissed European missionaries from the country and for more than a century, Nepal remained in isolation.

Ancient Nepalese Army

Krishna Temple in Lalitpur

Nuwakot Palace

During the mid-19^th Century Jung Bahadur Rana became Nepal’s first prime minister to wield absolute power relegating the Shah king to mere figureheads. He started a hereditary reign of the Rana Prime Ministers that lasted for 104 years. The Ranas were overthrown in a democracy movement of the early 1950s with support from the-then  monarch of Nepal, King Tribhuvan. Soon after the overthrow of the Ranas, King Tribhuvan was reinstated as the Head of the State. In early 1959, Tribhuvan’s son King Mahendra issued a new constitution, and the first democratic elections for a national assembly were held. The Nepali Congress Party was victorious and their leader, Bishweshwar Prasad Koirala formed a government and served as prime minister. But by 1960, King Mahendra had changed his mind and dissolved Parliament, dismissing the first democratic government.

Gorkha Palace

After many years of struggle when the political parties were banned, they finally mustered enough courage to start a People’s Movement in 1990. Paving way for democracy, the then-King Birendra accepted constitutional reforms and established a multiparty parliament with King as the Head of State and an executive Prime Minister. In May 1991, Nepal held its first parliamentary elections. In February 1996, the Maoist parties declared People’s War against monarchy and the elected government.

Patan Durbar Square

Then on 1^st June 2001, a horrific tragedy wiped out the entire royal family including King Birendra and Queen Aishwarya with many of their closest relatives. With only King Birendra’s brother, Gyanendra and his family surviving, he was crowned the king. King Gyanendra abided by the elected government for some time and then dismissed the elected Parliament to wield absolute power.In April 2006, another People’s Movement was launched jointly by the democratic parties focusing most energy in Kathmandu which led to a 19-day curfew. Eventually, King Gyanendra relinquished his power and reinstated the Parliament.On November 21, 2006, Prime Minister Girija Prasad Koirala and Maoist chairman Prachanda signed the Comprehensive Peace Agreement (CPA) 2006, committing to democracy and peace for the progress of the country and people. A Constituent Assembly election was held on April 10, 2008. On May 28,2008, the newly elected Constituent Assembly declared Nepal a Federal Democratic Republic, abolishing the 240 year-old monarchy. Nepal today has a President as Head of State and a Prime Minister heading the Government.

Recently, Nepal is in the path of poll of second Constitution Assembly at the end of  2013.

(Source: www.cia.gov)