Part 525

Legal system: based on Hindu legal concepts and English common law; has not accepted compulsory ICJ jurisdiction

Suffrage: 18 years of age; universal

Executive branch: chief of state: King BIRENDRA Bir Bikram Shah Dev (succeeded to the throne 31 January 1972 following the death of his father King MAHENDRA Bir Bikram Shah Dev, crowned king 24 February 1975) is a constitutional monarch; Heir Apparent Crown Prince DIPENDRA Bir Bikram head of government: Prime Minister Sher Bahadur DEUBA (since 12 September 1995); note - in 1994, the king appointed Man Mohan ADHIKARI to be prime minister using the standard criterion - he was the leader of the majority party in the House of Representatives following the last election; however, in September 1995, a parliamentary coalition of the Nepali Congress Party, the Rastriya Prajantra Party, the Nepal Sadbhavana Party, and independents voted against Prime Minister ADHIKARI; Sher Bahadur DEUBA, the leader of the Nepali Congress Party, then formed the new government and was appointed the new prime minister by the king cabinet: Cabinet was appointed by the king on recommendation of the prime minister

Legislative branch: bicameral Parliament National Council: consists of 60 members (50 appointed by House of Representatives and 10 by the king) House of Representatives: elections last held 15 November 1994 (next to be held NA); results - NCP 33%, CPN/UML 31%, NDP 18%, Terai Rights Sadbhavana Party 3%, NWPP 1%; seats - (205 total) CPN/UML 88, NCP 83, NDP 20, NWPP 4, Terai Rights Sadbhavana Party 3, independents 7

Judicial branch: Supreme Court (Sarbochha Adalat), chief justice is appointed by the king on recommendation of the Constitutional Council, the other judges are appointed by the king on the recommendation of the Judicial Council

Political parties and leaders: Communist Party of Nepal/United Marxist and Leninist (CPN/UML), Man Mohan ADHIKARI, president; Nepali Congress Party (NCP), Krishna Prasad BHATTARAI (president), Girija Prasad KOIRALA, Prime Minister Sher Bahadur DEUBA; National Democratic Party (NDP), leader NA; Terai Rights Sadbhavana (Goodwill) Party, Gajendra Narayan SINGH; Nepal Workers and Peasants Party (NWPP), leader NA; Nepal Sadbhavana Party, leader NA; Rastriya Prajantra Party, leader NA

Other political or pressure groups: numerous small, left-leaning student groups in the capital; several small, radical Nepalese antimonarchist groups

International organization participation: AsDB, CCC, CP, ESCAP, FAO, G-77, IBRD, ICAO, ICRM, IDA, IFAD, IFC, IFRCS, ILO, IMF, IMO, Intelsat, Interpol, IOC, ISO (correspondent), ITU, NAM, SAARC, UN, UNCRO, UNCTAD, UNESCO, UNIDO, UNIFIL, UNMIH, UNPROFOR, UPU, WFTU, WHO, WMO, WToO, WTrO (applicant)

Diplomatic representation in US: chief of mission: Ambassador Basudev Prasad DHUNGANA chancery: 2131 Leroy Place NW, Washington, DC 20008 telephone: (202) 667-4550 consulate(s) general: New York

US diplomatic representation: chief of mission: Ambassador Sandra L. VOGELGESANG embassy: Pani Pokhari, Kathmandu mailing address: use embassy street address telephone: (1) 411179 FAX: (1) 419963

Flag: 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

Economy -------

Economic overview: Nepal is among the poorest and least developed countries in the world. Agriculture is the mainstay of the economy, providing a livelihood for over 80% of the population and accounting for about one-half of GDP. Industrial activity is limited, mainly involving the processing of agricultural produce (jute, sugarcane, tobacco, and grain). Production of textiles and carpets has expanded recently and accounted for 85% of foreign exchange earnings in FY93/94. Apart from agricultural land and forests, exploitable natural resources are mica, hydropower, and tourism. Agricultural production in the late 1980s grew by about 5%, as compared with annual population growth of 2.6%. More than 40% of the population is undernourished. Since May 1991, the government has been moving forward with economic reforms particularly those that encourage trade and foreign investment, e.g., by eliminating business licenses and registration requirements in order to simplify investment procedures. The government has also been cutting public expenditures by reducing subsidies, privatizing state industries, and laying off civil servants. (In 1995 little progress was made in these areas because the communist government had trouble formulating and implementing policies.) The new coalition government is planning to pick up the pace of reforms in 1996, focusing primarily on raising revenues to develop the rural sector by increasing taxation and privatization. Prospects for foreign trade and investment, particularly in areas other than power development and tourism, will continue to remain poor because of the small size of the economy, its technological backwardness, its remoteness, and its susceptibility to natural disaster. The international community provides funding for 62% of Nepal's developmental budget and for 34% of total budgetary expenditures.

GDP: purchasing power parity - $25.2 billion (1995 est.)

GDP real growth rate: 2.3% (1995 est.)

GDP per capita: $1,200 (1995 est.)

GDP composition by sector: agriculture: 49.3% industry: 18.4% services: 32.3% (1993)

Inflation rate (consumer prices): 6.7% (FY94/95)

Labor force: 8.5 million (1991 est.) by occupation: agriculture 93%, services 5%, industry 2% note: severe lack of skilled labor

Unemployment rate: NA%; substantial underemployment (1995)

Budget: revenues: $645 million expenditures: $1.05 billion, including capital expenditures of $NA (FY94/95 est.)

Industries: tourism, carpet, textile; small rice, jute, sugar, and oilseed mills; cigarette; cement and brick production

Industrial production growth rate: 14.7% (FY94/95 est.)

Electricity: capacity: 280,000 kW production: 920 million kWh consumption per capita: 41 kWh (1993)

Agriculture: rice, corn, wheat, sugarcane, root crops; milk, water buffalo meat

Illicit drugs: illicit producer of cannabis for the domestic and international drug markets; transit point for heroin from Southeast Asia to the West

Exports: $430 million (f.o.b., 1995 est.) but does not include unrecorded border trade with India commodities: carpets, clothing, leather goods, jute goods, grain partners: India, US, Germany, UK

Imports: $1.4 billion (c.i.f., 1995 est.) commodities: petroleum products 20%, fertilizer 11%, machinery 10% partners: India, Singapore, Japan, Germany