NEPAL

Kingdom of Nepal

Nepal Adhirajya

CAPITAL: Kāthmāndu

FLAG: The national flag consists of two red adjoining triangles, outlined in blue and merging at the center; the points are at the fly. On the upper triangle, in white, is a symbolic representation of the moon; on the lower triangle, that of the sun.

ANTHEM: The national anthem begins "May His Majesty, solemn and supremely valiant, be prosperous forever."

MONETARY UNIT: The Nepalese rupee (nr) is a paper currency of 100 paisa. There are coins of 1, 2, 5, 10, 20, 25, and 50 paisa and 1, 2, 5, 10, 20, 25, 50, and 100 rupees, and notes of 1, 2, 5, 10, 20, 50, 100, 500, and 1,000 Nepalese rupees. nr1 = $0.01357 (or $1 = nr73.674; as of 2004).

WEIGHTS AND MEASURES: The metric system is in use, but some traditional Indian standards also are employed.

HOLIDAYS: National Unity Day, 11 January; Martyrs' Day, 30 January; Rashtriya Prajatantra Divas—National Democracy Day, 18 February; Nepalese Women's Day, 8 March; Navabarsha—Nepalese New Year's Day, mid-April; UN Day, 24 October; Queen Aishworya's Birthday, 7 November; Constitution Day, 9 November; National Day (King Birendra's Birthday), 28 December. Hindu and Buddhist religious holidays are based on the lunisolar calendar. Saturday is the general day of rest.

TIME: 5:45 pm = noon GMT.

LOCATION, SIZE, AND EXTENT

A comparatively narrow strip of territory dividing India from China, landlocked Nepal has an area of about 140,800 sq km (54,363 sq mi), extending 885 km (550 mi) se–nw and 201 km (125 mi) ne–sw. Comparatively, the area occupied by Nepal is slightly larger than the state of Arkansas. In its length lie some 800 km (500 mi) of the Himalayan mountain chain. Nepal is bounded on the n by China and on the e, s, and w by India, with a total boundary length of 2,926 km (1,818 mi). Nepal's capital city, Kāthmāndu, is located in the central part of the country.

TOPOGRAPHY

Nepal is made up of three strikingly contrasted areas. Southern Nepal has much of the character of the great plains of India, from which it extends. Known as the Terai, this region comprises both cultivable land and dense jungle, the latter being for the most part a game preserve inhabited by the wild elephant, tiger, and other typically South Asian fauna. Besides being a hunting ground, the forests are worked for their valuable timber. The Terai contains about one-third of Nepal's population and makes up about one-fourth of the total area. The second and by far the largest part of Nepal is formed by the Mahabharat, Churia, and Himalayan mountain ranges, extending from east to west. Their altitude increases toward the north, culminating on the Tibetan border in Mt. Everest (Sagarmatha in Nepali), standing amid other noble peaks.

Three principal rivers originate from glaciers and snow-fed lakes, break southward through deep Himalayan gorges, and enter, respectively, the Karnali, Gandak, and Kosi basins. Flowing toward India, they become tributaries (as are all Nepal's rivers) of the Ganges system. The third area is a high central region, some 890 km (344 sq mi) in extent between the main Himalayan and Mahabharat ranges; this region is known as the Kāthmāndu Valley, or the Valley of Nepal. Overlooked by mountains, the valley, with its fertile soil and temperate climate, supports a thriving agriculture. Here Kāthmāndu, the capital, is situated, with the foothill towns of Bhaktapur and Patan nearby. This is the only region of Nepal that has any considerable population density.

Eight of the world's highest mountains are situated in the Himalaya range on the Tibetan border. Triangulated in 1850, Mt. Everest was officially given the status of the world's highest peak in 1859. The summit (8,850 m/29,035 ft) was reached for the first time on 29 May 1953 by Sir Edmund Hillary, a New Zealander, and Tenzing Norgay, a Sherpa guide.

CLIMATE

Below the Kāthmāndu Valley and throughout the Terai, the climate is subtropical and, in the swamps and forests, extremely humid. The valley itself enjoys the temperate conditions generally found between altitudes of 1,200–3,400 m (4,000–11,000 ft). At 1,300 m (4,300 ft) above sea level, the elevation of Kāthmāndu, the rainy season lasts from June to October; 80% of annual precipitation falls during this monsoon season. Colder weather follows, lasting until the middle of March, when the warm season begins. The warm season increases in intensity until broken by the rains, which account for precipitation of about 150 cm (60 in) annually. Temperatures in Kāthmāndu in January range from an average minimum of 2°c (36°f) to an average maximum of 18°c (64°f); the July range is 20–29°c (68–84°f). Northward of the Kāthmāndu Valley, a subalpine zone continues to altitudes of about 4,300 m (14,000 ft); above that elevation, the country is covered with snow during the long winter, and extreme cold is experienced in the upper Himalayas.

FLORA AND FAUNA

The wide range of climate accounts for correspondingly marked contrasts in flora and fauna between different regions of the country. In the south, the sal (the wood of which is used for railroad ties), sisu, and other subtropical trees are abundant in forests; in the extreme north, junipers are seen even at the altitude of the glacial moraines. Many kinds of conifers also exist in the alpine zone, along with the yew, various hollies, birch, dwarf rhododendrons, and other alpine flora.

Dominant in the Langtang Valley are the chir pine, willow, alder, and evergreen oak. Blue pine and silver fir are frequent in the subalpine zone, which also supports tree rhododendrons—magnificent plants often reaching a growth of 12 m (40 ft). Ground orchids, lilies, yellow and blue poppies, and crimson anemones are prevalent in central Nepal. The profusion of wild flowers extends to very high altitudes; at 5,200 m (17,000 ft), several varieties of primula, pink and white cotoneaster, and white erica have been gathered, along with many kinds of alpine mosses and ferns.

The tiger, hyena, and jackal still exist in southern Nepal, although in decreasing numbers. Rhesus monkeys and a variety of other small jungle mammals and rodents are common. At middle altitudes are found the black bear, several species of cats, squirrel, hare, deer, and antelope. Higher in the mountains, wild sheep and goats, marmots, and a species of tailless mouse-hare are numerous. Wild yaks can still be found in the mountains of Nepal. The wild yaks, an endangered species that holds the distinction of being the mammal that lives at the highest altitudes, can make their homes at altitudes up to 6,096 m (20,000 ft), but have trouble in altitudes below 3,048 m (10,000 ft). Small black spiders were found at 6,900 m (22,500 ft) on rocky ledges traversed by the Mt. Everest expedition of 1953.

Birds of Nepal include the green finch, dove, woodpecker, nuthatch, warbler, flycatcher, bulbul, and other familiar species. At about 2,700 m (9,000 ft) are found the hill partridge, pheasant, yellow-backed sunbird, minivet, and many of the flowerpeckers; the redstart, pipit, wagtail, snow pigeon, snowcock, and golden eagle thrive in both the alpine and subalpine zones.

As of 2002, there were at least 181 species of mammals, 274 species of birds, and over 6,900 species of plants throughout the country.

ENVIRONMENT

Nepal's environment has suffered the effects of agricultural encroachment, deforestation and consequent soil erosion, and contamination of the water supply. Between the mid-1960s and the late 1970s, forestland declined from 30% to 22% of the total area, mainly because of the felling of timber for firewood, which supplies over 90% of Nepal's fuel requirements. All of Nepal's forests were nationalized in 1957, but reforestation efforts have been minimal. A forest conservation program, begun in 1980, includes the establishment of village tree nurseries, free distribution of seedlings, and provision of wood-burning stoves of increased efficiency. By 1985, however, deforestation averaged 324 sq mi per year, while reforestation was only 4,000 hectares (9,900 acres) per year. An additional 4.4% of forest and woodland were lost between 1983 and 1993. As of 2000, the annual rate of deforestation was at about 1.8%. The FAO has estimated that at the present rates of depletion, the forests will be virtually wiped out by 2015.

Air and water pollution are significant environmental problems in Nepal. In 2000, the total carbon dioxide emissions was at 3.4 million metric tons. The use of contaminated drinking water creates a health hazard. Untreated sewage is a major pollution factor: the nation's cities have produced an average of 0.4 million tons of solid waste per year.

In 2003, about 8.9% of the total land are of Nepal was protected. There are two natural UNESCO World Heritage Sites: Sagarmatha National Park and Royal Chitwan National Park. There are four Ramsar wetland sites. According to a 2006 report issued by the International Union for Conservation of Nature and Natural Resources (IUCN), threatened species included 29 types of mammals, 31 species of birds, 6 types of reptiles, 3 species of amphibians, 1 species of invertebrates, and 7 species of plants. Species classified as endangered in Nepal included the snow leopard, tiger, Asian elephant, pygmy hog, great Indian rhinoceros, Assam rabbit, swamp deer, wild yak, chir pheasant, and gavial.

POPULATION

The population of Nepal in 2005 was estimated by the United Nations (UN) at 25,371,000, which placed it at number 45 in population among the 193 nations of the world. In 2005, approximately 4% of the population was over 65 years of age, with another 39% of the population under 15 years of age. There were 98 males for every 100 females in the country. According to the UN, the annual population rate of change for 2005–10 was expected to be 2.2%, a rate the government viewed as too high in light of the country's environmental problems and poverty. The projected population for the year 2025 was 36,093,000.

The population density was 172 per sq km (446 per sq mi), but population distribution is uneven, with about 45% of all Nepalese concentrated in the hilly central region, 47% in the fertile Terai plain, and only 8% in the mountains.

The UN estimated that 14% of the population lived in urban areas in 2005, and that urban areas were estimated to be growing at an annual rate for 2000–05 at 5.1%. The capital city, Kāthmāndu, had a population of 741,000 in that year.

MIGRATION

Nearly 20,000 Tibetans arrived in Nepal between the Chinese annexation of Tibet in 1959 and 1989. Hundreds of thousands of Nepalese were believed to be working in India in the 1980s, and over 100,000 Indians were working in Nepal, particularly in the garment industry and on the building of highways.

An influx of Bhutanese refugees into Nepal began in late 1991 and peaked in 1992; the flow of new arrivals slowed after 1997. The total number of migrants in 2000 was 619,000 including refugees. In 2004, there were 104,915 refugees from Bhutan and 20,704 from Tibet, and an additional 654 asylum seekers. In that same year over 1,200 Nepalese applied for asylum in Europe, Hong Kong, the United Kingdom, and the United States. Others of concern to the United Nations High Commissioner for Refugees (UNHCR) in Nepal are 10,000 Bhutanese and 737 Tibetans.

In 2005, the net migration rate was zero per 1,000 population. The government views the migration levels as satisfactory. In 2004, an estimated 1.2 million Nepalese worked abroad in nearly 40 foreign countries returning about $1 billion in remittances.

ETHNIC GROUPS

Nepal consists of two primary ethnic elements: Mongoloids, who migrated to Nepal by way of Tibet, Sikkim, Assam, and northern Bengal; and Indo-Aryans, who came from the Indian plains and from the sub-Himalayan hill areas to the west of Nepal. These can be broken down into more than 75 ethnic groups. There are also small remnants of Dravidian tribes. Bhotes, of Tibetan origin, are the principal occupants of northern Nepal. In the central valley, Newars, considered to be one of the earliest groups of inhabitants, and Murmis predominate, the former being responsible for most of the agriculture and trade. Less numerous groups include Gurungs and Magars in west-central Nepal and Kirantis and Rai in the east. Sherpas, a Himalayan people, have become well known as guides for mountain-climbing expeditions. The aboriginal Tharus live in the southern Terai region. The Brahman and Chetri caste groups are believed to be descendants of Indian settlers. The Dalit, who are members of the lowest caste system formerly called "untouchables," still face social, political, economic, and even religious discrimination, particular in the rural areas of the west. The government has imposed laws prohibiting such discrimination.

At the 2001 census, the Chetri accounted for about 15.5% of the population and the Brahmans made up 12.5% of the population. Magars accounted for 7%, Tharus for 6.6%, Tamang 5.5%, Newar 5.4%, Muslims 4.2%, Kami 3.9%, and Yadav 3.9%.

LANGUAGES

Nepali is the official language, although some 50 different languages are spoken. Nepali is spoken by about 47.8% of the population and is the language for most intertribal communication; it is used in government publications and has been the language of most of the written literature since the Gurkha unification of Nepal. About 12.1% of the people speak Maithili as their first language, 7.4% Bhojpuri, 5.8% Tharu, 5.1% Tamang, 3.6% Newar, 3.3% Magar, and 2.4% Awadhi. Except in primary schools, where children are taught in their own language, Nepali or English is the medium of instruction. English is taught as a second language in secondary schools and colleges and is widely understood in business and government circles.

RELIGIONS

Hinduism and Buddhism exist side by side in Nepal and to some extent are intermingled. The importance of both in the national life is manifested everywhere; more than 2,700 temples and shrines have been counted in the Kāthmāndu Valley alone, while innumerable others are scattered along trails and roads extending to the most distant mountain passes. Bodhnath and Shambunath are famous Buddhist temples. The ancient temple of Chandrahigiri is dedicated to both religions. The Baghmati River, flowing through central Nepal, is considered sacred and is visited by pilgrims, as are certain mountains and lakes.

A 2004 report indicated that about 81% of the population were nominally Hindu, while 11% were Buddhist. Muslims constituted about 4.2% of the population. Minorities included Christians, Baha'is, Jains, and Kirants (followers of an indigenous animist religion). The constitution does not establish a state religion but does describe the nation as a "Hindu Kingdom." The constitution also forbids proselytizing. Certain Hindu holidays are recognized as national holidays, as is the birthday of the Buddha. Some local authorities have restricted public celebrations of Tibetan Buddhist festivals.

TRANSPORTATION

Nepal's ratios of road mileage to area and to population are among the lowest in the world, and the principal means of land transport is by porters with pack animals. The main highways are the 190-km (118-mi) road that penetrates the Kāthmāndu Valley, connecting it with the Indian border; the 87-km (54-mi) road between Kāthmāndu and Kodari on the Tibetan (Chinese) border, which was severely damaged by flooding in late 1982 and was later rebuilt with Chinese assistance; the 862-km (536-mi) east–west Mahendra Highway; and the 200-km (124-mi) Kāthmāndu-Pokhara highway, which is being extended to Surkhet. In all, Nepal had 13,223 km (48,217 mi) of roadway in 2002, of which 4,073 km (2,531 mi) were paved.

There are no waterways in Nepal. The only practical seaport for goods bound for Kāthmāndu is Calcutta in India.

Nepal had a total of 59 km (37 mi) of railways in 2004, all of it narrow gauge and all in Kosi, close to the Indian border. Opened in 1927, the line runs from Jayanagar, in India, to Janakpur, a distance of 52 km (32 mi), of which 10 km (6 mi), running from Raxaul, India, to the frontier town of Birganj, is government owned. An electrically driven ropeway, inaugurated in 1925 and improved with US aid in 1962, carries 25 tons an hour a distance of 43 km (27 mi), to a height of nearly 1,400 m (4,500 ft) from Hetaura to Kāthmāndu.

Much of Nepal is easily accessible only by air. In 2004 there were an estimated 46 airports, of which 10 (as of 2005), had permanently surfaced runways. The leading air terminal is Tribhuvan airport at Kāthmāndu. Domestic flights are operated by the Royal Nepal Airlines Corp., which also schedules flights to Great Britain, Germany, India and eight other Asian countries. In 2003, about 625,000 passengers were carried on scheduled domestic and international airline flights.

HISTORY

Fact, myth, and legend are intertwined in Nepal's historical literature, which, in the Vamshavali, traces the origins of the country in the distant past when Nepal was allegedly founded by Ne-Muni and derived its name from this source. A reliable chronology can be established only after the conquest of Nepal by Harisinha-deva, rajah of Simraun in about 1324. Under the Malla dynasty, Nepal was administered in four separate states: Banepa, Bhadgaon (now Bhaktapur), Kantipur (modern Kāthmāndu), and Lalitpur (now Pāţan).

Prithwi Narayan Shah, the ruler of Gorkha, a small principality west of Kāthmāndu, established the modern kingdom of Nepal in 1768 by incorporating the Kāthmāndu Valley into his domain and unifying with it many small independent principalities and states. Under his descendants, most of the present boundaries of Nepal were established and Hinduism was introduced from India as the official religion.

Nepal came in contact with the influence of larger powers outside South Asia in the late 18th century as a consequence of the British East India Company's conquest of India to its south and a trade dispute with Tibet that led to a Nepalese confrontation with China. Peace was imposed by China in 1792, after Chinese forces had invaded, then withdrawn from Nepal. In the same year, a commercial treaty was ratified between Britain and Nepal. Relations with the British in India remained peaceful until 1814 when a border dispute led to inconclusive hostilities between Nepal and the British East India Company. When the fighting ended two years later, Nepal's independence was preserved in an agreement in which Nepal yielded a large piece of territory to the Company on its southern border and agreed to the establishment of a permanent British resident at Kāthmāndu.

The 1816 agreement (reaffirmed by a formal treaty of friendship between Nepal and Great Britain in 1923) also laid the groundwork for more than a century and a half of amicable relations between Britain and Nepal. Included under the agreement was Nepalese approval for British recruitment of Nepalese Gurkha mercenaries for the British-officered Indian army. During the Indian Mutiny of 1857, Nepal's Rana prime minister sent some 12,000 additional Nepalese troops in support of British garrisons; he also offered troops to US president Abraham Lincoln in 1866 during the US Civil War. Over the years, the Gurkha regiments serving in the British Indian army (and after 1947 under both Indian and British flags) won renown for their bravery, skill, and endurance—in Afghanistan in 1879 and Tibet in 1904, in Europe, Asian, and Africa in the 20th century's two world wars, in the UN action in the Belgian Congo in the 1960s, in India's conflicts with China and Pakistan, and in 1982, in Britain's conflict with Argentina over the Falkland Islands.

In 1846, Shumshere Jung Bahadur (Rana) became Nepal's de facto ruler, banishing the king and ruling as regent for the king's minor heir. The prime ministership became a hereditary office in his Rana family, not unlike the Tokugawa Shogunate in Japan, ruling successively until 1951. Following the end of World War II, the termination of British rule on the South Asian subcontinent in 1947 caused deep stirrings of change in Nepal. Resentment grew against the autocratic despotism of the Ranas, who—as regents—had kept successive monarchs virtual prisoners. A political reform movement, begun in 1946 with the founding of the Nepali Congress Party on the model of the Indian Congress Party, won the support of King Tribhuvana Bir Bikram Shah, but in a power struggle in 1950, the king was forced to flee from the Ranas to India. With Indian support, insurgents began operations against the Rana government until, with the mediation of Indian Prime Minister Nehru, a political compromise was reached that returned the king to Kāthmāndu and ended a century of hereditary Rana family rule. By late 1951 a new government took office, headed by Matrika Prasad Koirala, with his brother, a co-founder of the Nepali Congress Party (NC).

Political life in Nepal in the years since the restoration of the monarchy in 1951 has been dominated by the struggle between the monarchy and the country's political elements to define the terms under which they will co-exist and bring the country into the modern world. Six different cabinets, each lacking popular support and riddled with dissension, held office in rapid succession between 1951 and 1957, and in 1957–58, King Mahendra Bir Bikram Shah, who had succeeded to the throne upon the death of his father in 1955, ruled directly for a period of months. In April 1959, he promulgated a democratic constitution, providing for a constitutional monarchy, two houses of parliament, and a cabinet and prime minister responsible to the lower house, in the Westminster model. Bisweswar Prasad (B. P.) Koirala of the NC assumed office on 24 July 1959 as first prime minister under this constitution.

Less than 18 months later, on 15 December 1960, the king suspended the constitution, dissolved parliament, dismissed the cabinet, and again established his own government, this time with an appointed council of ministers. He ruled directly until April 1962 when he promulgated a new constitution establishing an indirect, nonparty system of rule through a tiered system of panchayats (council) culminating in a National Panchayat. Five years later, after growing agitation and hit-and-run attacks by NC elements based in India, the king—again under Indian pressure—promulgated a series of amendments introducing gradual liberalization.

In January 1972, Mahendra died suddenly and was succeeded by his 27-year-old son, Birendra Bir Bikram Shah Dev. The young monarch, who had attended Harvard University in the United States, was committed to maintaining the authority of the monarchy while keeping Nepal on the course of gradual political and social reform set by his father. Student demonstrations in early 1979 led him to call for a national referendum on whether to continue the panchayat system or create a more conventional multiparty system. With the king promising further liberalization, the existing panchayat system was endorsed by 55% of the voters in May 1980, and later that year, the king's subsequent constitutional amendments established direct elections and permitted the Panchayat, not the king, to choose the prime minister. The king's failure to lift the ban on political parties led party members—ineffectively—to boycott the elections of 1981 in which Surya Bahadur Thapa, a former civil servant who had become prime minister in 1979, was reaffirmed in June 1981 and continued in office until 1983 when he was replaced by Lokendra Bahadur Chand following the government's loss of its majority on an opposition "no confidence" motion.

In nonparty elections to the National Panchayat in May 1986, again in the face of a major party boycott, a majority of the incumbents were defeated, and Marich Man Singh Shrestha became prime minister. Most new members were opponents of the panchayat system, foreshadowing a new struggle between the king and his legislators. By early 1990, the NC and the United Leftist Front (ULF), a Communist alliance of seven parties, again went to the streets, organizing agitations that forced the king to make further constitutional changes in April; included were an end to the ban on political parties and their activities. The king dissolved the National Panchayat and appointed NC president Krishna Prasad Bhattarai interim prime minister, who was assisted by a cabinet made up of members of the NC, the ULF, independents, and royal appointees. A Constitutional Reforms Commission produced a new constitution in November 1990 that ended the panchayat era and restored multiparty democracy in a constitutional monarchy. In May 1991, the first openly partisan elections in 32 years were held, resulting in an NC majority in the new House of Representatives which chose Girija Prasad Koirala as prime minister. As of December 2002, Koirala had held the office of prime minister four times in his career.

On 1 June 2001, the former Crown Prince Dipendra Bir Bikram killed most of the royal family with an assault rifle as they sat around a dinner table. Although many theories circulated as to the motive for the killings, it is generally accepted that he turned against his family because his mother did not approve of a young woman as his choice of bride. Dipendra murdered his father, King Birendra, his mother, Queen Aishwarya, his sister, Princess Sruti, his brother, Prince Nirajan, and five others. He then shot himself in the head. Dipendra was anointed king while in a coma; two days later he died, and his uncle, Gyanendra Bir Bikram Shah Dev, was named king.

In addition to the slayings, Nepal has been embroiled in civil war. In 1996, a "people's war" was launched by several Maoist organizations in the central-western hill districts of Nepal. The Maoists' aims are the removal of the constitutional monarchy and the eradication of rural poverty. As of December 2005, more than 12,000 people had been killed in the fighting. The insurgents call themselves the Communist Party of Nepal (Maoist), modeled after Peru's Maoist Shining Path guerrillas. As of December 2005, they controlled 45% of Nepal, and brought the economy and political system to a virtual standstill. They are led by Chhabi Lal Dahal, or "Prachanda," who is seen by his followers as charismatic and by his enemies as fanatical. In July 2001, the Maoists came into direct combat with the Nepalese army for the first time, and stepped up their campaign of violence. Koirala, who was prime minister at the time, resigned after losing support from his ruling coalition, and alluded to the violence as a reason why the country needed to work for national consensus. Sher Bahadur Deuba became prime minister. In November 2001, after more than 100 people were killed in four days of violence, the king called a State of Emergency. The emergency measures restricted freedom of the press, as well as freedom of assembly, expression and movement. Suspects could be detained for three weeks without charges.

In February 2002, international donor agencies and individual nations pledged us$2.5 billion to Nepal, and the government increased military activity against the insurgents. In April, more than 300 people were killed in two of the most serious attacks of the rebellion, and the Maoists ordered a five-day national strike. Parliament was dissolved on 22 May, and national elections were scheduled for 13 November. In October, Prime Minister Deuba asked the king to put off the national elections for a year due to the mounting Maoist violence. King Gyanendra dismissed him and indefinitely put off the elections. Lokendra Bahadur Chand was appointed interim prime minister until elections were held and Surya Bahadur Thapa was elected prime minister in 2003. However former Prime Minister Deuba was later reinstated as prime minister in 2004. In February 2005, the King dismissed Prime Minister Deuba (again), dissolved the Cabinet and declared a State of Emergency, which was lifted in April 2005.

In 2004 the cease-fire that had existed between the Maoist rebels and the government collapsed. The killings increased on both sides with the Maoist rebels assassinating government officials, usually at the local level, bombing and attacking Indian-owned establishments. The government officially invited the Maoists to negotiate again in 2004, but the rebels refused.

In the area of foreign policy, Nepal has remained generally nonaligned, maintaining friendly relations with China and with India, despite efforts to minimize traditional Indian influence and the occasional clash of policies on matters relating to trade. In 1961, Nepal signed an agreement with China (which had earlier absorbed Tibet) defining the boundary between the two countries along the traditional watershed. Nepal was uninvolved in the 1962 hostilities between India and China on portions of the border to the east and west of Nepal. One result of this conflict however, was India's occupation of Kalapani, a border region of northwestern Nepal which, as of 2005, was still a matter of dispute with India. The refugee issue of some 104,235 Bhutanese in Nepal remained unresolved as of December 2005 as well as the many Tibetan exiles who have crossed the border from China. Ninety percent of these displaced persons are housed in seven United Nations High Commissioner for Refugees (UNHCR) camps. Nepal also faces a severe illiteracy rate with only 30% of women being literate compared to 65% of males in 2005.

Nepal has a very low per capita GDP of us$240 and a high population growth. The Nepalese economy is characterized by being highly dependent on international aid and having few export options (clothing, carpets and leather goods), although the tourist industry had resurged prior to the 2005 State of Emergency. Nepal also has pursued friendly relations with the great powers and has been the recipient of economic aid from India, the United States, the former USSR, and the World Bank.

GOVERNMENT

The 1990 constitution, Nepal's third (with variations) since 1951, established a constitutional monarchy in which the legislature consists of the king and two houses of parliament, the lower house, called the House of Representatives and the upper house, the National Council. The king is Gyanendra Bir Bikram Shah Dev, the descendent of an unbroken Rajput line going back more than 200 years. The House of Representatives has 205 members elected to terms of five years; at least 5% of the contestants from every party must be women. The National Council has 60 members, 35 of whom are elected by the House of Representatives. The National Council members included three elected women as of 2003. Suffrage is universal at 18 years of age.

The National Council is a permanent body, retiring one-third of its members every two years in elections that take place in May of even-numbered years. The king appoints 10 of the 60 members in the National Council. The remaining 15 members are selected by an electoral college.

In May 2002, parliament was dissolved, and elections were scheduled for 13 November of that year. However, King Gyanendra removed his prime minister who had called for a postponement of national elections for a year due to mounting Maoist violence. King Gyanendra subsequently indefinitely postponed the elections, which, as of December 2005, had not been held.

Nepal's supreme court chief justice is appointed by the king on recommendation of the Constitutional Council. Corruption is seen to be endemic in Nepal and government institutions had all but broken down in rural areas as of 2005. The government suppresses speech that might undermine the monarchy, interethnic or intercaste relations or national security. Internet access to Maoist websites is censored, but otherwise allowed. Most NGOs have abandoned efforts in western Nepal due to Maoist domination of the area. Both the government and the Maoist rebels have been accused of increasing human rights violations after the insurgency in 1996. Nepal has the highest number of unexplained political disappearances worldwide. The Moaist rebels consist of approximately 5,000 guerrillas supported by 15,000 fighters who control 45% of Nepal. Maoists have enacted their own judicial system within their jurisdiction termed "people's government". The Maoists are accused of recruiting, as well as abducting, children to be used as soldiers. International organizations estimate that several hundred thousand Nepalese have been displaced due to the Maoist insurgency. The Maoist insurgency has also drastically reduced Nepalese tourism which was once a major source of revenue for the government.

For development purposes, the country is also divided into five regions by geography (Eastern, Central, Western, Mid-Western, and Far-Western), each of which serves also as a parliamentary constituency, electing three members of the lower house. In 1992, the government undertook a reform of the civil service, lowering the age of retirement from 60 to 58, committing itself to reducing its overall size by 25% by 1993, and engaging in wholesale dismissals of those with 20 or more years of service. Nepal is a majority Hindu country and, although against the law, discrimination due to caste is widespread. The dalits, or untouchables, caste is routinely discriminated against through violence and socio-economic exclusion. Organized gangs traffic between 5,000–12,000 Nepalese women a year to India to work in brothels. The majority who return are HIV positive and are also strongly discriminated against.

POLITICAL PARTIES

The 1962 constitution originally prohibited the formation of political parties and associations, even though political groups continued to exist and operate underground, at times on a quasi-legal basis. Parties were legalized in 1990 and now operate freely in Nepal's multiparty constitutional monarchy. Nepal does not allow party formation along ethnic, caste, religious, tribal or regional lines. The main party through Nepal's modern history—providing nearly all of the country's prime ministers even when the ban on parties prohibited party activity—is the Nepali Congress Party (NC). Inspired by the socialist wing of the Indian National Congress and founded by the Koirala brothers, M. P. and B. P., in 1946, the party led Nepal's first democratic government in 1959. Most of its leaders were imprisoned during the 1960s, but with Indian help, the party operated from India, mounting hit-and-run attacks and maintaining an underground presence in Nepal.

The NC leadership led the opposition to King Mahendra's tiered panchayat system of indirect government. Although NC leaders called for a boycott of the May 1986 elections to the National Panchayat, 1,547 candidates ran for office, and only 40 of the previously elected members retained their seats. After these elections, a Democratic Panchayat Forum (DPF) was formed by NC members to mobilize voters on a nonparty basis to counter the influence in local elections of the Communist Party of Nepal (CPN), whose members had won 16 seats in the National Panchayat.

The communist movement in Nepal has been severely fragmented for years by personal and ideological schisms, some of them occasioned by splits and the loss of orthodoxy in the communist movement worldwide in the 1960s and 1980s. Operating for electoral and agitational purposes in the 1980s as the United Leftist Front (ULF), the Communist Party (CPN) and its several communist allies have since split, fragmenting the movement into a number of splinter parties but leaving the CPN, now reassembled as the United Marxist-Leninists (UML) as the leading opposition party in the parliament. The latest elections to the House of Representatives were held on 3 and 17 May 1999. The results were: Nepali Congress (NC), 113 seats; Communist Party of Nepal/United Marxist-Leninist (CPN/UML), 69 seats; National Democratic Party (NDP), also called the Rastriya Prajatantra Party, 11 seats; Nepal Sadbhavana Party (NSP), 5 seats; Rastriya Jana Morcha, 5 seats; Samyukta Janmorcha Nepal, 1 seat; Nepal Workers and Peasants Party (NWPP), 1 seat. Elections scheduled to be held on 13 November 2002 were indefinitely postponed by the king.

LOCAL GOVERNMENT

For centuries, the heads of petty principalities within Nepal exercised local judicial, police, and other powers. Under the panchayat reforms introduced in 1962, the country was divided into 14 zones, which in turn were divided into 75 districts. The zones were directly administered by commissioners appointed by the central government, and the zonal panchayats were executive bodies elected from the 11-member panchayats at the district level, the members of which were in turn selected from village and town panchayats. Each of the 3,600 villages with populations of more than 2,000 and each of the 33 towns with populations over 10,000 also had an 11-member panchayat, as well as its own local assembly.

In April 1990, the partyless panchayat system was abolished as a result of a people's movement organized by the Nepali Congress Party and several leftist parties. However, the country remains divided into 14 zones (headed by appointed commissioners) and 75 districts (under the charge of district officers responsible for law and order, collecting revenues, and setting development priorities). The districts are further divided into smaller units—into municipalities and village development committees (VDC). At present, there are 3,913 VDCs and 58 municipalities in the country. A VDC consists of 9 wards and the municipalities consist from 9 to 35 wards. Municipalities and VDCs are directly elected.

In 1997, a royal decentralization ordinance was enacted that allowed for increased political participation by women. The ordinance called for the reservation of 20% of local government ward seats for women. This election resulted in approximately 32,000 local government seats in Nepal held by women. However, due to lack of knowledge, skills and education needed to carry out their responsibilities, arguments ensued amongst representatives against the mandatory percentage afforded to women.

JUDICIAL SYSTEM

Each district has a court of first instance, civil and criminal, as well as a court of appeals and 14 zonal courts. There are five regional courts—at Kāthmāndu, Dhankutā, Pokharā, Surkhet, and Dipayal—to which further appeals may be taken. At the apex is the supreme court in Kāthmāndu, which is empowered to issue writs of habeas corpus and decide on the constitutionality of laws. The court is composed of a chief justice, assisted usually by six other judges, with seven additional judges in reserve; all are appointed by the king. The Supreme Court is the court of last resort, but the king may grant pardons and suspend, commute or remit sentences of any court. There are separate military courts which generally deal only with military personnel. In 1992, the supreme court ruled that civilians may not be tried in the military courts. In April 2001, the supreme court appointed its first female judge.

The 1990 constitution declared the independence of the judiciary. The supreme court has exercised considerable independence in practice, declaring provisions of the Citizenship Act of 1991 and parts of the Labor Act of 1992 unconstitutional. In 1995 the constitutional court also ruled that the dissolution of the parliament at the request of a former primer minister was unconstitutional.

The 1990 constitution affords a number of procedural safeguards for criminal defendants including the right to counsel and protection from double jeopardy and from retroactive application of laws.

Although the judiciary remains, the monarch holds ultimate power, which can be seen in the decree forbidding news media from criticizing the King. While the State of Emergency was formally lifted on 29 April 2005, human rights organizations maintain that many freedoms have yet to be restored. This is most concerning in regards to the Terrorist and Disruptive Activities Ordinance (TADO), which allows up to one-year incommunicado detention. There are many reports of torture, execution and disappearances attributed to both the official government as well as the Maoists rebels.

There is no jury system. Special tribunals hear cases involving terrorism or treason under a treason act. Nepal is a member of the United Nations and the International Criminal Court.

ARMED FORCES

Nepal's armed forces numbered 69,000 active personnel in 2005, all of it accounted for by the Army. The service's primary weapon systems included 40 reconnaissance vehicles, 40 armored personnel carriers and over 95 artillery pieces The Army also had a small air wing of 320 personnel with no combat aircraft. Its air fleet was made up of 2 fixed wing transports, 7 support, and 5 utility helicopters. Nepal also had a paramilitary force of 62,000, which consisted of an armed police force of 15,000 under the Ministry of Home Affairs, and a regular police force of 47,000. The United Kingdom maintained a small military presence in Nepal involved in the recruitment and training of gurkha troops. In 2005, Nepal's defense budget totaled $151 million. Nepalese troops were stationed in 11 countries or regions as UN peacekeepers.

Under separate treaty arrangements going back to 1816, gurkhas of the same mountain stock (especially Magars, Gurungs, Rais, and Limpus) are recruited in Nepal by Great Britain and, since 1947, by the Republic of India. Under British and Indian flags, and with arms, training, and officers provided by their foreign recruiters, gurkhas are among the world's most renowned fighting men with extensive service in all parts of the globe in both world wars and several UN actions of this century.

INTERNATIONAL COOPERATION

Nepal was admitted to the United Nations on 14 December 1955 and is a member of ESCAP and several nonregional specialized agencies, including the FAO, the World Bank, ILO, IMF, UNESCO, UNIDO, and the WHO. It also belongs to the Asian Development Bank, the Colombo Plan, and G-77. In 1985, Nepal joined with six other Asian nations to form the South Asian Association for Regional Cooperation (SAARC); the secretariat is in Kāthmāndu.

Nepal is a member of the Nonaligned Movement. The country has offered support to UN missions and operations in Kosovo (est. 1999), Ethiopia and Eritrea (est. 2000), Liberia (est. 2003), Sierra Leone (est. 1999), East Timor (est. 2002), Burundi (est. 2004, Côte d'Ivoire (est. 2004), and the DROC (est. 1999).

In environmental cooperation, Nepal is part if the South Asia Cooperative Environment Program (SACEP), the Basel Convention, the Convention on Biological Diversity, Ramsar, CITES, International Tropical Timber Agreements, the Montréal Protocol, the Nuclear Test Ban Treaty, and the UN Conventions on the Law of the Sea, Climate Change and Desertification.

ECONOMY

Despite social and economic reforms begun in the 1950s, Nepal's per capita income was only $1,100 (PPP) in 1998, and general living standards are low. The economy is based on subsistence agriculture, which engages about 80% of the labor force but is inefficiently organized and limited by a shortage of arable land in relation to population. Eight development plans, extending from 1955 to 1992, have slowly built up the nation's infrastructure. Nevertheless, the industrial sector is still small and dominated by traditional handicrafts, spinning and weaving, and similar occupations. Growth in medium-scale and cottage industry-based production of carpets and garments for export, expanding tourism, and some government-promoted development of heavy industry sustained an average GDP growth rate of over 5% from 1980–88. In 1989/90, Nepal weathered a major trade and transit dispute with India, maintaining a GDP growth rate of 2%, despite the potentially debilitating tariffs suddenly placed on trade with its largest import supplier and external market.

Nepal's economic potential is by no means insignificant. Kāthmāndu Valley and the Terai zone are fertile areas; there is great forest wealth, including valuable medicinal plants such as pyrethrum, belladonna, and ipecac; deposits of several minerals are known to exist; and swift Himalayan rivers offer great possibilities for hydroelectric development.

The principal challenge for the Nepalese is to provide for a rising and unequally distributed population and to achieve material progress without irrevocably depleting the environmental resource base. Structural adjustment measures initiated in 1989 have reduced the regulation of industry and imports, and are supported by similar liberalization in India, to which Nepal's economy is closely tied. However, aggregate economic growth remained sluggish during the early 1990s. Gross domestic product growth declined from 4.6% in 1990/91 to only 2.1% in 1991/92, due in large part to declining agricultural output following poor weather. Gross domestic product growth averaged an annual rate of 5% between 1988 and 1998. International actors fund more than 60% of Nepal's development budget and account for more than 28% of total budgetary expenditures. In 1995 Nepal joined the South Asian Association for Regional Cooperation (SAARC) in the South Asian Preferential Trade Area.

The GDP growth rate was negative in 2002 (-0.3%), but the economy recovered in 2003 and 2004, expanding by 2.8% and 3.4% respectively; in 2005, the GDP growth rate was expected to be 3.5%. The inflation rate has been fluctuating, but at 2.9% in 2004, it was considered to be under control and did not pose a problem to the overall economy. Despite encouraging economic growth rates, Nepal remains one of the poorest countries in the world, land-locked, with a poor infrastructure, and meager connections to outside markets.

INCOME

The US Central Intelligence Agency (CIA) reports that in 2005 Nepal's gross domestic product (GDP) was estimated at $42.2 billion. The CIA defines GDP as the value of all final goods and services produced within a nation in a given year and computed on the basis of purchasing power parity (PPP) rather than value as measured on the basis of the rate of exchange based on current dollars. The per capita GDP was estimated at $1,500. The annual growth rate of GDP was estimated at 2.5%. The average inflation rate in 2005 was 2.9%. It was estimated that agriculture accounted for 40% of GDP, industry 20%, and services 40%.

According to the World Bank, in 2003 remittances from citizens working abroad totaled $785 million or about $32 per capita and accounted for approximately 13.4% of GDP. Foreign aid receipts amounted to $467 million or about $19 per capita and accounted for approximately 8.0% of the gross national income (GNI).

The World Bank reports that in 2003 household consumption in Nepal totaled $4.57 billion or about $185 per capita based on a GDP of $5.9 billion, measured in current dollars rather than PPP. Household consumption includes expenditures of individuals, households, and nongovernmental organizations on goods and services, excluding purchases of dwellings.

In 2001 it was estimated that approximately 44% of household consumption was spent on food, 7% on fuel, 5% on health care, and 14% on education. It was estimated that in 1996 about 42% of the population had incomes below the poverty line.

LABOR

In the latest years for which data was available, as of 1998, Nepal's labor force was estimated to number 11 million. In 2002, the vast majority, approximately 81% of the workforce, was engaged in agriculture. Most agriculturists are peasant farmers, and there are many wage laborers, but only in the peak seasons. The service sector provides work for 16% of the labor force, and industry accounts for the remaining 3%. There is a severe lack of skilled labor. Among some tribes, women do most of the farm work, while in others, especially among strict Hindus, they do no farming at all. Many occupations are effectively restricted to certain castes, although the practice has been declared illegal. In 2001, the unemployment rate was 47%.

Unions are allowed to organize and strike. The three largest trade unions are associated with political parties, but the government does not restrict union activity. However, the right of a union to strike is limited to nonessential services. About 20% of the workforce is covered by collective bargaining agreements.

Minimum wage rates and working conditions in the small industrial sector are set by the Nepal Factories and Factory Workers' Act of 1959, as amended. In 2002, the minimum wage was $20 per month for unskilled, $21 for semiskilled, and $25 for skilled workers in the organized industrial sector. Wages can be as low as 50% of the minimum in the informal economy and the agricultural sector. The law establishes a minimum employment age of 16 years in industry and 14 years in agriculture.

AGRICULTURE

In 2003, agriculture provided about 41% of GDP. Only about 7% of the land can actually be cultivated. Regional imbalance and lack of integration also hamper Nepal's agriculture. Although the country produces an overall exportable surplus of food grains, some areas of the country, particularly Kāthmāndu Valley and the hill areas, have a food deficit. Lack of transportation and storage facilities prevents the movement of food grains from the Terai to the hills, with the result that Nepal both exports and imports the same food items.

Agriculture has been hampered by the lack of irrigated land, by the small size of farms (an average of four hectares/10 acres), and by inefficient farming methods. Some of the arable land is still held free of taxation by a few large landowners and farmed by tenants, whose productivity is low. The government has officially abolished tax-free estates (birta ), eliminated the feudal form of land tenure (jagira ), set a limit on landholdings, and redistributed the extra land to farm tenants. Its economic plans also include the use of fertilizers, insecticides, improved seeds, and better implements; the extension of irrigation; and the construction of transportation and storage facilities.

Rice, Nepal's most important cereal, is grown on more than half the cultivated land, mainly in the Terai but also on every available piece of ground in the Kāthmāndu Valley during the monsoon season. In 2004, rice production totaled 4,300,000 tons. Production of maize, grown on the carefully terraced hillsides, was 1,590,000 tons in 2004; land under cultivation with maize was 25% of the area allotted to food grains. The output of wheat in 2004 was 1,387,000 tons; millet, 283,000 tons; and barley, 30,000 tons. Cash crops (with 2004 output) included sugarcane, 2,305,000 tons; potatoes, 1,643,000 tons; mustard seed, 133,000 tons; linseed, 6,100 tons; jute, 6,900 tons; and tobacco, 3,300 tons. Sugarcane, jute, and tobacco are the major raw materials for Nepal's own industries. Potatoes are grown in Ilam and fruit mainly in Dharan, Dhankuta, and Pokhara. Tea is also grown in Ilam and elsewhere. In 2004, exports of agricultural products totaled $94.8 million, while agricultural imports amounted to $187 million.

ANIMAL HUSBANDRY

Livestock, adapted to many uses, forms an essential part of the economy. Livestock accounts for about 30% of gross agricultural output. In farm work, bullocks and asses are largely used. Herds of yaks, cows, and their hybrids, zobos, are grazed in the central valley and to some extent along the borders of the foothill jungles. A few hogs usually are kept on the larger farms. Sheep and goats are used for food and also as pack animals, particularly in the distribution of salt over the trade routes; the sheep also supply a valuable type of wool.

In 2005, Nepal had an estimated 6,994,000 head of cattle, 4,081,000 water buffalo, 817,000 sheep, 7,153,000 goats, and 948,000 hogs. Modern poultry farms are operated principally by the Newaris, who carry on most of the agriculture in the Kāthmāndu Valley. There were about 22.8 million chickens in 2005, when 15,700 tons of poultry meat were produced. Traditionally, butter and cheese are among the leading exports of Nepal. Livestock products in 2005 included an estimated 380,000 tons of cow's milk, 20,000 tons of butter and ghee, and 590 tons of wool (greasy basis).

FISHING

The commercial fish catch amounted to 36,568 tons in 2003 (up from 5,281 tons in 1991), with aquaculture accounting for 48%. In the Terai are many small fish ponds and several government fish farms. Common fish species are carp, gar, and murrel.

FORESTRY

In 2000, forests covered an estimated 27.3% of Nepal's total land area. Timber cutting has been contracted out to private firms. About 91% of the 13.9 million cu m (491 million cu ft) of roundwood cut in 2004 was for fuel.

In 1961, the government established a department of medicinal plants to encourage Nepal's commercially important herb exports. There are regional herbal farms at Kāthmāndu and Nepalganj. There is also a royal research laboratory for drug analysis.

MINING

Although mining in Nepal was an ancient occupation, the country's mineral resources have been little exploited. Mining and quarrying was dominated by the production of cement, red clay, coal, limestone, magnesite, and marble. In 2004, cement production totaled 300,000 metric tons, while red clay output came to 29,234 metric tons. Coal output that same year (bituminous and lignite) totaled 10,517 metric tons, while limestone production totaled 388,109 metric tons. In 2004, the country also produced quartz, quartzite, salt, talc, and tourmaline. A lead and zinc deposit near Lari had reserves of two million tons, and there were known deposits of iron, copper, graphite, cobalt, mica, and slate. Development plans included the encouragement of small-scale mining, and provided for continuing mineral surveys.

ENERGY AND POWER

Nepal, as of 1 January 2004 had no proven reserves of crude oil, natural gas, or any refining capacity, and as of 2003, negligible reserves of coal.

In 2002, Nepal's imports of refined petroleum products averaged 15,620 barrels per day, while demand in that year averaged 15,510 barrels per year. Although there were no recorded imports of natural gas in 2002, Nepal did import 238,000 short tons of coal, and did produce 13,000 tons of bituminous coal.

The bulk of Nepal's electricity is hydroelectric. In 2002, electric generating capacity totaled 0.458 million kW, with hydroelectric accounting for almost 84% of that total. The remaining capacity was dedicated to conventional thermal sources. Electric power output in 2002 totaled 2.333 billion kWh, of which hydroelectric generation produced almost 90% of that amount. Demand for electricity in 2002 totaled 2.268 billion kWh. As of 2000, only 15% of Nepal's population had access to electricity.

INDUSTRY

Until the 1980s, modern industry was almost nonexistent; only 0.66% of Nepal's GDP was derived from industry in 1964/65. Since then, industrial development has been given emphasis in economic planning. Manufacturing as a percent of total GDP rose from 4.2% in 1980 to 6.1% in 1990 to 9.2% in 1995 to an estimated 22% in 2000. However, manufacturing is a sector that has been hit particularly hard by the Maoist insurgency and the intensification of violence since 2001. The CIA estimates that the industrial production growth rate for 1999/2000 was 8.7%. However, this had dropped to less than 1% for 2001/02 according to IMF estimates.

Starting in the 1930s, a number of public enterprises (PEs) were established by the government with an aim of building an industrial and manufacturing base. About 62 PEs in all were established, close to half in the industrial sector, with others in the trading, service, public utility and financial sectors. The oldest surviving PE is the Biratnagar Jute Mills (BJM), set up in 1936. The jute industry has been in decline since 1966. In 2002 BJM was being operated by a private conglomerate on terms of a five year lease from the government. PEs in the industrial sector include cement factories, brick factories, sugar mills, textile mills, jute products factories, tool factories, foundries, and industrial chemical and fertilizer factories. From the early 1990s, there have been planned campaigns to reform and privatize the PEs. By the beginning of the Ninth Five-Year Plan (1997–2002), 16 PEs, over half industrial, had been handed over to private owners, and four had been shut down. A list of 30 PEs, 13 in the industrial sector, were scheduled for privatization during the Ninth FYP, but, in fact, only one, the Nepal Tea Development Corporation, has been privatized. The slowdown of the reform is attributable to both the outbreak of the Maoist insurgency in 1996 and a growing resistance to the privatization program from many sides, but particularly from workers' unions who perceive jobs as threatened. The PEs were not originally set up as commercial enterprises, and most do not even maintain updated accounts that would allow an auditor to assess their market viability. Analysts generally agree, however, that they are inefficiently overstaffed with low skill labor, and that most of the industrial PEs have a negative worth. The IMF estimates that net profits from the PE sector as a whole plunged from around nr3 billion (about $44 million) in 1998/99 to nr240 million (about $3.23 million) in 2000/01, despite continued government transfers and investment. That the figure remained positive is due virtually entirely to the profitability of three public utility PEs. Some of the known liabilities in the industrial sector include wage arrears that reached 16 months for the Agricultural Tool Factory, and four months for the Lumbini Sugar Factory. According to a study of eight industrial PEs reported by the IMF, employees of these companies are owed for gratuity, sick and home leaves, medical allowance and insurance premiums to the amount of about nr15.2 billion (about $204 million or 3–4% of Nepal's GDP). There are also large arrears to banks and suppliers, but monitoring mechanisms are insufficient to make reliable estimates. In February 2002, the government set up a special financing facility at 3% interest to encourage commercial banks to provide concessional loans to ailing industries, particularly those in the garment and hotel industries, which through exports and tourism are major earners of foreign exchange.

According to the CIA, major industries in Nepal include tourism, carpets, textiles, small rice jute, sugar, and oilseed mills; cigarettes, cement and brick factories. Aside from small-scale food processing (rice, wheat and oil mills), light industry, largely concentrated in southeastern Nepal, includes the production of jute goods, refined sugar, cigarettes, matches, spun cotton and synthetic fabrics, wool, footwear, tanned leather, and tea. The carpet, garment and spinning industries are the three largest industrial employers, followed by structural clay products, sugar and jute processing. Sugar production was 49,227 tons in 1995, jute goods, 20,1870 tons; and soap, 23,477 tons. That year, 14.7 million m of synthetic textiles and 5.06 million m of cotton textiles were produced. Industrial production from agricultural inputs included 20,800 tons of vegetable ghee, 16.76 million of beer and liquor, 9 billion cigarettes, and 2,351 tons of tea.

Heavy industry includes a steel-rolling mill, established in 1965, which uses imported materials to produce stainless steel. During the 1980s, the government gave priority to industries such as lumber, plywood, paper, cement, and bricks and tiles, which make use of domestic raw materials and reduce the need for imports. Production by heavy industries in 1995 included 326,839 tons of cement and 95,118 tons of steel rods.

Industrial production growth rates have been higher than the overall economy growth rates, indicating that industry is a growth engine. However, this sector had a share of only 20% in the GDP, and employed only 3% of the working population; agriculture was by far the largest employer, and accounted for 40% of the economy; services came in second, with a 16% representation in the labor force, and a 40% share in the GDP.

SCIENCE AND TECHNOLOGY

The only advanced technology is that brought in under the various foreign aid programs. Foreign technicians provide training in cottage industries, and local workers are trained at the Cottage Industry Center in Kāthmāndu. In 1982, the Royal Nepal Academy of Science and Technology was established at Kāthmāndu to aid in socioeconomic development. The National Council for Science and Technology aims to formulate science and technology policy, promote scientific and technological research, coordinate research among ministries and Mehendra Sanskrit University, and disseminate information to the public. Tribhuvan University has faculties of science and technology, medicine, agriculture and animal science, engineering, and forestry. In 1987–97, science and engineering students accounted for 13% of college and university enrollments. In 2002 Nepal's expenditures on research and development (R&D) totaled $220.821 million, or 0.67% of GDP. In that same year, Nepal had 62 researchers and 145 technicians engaged in R&D per million people.

DOMESTIC TRADE

For the six and one-half years of the Maoist insurgency in Nepal domestic trade has been severely hampered in rural areas. For many Nepalese, local trade is a part-time activity, limited to such products as cigarettes, salt, kerosene, and cloth. Marketing centers are along the main trails and are supplemented by small local markets. Distribution channels generally move from manufacturer, to distributor, to retailer. Poor communications facilities make extensive domestic trade impractical. However, one major impediment, the local tax on trade called octroi, was eliminated in 1997. Also, in the early 1990s, domestic airline routes were privatized, quadrupling domestic air traffic.

Most shops are open from 10 am to 8 pm. Businesses and government offices generally operate from 9 am to 5 pm. Most stores and businesses are closed on Saturdays.

FOREIGN TRADE

Traditionally, Nepal's foreign trade was limited to Tibet and India. After 1956, Nepalese trading agencies in Tibet were confined to Xigaze, Gyirong, and Nyalam, with Lhasa, Xigaze, Gyangze, and Yadong specified as markets for trade. In 1980, however, Nepal and China agreed to open 21 new trade routes across the Tibetan frontier. Treaty arrangements with China strictly regulate the passage of both traders and pilgrims in either direction across the border. Up until 1989, treaty agreements between India and Nepal allowed for unrestricted commerce across 21 customs posts along the border, and duty-free transit of Nepalese goods intended for third-party countries through India. In 1989, a breakdown in the treaty renewal negotiations resulted in retaliatory actions on both sides. India's share of Nepali exports plummeted from 38% in 1986/87 to 9% in 1989/90. India's share of the country's imports declined by about 25–50%. Despite the severe shock sustained by the Nepali economy, the signing of a new interim agreement in 1990 prevented a prolonged crisis, helping to fuel a robust recovery in export growth as exports increased by 28% in 1990/91 over 1989/90, and again by 35% in 1991/92.

Under the renewal of the bilateral trade treaty with India in 1997, Nepali goods entered India essentially duty free and quota free. As a result, exports to India grew for four years, from 1997 to 2001, at an average rate of 42% a year. The most recent India-Nepal Treaty of Trade, signed in March 2002, continues to allow Nepali manufactures to enter the Indian market on a nonreciprocal, preferential, or duty-free basis, with rules of origin less restrictive than the international norm (Nepal's manufactures can have up to 70% foreign content instead of the international norm of less than 50%). However, it places quotas on four sensitive imports: vegetable fats, acrylic yarn, copper products, and ferro oxide, all at volumes lower than Nepali exports to India.

The imposition of some nontariff barriers (NTBs) by India is just one factor in the estimated decline in the growth rate of Nepal's exports. Other factors are the damage to production caused by the intensification of the country's Maoist insurgency in 2001, the global economic slowdown, and a rapid decline in demand from Nepal's main third-country destinations, the United States and Germany, in the post-9/11 atmosphere. The end of the 1990s

saw robust growth in Nepal's exports, which increased nearly 12% in 1997/98, nearly 18% in 1998/99 and 37.4% in 1999/2000. The export growth rate fell, however, to 4.6% in 2000/01, according to the IMF. In 2001/02, exports are estimated to have actually declined by 15%.

The CIA reported that for 2000/01, recorded exports from Nepal were an estimated $757 million (FOB) and that imports for this period were $1,600 million, indicating an apparently unsustainable merchandise trade deficit of $843 million, or 111.5% of exports. However, the figure for exports does not include unrecorded border trade with India, including substantial gold smuggling.

The major export destinations in 2000/01 were India (48%), the United States (26%), and Germany (11%). Over the past decade, exports to India, while continuing to account for about half of Nepal's exports, have soared in value and become increasingly diversified as Nepal's manufactures have carved out niches in the Indian market. Exports to the United States consist mainly of apparel, including pashmina (the Indian name for cashmere) products, whereas exports to Germany are dominated by woolen carpets. In the wake of 9/11, exports to the United States declined 15% in 2001, after an increase if 30% in 2000. For 2001/02, the IMF estimates that exports to countries other than India declined more than 40% due to the combination of external slowdown and internal supply disruptions.

In 2004, exports reached $626 million (FOB—Free on Board), while imports grew to $1.7 billion (FOB). The bulk of exports went to India (47.4%), the United States (22.7%), Germany (8.4%), and the United Kingdom (3.1%). Imports included petroleum products, vehicles and spares, other machinery and parts, textiles, and thread, and mainly came from India (46.3%), China (10.8%), the UAE (9.3%), and Saudi Arabia (4.1%).

BALANCE OF PAYMENTS

Despite large recorded trade deficits, Nepal often maintains a surplus in its current account thanks to surpluses in services (including tourism), official aid transfers, and increasingly large remittances from Nepalese living abroad, and in spite of unrecorded trade and smuggling across the Indian border. The IMF reported small surpluses on Nepal's current account of $24 million and $28 million respectively, for the fiscal years 1998/99 and 1999/2000, even exclusive of official aid transfers. Adding in official transfers brought the total current account surpluses for these years to $98 million and $114 million, respectively, representing 2–3% of GDP. Nepal's overall balance of payments was positive for the fiscal years 1998/99 and 1999/2000, at $136 million and $192 million, respectively, as outflows of capital and other payments were estimated to be more than offset by inflows of capital grants and official disbursements. However, in 2001/02, by IMF's preliminary estimate, Nepal's overall balance of payments was a negative $77 million (1.4% of GDP) due primarily to a falling off in foreign aid. Official reserves held by the central bank in 2000/01 were initially estimated to be sufficient to cover 6.7 months of imports, just above the 6 months' coverage deemed financially prudent. However, of these reserves, about $290 million were being held in Indian rupees, with about $732 million in convertible currencies, enough to cover only 4.8 months of imports. Total external debt in FY 2000/01 was $2.55 billion, about 46% of annual GDP. Nepal's debt service ratio (the ratio of annual payments on the debt to annual exports) was a low 6% in this period, reflecting the highly concessional nature of its external finance. Nepal's debt has never been rescheduled. Its last arrangement with the IMF was in October 1992 under the Extended Structural Adjustment Facility (ESAF), for a line of credit of SDR 33.5 million—47% of Nepal's quota—of which only half, SDR 16.79, was ever drawn down by Nepal. The obligation was scheduled to be fully repaid by 2006, with payments of SDR 2.4 million in 2003; SDR 0.8 million in 2004; SDR 0.2 million in 2005; and SDR 0.2 million in 2006.

The International Monetary Fund (IMF) reported that in 2001 Nepal had exports of goods totaling $721 million and imports totaling $1.49 billion. The services credit totaled $413 million and debit $215 million. The US Central Intelligence Agency (CIA) reported that in 2001 the purchasing power parity of Nepal's exports was $757 million while imports totaled $1.6 billion resulting in a trade deficit of $843 million.

Exports of goods and services reached $1.1 billion in 2004, up from $925 million in 2003. Imports grew from $1.8 billion in 2003, to $2.1 billion in 2004. The resource balance was consequently negative in both years, reaching -$882 million in 2003 and -$999 million in 2004. The current account balance was also negative, decreasing from -$88 million in 2003, to -$144 million in 2004. Foreign exchange reserves (including gold) grew to $1.5 billion in 2004, covering more than eight months of imports.

BANKING AND SECURITIES

The central bank of Nepal is the Nepal Rastra Bank (NRB), established under the NRB Act of 1955, which, effective 31 January 2002, was replaced by a new NRB Act designed to give the central bank more autonomy in setting monetary policy and more supervisory authority. The new legislation outlines the procedures for appointing and dismissing the NRB Governor, Deputy Governor and board, as well as procedures for intervening with insolvent financial institutions. Further reforms are expected with the implementation of the Banking and Financial Institutions Act of 2003 which aims, inter alia, to reduce the government's role as owner and strengthen its role as regulator. Nepal's financial sector has historically been weak and nontransparent, characterized by politically-motivated interference, insider trading, weak management, disruptive unions, an inadequate financial information system, and a deeply entrenched culture of nonpayment of loans.

A World Bank report found that as of November 2002 Nepal had 15 commercial banks. The two largest, the Rastriya Banijya Bank (RBB), Nepal's largest bank with an estimated 27% of total banking assets, and the Nepal Bank Ltd. (NBL), Nepal's oldest commercial bank, founded in 1937, account for over 50% of banking assets. The RBB is wholly owned by the government (but slated for privatization), whereas the NBL, though founded with 51% government ownership, has sold shares to the public sufficient to reduce the government's share to 41%. There are also nine smaller joint venture banks (JVB's) with mixed public-private ownership, and four local commercial bank. The banking sector also includes two large development banks, the Agriculture Development Bank of Nepal (ADB/P) and the Nepal Industrial Development Corporation (NIDC), the second- and third-largest banks. The ADB/N maintains a micro-financing window, as does the NRB, the RBB, the NBL, and the regional development banks. According to the World Bank, as of November 2002, Nepal also had 48 finance corporations, 13 insurance companies, numerous finance institutions, 7 Grameen Replicator Banks, 35 financial cooperatives, and 25 financial NGOs.

Both of the largest commercial banks, the RBB and the NBL, are in precarious financial condition. According to a 2000 study by the World Bank, the most recent available, in 1998 the RBB and NBL together had a losses of $146 million, equivalent to 8.6 % of Nepal's GDP or 46% of the government's budget. The condition of both banks has doubtless deteriorated since then. In 2001 government authorities, in conjunction with the IMF and the World Bank, concluded that external managers, selected by the World Bank and the United Kingdom, were needed to reform the RBB and the NBL. Opposition to these proposals came from all sides: the boards of directors, the employees' unions and the borrowers. In January 2002, the NRB invoked the provisions of the new NRB Act and suspended the board of the NBL, effective 15 March 2002. For the RBB, the government entered into a contract on 31 January, 2002 with the American firm Deloitte Touch Tomatsu (DTT) for that company to take over management of the RBB. DTT, however, soon pulled out of the agreement, citing ambiguities in the contract and security concerns as the Maoist insurgency in Nepal became increasingly violent. In July 2002, a professional management team was installed at NBL, and in late 2002, a new CEO was appointed. The RBB is slated to be privatized in 2003.

Demand for new credit in Nepal was weak in 2001 and 2002, but the demand for credit to refinance from troubled debtors was substantial. Credit expanded in 2001 by about 10%, creating liquidity shortages at some commercial banks. In response, the NRB lowered Cash Reserve Requirements (CRR's) in January 2002 by 1.2% to around 9% (with a 3% of deposits required to be cash-in-vault). Also, refinancing rates were lowered 100–200 basis points to 2–5% in January 2002. In February 2002, the NRB set up a special refinancing facility at 3% interest to encourage commercial banks to make concessional loans to ailing businesses, particularly those in the garment and hotel enterprises hit by sharp declines in export demand and tourism.

At the end of FY 2000/01, in July 2001, net foreign assets held by monetary authorities in Nepal totaled $1 billion, and broad money supply totaled about $2.87 billion The broad money supply grew by 21% in 1999, 21.7% in 2000, and 15% in 2001, considerably ahead of inflation rates for those years, mostly due to expansion of paper currency resulting from the progressive monetization of the Nepalese economy. However, for FY 2001/02, the IMF estimates that broad money growth slowed to 6% because of the weakened economy and stagnant bank deposits due to the voluntary disclosure of income scheme (VDIS) and other asset verification efforts by the tax authorities. Inflation as reflected in consumer prices has been substantially moderated since October 1997 when Nepal shifted its exchange regime to one pegged only to the Indian rupee,

instead of to a composite of currencies. Earlier, in February 1993, Nepal had ended its dual currency system where by both the Indian and Nepalese rupee were allowed to circulate freely. In 2001, weak domestic demand and stable Indian prices combined to produce a subdued inflation rate of 3%. The International Monetary Fund reports that in 2001, currency and demand deposits—an aggregate commonly known as M1—were equal to $962.8 million. In that same year, M2—an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual funds—was $2.9 billion. The discount rate, the interest rate at which the central bank lends to financial institutions in the short term, was 6.5%.

The NIDC, along with the NRB, controlled the Security Exchange Center (SEC), set up in 1981, which was subsequently converted into the Nepal Stock Exchange (NEPSE) in 1984. In January 2003, there were 55 companies listed on the NEPSE, virtually all actively traded.

INSURANCE

The World Bank reported in November 2002 that Nepal had 13 insurance companies. All are government owned or have some government participation. Nepal joined the Multilateral Investment Guarantee Agency (MIGA) in 1993. The US Overseas Private Investment Corporation (OPIC) and other investment insurance programs are free to operate in Nepal without restriction. OPIC is authorized to offer its extended-risk guarantee facility to US investments in Nepal.

PUBLIC FINANCE

Nepal's fiscal year ends on July 15. The continued and increasingly violent Maoist insurgency, entering its tenth year in 2006, has had crippling impacts on Nepal's public finances, interfering with tax collections and disrupting production while at the same time requiring increased public spending on security and to repair damaged infrastructure. Most fundamentally, the insurgency hampers the government's efforts to address the poverty and other social problems fueling the rebellion. The perception of widespread corruption aggravates the present difficulties as does the global economic slowdown. Historically, most deficits on capital account have been financed by foreign grants, while domestic revenues have been sufficient to cover expenditures. Macroeconomic policy in FY 2001/02 was focused on increasing revenue collection, maintaining strict expenditure priorities, and containing domestic borrowing. A voluntary disclosure of income scheme (VDIS) plus other special revenue measures probably contributed to raising domestic revenues collected to 11.4% of GDP in FY 2000/01 and FY 2001/02, up from an average of less than 10.5% for the three previous fiscal years, but the relative rise in expenditures—1.5% of GDP—has outpaced the 0.9% rise in the revenue effort. Domestic public rose from about 14% of GDP in FY 1998/99 to about 18% of GDP in FY 2001/02, raising concerns that with increased domestic financing, in an environment in which bank deposit rates are stagnant, banks will have to draw on Nepal's scarce hard currency reserves. For FY 2000/01 the CIA estimated Nepal's external debt at $2.55 billion. By IMF estimates, total public debt in FY 2000/01 came to 49.9% of GDP, somewhat below the average for the previous five years of 52.2% of GDP.

The International Monetary Fund (IMF) reported that in 2003, the most recent year for which it had data, central government revenues were nr61,250 million and expenditures were nr74,715 million. The value of revenues was us$804 million and expenditures us$980 million, based on a market exchange rate for 2003 of us$1 = nr76.141 as reported by the IMF. Government outlays by function were as follows: general public services, 25.2%; defense, 10.0%; public order and safety, 9.5%; economic affairs, 22.0%; housing and community amenities, 4.6%; health, 5.4%; education, 17.8%; and social protection, 5.5%.

TAXATION

The principle sources of domestic revenue are customs tariffs, value-added taxes (VAT), excise duties, and income taxes on personal and corporate incomes. There are also local development taxes, as well as license and registration fees for houses, land and vehicles.

The standard corporate income tax rate is 25%, with a minimum rate of 20%. However, financial institutions are liable for 30%. Capital gains are taxed at a 10% rate. Ordinary income cannot be offset by capital losses, and ordinary losses cannot be offset by capital gains.

The VAT was introduced in November 1997 as a reform designed to replace sales taxes and most excises. The "octori," a traditional local tax on trade, was also eliminated at this time. Five years after its introduction, however, the VAT had yet to be completely implemented, as indicated by a finding that whereas net taxes from VAT have increased 65% over the first five years, refunds have increased by a factor of 23. The VAT rate is 10% and is collected at every stage of selling goods and services. Goods exempted for the VAT include primary food stuffs, agricultural products, and industrial machinery. There is no VAT on goods for export, or on raw materials imported by an export promotion industry, nor the products of such an industry.

Excise taxes are applied mainly to goods deemed hazardous to health, such as alcoholic beverages, cigarettes and soft drinks. In January 2002, a new Excise Act went into effect that raised rates slightly as part of the government's effort to pay for increased security expenditures since 2001.

On April 1, 2002 the government put into effect a new Income Tax Act, replacing the previous act of 1958, and developed in close cooperation with the IMF. The new act covers all sources of income—from employment, business and investment—and encourages self-assessment and pooled depreciation. In July 2002, personal income tax brackets were adjusted upward somewhat. With these adjustments, there are two tax tiers, 15% and 25%. For individuals, income below nr65,000 (about $850) is exempt, and for couples, nr85,000 (about $2100). The highest marginal rate, 25%, applies to income above nr140,000 (about $1850) for individuals, and nr160,000 (about $2000) for couples.

In addition to regular taxes, the government has imposed a number of "security surcharges" to deal with the increased security expenditure needed to deal with the intensifying Maoist insurgency. Special fees of 3% have been added to the taxable income of individuals, couples, companies, partnerships and nonresident taxpayers. Surcharges of 1–3% have been applied to imports, plus a nr1 (about $.013) per liter tax has been added to petroleum products. The government also mounted a voluntary disclosure of income scheme (VDIS), which had questionable results. Over 3,000 new taxpayers were registered, but a simultaneous decline in bank deposits suggests more taxable income was being hidden than disclosed.

CUSTOMS AND DUTIES

Customs and duties are a principle source of domestic revenue. Import tariffs are generally assessed on an ad valorem basis, with duties ranging from 0–140%. Most primary products, including live animals and fish, enter duty-free. Machinery and goods related to basic needs are charged 5%. Duties on agricultural imports were fixed in 2003 at 10%. Cigarettes and alcoholic beverages are charged at 110%, although alcoholic beverages with more that 60% alcohol are prohibited altogether. Other prohibited imports include narcotic drugs and beef and beef products. Products that may be imported only under special licenses include arms, ammunition, and explosives; and communication equipment, including computers, TVs, VCRs, and walkie-talkies. Valuable metals and jewelry are prohibited except under bag and baggage regulations. According to the World Bank, Nepal's weighted average tariff rate in 2000, the most recent data available, was 17.7%. This average probably increased in 2001 and 2002 because of "security surcharges" levied on most imports. No special fee was assessed on goods with tariff rates less than 2.5%. For goods with charged duties up to 5%, the surcharge was 1%, and for all those with duties above 5%, the surcharge was 3%.

The export service charge is 0.5% and there are export duties on vegetable ghee and plastic goods of 2 to 10%. Prohibited exports include: archeological and religious artifacts; controlled wildlife; narcotics; arms, ammunition and explosives; industrial raw materials; imported raw materials, parts and capital goods; and timber and logs. Goods imported from India are granted a rebate of the application of ad valorem of 10% in tariff rates up to 40% and of 7% on rates above 40%.

Smuggling is substantial across the Indian border, especially on lumber goods, labor, construction equipment, currency and weapons. Gold smuggling is thought to be particularly large. Official records show substantial imports of gold, but few gold exports, even though it is well known that most of the gold imports are intended for the Indian market. Efforts to combat smuggling appeared to have at least changed the dominant mode from men driving trucks and buses to individuals, many women and children, driving bicycles.

FOREIGN INVESTMENT

Foreign direct investment in Nepal, always low in this land-locked kingdom, has seen annual decreases across the five years of the Ninth economic plan (1997/98 to 2001/02), from an annual total of $11 million in 1997/98 to annual totals of $6 million in both 2000/01 and 2001/02, according to IMF estimates. The fiscal year 1999/2000 actually had the lowest annual total, at $3 million. In 2001, according to the government of Nepal, there were 670 foreign investment projects in the country, worth together about $1 billion. Of these, 35% were Indian and 11% (69 projects) were from the United States with other prominent participants being Japan, China, Germany, and Korea. India's dominance is due not just to its proximity, but also to incentives for Indian investors to take advantage of the preferential trade regime India extends to Nepal's manufactures through their bi-lateral trade agreements. The bilateral trade treaty signed 4 December 1996 lifted all customs duties on Nepalese industrial products, while imposing more lenient rules of origin than the international norm. The renewed treaty in March 2002, while imposing quotas on four primary and raw material exports, preserved the preferences on industrial products intact. Besides India, Nepal has negotiated bilateral investment agreements with Bhutan, Germany, and Norway.

In conjunction with the advent of multiparty democracy in 1991, Nepal has undertaken economic reforms that, at least on paper, have been aimed at making Nepal increasingly attractive to foreign investors, beginning with the Foreign Investment and One Window Policy Act of 1992 and the establishment of an Investment Promotion Board. Steps have been taken to privatize dozens of government-owned public enterprises (PEs), and to open up for private investment previous government monopolies in telecommunications, hydroelectric power, and air transportation.

Licensing requirements have been streamlined, and 100% foreign ownership is now permitted. In 1999, minimum investment requirements were also lifted. The legal basis for the full-scale private development of Nepal's massive hydroelectric resources and private export to India have been laid. The first fully private power projects are now in operation, though less than 1% of the potential has been exploited. Repatriation on income by foreign permanent nonresidents is taxed at 10%. Foreign investors are entitled to repatriate outside of Nepal the amount received from the sale of all or part of shares in their Nepali investment, and all amounts received as profits or dividends.

The US State Department, however, has reported that the implementation of the liberalizing reforms has been distorted not only by bureaucratic delays and inefficiencies, but by contradictory policies that mitigate and even negate the reforms. Many sectors remain closed to foreign investment, including financial services and management consulting, as well as traditional cottage industries, defense-related industries, alcohol and tobacco. On intellectual property rights both legislation and practice are considered inadequate. All foreign investment and technology transfer must have specific permission from the Department of Industries. Problems doing business in Nepal, even aside from the intensifying insurgency, make a formidable list: lack of direct access to airports, poor ground transportation, lack of skilled labor and technological expertise, unclear rules on labor relations, inadequate power, inadequate water supply, few local raw materials, nontransparent and arbitrary tax administration, and inadequate and obscure commercial legislation. One result, according to the US State Department, is the necessity for constant interaction with government officials, far from the "One Window" policy set out in the 1992 legislation.

In 2002, the government has spoken about plans for new bankruptcy and debt recovery legislation, new intellectual property legislation, and intentions to open the country to international accounting and auditing firms, but these have not taken concrete form. For 2002/03 perhaps the promising step is the introduction of a 10 year multi-entry visa for nonresident Nepalis (NRNs) willing to invest in Nepal.

In 2004, there were 927 foreign investment projects in Nepal, whose value rose to approximately $1.7 billion. The total share of FDI included in these projects was $442 million. Most of the investments went to the manufacturing and tourism industry. Major investors included India, the United States, China, the British Virgin Islands, Norway, Japan, and South Korea. Although the government has made some progress in creating a better business environment for foreign investors, Nepal remains an inaccessible country (with the nearest accessible port in Calcutta, India), with a very poor infrastructure, a poorly educated population, scarce natural resources, an inefficient energy sector, and an obtuse law system.

ECONOMIC DEVELOPMENT

In July 2002, Nepal completed its ninth economic planning period, and embarked on its tenth (2002/03 to 2007/08). It has not been a triumphant progression. Buffeted by a sagging world economy, the aftermath of the 11 September 2001 terrorist attacks on the United States, and an increasingly violent Maoist rebellion, Nepal reported its lowest growth rate—0.8% of GDP—in over a decade, and a 23.4% plunge in development spending, a serious stumble in the moderate, but steady progress it had been making in the 1990s.

Planned economic development began in 1953 with construction of roads and airfields and of irrigation projects to bring more acreage under cultivation. In 1956, these projects were integrated into the first five-year plan (1956–61) to assist existing industries, revive and expand cottage industries, encourage private investment, and foster technological training. With the second plan (1962–65), the government introduced land reform with programs to set ceilings on land holdings, to protect tenancy to redistribute land to the landless, and to initiate a compulsory saving plan. Though declared a success at the time, land holdings have remained seriously skewed in distribution mainly because large land holders were able parcel out land to relatives, and because the poor have been forced to sell their redistributed land to pay debts. The third economic plan (1965–70), was the first to be administered under the panchayat system, the system overthrown in the economic reforms of the early 1990s. The fourth (1970–75) and fifth (1975–80) five-year plans continued to emphasize infrastructural development, primarily in transportation, communications, electricity, irrigation, and personnel. The sixth development plan (1980–85) allocated nearly one-third of its total expenditure to agriculture and irrigation. However, money targeted for development projects was used for other purposes.

The objectives of the seventh plan (1986–90) were to increase production, create opportunities for employment, and fulfill basic needs. Of the total expenditure, 65% was to be used for investment, allocated as follows: agriculture, irrigation, and forestry, 30.6%; industry, mining, and electricity, 26%; transportation and communications, 17.7%; social services, 25.2%; and other sectors, 0.5%. Foreign aid was expected to fund about 70% of these projects.

With the establishment of multiparty government in 1991, a comprehensive set of reforms affecting all sectors of the economy was initiated under the eighth five-year plan (1992–97). Nepal's public enterprises (PEs) were slated for privatization, government monopolies in hydroelectric power, telecommunications, and transportation were opened to private investment, customs were streamlined, and the country declared open for foreign investment. The ninth plan (1997–2002) emphasized investments in agriculture and hydroelectric power, liberalization and privatization of the economy, and a thorough reform of the tax system and banking practices. Under the tenth plan, to run until 2007/08, priorities have shifted to security and poverty reduction, but with a renewed emphasis on privatization and the effort to encourage private investment.

Nepal has considerable development potential. Its vast hydroelectric power resources are estimated at 83,000 MW, of which less that 1% has been brought on line. The legal framework for the full-scale private development of the hydro-electric sector, with private exports to India, is in place. Other promising growth sectors are air transportation and telecommunications, both open to private investment, and tourism. There is growth potential in both malefactors and agricultural products for export. Although there have been many slips in the implementation of the government's economic liberalization program, it has maintained a stable, noninflationary currency regime, and, until the eruption of problems in 2001, a record of unspectacular but steady 5% annual growth rates in GDP. The government also claims improvement in the reduction of poverty, from 42% of the population in 1997 to 38% in 2003.

Nevertheless, the challenges to Nepal's economic development are formidable. These include limited natural resources, difficult topography, poor infrastructure, landlocked location, weak human capital (with both low levels of education and health), poor public management, and a long history of political interference in the economy. Nepal's economy is characterized by a high vulnerability to shocks, natural and man-made. Its growth has been arrested since 2001, and with a per capita income below $300 in nominal terms, it remains one of the world's poorest countries. It remains to be seen whether its economic reform programs will be swept away, or prove to be built solidly enough to weather the passing storms.

The economy has been expanding modestly in 2003, and 2004, and is expected to continue the trend for at least a couple of more years. The main growth engines of the economy are remittances from Nepali workers overseas. The on-going Maoist conflict, as well as expected insufficient precipitations (which will negatively affect the agriculture sector), will likely place the expansion rate of the economy below its potential.

SOCIAL DEVELOPMENT

The government maintains a countrywide village development service, which endeavors to meet the villagers' needs for food, clothing, shelter, health services, and education. Village development workers demonstrate improved methods of sanitation and health and teach the villagers to read and write. The Employee Provident Fund administers a program of old age, disability, and death benefits for government and corporate employees, funded by contributions from both employers and employees. Pensions are provided as a lump sum equal to contributions plus interest. Retirement is at age 55. There is a social assistance program that provides benefits to Nepalese citizens aged 75 or older. Employees of establishments with 10 or more workers are covered by work injury insurance, which is funded by the employer through a private carrier. Severance pay is also mandated in some circumstances.

Women are subject to gender discrimination, especially in traditional rural areas. The present constitution has strengthened provisions protecting women, including equal pay for equal work, but few women work in the money economy. Women's inheritance and marriage rights have been strengthened, but women suffer discrimination in both areas. Domestic abuse and violence against women are serious societal problems that citizens and governmental authorities do not recognize. The tradition of dowry remained strong and the killing of brides for default are still reported in 2004. There are also reports of women being abused because they are suspected of witchcraft. The abduction of young girls to be taken to India to work as prostitutes is a serious problem.

The human rights record remained poor. Members of lower castes suffer from widespread discrimination and many are in positions of bonded labor. Senior positions in politics and the civil service are dominated by urban-oriented castes, such as the Brahmin and Chhetri.

HEALTH

As of 2004, there were fewer than 5 physicians, 26 nurses, and 7 midwives per 100,000 people. In the same year, there were 9 private hospitals and at least 10,000 private pharmacies in the country. Most of the medical personnel work in the Kāthmāndu Valley and health services elsewhere are in short supply. The public sector provides most of the country's health care. Traditional medicine and faith healing are still used frequently, especially in the hill districts. Only one in 10 rural dwellers lived within one hour of a hospital. Total health care expenditure was estimated at 5.4% of GDP.

Although protected by mountain barriers, Nepal is in frequent danger from epidemics, notably cholera. Japanese encephalitis is endemic in the Terai plain and inner Terai zone. Overall, 70% of illness is from communicable disease. Common afflictions are black fever (kala-azar ), amoebic dysentery, eye diseases, typhoid, and venereal diseases. Malnutrition, contaminated water, and inadequate sanitation cause widespread health problems. Improved health programs in rural areas have helped control malaria, leprosy, and tuberculosis. However, tuberculosis remains a significant health problem. Approximately 81% of the population had access to safe drinking water and 27% had adequate sanitation.

Immunization rates for children up to one year old were as follows: tuberculosis, 96%; diphtheria, pertussis, and tetanus, 78%; polio, 78%; and measles, 85%. Major causes of illness in children are perinatal conditions, diarrhea, measles, and severe respiratory conditions.

Nepal has a large number of drug addicts. Stringent amendments to the Narcotic Drug Control Act were adopted in 1986 in response to pressure from the United States and the United Kingdom.

As of 2002, the crude birth rate and overall mortality rate were estimated at, respectively, 32.9 and 10 per 1,000 people. Birth control was used by 29% of married women. The infant mortality rate was 66.98 per 1,000 live births in 2005. In the same year, the average life expectancy was 62.73 years. Malnutrition is a common problem. Over half of all children under five were underweight. It was estimated that 54% of children under five were malnourished.

As of 2004, there were approximately 61,000 people living with HIV/AIDS in the country. There were an estimated 3,100 deaths from AIDS in 2003. The HIV/AIDS prevalence was 0.50 per 100 adults in 2003.

HOUSING

Most of the population lives in rural villages where houses are made of stone or mud bricks, with thatched roofs and raised eaves. Bamboo and reed huts are also prevalent. Most houses have two stories, but some contain only two rooms, a sleeping room and a room for cooking. In slum areas, wood, straw, paper, and plastic sheeting are used for temporary shelters. The well-constructed houses of the Sherpas are generally built of stone and timber, roofed with wooden slats.

In 2001, there were about 3,598,212 dwellings serving about 4,174,372 households. The average household size is 5.4 members. About 49.7% of all households live in temporary housing, those made with bamboo, reeds, mud, or other nondurable materials. About 23.5% live in permanent structures made of concrete, brick, stone, tile, and other durable materials. About 88.3% of all dwellings are owner occupied. About 93% of rural dwellings are owner occupied; compared to 60% of urban dwellings. A little over 53% of all households have access to piped water and only 46% have toilet facilities. Wood is the most commonly used fuel for cooking. Only about 39.8% of households have electric lighting.

EDUCATION

Traditional schools (pathshalas ) provide a classical education emphasizing languages. Gompas along the northern border train boys and men to become Buddhist religious leaders. English schools are modeled after those in India. Under a 1954 plan, a national school system with a single curriculum has been replacing the traditional schools, although English schools have increased.

Free primary education was introduced in 1975. Schooling is compulsory for five years, which is the duration of primary school studies. Students then move on to either technical school (8 to 10 years) or general secondary school (about 7 years). In 2001, about 12% of children between the ages of three and five were enrolled in some type of preschool program. Primary school enrollment in 2001 was estimated at about 70% of age-eligible students; 75% for boys and 66% for girls. Secondary school enrollment in the same year was about 43% of eligible students; 49.8% for boys and 37.4% for girls. It is estimated that about 80% of all students complete their primary education. The student-to-teacher ratio for primary school was at about 36:1 in 2003; the ratio for secondary school was about 35:1. In 2003, private schools accounted for about 14.7% of primary school enrollment and 27.8% of secondary enrollment.

Tribhuvan University is composed of five institutes (medicine, engineering, science, agriculture and forestry), four research centers, and four faculties (humanities and social science, management, law, and education) at 61 constituent and 140 affiliated campuses. Other institutions of higher learning include the Mahendra Sanskrit University, Kāthmāndu University, Purbanchal University, and B. P. Korala Institute of Health Science. In 2003, about 5% of the tertiary age population were enrolled in some type of higher education program. The adult literacy rate for 2004 was estimated at about 48.6%, with 62.7% for men and 34.9% for women.

As of 2003, public expenditure on education was estimated at 3.4% of GDP, or 14.9% of total government expenditures.

LIBRARIES AND MUSEUMS

The National Library in Kāthmāndu has 75,000 volumes in Nepali, English, Sanskrit, Hindi, and other Indian languages. The Bir Library, founded in the 14th century, contains 15,000 manuscripts. Other important collections are maintained by the library of Tribhuvan University (18,000 volumes) and the Singh Darbar, Nepal-Bharat (41,000), and the British Council libraries, all in Kāthmāndu. The Kaiser Library, also in Kāthmāndu, contains the private collection of Kaiser Shumsher Jung Bahadur Rana; with about 50,000 volumes, it also serves as a reference library open for public use. The Library and Documentation Center of the Royal Nepal Academy of Science and technology maintains a collection of about 13,000 books. There are about 600 public libraries within the country, many of which have fairly small collections and some of which are located in community centers.

The National Museum (1928) and the Natural History Museum (1975) are both in Kāthmāndu, along with a postage museum and the King Tribhuvan Memorial Museum. There is a Museum of Excavated Archeological Antiquities in Lalitpur and a National Art Gallery housed in the Palace of Fifty-Five Windows in Bhaktapur.

MEDIA

Postal, telephone, and telegraph services are operated by the government. Telephone service connects Kāthmāndu with Birganj on the Indian frontier, and another line links the capital with foothill towns in the eastern Terai. The telecommunications network includes a 5,000-telephone automatic exchange of over 90 radio relay stations, and an earth satellite station established with help from the United Kingdom in 1982. In 2003, there were an estimated 16 mainline telephones for every 1,000 people; about 319,500 people were on a waiting list for telephone service installation. Also in 2003, there were approximately two mobile phones in use for every 1,000 people.

Radio Nepal, a commercial, semigovernmental network, broadcasts in Nepali and English on both short and medium wavelengths. Television was introduced into the Kāthmāndu Valley in 1986 and the Nepalese Television Corporation, operated by the government, broadcasts about 23 hours a week. While there are private stations, media restrictions imposed in 2005 by King Gyanendra forced many of these stations to cease broadcasting political news. In 2003, there were an estimated 39 radios and 8 television sets for every 1,000 people. The same year, there were 3.7 personal computers for every 1,000 people and three of every 1,000 people had access to the Internet. There were eight secure Internet servers in the country in 2004.

Dailies, weeklies, and monthlies in Nepali, Newari, Hindi, and English are published mainly in Kāthmāndu. The largest daily newspapers (with 2002 circulation) are the Gorkhapatra (75,000), the Nepali Hindi Daily (62,000), Samaya (18,000), and the English-language Rising Nepal (20,000). The 2005 media restrictions set strict guidelines for print media, so that some papers no longer publish editorials and practice self-censorship.

Though the constitution specifies that the government may not censor expression, including that of the press, the press is licensed by the government, and licenses have been suspended and individuals arrested for criticism of the monarchy or support of a political party.

ORGANIZATIONS

The leading commercial organization is the Federation of Nepalese Chambers of Commerce and Industry. The variety of professional organizations includes the Garment Association of Nepal, the Nepal Journalist Association, and the Nepal Drivers' Association.

National youth organizations include the Foolchowi Youth Star Club, the All Nepal National Free Students Union, Democratic National Youth Federation, Junior Chamber, the Nepal Children's Organization, the Council of Free Students Union of Nepal, the Nepal Scouts Associations, YMCA/YWCA, and Youth for Human Rights, Education and Development. There are several active sports associations as well. National women's organizations include the Nepal Women's Organization, the Nepal Association of University Women, and the Women's Development Society.

Organizations involved in educational pursuits include the Environment, Culture, Agriculture, and Research Development Society in Nepal and the Royal Nepal Academy of Science and Technology. Nepal Medical Association promotes research and education on health issues and works to establish common policies and standards in healthcare. There are several other associations dedicated to research and education for specific fields of medicine and particular diseases and conditions. The World Conservation Union, promoting education and action concerning environmental issues, has an office in Kāthmāndu.

International Organizations with national chapters include Amnesty International, CARE Nepal, Defence for Children International, Caritas, Habitat for Humanity, and the Red Cross.

TOURISM, TRAVEL, AND RECREATION

In 1951, the government of Nepal reversed its long-standing policy and began to encourage visitors; before then, mountaineering expeditions had been permitted into the country only under severe official scrutiny and restraining regulations. For mountain trekkers, travel agencies in Kāthmāndu provide transportation to mountain sites, as well as Sherpa guides and porters. Tents, sleeping bags, and other mountain-climbing gear are available in Kāthmāndu. White-water rafting and kayaking are also popular.

Tourism was first officially included among the country's major potential assets in 1956.There were 338,132 tourists who visited Nepal in 2003, of whom 25% came from India. The 20,063 hotel rooms had 38,270 beds. Tourist expenditure receipts totaled $232 million that year. A valid passport and visa are required to enter Nepal. Upon arrival visitors may obtain a tourist visa at specified ports of entry.

In 2004, the US Department of State estimated the daily cost of travel in Kāthmāndu and Pokhara at $188. Other areas were significantly less expensive at $92 per day.

FAMOUS NEPALESE

Buddhism, one of the world's great religions, is based on the teachings of Siddhartha Gautama, who became known as the Buddha ("Enlightened One"). He was born (traditionally about 624 bc but according to most modern scholars about 563 bc) in Lumbini, near Kapilavastu in the Terai, then part of India, and died at Kushinagara (traditionally about 544 bc but according to the modern view about 483 bc).

Amar Singh Thapa, Nepalese military leader of the 19th century and rival of Gen. David Ochterlony in the war between British India and Nepal, is a national hero. The two best-known Rana prime ministers were Sir Jung Bahadur Rana (1817–77) and Sir Chandra Shamsher Jang Rana (1863–1929). The most highly regarded writers are Bhanubhakta, a great poet of the 19th century, and the dramatist Bala Krishna Sama (Shamsher, 1902–81).

King Mahendra Bir Bikram-Shah (1920–72), who introduced the partyless political system, based on the Nepalese tradition of the village panchayat (council), was succeeded on the throne by his son, King Birendra Bir Bikram Shah Dev (1945–2001), who democratized the panchayat system. Birenda and most of his family were killed in 2001 by his eldest son and heir, Dipendra (1971–2001), who killed himself in the rampage. Gyanendra Bir Bikram Shah Dev (b.1947) ascended to the throne in June 2001. Well-known political leaders include the brothers Matrika Prasad Koirala (b.1912), head of the Nepali Congress Party and the first post-Rana prime minister of Nepal (1951–52 and 1953–55), and Bisweswar Prasad Koirala (1915–82), head of the Nepali Congress Party and the first elected prime minister of Nepal (1959–60).

World renown was gained for Nepal by a Sherpa porter and mountaineer, Tenzing Norgay (Namgyal Wangdi, 1914–86), who, with Sir Edmund Hillary, a New Zealander, ascended to the summit of Mt. Everest in 1953.

DEPENDENCIES

Nepal has no territories or colonies.

BIBLIOGRAPHY

Financial Accountability in Nepal: A Country Assessment. Washington, D.C.: World Bank, 2003.

Hutt, Michael (ed.) Himalayan People's War: Nepal's Maoist Rebellion. Bloomington: Indiana University Press, 2004.

Kincaid, Jamaica. Among Flowers: A Walk in the Himalaya. Washington, D.C.: National Geographic, 2005.

Lawoti, Mahendra. Towards a Democratic Nepal: Inclusive Political Institutions for a Multicultural Society. Thousand Oaks, Calif.: Sage Publications, 2005.

Sever, Adrian. Aspects of Modern Nepalese History. New Delhi, India: Vikas Publishing House, 1996.

Shrestha, Nanda R. Nepal and Bangladesh: A Global Studies Handbook. Santa Barbara, CA: ABC-CLIO, 2002.

Shrestha, Nanda R. and Keshav Bhattarai. Historical Dictionary of Nepal. Lanham, Md.: Scarecrow, 2003.

Shrivastava, L.P.S. Nepal at the Crossroads. New Delhi, India: Allied Publishers, 1996.

Thapa, Asoke K. Bramu: A People in Transitions. Kāthmāndu, Nepal: Walden Book House, 1996.

Watkins, Joanne C. Spirited Women: Gender, Religion, and Cultural Identity in the Nepal Himalaya. New York: Columbia University Press, 1996.

Whelpton, John. A History of Nepal. New York: Cambridge University Press, 2005.

Nepal

Compiled from the October 2006 Background Note and supplemented with additional information from the State Department and the editors of this volume. See the introduction to this set for explanatory notes.

Official Name:
Kingdom of Nepal

PROFILE

PEOPLE

HISTORY

GOVERNMENT AND POLITICAL CONDITIONS

ECONOMY

DEFENSE

FOREIGN RELATIONS

U.S.-NEPAL RELATIONS

TRAVEL

PROFILE

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. 1.5 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, during which showers occur almost every day, bringing 75 to 150 centimeters (30-60 in.) of rain.

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.) or Nepalese (plural). Adjective—Nepalese or Nepali.

Population: (October 15, 2005 census update by UNFPA) 27.1 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—61/1,000 (in 2005). Life expectancy—61.8 years (male), 62.5 years (female).

Work force: Agriculture—85%; industry—3%; services—11%; other—1%.

Government

Type: Constitutional monarchy.

Constitution: November 9, 1990.

Government 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, 16 appellate courts, 75 district courts.

Political subdivisions: 5 development regions, 14 zones, and 75 districts. 75 district development committees, 58 municipalities, 3,913 village development committees, and 36,023 ward committees.

Political parties: (lower house representation) Nepali Congress Party, Nepali Congress-Democratic Party, Communist Party of Nepal/United Marxist-Leninist, National Democratic Party (RPP), Nepal Goodwill Party (NSP), National People’s Front, and others.

Elections: No national elections since 1999.

Suffrage: Universal over 18. Defense/police: (2005) $265 million.

National Day: Democracy Day, Falgun 7 (mid-February). The King’s birthday July 7.

Economy

GDP: (2004/05) $7.37 billion.

Annual growth rate of real GDP: 2.04% in FY 2004/05.

Per capita income: (Gross National Product) $300 in FY 2004/05.

Avg. inflation rate: (Consumer Price Index) 7.8% in Oct. 2005.

Natural resources: Water, hydro-power, scenic beauty, limited but fertile agricultural land, timber.

Agriculture: (39.2% of GDP) Products—rice, wheat, maize, sugarcane, oilseed, jute, millet, potatoes. Cultivated land—25%.

Industry: (11% of GDP) Types—carpets, pashmina, garments, cement, cigarettes, bricks, sugar, soap, matches, jute, hydroelectric power.

Trade: (2004/05) Exports—$821.84 million: carpets, pashmina, garments. Major markets—Germany and the U.S. Imports—$2.00 billion: manufactured goods. Major supplier—India.

Central gov. budget (FY 2005/06) $1.79 billion; military allocation $153.73 million.

Exchange rate: (July 16, 2005) 70.9 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. The Kathmandu Valley, in the middle hill region, constitutes a small fraction of the nation’s area but is the most densely populated, with almost 7.4% of the population.

Religion is important in Nepal—The 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 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 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 eighteen 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 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 five years saw five successive unstable coalition governments and the beginning of a Maoist insurgency.

Following the May 1999 general elections, the Nepali Congress Party once again headed a majority government after winning 113 out of 205 seats. 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 began 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. Over 12,000 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.

Struggle for Democracy Continues

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 were called off. 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 declared a cease-fire on January 29, 2003. This marked the second cease-fire with the Maoists; the first, 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 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 only seven 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 second ceasefire. 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 own chairmanship on February 1, 2005. He stated that the Council of Ministers (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 for almost three months. His new government was sworn in on February 2, 2005. The Council of Ministers under the King’s chairmanship has been reshuffled twice since then.

In April 2006, a second major people’s movement for the restoration of democracy pressured the King to relinquish power, and on April 24, 2006, King Gyanendra reinstated the 1999 parliament that was dismissed in May 2002. Former Prime Minister Girija Prasad Koirala of the Nepali Congress Party was selected by the opposition seven-party alliance to again lead the government. The Maoists declared a ceasefire on April 26, and the new Koirala government announced its own ceasefire and plans for peace talks with the Maoist insurgents on May 3, 2006.

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. There have not been any parliamentary elections since 1999. 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, one in 2003, another from September 3, 2005 to January 2, 2006, and the latest one from April 26, 2006—has been ongoing since 1996. A nationwide state of emergency was in effect from November 2001 to August 2002 after Maoist insurgents broke a four-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 ceasefire on August 27, 2003 and resumed attacks against government, security, and civilian targets.

Prime Minister Thapa resigned in May 2004, and 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. The Maoists announced a three-month unilateral cease-fire on September 3, 2005, which was extended for another month on December 2, 2005. The Maoists ended this third cease-fire, returning to violence on January 2, 2006. After the King announced the reinstatement of parliament on April 24, the Maoists declared a three-month unilateral ceasefire on April 26, which the new Koirala government reciprocated on May 3.

Under the constitution, Nepal’s judiciary is legally separate from the executive and legislative branches, and in practice 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 pronounced by any court.

Human Rights

Since political reform began in 1990, some progress has been achieved in the transition to a more open society with greater respect for human rights; however, substantial problems remain. Poorly trained police sometimes use excessive force in quelling violent demonstrations. In addition, there have been reports of torture during 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. 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 for almost three months—including freedom of expression, assembly, and privacy—was 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 personnel have committed numerous human rights violations. The Maoists have used tactics such as kidnapping, torture, bombings, intimidation, killings, and conscription of children. Within the Nepalese security force, violations ranging from disappearances to executions have been recorded. After the royal takeover on February 1, 2005 and subsequent imposition of the state of emergency, the security forces arrested many political leaders, student leaders, journalists, and human rights activists under the Public Security Act of 1989, although all were released by June 2005 when the King ended the state of emergency.

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 weekly periodicals that are privately owned and of diverse journalistic quality. Views expressed since the 1990 move to democracy are varied and vigorous. Currently twenty-five radio and three 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.

There are some restrictions 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. After the royal takeover on February 1, 2005, the Ministry of Information and Communications issued a notice invoking the National Broadcasting Act of 1992, stating that no media can publish interviews, articles, or news items against the spirit of the royal proclamation of February 1. A second notice invoking the Press and Publications Act of 1991 was issued on February 3 stating that no media can publish news items supporting terrorist and destructive activities.

On October 9, 2005, the government promulgated a new Media Ordinance restricting news reporting by private FM radio stations, prohibiting criticism of the King and royal family, restricting dissemination of news from foreign sources, enabling a government-controlled press council to recommend revoking a journalist’s press credential; and placing new restrictions on cross-media ownership. In the months following the issuance of the ordinance, armed authorities raided private FM radio stations and seized station equipment, although the government has since obeyed a Supreme Court order to return the equipment and allow FM stations to broadcast news. The newly reinstated government led by Prime Minister Koirala announced in May 2006 that all media ordinances passed by the former King-led government would be overturned, and the Supreme Court on May 5, 2006, upheld FM stations’ right to air news. Trafficking in women and child labor remain serious problems. Discrimination against women and lower castes is prevalent.

Principal Government Officials

Last Updated: 7/12/2006

King: GYANENDRA (Bir Bikram Shah Dev)

Prime Minister: Girija Prasad KOIRALA

Dep. Prime Min.: K. P. OLI

Dep. Prime Min.: Amik SHERCHAN

Min. of Agriculture & Cooperatives: Mahanta THAKUR

Min. of Defense: Girija Prasad KOIRALA

Min. of Education & Sports: Mangal Siddhi MANANDHAR

Min. of Environment, Science, & Technology: Man Bahadur BISHWOKARMA

Min. of Finance: Ram Sharan MAHAT

Min. of Foreign Affairs: K. P. OLI

Min. of Forest & Land Conservation: Gopal RAI

Min. of Health & Population: Amik SHERCHAN

Min. of Home: Krishna SITAULA

Min. of Industry, Commerce, & Supplies: Giriraj Mani POKHAREL

Min. of Information & Communications: Dilendra Prasad BADU

Min. of Labor & Transport Management: Ramesh LEKHAK

Min. of Land Reform & Management: Prabhu Narayan CHAUDHARY

Min. of Law, Justice, & Parliamentary Affairs: Narendra Bikram NEMWANG

Min. of Local Development: Rajendra PANDEY

Min. of Physical Planning & Works: Gopal Man SHRESTHA

Min. of Royal Palace Affairs: Girija Prasad KOIRALA

Min. of Tourism, Culture, & Civil Aviation: Pradip GYAWALI

Min. of Water Resources: Gyanendra Bahadur KARAKI

Min. of Women, Children, & Social Welfare: Urmila ARYAL

Governor, Central Bank:

Ambassador to the US:

Permanent Representative to the UN, New York: Madhu Raman ACHARYA

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 around $300. Based on national calorie/GNP criteria, an estimated 31% 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 five-year economic development plan in 2002; its currency has been made convertible; and fourteen state enterprises have been privatized, seven liquidated and two dissolved. Foreign aid accounts for more than half of the development budget. The Government of Nepal has shown an 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 76% of the population and providing 39% 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 9.32% in FY 2004/05 compared to an increase of 7.78% in FY 2003/04. Imports grew by 7.08% in FY 2004/05 compared with 5.94% in FY 2003/04. The increase in exports is marginal due to the fact that there has been a significant drop in Nepal’s main export, ready-made textile products. The trade deficit for FY 2003/04 was $1.0 billion, which widened to $1.18 billion in FY 2004/05. 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 below 5%. In 2002, the GDP recorded a negative growth rate of 0.33%, largely because of the Maoist insurgency. GDP grew 3.1% in 2003 and 3.26% in 2004, and again slipped to 2.04% in 2005, according to Nepal Rastra Bank (Nepal’s Central Bank).

Despite its growing trade deficit, Nepal traditionally has a balance of payments (BOP) surplus due to money sent home from Nepalis working abroad. In FY 2004/05, however, Nepal recorded a much lower balance of payments surplus of $80 million, as compared to $217.7 in FY 2003/04. The lower BOP surplus in FY 2004/05 is mainly attributable to the lower inflow of net government loans. The decline is primarily in the capital account, due primarily to a slow down in development activities funded by foreign grants and loans. 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. Such assistance has decreased substantially in FY 2004/05 after the royal takeover of February 1, 2005 and also because the ongoing Maoist conflict has seriously undermined development activities throughout most of Nepal. On April 23, 2004 Nepal became 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 showed a 12.8% increase in arrivals in 2004, but these are well below numbers during 1999, the peak tourism year. Recent tourist arrivals, during the Maoist cease-fire, show a recovery from the massive decline experienced during the first five months of 2005; however, 2005 annual arrivals fell 3.9% short of total arrivals in 2004. The fragile security situation, particularly after the Maoists ended their unilateral cease-fire on January 2, 2006, is expected to alter the trend of growth in tourist arrivals witnessed during recent months.

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. Kali Gandaki A started commercial operation in August 2002. The most significant privately financed hydro-electric projects currently in operation are the Khimti Khola (60 MW) and Bhote Koshi (36 MW) projects.

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. The private-sector West Seti (750 MW) storage project is dedicated to electricity exports. An Australian company, which signed a power purchase agreement with the Indian Power Trading Corporation in September 2002, is promoting the project for implementation along build-own-transfer lines. Negotiations with India for a power purchase agreement have been underway for several years, but agreement on pricing and capital financing remains a problem. The Government of Nepal has taken up the issue of project financing for the West Seti project with the EXIM Bank of China. 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 the nearly 90,000-strong Royal Nepalese Army (RNA), which is organized into six divisions (Far Western, Mid Western, Western, Central, Eastern and the Valley Division) with separate Aviation, Parachute and Royal Palace Brigades as well as brigade-sized directorates encompassing air defense, artillery, engineers, logistics and signals which provide general support to the RNA. The King is the Supreme Commander of the RNA while the Prime Minister normally serves as Minister of Defense. General Pyar Jung Thapa is Chief of the Army Staff (COAS).

The RNA has contributed more than 45,000 peacekeepers to twenty-eight peacekeeping missions such as the UN Interim Force in Lebanon (UNIFIL), the UN Protection 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 Maoist insurgency within Nepal, RNA units are also presently serving in the UN Mission in Sierra Leone (UNAMSIL), the UN Mission in the Democratic Republic of the Congo (MONUC), and the UN Mission in Haiti (MINUSTOH), among others. Approximately 3,400 of the world-famous Nepalese Gurkha forces serve in the British Army and 40,000 serve in the Indian Army.

The U.S. Pacific Command (USPACOM) coordinates U.S. military engagement and security assistance with Nepal through the Office of Defense Cooperation. U.S. military assistance to the RNA has consisted of $21.95 million in grant Foreign Military Financing (FMF) since 2002, annual professional and technical training provided under the International Military Education and Training Program (IMET) grant ($650,000 in FY05), additional training provided under the Counter Terrorism (CT) Fellowship ($200,000 for FY04), and approximately $2 million of 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 such as 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 signed in 1991 is renewed every five years. The most recent renewal on March 5, 2002 shall remain in force until March 5, 2007. However, a transit treaty with India, which allows Nepal to trade with other countries through the Calcutta/Haldia ports, expired on January 5, 2006. To allow time for the review of the seven-year-old transit treaty, India extended the treaty for a period of three months, until April 5, 2006.

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. Nepal is also a signatory of the agreement on South Asian Free Trade Area (SAFTA), which came into force on January 1, 2006, and the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation Free Trade Agreement (BIMSTEC-FTA), which will come into force on July 1, 2006. 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 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. 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. To date, U.S. contributions to multilateral organizations working in Nepal approach an additional $725 million, including humanitarian assistance. The Peace Corps temporarily suspended its operations in Nepal in 2004 due to increasing security concerns, and officially terminated its Nepal program in 2006.

Principal U.S. Embassy Officials

KATHMANDU (M) Address: Panipokhari, Kathmandu; Phone: (977) 1-441-1179; Fax: (977) 1-441-9963; INMARSAT Tel: 808-559-1213 and 808-659-0920; Workweek: Mon-Fri/0800-1700; Website: www.south-asia.com/usa.

Last Updated: 1/21/2007

TRAVEL

Consular Information Sheet : December 15, 2006

Country Description: Nepal is a developing country with extensive tourist facilities, which vary widely in quality and price. The capital is Kathmandu. Nepal has suffered from political instability during almost 11 years of a violent Maoist insurgency. The Government signed a comprehensive peace agreement on November 21 formally ending the Maoist insurgency, which began in 1996. It remains unclear however whether the Maoists will comply with their commitments to end all violence.

Entry/Exit Requirements: A passport and visa are required. Travelers may obtain visas prior to travel. Visas and information on entry/exit requirements can be obtained from the Embassy of Nepal at 2131 Leroy Place, N.W., Washington, D.C. 20008, telephone (202) 667-4550, or the Consulate General in New York at (212) 370-3988. Active duty U.S. military and Department of Defense contractors must obtain a country clearance for official and unofficial travel to Nepal.

Tourists may also purchase two-month, single-entry visas or two-month, multiple-entry visas upon arrival at Tribhuvan International Airport in Kathmandu and at the following land border points of entry: Kakarvitta, Jhapa District (Eastern Nepal), Birgunj, Parsa District (Central Nepal), Kodari, Sindhupalchowk District (Northern Border), Belahia, Bhairahawa (Rupandehi District, Western Nepal), Jamunaha, Nepal-gunj (Banke District, Mid-Western Nepal), Mohana, Dhangadhi (Kailali District, Far Western Nepal), and Gadda Chauki, Mahendranagar (Kanchanpur District, Far Western Nepal). Upon departure from Tribhuvan International Airport, all foreigners must pay an airport exit tax, regardless of the length of their stay. Tourists may stay in Nepal no longer than 150 days in any given calendar year. Travelers occasionally report immigration difficulties with Chinese authorities when crossing the Nepal-China border overland in either direction. Chinese authorities often require American and other foreign tourists to organize “group” tours through established travel agencies as a pre-requisite for obtaining visas and entry permits into Tibet. U.S. citizens planning to travel to Tibet from Nepal may contact the U.S. Embassy in Kathmandu for current information on the status of the border-crossing points. Travelers may also wish to check with the Embassy of the People’s Republic of China in Nepal for current regulations on entry into Tibet.

Visit the Embassy of Nepal web site at http://www.nepalembassyusa.org/ for the most current visa information. Travelers may also obtain entry and exit information from the Nepalese Department of Immigration website at www.viewnepal.com/immigration/touristvisa.php.

Safety and Security: A Travel Warning remains in effect for Nepal because the Department of State continues to be concerned about the security situation in Nepal. Despite the signing of the November 21 Comprehensive Peace Agreement, Maoist extortion and abductions continue. Maoists are now free to roam about the countryside and cities, sometimes openly bearing their weapons. Travel via road in areas outside of the Kathmandu valley is still dangerous and should be avoided. There have been attacks in the countryside involving foreigners. Trekkers and other individuals who resist Maoist extortion demands have been threatened, sometimes assaulted, and risk being detained. In March 2006, Maoists detained several Polish trekkers after the trekkers refused to pay extortion. Since the ceasefire in April 2006, hotels and businesses frequented by American citizens have been the target of extortion demands and, in some cases, have become the focus of demonstrations. In November 2006, some resident Americans reported that they were told that they would have to house and feed Maoists intending to participate in rallies. In a few cases, local staff of American residents were threatened or beaten when they attempted to resist extortion demands. The discrepancy between Maoist statements on their intentions and their actions, combined with their anti-American rhetoric, make it unclear how they will conduct themselves following the signing of the peace agreement.

While large scale protests such as those that occurred in April 2006 have abated, the potential for large or violent demonstrations remains. During recent demonstrations, protests were violent. Demonstrators burned vehicles, threw rocks at passing motorists and burned tires to block traffic. Given the nature, intensity and unpredictability of disturbances, American citizens are urged to exercise particular caution when demonstrations are announced or reported, avoid areas where demonstrations are occurring or crowds are forming, avoid road travel during these periods and maintain a low profile. Demonstrations can occur with little or no advance notice. American citizens are urged to consult media sources and the Embassy’s website (http://nepal.usembassy.gov) for current security information.

On September 10, 2004, two bombs exploded at the American Center compound in Kathmandu. There were no injuries, but the blasts damaged the facility. Shortly thereafter, on September 14, 2004, the Peace Corps announced the temporary suspension of its operations in Nepal, which continues. Since November 2001, Maoist insurgents have carried out attacks on Nepali security forces, government facilities, and private businesses in most parts of the country. Maoist cadres also have engaged in a variety of guerrilla and terrorist tactics that have victimized and, in many cases, brutalized civilians. The insurgents have detonated explosive devices both within and outside the Kathmandu Valley, causing numerous injuries and some fatalities.

The Department of State has designated the Communist Party of Nepal (Maoist) as a Terrorist Organization under the “Terrorist Exclusion List” of the Immigration and Nationality Act and under Executive Order 13224. These two designations make Maoists excludable from entry into the United States and bar U.S. citizens from transactions such as contribution of funds, goods, or services to, or for the benefit of the Maoists.

Maoists have exhibited a willingness to harass and attack established tourist facilities and infrastructure, and on a number of occasions have burned or bombed tourist resorts after the foreigners staying there were given short notice to evacuate. Maoists have detonated bombs within Kathmandu, including in Thamel, a well-known tourist hub. The random, indiscriminate, and unpredictable nature of these attacks creates the risk of U.S. citizens in Nepal being caught in the wrong place at the wrong time should the violent insurgency resume.

Of Nepal’s 75 Districts, all but one have suffered violence related to the Maoist insurgency. Armed rebel attacks, landmine explosions and vehicle burnings have occurred sporadically on main highways, including the roads linking Kathmandu with the Chinese and Indian borders and with the tourist destinations of Pokhara, Annapurna Conservation Area, and Chitwan National Park. On June 6, 2005 Maoist members detonated a landmine underneath a crowded bus in the Chitwan district, killing or injuring over a hundred people. There have been attacks in the countryside involving foreigners. Maoist extortion of tourists along some popular hiking trails continues. Trekkers and other individuals who resist Maoist extortion demands are threatened, sometimes assaulted and risk being detained. Visitors throughout Nepal, including in Kathmandu, should use metered taxis and avoid public buses.

U.S. citizens are advised to avoid road travel outside the Kathmandu Valley unless they have reliable information that they can proceed safely in specific areas at specific times. Maoist leaders occasionally announce road closures (blockades) in certain districts of Nepal and forcibly block major roads throughout the country, including roads to Tibet, India, Chit-wan, Pokhara, and Jiri. In late Spring 2004, Maoists forcibly blocked all traffic in areas surrounding Pokhara, preventing the departure of tourists for an extended period, and causing some to miss their international flights from Kathmandu. In August and December 2004, the Maoists instituted a virtual blockade around Kathmandu Valley. Other district centers have been blockaded without warning. U.S. citizens are encouraged to contact the U.S. Embassy in Kathmandu for the latest security information, and to travel by air whenever possible.

Maoists have attacked the offices of several non-governmental organizations (NGOs), their local partners, and multinational businesses working in Nepal. NGO workers report widespread harassment and extortion by rebels. Some workers have left their projects in rural areas because of direct threats or concerns about possible rebel violence. A statement by the Maoists on October 21, 2003 threatened attacks against or disruption of NGOs funded by “American imperialism.” In a November 2002 press release, the Maoists claimed responsibility for targeting and murdering two locally-hired U.S. Embassy security guards.

The U.S. Embassy in Kathmandu requires pre-clearance of all travel outside the Kathmandu Valley by U.S. Government employees. U.S. citizens who decide to travel outside the Valley are strongly urged to contact the U.S. Embassy in Kathmandu to discuss and register their planned itinerary and to receive the most recent security information before traveling. Nighttime road travel should be strictly avoided outside the Kathmandu Valley and minimized within Kathmandu.

Visitors in areas on or near the rim of the Kathmandu Valley, such as Shivapuri National Park, should be particularly cautious when traversing military camps or checkpoints and carefully follow the commands of security personnel. Military installations and checkpoints are often protected with defensive explosive devices. Movement in such areas at or after dusk should not be undertaken.

Bandhs (General Strikes): A “bandh” (forced closure of businesses, schools and halting of vehicular traffic) is a longstanding form of political expression in Nepal, which has been frequently used by the Maoists and political parties. Maoist bandhs are enforced through intimidation and violence, with past bandhs resulting in the shutdown of businesses, schools, offices and vehicular traffic. Both within and outside the Kathmandu Valley, the rebels have established a pattern of bombings, targeted assassinations (usually of security personnel), and other acts of intimidation prior to scheduled bandhs. In the lead-up to past bandhs, Maoists have attacked public buses, private vehicles, Nepalese Government vehicles and offices, schools and private businesses with firebombs and explosive devices in an effort to terrorize the population into observing the strike. In anticipation of a bandh planned for May 2004, for example, Maoists detonated several small bombs in the heart of Kathmandu, including one on a public bus, injuring over 20 people and killing one.

Bandhs tend to be unpredictable and take place without any prior notice. Such bandhs typically draw thousands of demonstrators into the streets that may attempt to incite or initiate violence. The demonstrations tend to focus on the central areas of Kathmandu, but bandh-related violent disturbances by protesting parties may occur throughout the Kathmandu Valley, as well as other major towns.

During bandhs, U.S. citizens are urged to pay attention to the volume of traffic on the roads, waiting until a pattern of traffic is well established before undertaking travel, and to maintain a low profile throughout bandh periods. Buses, taxis, and other forms of public transportation may not operate during a bandh. Observance of bandhs, particularly in the transportation sector, may be higher outside the Valley, where a number of private buses and trucks have been stopped, torched, and their drivers beaten. U.S. citizens are strongly urged to avoid road travel outside the Kathmandu Valley at all times and especially during scheduled bandhs. American citizens should exercise additional caution both during the lead-up to and during bandhs. If you are planning air travel to or from Nepal during scheduled bandhs be aware that transportation to and from airports throughout Nepal could be affected. Consult the U.S. Embassy web site at http://nepal.usembassy.gov for up-to-date information on upcoming bandhs as well as the latest security information.

For the latest security information, Americans traveling abroad should regularly monitor the Department’s Internet web site where the current Travel Warnings and Public Announcements, including the Travel Warning for Nepal and the Worldwide Caution Public Announcement, can be found. Up-to-date information on safety and security can also be obtained by calling 1-888-407-4747 toll free in the U.S., or for callers outside the U.S. and Canada, a regular toll-line at 1-202-501-4444. These numbers are available from 8:00 a.m. to 8:00 p.m. Eastern Time, Monday through Friday (except U.S. federal holidays).

Crime: Although the rate of violent crime is low in Kathmandu relative to that in comparably-sized American cities, street crime does occur in Kathmandu as well as in other areas frequented by foreigners. Solo trek-kers have also been robbed by small groups of young men, even on some popular trails. Visitors should avoid walking alone after dark and carrying large sums of cash or wearing expensive jewelry.

Since the Maoists declared a cease-fire in April 2006, the incidences of robbery and home invasion robbery by armed gangs has increased, and in some cases American citizens have been victimized. The U.S. Embassy has received several reports of individuals harassing American women in Kathmandu, and in one case an American woman was assaulted.

Although foreigners are not normally the targets of assaults, in late 2005 two European women were murdered in Nargarjun Forest, a popular tourist destination. The two murders occurred within weeks of each other and both involved women hiking alone. The body and valuables of one woman were recovered and theft did not appear to be the motivation behind the crime. Both crimes remain unsolved and no culprit(s) have been identified. In addition, visitors should consider exchanging money only at banks and hotels and limiting shopping to daylight hours. Valuables should be stored in the hotel safety deposit box and should never be left unattended in hotel rooms. Travelers should be especially alert at or near major tourist sites, where most pick-pocketing occurs. Passports and cash should be carried in a protected neck pouch or money belt—not in a backpack or handbag. There have been several reported incidents where tourists have had their belongings stolen from their rooms while they were asleep. In one case, when police detained two employees of a hotel where this occurred, the American citizen victim was threatened by Maoists. The citizen was told that unless the two employees were released, the citizen would not be allowed to leave Nepal.

Information for Victims of Crime: The loss or theft abroad of a U.S. passport should be reported immediately to the local police and the nearest U.S. Embassy or Consulate. If you are the victim of a crime while overseas, in addition to reporting to local police, please contact the nearest U.S. Embassy or Consulate for assistance. The Embassy/Consulate staff can, for example, assist you to find appropriate medical care, contact family members or friends and explain how funds could be transferred. Although the investigation and prosecution of the crime is solely the responsibility of local authorities, consular officers can help you to understand the local criminal justice process and to find an attorney if needed.

Medical Facilities and Health Information: Medical care in Nepal is limited and is generally not up to Western standards. Serious illnesses often require evacuation to the nearest adequate medical facility (in Singapore, Bangkok or New Delhi). Illnesses and injuries suffered while on trek in remote areas often require evacuation by helicopter to Kathmandu. Travelers should be aware that emergency services such as evacuations and rescues from remote areas have been compromised by Maoist attacks on helicopters and airfields and the destruction of regular phone service in most trekking areas. Moreover, emergency helicopter evacuations may be impeded by restrictions limiting helicopter landings generally to locations where an armed police force with a contingent of at least 30 personnel is present. Those trekking in remote areas of Nepal should factor the high costs of a potential helicopter rescue into their financial considerations. Travelers are urged to consider purchasing medical evacuation insurance if they plan to visit remote areas. There is minimal mental-health care available in Nepal. Americans with mental health problems are generally stabilized and transported to the U.S. for care. The Consular Section in Kathmandu can provide a list of available medical facilities to Americans upon request.

Information on vaccinations and other health precautions, such as safe food and water precautions and insect bite protection, may be obtained from the Centers for Disease Control and Prevention’s hotline for international travelers at 1-877-FYI-TRIP (1-877-394-8747) or via the CDC’s internet site at http://www.cdc.gov/travel. For information about outbreaks of infectious diseases abroad consult the World Health Organization’s (WHO) website at http://www.who.int/en. Further health information for travelers is available at http://www.who.int/ith/en/.

Medical Insurance: The Department of State strongly urges Americans to consult with their medical insurance company prior to traveling abroad to confirm whether their policy applies overseas and whether it will cover emergency expenses such as a medical evacuation.

Traffic Safety and Road Conditions: While in a foreign country, U.S. citizens may encounter road conditions that differ significantly from those in the United States. The information below concerning Nepal is provided for general reference only, and may not be totally accurate in a particular location or circumstance.

American citizens are strongly warned against undertaking any road travel outside the Kathmandu Valley at night or during or immediately preceding bandhs (general strikes). Additionally, American citizens should be extremely cautious when traveling overland in Nepal, especially by bus. Moreover, Americans should consider avoiding riding motorcycles in Nepal. In 2006, three foreigners were killed after they were hit by trucks while riding motorcycles on the highway. A number of public buses have been held up and/or burned by Maoists. On June 6, 2005 Maoist members detonated a landmine underneath a crowded bus in the Chitwan district, killing or injuring over a hundred people. In addition, there have been attacks in the countryside involving foreigners.

In general, roads are in poor condition and lack basic safety features. Many mountain and hill roads are impassable during monsoon season (June-September) due to landslides, and are hazardous even in the best weather. Avoid travel on night buses; fatal accidents are frequent. In the Kathmandu Valley, motor vehicles, bicycles, pedestrians and animals, all traveling at different speeds, congest narrow roads. Traffic is poorly regulated, and the volume of vehicles on the roads has been increasing by 15 percent a year. Many drivers are neither properly licensed nor trained. Many vehicles are poorly maintained. Sidewalks and pedestrian crossings are non-existent in most areas, and drivers do not yield the right-of-way to pedestrians. Pedestrians account for over 40% of all traffic fatalities in Nepal.

Visit the website of Nepal’s national tourist office and national authority responsible for road safety at http://www.welcomenepal.com/.

Aviation Safety Oversight: As there is no direct commercial air service between the United States and Nepal, the U.S. Federal Aviation Administration (FAA) has not assessed Nepal’s Civil Aviation Authority for compliance with International Civil Aviation Organization (ICAO) aviation safety standards. For more information, travelers may visit the FAA’s Internet website at http://www.faa.gov.

In 2003, the Civil Aviation Authority of Nepal grounded several domestic airlines for failing to meet minimal aircraft safety equipment requirements.

Special Circumstances: Foreign trekkers and climbers, including a number of American citizens, continue to be robbed, extorted, intimidated and injured by armed Maoists on the trails. Risks of a Maoist encounter are very high on nearly all trekking routes in Nepal, and injuries to foreigners by Maoists for arguing or failing to pay extortion demands have occurred. On some trails, Maoists have announced that U.S. citizens are not welcome and are demanding proof of citizenship from foreigners when extorting money. On a number of occasions, Maoists have forcibly detained Americans, in one case for several days.

While Maoist extortion of trekkers was previously absent above Lukla in the Everest park, Maoist checkpoints where armed Maoists demand payment for “trekking permits” are now a concern. In the Annapurna region, numerous military confrontations between the Maoists and government security forces have occurred on trails to the Annapurna Base Camp and throughout the southern portions of the Annapurna Circuit. Recent reports indicate that Maoists are also stopping trekkers in the upper Annapurna trails as well. In March 2004, there was a large-scale attack in the town of Beni, astride a main trail into the Annapurna trekking area from the southwest. Unexploded Maoist ordnance has been reported along several portions of the Annapurna trails. There are many reports of Maoist extortion, including at gunpoint, and encounters with large groups of armed insurgents in the Annapurna region, especially on the route to the Annapurna Base Camp and on the popular Poon Hill. Moreover, the Maoist insurgents have also forced the closure of Annapurna Conservation Area Project offices and police posts, which have traditionally provided security, information and emergency services for Annapurna trekkers. The Embassy advises against trekking to the Annapurna Base Camp or along the Annapurna Circuit (except between Manang and Jomsom) until Maoist extortion and attacks end.

U.S. citizens should never hike alone or become separated from larger traveling parties while on a trail. Solo trekking has contributed to injuries and deaths, and makes one a more vulnerable target to trail hoodlums as well as rebels. The safest option for all trekkers is to join an organized group and/or use a reputable firm that provides an experienced guide and porters who communicate in both Nepali and English. Also, Americans are urged to refrain from arguing with or “talking back” to Maoists, as any rebel encounter involves a risk of violence. Maoist cadres have pointed weapons at foreigners and/or beaten with sticks those who initially refused to pay or were seen as argumentative.

Maoist destruction of telephone services to many trekking areas complicates efforts to locate U.S. citizens and make arrangements for medical evacuations. U.S. citizens are strongly encouraged to contact the Embassy in Kathmandu for the latest security information and to register their itinerary before undertaking treks outside the Kathmandu Valley. Trekkers are also advised to leave their itinerary with family or friends in the U.S. and to check in at police checkpoints where trekking permits are logged.

Trekking in Nepal involves walking over rugged, steep terrain, where one is exposed to the elements, often at high altitudes. Many popular trekking routes in Nepal cross passes as high as 18,000 feet. The U.S. Embassy in Kathmandu strongly recommends that U.S. citizens exercise extreme caution when trekking at higher altitudes. Only experienced mountain travelers should tackle the Himalayas. Trekkers of all ages, experience, and fitness levels can experience Acute Mountain Sickness (AMS), which can be deadly.

Trekkers should also be alert to the possibility of avalanches and landslides, even when trails are clear. Avalanches at the narrow gorge above Deurali on the route to the Annapurna Base Camp regularly result in the deaths of trekkers and climbers. Avalanches and landslides caused by severe storms have killed many foreign trekkers and their Nepalese guides, and have stranded hundreds of others. Trekking in Upper Mustang requires a special permit from the Government of Nepal at a minimum cost of $700 per person.

Before leaving Kathmandu, trekkers can check with the Himalayan Rescue Association (phone (977) (1) 4440-292/4440-293 or the U.S. Embassy for reliable information about trail conditions and possible hazards in the high country.

Nepal has a controlled, or fixed, currency exchange rate with the Indian Rupee. In order to manage this rate of exchange, the Government of Nepal requires travelers to declare either the import or export of currency. As of this writing, travelers must declare any cash currency carried that exceeds $2,000 in value by filling out a custom’s declaration form. Travelers should ensure that they keep a copy of the declaration form after customs officials have put the endorsement on the form to prevent any problems upon departure. Please note that this requirement is subject to change and travelers should contact the Embassy of Nepal in Washington to obtain the latest information. Consequences for violating this requirement could include seizure of all cash carried, fines, and imprisonment. It is illegal to possess 500 or 1,000 Indian Rupee notes in Nepal.

Nepal is prone to earthquakes, landslides, and flooding. The Government of Nepal’s ability to respond is limited. Nepalese customs authorities may enforce strict regulations concerning importation (even temporary) into or export from Nepal of items such as valuable metals, articles of archeological and religious importance, wildlife and related articles, drugs, arms and ammunition, and communications equipment. It is advisable to contact the Embassy of Nepal in Washington or Nepal’s Consulate General in New York for specific information regarding customs requirements.

Criminal Penalties: While in a foreign country, a U.S. citizen is subject to that country’s laws and regulations, which sometimes differ significantly from those in the United States and may not afford the protections available to the individual under U.S. law. Penalties for breaking the law can be more severe than in the United States for similar offenses. Persons violating Nepali laws, even unknowingly, may be expelled, arrested or imprisoned. Penalties for possession, use, or trafficking in illegal drugs in Nepal are severe, and convicted offenders can expect long jail sentences and heavy fines. Proselytizing is illegal in Nepal and those found guilty could be sentenced from three to six years in prison and deported after they have served their sentence. Engaging in sexual conduct with children or using or disseminating child pornography in a foreign country is a crime, prosecutable in the United States.

Children’s Issues: For information on international adoption of children and international parental child abduction, see the Office of Children’s Issues website at http://travel.state.gov/family/family_1732.html.

Registration/Embassy Location: Americans living or traveling in Nepal are encouraged to register with the nearest U.S. Embassy or Consulate through the State Department’s travel registration website so that they can obtain updated information on travel and security within Nepal. Please include the following information under Comments or Purpose of Visit: travel/medevac insurance information; travel or trekking agency contact in Nepal; planned itinerary in Nepal; and traveling companions’ names and nationalities. Americans without Internet access may register directly with the nearest U.S. Embassy or Consulate. By registering, American citizens make it easier for the Embassy or Consulate to contact them in case of emergency. The U.S. Embassy is located at Pani Pokhari in Kathmandu, telephone (977) (1) 441-1179. The Consular Section is located at the Yak and Yeti Hotel complex on Durbarmarg Street. The section can be reached directly at (977) (1) 444-5577; fax (977) (1) 444-4981 or through the Embassy switchboard.

International Adoption : July 2006

The information below has been edited from a report of the State Department Bureau of Consular Affairs, Office of Overseas Citizens Services. For more information, please read the International Adoption section of this book and review current reports online at www.travel.state.gov/family.

Disclaimer: The information in this flyer relating to the legal requirements of specific foreign countries is based on public sources and current understanding. Questions involving foreign and U.S. immigration laws and legal interpretation should be addressed respectively to qualified foreign or U.S. legal counsel.

U.S. citizens wishing to adopt a child in Nepal must meet both U.S. requirements and the requirements set by the Nepalese government. Procedures for foreign adoptions in Nepal are unpredictable and the Nepalese government requirements are not enforced uniformly. The Nepalese government frequently changes requirements with little notice. Due to the high levels of visa fraud in Nepal, fabricated documents or real documents fraudulently obtained are readily available. As a result, the U.S. Embassy in Kathmandu must carefully investigate all orphan visa cases to determine whether the child meets the definition of an orphan under U.S. immigration law. The need for investigations may result in delays in the visa process and issuing the visa. Cases deemed not clearly approvable by the U.S. Embassy in Kathmandu will be referred to the Department of Homeland Security (DHS) for review.

Under Nepalese law, single mothers or married mothers who have been left by their husbands must meet stringent requirements regarding the relinquishment of their children for adoption. Fathers have twelve years from the child’s birth to claim the child and assert custody rights. Unless a mother identifies the father and he agrees, in writing, to the child’s adoption, the child will not be eligible for adoption. This can result in uncertainties as to a whether a child is actually eligible for adoption and may result in further investigations and delays.

Patterns of Immigration: Please review current reports online at www.travel.state.gov/family.

Adoption Authority: The Ministry of Women, Children and Social Welfare (WCS) is the Nepalese Government office responsible for adoptions in Nepal. Officially, the Ministry has recognized the Nepal Children’s Organization (NCO), also known as Bal Mandir, to process adoptions, although adoptions through other orphanages are possible.

Ministry of Women, Children and Social Welfare
Singha Durbar, Kathmandu
Tel: 977-1-424-1465, 977-1-424-1728
Fax: 977-1-424-1516
Email: mwcsw@ntc.net.np

Eligibility Requirements for Adoptive Parents: Nepalese law sets out the following age and civil status requirements:

• The age difference between prospective parents and the adoptive child must be at least 30 years;
• The couple must have been married for at least 4 years prior to filing an application and be “infertile;”
• Single women between the age of 35 and 55 may also adopt. Single men may not adopt Nepalese children.

Eligibility for Children to be Adopted: Children (either male or female) under the age of 16 may be adopted. If the prospective parents already have a child or children of their own, Nepalese government regulations state they only adopt a Nepalese child of the opposite sex of their biological child or children. Siblings of the opposite sex can be adopted together if other qualifications are met.

Residency Requirements: There are no residency requirements for adopting an orphan from Nepal.

Time Frame: Most orphanages in Nepal will not assign a child to prospective adoptive parents until there is evidence that the I-600A and fingerprints (evidence of no criminal record) have been approved by DHS (United States Citizenship and Immigration Services, USCIS). See “U.S. Immigration Requirements” section below for details on U.S. immigration requirements. Once the I-600A and fingerprints have been approved by DHS, the U.S. Embassy in Kathmandu will receive a Visas 37 cable from DHS. The Embassy cannot issue the Guarantee Letter until the Visas 37 cable has been received. The process from the approval of the I-600A and the issuance of the Guarantee Letter to the approval of the adoption by the Nepalese government varies in length from six months to two years. Adoptive parents adopting children over the age of three years sometimes find their cases are completed in a shorter time period. The timing is often uneven and inconsistent; changes in the security situation or the government may lead to additional delays. Some adoptions in Nepal may be completed with one trip to Nepal; however, many adoptive parents travel to Nepal twice or more. On the first visit, they meet the child and complete initial paperwork required by the Nepalese government. They then return to Nepal when the adoption is approved by the Nepalese government to file for the immigrant visa.

Adoption Agencies and Attorneys: Most adoptive families work with an adoption agency in the U.S. to adopt from an orphanage in Nepal. Some orphanages have established relationships with specific adoption agencies in the U.S. and work only with those agencies. The U.S. Embassy in Kathmandu encourages all parents to work through a U.S. agency, as the adoption process in Nepal is quite complex. The Nepalese government does not require adoptive parents to work with specific agencies in the U.S. or Nepal. Only designated orphanages in Nepal are approved to process intercountry adoption cases. The U.S. Embassy in Kathmandu does not maintain a list of U.S. agencies or Nepalese orphanages processing intercountry adoption cases in Nepal as these may change frequently and any such list would be very difficult to keep up-to-date.

Adoption Fees: The Ministry of Women, Children and Social Welfare charges a fee of $300 for the adoption of an orphan from Nepal. Orphanages and local facilitators in Nepal often charge additional fees to process the adoption and to care for the child once the child has been assigned to adoptive parents but prior to the Nepalese government approval of the adoption by the Nepalese government. These fees vary widely. Adoptive parents have reported a wide variance in fees (between $3,000 – $17,000) charged by Nepalese orphanages, which are largely unregulated by the Nepalese government. Many parents have reported that orphanages have charged them new and unexpected fees once the parents arrive in Nepal. Prospective parents are advised to obtain detailed receipts for all fees and donations paid to orphanages, either by the parents directly or through their U.S. adoption agencies. The U.S. Embassy requires a copy of receipts and information on fees paid in the U.S. and in Nepal at the time of the immigrant visa interview.

Adoption Procedures: Prospective parents may adopt through Nepal Children’s Organization (Bal Mandir) or through a private agency.

Adoptive parents in Nepal sign many documents in the process of completing an adoption. Many of these documents are in Nepalese, and English translations are not routinely provided. Parents are encouraged to have documents translated before they are signed. Shree Law Book Management Board is the official governmental translation office. The office is located in Babar Mahal, Kathmandu. The U.S. Embassy requires both the original and the official translation of all case documents at the time of the immigrant visa interview.

Nepal Children’s Organization reviews applications and makes determinations if parents are eligible to adopt. The U.S. Embassy has no authority to challenge or change a decision by NCO to deny an application. Denial by NCO does not mean a definitive end to the process; parents may still able to proceed with a private agency.

Adoption Guarantee Letter: The Nepalese government requires that all adoptive parents complete and sign a “Guarantee Letter.” This letter, which is made part of the dossier that is submitted to the WCS serves to assure the Nepalese Government that the adoptive parents have been approved by the U.S. Please review current reports online at travel.state.gov/family for detailed information on preparing the Guarantee Letter.

Next Steps: Once NCO or another private agency has reviewed the case, a committee at the Ministry of Women, Children and Social Welfare reviews each adoption file. If the committee deems that everything is in order, it will recommend the case to the legal section of WCS for further processing. Once the legal section reviews the case and issues a positive recommendation, the Secretary of the WCS issues and signs the final adoption decree in English. Adoptive parents must be physically present in Nepal to take custody of the child once the final adoption is pronounced.

This step in the process varies widely in length. While some cases are processed in as little as three weeks, some take as long as six months, depending on the political situation and the circumstances of an individual case. Further questions about the adoption process on the Nepalese side should be addressed to an attorney licensed in Nepal.

Nepalese Travel Document: Once adoptive parents obtain the adoption decree, they will also need to obtain a travel document for the child through the Nepalese Ministry of Foreign Affairs. Generally, the Nepalese travel document is valid only for oneway travel to the United States and countries en route. Since there is no direct flight to the U.S. from Nepal the U.S. Embassy recommends that adoptive parents confirm with the countries that they will transit what visa requirements, if any, exist for the child. As the child will be traveling back to the U.S. on a Nepalese travel document (not a Nepalese passport), visa requirements may vary from those for U.S. or Nepalese citizens.

Documentary Requirements: If an adoption is processed through a private agency, in addition to the information listed above for NCO adoptions, the parents must also obtain a favorable recommendation from the District Administrative Officer (Chief District Officer) where the child resides; and a death certificates and/or a affidavits of consent and irrevocable release of the child of biological parents for purposes of emigration and adoption. Once a child is identified, the adoption can be handled directly through WCS. Many who choose the private adoption route find it useful to have an adoption lawyer or contact person in Nepal to help navigate the process.

The Nepalese Embassy in Washington, DC:

2131 Leroy Place, N.W.
Washington, DC 20008
Tel. 202-667-4550
info@nepalembassyusa.org

Nepalese Consulate General New York:

820 Second Avenue, 17th Floor
New York N.Y.10017
Tel: 212-370-3988, 212-370-3989
Fax: 212-953-2038
Email: nepal@un.int, nplun@undp.org

U.S. Immigration Requirements: Prospective adoptive parents are strongly encouraged to consult USCIS publication M-249, The Immigration of Adopted and Prospective Adopting Children, as well as the Department of State publication, International Adoptions. Please see the International Adoption section of this book for more details and review current reports online at www.travel.state.gov/family.

Additional Information: Specific questions about adoption in Nepal may be addressed to the Consular Section of the U.S. Embassy in Nepal, 977-1-444-5577 or adoptionsnepal@state.gov. General questions regarding international adoption may be addressed to the Office of Children’s Issues, U.S. Department of State, CA/OCS/CI, SA-29, 4th Floor, 2201 C Street, NW, Washington, D.C. 20520-4818, toll-free Tel: 1-888-407-4747.

Travel Warning : December 8, 2006

This Travel Warning provides updated information on the security situation in Nepal. The Department of State continues to be concerned about the security situation in Nepal and urges American citizens contemplating a visit to Nepal to obtain updated security information before they travel and to be prepared to change their plans at short notice. This supersedes the Travel Warning issued on May 11, 2006.

The restoration of Nepal’s parliament, formation of a new government, and the signing of a comprehensive peace agreement in November 2006 are positive developments. These developments have not, however, resulted in the end of human rights abuses, including murder, kidnapping and extortion. Despite the signing of a comprehensive peace agreement by the Government and Maoist insurgents, Maoist extortion and abductions continue. Maoists freely roam the countryside and cities, sometimes still openly bearing their weapons. Travel via road in areas outside of the Kathmandu valley is still dangerous and should be avoided. There have been attacks in the countryside involving foreigners. Trekkers and other individuals who resist Maoist extortion demands have been threatened, sometimes assaulted, and risk being detained. In March 2006, Maoists detained several Polish trekkers after the trekkers refused to pay extortion.

Since the cease-fire in April 2006, hotels and businesses frequented by American citizens have been the target of extortion demands and, in some cases, have become the focus of demonstrations. In November 2006, the Embassy received numerous firsthand accounts from resident American citizens that Maoist cadres had approached them and demanded food and lodging. These demands were often accompanied by threats of physical violence. Nepalese staff of Americans who resisted such demands were, in some instances, beaten.

Though the Maoist leadership has publicly prohibited their cadres from engaging in all human rights abuses, including extortion and kidnapping, local media outlets continue to report numerous incidents in which Maoist cadres extort money, kidnap, kill and threaten Nepalese citizens.

While widespread protests have abated, the potential for demonstrations and disruptions remains high. During recent demonstrations, protestors used violence, including burning vehicles, throwing rocks during street protests and burning tires to block traffic. Government security forces responded with force at times to quell demonstrations. Given the nature, intensity and unpredictability of disturbances, American citizens are urged to exercise special caution during times when demonstrations are announced, avoid areas where demonstrations are occurring or crowds are forming, avoid road travel and maintain a low profile. Curfews can be announced with little or no advance notice, and American citizens are urged to consult media sources and the Embassy’s website (http://nepal.usembassy.gov) for current security information.

U.S. official personnel do not generally travel by road outside the Kathmandu Valley. All official travel outside the Kathmandu valley, including by air, requires specific clearance by the Regional Security Officer. As a result, emergency assistance to U.S. citizens may be limited. Active duty U.S. military and Department of Defense contractors must obtain a country clearance for official and unofficial travel to Nepal.

Crime in the Kathmandu Valley, including violent crime and harassment of women, has increased since April 2006. Police recently have reported a number of robberies by armed gangs, and in some cases victims have been attacked and injured. Solo trekkers have also been robbed by small groups of young men, even on some popular trails. In late 2005, two European women were murdered in Nargarjun Forest, a popular tourist destination in the Kathmandu Valley. The two murders occurred within weeks of each other and both involved women hiking alone. The body and valuables of one woman were recovered and theft did not appear to be the motivation behind the crime. Both crimes remain unsolved and no culprit(s) has been identified. Visitors should avoid walking alone after dark and carrying large sums of cash or wearing expensive jewelry.

U.S. citizens who travel to or reside in Nepal should factor the potential for violence into their plans, avoid public demonstrations and maintain low profiles while in Nepal. U.S. citizens are urged to register with the Consular Section of the Embassy by accessing the Department of State’s travel registration site at https://travelregistration.state.gov or by personal appearance at the Consular Section. The Consular Section is located at the Yak and Yeti Hotel complex on Durbarmarg Street. The section can be reached directly at (977) (1) 444-5577 or through the Embassy switchboard. The U.S. Embassy is located at Pani Pokhari in Kathmandu, telephone (977) (1) 441-1179; fax (977) (1) 444-4981, website http://nepal.usembassy.gov. The Consular Section can provide updated information on travel and security.

U.S. citizens should also consult the Department of State’s Consular Information Sheet for Nepal and Worldwide Caution Public Announcement via the Internet on the Department of State’s home page at http://travel.state.gov or by calling 1-888-407-4747 toll free in the United States and Canada, or, for callers outside the United States and Canada, a regular toll line at 1-202-501-4444. These numbers are available from 8:00 a.m. to 8:00 p.m. Eastern Time, Monday through Friday (except U.S. federal holidays).

Nepal

PROFILE
PEOPLE
HISTORY
GOVERNMENT AND POLITICAL CONDITIONS
ECONOMY
DEFENSE
FOREIGN RELATIONS
U.S.-NEPAL RELATIONS
TRAVEL

Compiled from the November 2007 Background Note and supplemented with additional information from the State Department and the editors of this volume. See the introduction to this set for explanatory notes.

Official Name:

Kingdom of Nepal

PROFILE

Geography

Area: 147,181 sq. km. (56,136 sq. mi.), about the size and shape of Tennessee, bordering China and India.

Cities: Capital—Kathmandu (3 districts) (pop. 2.2 million est.). Other cities—Biratnagar, Patan, Pokhara, Birgunj, Dharan, Nepalgunj.

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, including Mount Everest. 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, during which showers occur almost every day, bringing 75 to 150 centimeters (30-60 in.) of rain.

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.) or Nepalese (plural). Adjective—Nepalese or Nepali.

Population: (2007 estimate) 29 million.

Annual growth rate: (2007 estimate) 2.132%.

Population breakdown/distribution: Rural (86%); female (50%); in the southern Terai region (49%); in the hills (44%); 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 (81%), Buddhism (11%), Islam (4%), and others (4%).

Languages: Nepali and more than 12 others.

Education: Years compulsory—0. Attendance—primary 80.4%, secondary 20%. Literacy—49% (63% male, 35% female).

Health: Infant mortality rate (2007 estimate)—63.7 deaths/1,000 live births. Life expectancy (2007 estimate)—61.9 years for males and 65.5 years for females.

Work force: Agriculture—71%; industry—3%; services—11%; other—1%.

Government

Type: Interim. An interim Parliament was formed on January 15, 2007 after a comprehensive peace agreement between the ruling Seven-Party Alliance and the Maoist rebels. Prime Minister and Council of Ministers chosen through political consensus among the eight ruling parties on April 1, 2007; role of monarchy suspended, with future status to be decided by upcoming Constituent Assembly.

Constitution: Interim constitution promulgated on January 15, 2007.

Government branches: Executive—Prime Minister (head of government), interim Council of Ministers formed on April 1, 2007. Legislative—interim Parliament is the unicameral House of Representatives, consisting of 329 members; 194 were members of the old Parliament, 14 were former National Assembly members, 73 were appointed by the Maoists, and 48 were appointed by the various political parties. Judicial—Supreme Court, 16 appellate courts, 75 district courts.

Political subdivisions: 5 development regions, 14 zones, and 75 districts. 75 district development committees, 58 municipalities, 3,913 village development committees, and 36,023 ward committees.

Political parties: Nepali Congress Party, Nepali Congress-Democratic Party, Communist Party of Nepal-United Marxist Leninist, Communist Party of Nepal-Maoist (still on the U.S. terrorist exclusion list), National Democratic Party (RPP), Nepal Goodwill Party-Ananda Devi (NSP-A), People's Front Nepal, United Left Front, and others.

Elections: No national elections since 1999; Constituent Assembly election planned.

Suffrage: Universal over 18. Defense/police (FY 2006/2007) $248 million.

National Day: Democracy Day, Fal-gun 7 (mid-February).

Economy

GDP: (2005/2006) $7.7 billion.

Annual growth rate of real GDP: (FY 2005/2006) 2.38%.

Per capita income: (gross national product, FY 2005/2006) $322.

Avg. inflation rate: (Consumer Price Index, November 2006 est.) 8.6%.

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: (10% of GDP) Types—carpets, pashmina, garments, cement, cigarettes, bricks, sugar, soap, matches, jute, hydroelectric power.

Trade: (2005/2006) Exports—$834 million: carpets, pashmina, garments. Major markets—Germany and the U.S. Imports—$2.2 billion: manufactured goods. Major supplier—India.

Budget: (FY 2006/2007) $1.9 billion; military allocation $139 million.

Exchange rate: (as of July 16, 2006) 74.10 Nepalese rupees=U.S. $1.00.

Fiscal year: July 16-July 15.

PEOPLE

Perched on the southern slopes of the Himalayan Mountains, 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.

The Terai, a part of the Ganges Basin with 20% of Nepal's land, is the country's breadbasket. Much of the population is physically and culturally similar to the Indo-Aryan people of northern India. People of Indo-Aryan and Mongoloid origin live in the hill regions. The mountainous highlands are sparsely populated. The Kathmandu Valley, in the middle hill region, constitutes a small fraction of the nation's area but is the most densely populated, with over 7% of the population.

Religion is important in Nepal; the Kathmandu Valley alone has more than 2,700 religious shrines. According to the 2001 census, Nepal is about 81% Hindu. Buddhists account for about 11% of the population. The interim constitution promulgated on January 15, 2007 declared the country a “secular state.” Buddhist and Hindu shrines and festivals are respected and celebrated by many. The government celebrates most Hindu and some Buddhist holidays. Nepal also has small Muslim and Christian minorities. Certain animistic practices of old indigenous religions also 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 Hindi and 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 numbeber 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 by the British in a war 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 highly centralized autocracy, pursued a policy of isolating Nepal from external influences. This policy helped Nepal maintain its national independence during the colonial era, but 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 administrattion. This allowed the return of the Shah family to power and, eventually, the appointment of a non-Rana 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 the British model.

Democracy Develops

In early 1959, King Mahendra, who had succeeded his father Tribhuvan in 1955, 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 eighteen months later, King Mahendra dismissed the Koirala government and promulgated a new con

stitution on December 16, 1962. The new constitution established a “partyless system of panchayats (councils), which King Mahendra claimed was 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 the nature of Nepal's government—either the continuation of the Panchayat syste 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 out of 205 seats 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 Communist Party of Nepal-United Marxist Leninist Party (CPN-UML); this made Nepal the world's first communist monarchy, with Man Mohan Adhikary as Prime Minister. The next five years saw five successive unstable coalition governments and the beginning of a Maoist insurgency.

Following the May 1999 general elections, the Nepali Congress Party once again headed a majority government after winning 113 out of 205 seats. 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.

Maoist Insurgency

In February 1996, the leaders of the Maoist United People's Front began 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. Over 13,000 police, civilians, and insurgents were killed in the conflict. 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, which the Parliament approved by a two-thirds vote. On the recommendation of Prime Minister Sher Bahadur Deuba, the King dissolved the House on May 22, 2002.

Struggle for Democracy Continues

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 were called off. After a weeklong 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.

Under Chand's premiership, the government and Maoists declared a cease-fire on January 29, 2003. This marked the second cease-fire with the Maoists; the first, 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 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 only seven 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 second cease-fire. Thapa resigned in May 2004 as a result of political pressure. In June 2004, the King reinstated formerly dismissed Sher Bahadur Deuba as Prime Minister.

King's Direct Rule

Citing a steady deterioration of conditions in the country, King Gyanendra dismissed the Cabinet and constituted a Council of Ministers under his own chairmanship on February 1, 2005. He stated that the Council of Ministers (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 for nearly three months. His new government was sworn in on February 2, 2005. The Council of Ministers under the King's chairman-ship was reshuffled twice during the King's 15 months of direct rule.

People's Movement

In April 2006, the major political parties, in cooperation with the Maoists, organized massive countrywide demonstrations for the restoration of democracy, forcing the King to relinquish power. On April 24, 2006, King Gyanendra reinstated the 1999 Parliament. Former Prime Minister Girija Prasad Koirala of the Nepali Congress Party was selected by the Seven-Party Alliance (SPA) of political parties to again lead the government. The Maoists declared a unilateral cease-fire on April 26, and the new Koirala government announced its own unilateral ceasefire and plans for peace talks with the Maoist insurgents on May 3, 2006. The SPA and the Maoists have since signed a number of agreements, including, in November 2006, a comprehensive peace agreement to end the decade-long insurgency. Both sides also agreed to an arms management process and elections for a Constituent Assembly. On January 15, 2007 a 329-member interim Parliament, including 83 Maoist representatives and other party representatives, was constituted. The first sitting of the Parliament unanimously endorsed an interim constitution, which replaced the constitution of 1990. On April 1, 2007, the ruling eight-party government formed an interim Council of Ministers through political consensus, including five Maoist ministers.

GOVERNMENT AND POLITICAL CONDITIONS

A Maoist insurgency—punctuated by cease-fires in 2001, 2003, 2005, and the latest one from April 26, 2006— has been ongoing since 1996. After King Gyanendra announced the reinstatement of Parliament on April 24, 2006, the Maoists declared a three-month unilateral ceasefire on April 26, 2006 which the new Koirala government reciprocated on May 3, 2006. Since then the Seven-Party Alliance (SPA) and the Maoists have signed five agreements, culminating in the comprehensive peace agreement of November 21, 2006, effectively ending the insurgency. However, Maoist violence and intimidation have continued since the agreement.

The main agenda of the SPA and the Maoists is to hold a Constituent Assembly (CA) election. The Constituent Assembly would draft and promulgate a new constitution defining the future political system in Nepal. The interim constitution, adopted on January 15, 2007, expressed full commitment to democratic ideals and norms, including competitive multiparty democracy, civil liberties, fundamental human rights, adult enfranchisement, periodic elections, press freedom, an independent judiciary, and the rule of law. The interim constitution also guaranteed the basic rights of Nepali citizens to formulate a constitution for themselves and to participate in the Constituent Assembly in an environment free from fear. The interim constitution transferred all powers of the King as head of state to the prime minister and stripped the King of any ceremonial constitutional role. Under the interim constitution, the fate of the monarchy will be decided by the first meeting of the Constituent Assembly. The interim Parliament is a unicameral house.

After promulgation of the interim constitution, many socially marginalized ethnic communities, including the Madhesis of the lowland Terai, began widespread protests against the proposed proportional representation system incorporated in the new constitution. After a Maoist shot and killed one of the demonstrators, violent protests erupted with clashes between police and demonstrators and attacks on government facilities in at least 10 districts, resulting in the death of over 30 people. Prime Minister Koirala, in an address to the nation on February 7, 2007 promised to amend the constitution to meet the demands of the Terai people. However, the situation remains tense, with continuing protests and violence.

Nepal's judiciary is legally separated from the executive and legislative branches and, in practice, has increasingly shown the will to be independent of political influence. However, by asserting executive control over the judiciary, the interim constitution called into question this independence. Under the interim constitution, the Prime Minister appoints the Chief Justice on the recommendation of the Constitutional Council, and the Chief Justice appoints other judges on 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.

Human Rights

Since political reform began in 1990, some progress has been achieved in the transition to a more open society with greater respect for human rights; however, substantial problems remain. Poorly trained police sometimes use excessive force in quelling violent demonstrations. In addition, there have been reports of torture during 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. 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 rul and suspension of many civil rights—including freedom of expression, assembly, and privacy—was a setback for human rights in Nepal. During this three-month period, censors were deployed to major newspapers, and many political leaders were kept under house arrest. The King's government restricted the media from publishing interviews, articles, or news items against the spirit of the royal proclamation of February 1, 2005 or in support of terrorist or destructive activities. The reinstated government, led by Prime Minister Koirala, reversed these decisions in May 2006. The interim constitution promulgated on January 15, 2007 ensured unrestricted freedom of expression.

Both the Maoists and security personnel have committed numerous human rights violations. The Maoists have used tactics such as kidnapping, torture, bombings, intimidation, killings, and conscription of children. Within the Nepalese security forces, violations ranged from disappearances to executions. After the royal takeover on February 1, 2005 and subsequent imposition of the state of emergency, the security forces arrested many political leaders, student leaders, journalists, and human rights activists under the Public Security Act of 1989, although all were released by June 2005 when the King ended the state of emergency.

After the April 2006 cease-fire announced by the government and the Maoists, incidents of human rights violations by the government declined substantially while incidents of human rights violations by the Maoists remained relatively unabated. Even after signing a comprehensive peace agreement with the government in November 2006, Maoists' extortion, abduction, and intimidation largely remained uncontrolled. Although activities by other political parties have increased significantly in the rural parts of Nepal, political party representatives, police, non-governmental organization (NGO) workers, and journalists reported continuous threats and intimidation by Maoist cadres. During the January-February 2007 uprising in the Terai, reports of government security forces using excessive force to quell demonstrations were common.

There are three major daily English-language newspapers, “The Kathmandu Post,” “The Himalayan Times” and “The Rising Nepal.” The last and its vernacular sister publication are owned by a government corporation. There are hundreds of smaller daily and weekly periodicals that are privately owned and of varying journalistic quality. Views expressed since the 1990 move to democracy are varied and vigorous. Currently, 75 radio and four television stations are privately owned and operated, following 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.

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

Principal Government Officials

Last Updated: 2/1/2008

King: GYANENDRA (Bir Bikram Shah Dev)

Prime Min.: Girija Prasad KOIRALA

Min. of Agriculture & Cooperatives: Chhabi Lal BISWOKARMA

Min. of Culture, Tourism, & Civil Aviation: Prithvi Subba GURUNG

Min. of Defense: Girija Prasad KOIRALA

Min. of Education & Sports: Pradeep NEPAL

Min. of Finance: Ram Sharan MAHAT

Min. of Foreign Affairs: Sahana PRADHAN

Min. of Forest & Soil Conservation: Matrika YADAV

Min. of Health: Girirajmani POKHAREL

Min. of Home: Krishna Prasad SITAULA

Min. of Industry, Commerce, & Supplies: Sham Sundar GUPTA

Min. of Information & Communications: Krishna Bahadur MAHARA

Min. of Labor & Transport Management: Ramesh LEKHAK

Min. of Land Reform & Management: Jagat Bahadur BOGATI

Min. of Law, Justice, & Parliamentary Affairs: Narendra Bikram NEMWANG

Min. of Local Development: Dev GURUNG

Min. of Peace & Rehabilitation: Ram Chandra POUDEL

Min. of Physical Planning & Public Works: Hisila YAMI

Min. of Science & Technology:

Min. of Water Resources: Gyanendra KARKI

Min. of Women, Children, & Social Welfare: Pampha BHUSAL

Governor, Central Bank:

Ambassador to the US:

Permanent Representative to the UN, New York: Madhu Raman ACHARYA

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 around $322. Based on national calorie/GNP criteria, an estimated 31% 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 five-year economic development plan in 2002; its currency has been made convertible; and fourteen state enterprises have been privatized, seven liquidated and two dissolved. Foreign aid accounts for more than half the development budget. The Government of Nepal has shown an 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 71% 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 2.8% in FY 2005/2006 compared to an increase of 8.3% in FY 2004/2005. Imports grew by 9.8% in FY 2005/2006 compared with 9.2% in FY 2004/2005. Exports were constrained by a prolonged phase of general strikes, industrial closures, and political turmoil during the second half of FY 2005/2006 and also by a significant drop in Nepal's main export, ready-made textile products. The trade deficit for FY 2004/2005 was $1.2 billion, which widened to $1.4 billion in FY 2005/ 2006. 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 below 5%. In 2002, GDP recorded a negative growth rate of 0.33%, largely because of the Maoist insurgency. GDP grew 3.1% in FY 2002/2003 and 3.6% in FY 2003/2004, and again slipped to 2.4% in 2004/ 2005 and to 2.4% in FY 2005/2006, according to the Central Bureau of Statistics.

Despite its growing trade deficit, Nepal traditionally has a balance of payments (BOP) surplus due to remittances from Nepalese working abroad. In FY 2005/2006, Nepal recorded a balance of payments surplus of $355 million, as compared to $79 million in FY 2004/2005. The lower BOP surplus in FY 2004/2005 was mainly attributed to the lower inflow of net government loans, and the higher surplus in FY 2005/2006 was due to resumption of foreign loans and assistance after the April 2006 People's Movement. Both the current account and the capital account registered significant growth in FY 2005/2006. Nepal receives substantial amounts of external assistance from India, the United Kingdom, the United States, Japan, Germany, and the Scandinavian countries. Several multilateral organizations—including the World Bank, the Asian Development Bank, and the UN Development Program—also provide assistance. Such assistance decreased substantially in FY 2004/2005 after the royal takeover of February 1, 2005 and also because of the Maoist conflict, which undermined development activities throughout most of Nepal. On April 23, 2004, Nepal became 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. However, the decade-long insurgency and a global economic slowdown threatened the tourism industry. Figures from the Department of Immigration showed a 4% increase in arrivals in 2006, but these remained well below numbers during 1999, the peak tourism year. Recent tourist arrivals have given relief to the tourism-based hotel, trekking, mountaineering, and aviation industries. Since the political parties and Maoists brokered a comprehensive peace agreement in November 2006, the tourism industry hoped that guest arrivals in Nepal would bounce quickly back to 1999 levels and higher.

Swift rivers flowing south through the Himalayas have massive hydroelectric potential to service domestic power needs and growing demand from India. Only about 1% of Nepal's hydroelectric potential is currently tapped. Several hydroelectric projects, at Kulekhani and Marsy-angdi, 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. Kali Gandaki A started commercial operation in August 2002. The most significant privately financed hydroelectric projects currently in operation are the Khimti Khola (60 MW) and Bhote Koshi (36 MW) projects.

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. The planned private-sector West Seti (750 MW) storage project is dedicated to electricity exports. An Australian company signed a power purchase agreement with the Indian Power Trading Corporation in September 2002 and has the lead on the project. Negotiations with India for a power purchase agreement have been underway for several years, but agreement on pricing and capital financing remains a problem. The Government of Nepal has taken up the issue of project financing for the West Seti project with the EXIM Bank of China. The Department of Electricity Development recently obtained proposals from 14 foreign companies for survey licenses of three projects—600 MW Budhi Gandaki, 402 MW Arun III, and 300 MW Upper Karnali. The Ministry of Water Resources is currently evaluating the proposals and has not awarded the survey licenses. 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 the nearly 95,000-strong Nepalese Army (NA), which is organized into six divisions (Far-Western, Mid-Western, Western, Central, Eastern, and Valley Divisions) with separate Aviation, Parachute, and Security Brigades as well as brigade-sized directorates encompassing air defense, artillery, engineers, logistics, and signals which provide general support to the NA. The Prime Minister is the Supreme Commander of the NA. The Prime Minister is currently Minister of Defense. General Rookmangud Katawal is Chief of the Army Staff (COAS), also the senior commissioned officer of the NA.

Since 1958, the NA has contributed over 50,000 peacekeepers to 28 peacekeeping missions such as the UN Interim Force in Lebanon (UNIFIL), the UN Protection Force (UNPRO-FOR) 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). NA units are presently serving in the UN Mission in Sierra Leone (UNAM-SIL), the UN Mission in the Democratic Republic of the Congo (MONUC), and the UN Mission in Haiti (MINUSTOH), among others. Approximately 3,400 of the world-famous Nepalese Gurkha forces serve in the British Army, and 40,000 serve in the Indian Army.

The U.S. Pacific Command (USPA-COM) coordinates U.S. military engagement and security assistance with Nepal through the Office of Defense Cooperation. Cumulative U.S. military assistance to the NA has consisted of $21.95 million in grant assistance: Foreign Military Financing (FMF) since 2002, annual professional and technical training provided under the International Military Education and Training Program (IMET grant for $650,000 in FY 2006), additional training provided under the Counter Terrorism (CT) Fellowship (approximately $200,000 annually), and approximately $2 million of Enhanced International Peacekeeping Capabilities (EIPC) funding to increase the pool of international peacekeepers and promote interoperability. Many NA officers attend U.S. military schools, conferences and seminars such as 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 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 signed with India in 1991 is renewed every five years. The most recent renewal was on March 6, 2007, which expires on March 5, 2012. A transit treaty with India, which allows Nepal to trade with other countries through the Calcutta/ Haldia ports, was extended on March 30, 2006 for seven years.

Nepal 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. Nepal is also a signatory of the agreement on South Asian Free Trade Area (SAFTA), which came into force on January 1, 2006. A SAFTA tariff liberalization program (TLP) was scheduled to be implemented July 1, 2006. All member countries, except for Nepal, whose TLP started on August 1, 2006, reduced tariffs for each other. However, on July 1, 2006, Pakistan officially toughened its stance of not trading with India under the SAFTA arrangements and did not announce TLP for India. Due to the stalemate between India and Pakistan, the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation Free Trade Agreement (BIMSTEC-FTA), which was initially scheduled to come into force on July 1, 2006, was deferred indefinitely. The BIMSTEC Summit scheduled for February 8, 2007, in India was also deferred due to political instability in member states, including Nepal. 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 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 center on helping Nepal build a peaceful, prosperous, and democratic society. Since 1951, the United States has provided more than $791 million in bilateral economic assistance to Nepal. 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. USAID is also supporting Nepal's peace process, as well as its preparation for Constituent Assembly elections. The United States also contributes to international institutions and private voluntary organizations working in Nepal. To date, U.S. contributions to multilateral organizations working in Nepal approach an additional $725 million, including humanitarian assistance. The Peace Corps temporarily suspended its operations in Nepal in 2004 due to increasing security concerns, and officially terminated its Nepal program in 2006.

Principal U.S. Embassy Officials

Last Updated: 2/19/2008

KATHMANDU (M) Maharajgunj, Kathmandu, APO/FPO 6190 Kath-mandu Place, Dulles, VA 20189-6190, (977) 1-400-7200, Fax (977) 1-400-7272, INMARSAT Tel 808-559-1213 and 808-659-0920, Workweek: Monday-Friday 0800-1700, Website: http://nepal.usembassy.gov.

TRAVEL

Consular Information Sheet

January 8, 2008

Country Description: Nepal is a developing country with extensive tourist facilities, which vary widely in quality and price. The capital is Kathmandu. Nepal has suffered from political instability for almost 11 years. The Government signed a Comprehensive Peace Agreement on November 21, 2006, formally ending the Maoist insurgency, which began in 1996. The Maoist insurgents and other political groups have yet to fully end the violence.

Entry Requirements: A passport and visa are required. Travelers may obtain visas prior to travel or purchase two-month, single-entry visas or two-month, multiple-entry visas upon arrival at Tribhuvan International Airport in Kathmandu and at the following land border points of entry: Kakarvitta, Jhapa District (Eastern Nepal); Birgunj, Parsa District (Central Nepal); Kodari, Sindh-upalchowk District (Northern Border); Belahia, Bhairahawa (Rupandehi District, Western Nepal); Jamunaha, Nepalgunj (Banke District, Mid-Western Nepal); Mohana, Dhangadhi (Kailali District, Far Western Nepal); and Gadda Chauki, Mahendranagar (Kanchanpur District, Far Western Nepal). Visas and information on entry/exit requirements can be obtained from the Embassy of Nepal at 2131 Leroy Place NW, Washington, DC 20008, telephone (202) 667-4550 or the Consulate General in New York at (212) 370-3988.

Upon departure from Tribhuvan International Airport, all foreigners must pay an airport exit tax (currently approximately $27), regardless of the length of their stay. Tourists may stay in Nepal no longer than 150 days in any given calendar year.

Active duty U.S. military and Department of Defense contractors must obtain a country clearance from their parent units to be forwarded to the Defense Attache's Office at the U.S. Embassy in Kathmandu for both official and unofficial travel to Nepal.

Travelers occasionally report immigration difficulties with Chinese authorities when crossing the Nepal-China border over land in either direction. Chinese authorities often require American and other foreign tourists to organize “group” tours through established travel agencies as a pre-requisite for obtaining visas and entry permits into Tibet. U.S. citizens planning to travel to Tibet from Nepal may contact the U.S. Embassy in Kathmandu for current information on the status of the border-crossing points. Travelers may also wish to check with the Embassy of the People's Republic of China in Nepal for current regulations on entry into Tibet.

Visit the Embassy of Nepal web site at http://www.nepalembassyusa.org/ for the most current visa information.

Safety and Security: A Travel Warning remains in effect because the Department of State continues to be concerned about the security situation in Nepal. Despite the signing of the November 21, 2006 Comprehensive Peace Agreement, Maoists and other political movements continue extortion, abduction and killing. Since April 2006, numerous groups using violent methods to advance various political goals have formed in Nepal. Business people (both Nepalese and foreign) and tourists who resist Maoist extortion demands have been threatened, sometimes assaulted, and risk being detained. Maoist demonstrators have stopped and in some cases attacked vehicles, including those of the U.S. Embassy. Since early 2007, the Maoist Young Communist League (YCL) has harassed and attacked established tourist facilities and infrastructure, and has threatened Kathmandu-based personnel of a U.S. non-governmental organization.

In May 2007, YCL cadre attacked with stones a UN High Commission for Refugees (UNHCR) vehicle carrying the UNHCR Resident Representative and the U.S. Ambassador in Jhapa District in the Terai.

The U.S. Embassy strongly recommends against non-essential travel to the Terai, the southern region bordering India. Maoist splinter groups in the Terai as well as other violent Terai-based groups continue to kidnap and murder Nepalese citizens. Additionally, ongoing political agitation and civil unrest in the Terai, including violent clashes between various political groups and Maoist splinter groups, as well as inter-communal violence and criminality, have increased. The random, indiscriminate, and unpredictable nature of these attacks creates the risk of U.S. citizens in Nepal being caught in the wrong place at the wrong time.

Since the ceasefire in April 2006, hotels and businesses frequented by American citizens have been the target of extortion demands and, in some cases, have become the focus of demonstrations. In November 2006, resident Americans reported that they were told that they would have to house and feed Maoists intending to participate in rallies in Kathmandu. In a few cases, local Nepali staff of the American residents were threatened or beaten when they attempted to resist this demand. The discrepancy between the Maoists' publicly stated intentions and their behavior, combined with their consistent anti-American rhetoric, remains a serious concern.

Americans traveling to Nepal should be aware of the potential for large or violent demonstrations. Frequently, demonstrators burn vehicles, throw rocks at passing motorists, and burn tires to block traffic. Given the frequency, nature, intensity and unpredictability of disturbances, American citizens are urged to exercise particular caution when demonstrations are announced or reported, avoid areas where demonstrations are occurring or crowds are forming, avoid road travel during these periods and maintain a low profile. Demonstrations can occur with little or no advance notice. American citizens are urged to consult media sources and the Embassy's web site (http://nepal.usembassy.gov) for current security information. Click the “Demonstration Alert” link.

In a November 2002 press release, the Maoists claimed responsibility for targeting and murdering two locally-hired U.S. Embassy security guards. In 2003, the Department of State designated the Communist Party of Nepal (Maoist) as a Terrorist Organization under the “Terrorist Exclusion List”of the Immigration and Nationality Act and under Executive Order 13224. These two designations make Maoists excludable from entry into the United States and bar U.S. citizens from transactions such as contribution of funds, goods, or services to, or for the benefit of, the Maoists.

The U.S. Embassy in Kathmandu requires pre-clearance of all travel outside the Kathmandu Valley by U.S. Government employees. U.S. citizens who decide to travel outside the Valley are strongly urged to contact the U.S. Embassy in Kathmandu to discuss and register their planned itinerary and to receive the most recent security information before traveling. Nighttime road travel should be strictly avoided outside the Kathmandu Valley and minimized within Kathmandu.

Visitors in areas on or near the rim of the Kathmandu Valley, such as Shivapuri National Park, should be particularly cautious when traversing military camps or checkpoints and carefully follow the commands of security personnel. Military installations and checkpoints are often protected with explosive devices. Movement in such areas at or after dusk should not be undertaken. For the latest security information, Americans traveling abroad should regularly monitor the Department of State, Bureau of Consular Affairs' web site at http://travel.state.gov, where the current Travel Warnings and Travel Alerts, including the Travel Warning for Nepal as well as the Worldwide Caution, can be found. Up-to-date information on safety and security can also be obtained by calling 1-888-407-4747 toll free in the U.S. and Canada or, for callers outside the U.S. and Canada, a regular toll-line at 1-202-501-4444.

Bandhs (General Strikes): A“bandh” (forced closure of businesses, schools and halting of vehicular traffic) is a frequently used and longstanding form of political expression in Nepal. Many bandhs are enforced through intimidation and violence. During a recent bandh, an American citizen was injured when demonstrators threw a rock and broke the window of the vehicle in which he was traveling to the airport. Bandhs tend to be unpredictable and may take place without any prior notice. Bandhs typically draw thousands of demonstrators into the streets who sometimes incite or initiate violence. Bandhs tend to focus on the central areas of Kathmandu, but they also can be nationwide, and bandh-related violent disturbances occur throughout Nepal.

Bandhs in the Terai region of Nepal also occur and have been known to last for several weeks, causing acute shortages of daily food supplies and bringing vehicular traffic to a complete halt. Individuals have been reported kidnapped or killed for not complying with the bandhs in the region.

During bandhs, U.S. citizens are urged to avoid all unnecessary travel. If travel by vehicle is necessary, U.S. citizens should pay attention to the volume of traffic on the roads, waiting until a pattern of traffic is well established before undertaking travel, and maintaining a low profile throughout bandh periods. Buses, taxis, and other forms of public transportation may not operate during a bandh. Observance of bandhs, particularly in the transportation sector, may be higher outside the Valley, where a number of private buses and trucks have been stopped, torched, and their drivers beaten. U.S. citizens are strongly urged to avoid road travel outside the Kathmandu Valley, especially during scheduled bandhs. If you are planning air travel to or from Nepal during scheduled bandhs, be aware that transportation to and from airports throughout Nepal could be affected. Consult the U.S. Embassy web site at http://nepal.usembassy.gov for up-to-date information on upcoming bandhs as well as the latest security information.

Crime: Although the rate of violent crime is low in Kathmandu relative to that in comparably-sized American cities, crime in Kathmandu and in adjacent areas has risen dramatically since April 2006. Robbery and home-invasion robbery by armed gangs has increased, and in some cases American citizens have been victimized. The U.S. Embassy has received several reports of individuals harassing American women in Kathmandu, and in one case an American woman was assaulted. In another case, when police detained two employees of a hotel where this occurred, the American-citizen victim was threatened by Maoists. The citizen was told that unless the two employees were released, the citizen would not be allowed to leave Nepal. Criminal activity and extortion of tourists occurs frequently along popular hiking trails. Trekkers and other individuals who resist extortion demands are threatened, sometimes assaulted, and risk being detained. In December 2007, Maoist cadres in the popular Annapurna circuit trekking area beat up a Swiss national who declined to pay the “donation” demanded by them. He sustained serious head injuries, requiring stitches.

In late 2005, two European women were murdered in Nargarjun Forest, a popular tourist destination near Kathmandu. The two murders occurred within weeks of each other and both involved women hiking alone. The body and valuables of one woman were recovered and theft did not appear to be the motivation behind the crime. Both crimes remain unsolved and no culprits have been identified.

Visitors should avoid walking alone after dark and carrying large sums of cash or wearing expensive jewelry. Women travelers are advised not to wear revealing clothing in public places as this can be culturally offensive to Nepalese. In addition, visitors should consider exchanging money only at banks and hotels and limiting shopping to daylight hours. There have been several reported incidents in which tourists have had their belongings stolen from their rooms while they were asleep. Valuables should be stored in the hotel safety deposit box and should never be left unattended in hotel rooms. Travelers should be especially alert at or near major tourist sites, where most pick-pocketing occurs. Passports and cash should be carried in a protected neck pouch or money belt—ot in a backpack or handbag. Nepali police forces have limited resources and lack sufficient manpower to effectively enforce law and order. Their services are not up to Western standards. Many cases reported to the police remain unresolved.

Information for Victims of Crime: The loss or theft abroad of a U.S. passport should be reported immediately to the local police and the nearest U.S. Embassy or Consulate. If you are the victim of a crime while overseas, in addition to reporting to local police, please contact the nearest U.S. Embassy or Consulate for assistance. The Embassy/Consulate staff can, for example, assist you to find appropriate medical care, contact family members or friends and explain how funds could be transferred. Although the investigation and prosecution of the crime is solely the responsibility of local authorities, consular officers can help you to understand the local criminal justice process and to find an attorney if needed.

Medical Facilities and Health Information: Medical care in Nepal is extremely limited and is generally not up to Western standards. Typical travelers' complaints can be addressed by the clinics in Kathmandu, and some surgeries can also be performed in the capital. However, serious illnesses often require evacuation to the nearest adequate medical facility (in Singapore, Bangkok or New Delhi ). Illnesses and injuries suffered while hiking in remote areas often require evacuation by helicopter to Kathmandu. Those trekking in remote areas of Nepal should factor the high costs of a potential helicopter rescue into their financial considerations. Travelers are urged to consider purchasing medical evacuation insurance if they plan to visit remote areas. There is minimal mental health care available in Nepal. Americans with mental health problems are generally stabilized and transported to the U.S. for care. The Consular Section in Kathmandu can provide a list of available medical facilities to Americans upon request. Medical facilities are often overwhelmed due to insufficient resources and the emergency services available fall far short of those expected in the U.S.

Information on vaccinations and other health precautions, such as safe food and water precautions and insect bite protection, may be obtained from the Centers for Disease Control and Prevention's hotline for international travelers at 1-877-FYI-TRIP (1-877-394-8747) or via the CDC's web site at http://wwwn.cdc.gov/travel. For information about outbreaks of infectious diseases abroad consult the World Health Organization's (WHO) web site at http://www.who.int/en. Further health information for travelers is available at http://www.who.int/ith/en

Medical Insurance: The Department of State strongly urges Americans to consult with their medical insurance company prior to traveling abroad to confirm whether their policy applies overseas and whether it will cover emergency expenses such as a medical evacuation.

Traffic Safety and Road Conditions: While in a foreign country, U.S. citizens may encounter road conditions that differ significantly from those in the United States. The information below concerning Nepal is provided for general reference only, and may not be totally accurate in a particular location or circumstance.

Travel via road in areas outside of the Kathmandu Valley remains dangerous and should be avoided. In general, roads in Nepal are in poor condition and lack basic safety features, resulting in significant numbers of accidents and fatalities. Moreover, Americans should consider avoiding riding motorcycles in Nepal. In 2006, three foreigners were killed after they were hit by trucks while riding motorcycles on the highway. Visitors throughout Nepal, including in Kathmandu, should use metered taxis and avoid public buses and microbuses. Various Nepalese political groups frequently announce road closures (blockades) in certain districts of Nepal and forcibly block major roads throughout the country, including roads to Tibet, India, Chitwan, Pokhara, and Jiri. Most recently, in May 2007, a number of Americans were stranded at the border crossing to India in southeastern Nepal for several days when the border was closed due to political demonstrations. U.S. citizens should travel into and within Nepal by air whenever possible. In the Kathmandu Valley, traffic jams are common on major streets, particularly from 9:00 a.m. to 6:00 p.m. Motor vehicles, bicycles, pedestrians and animals, all traveling at different speeds, congest narrow roads. Traffic is poorly regulated, and the volume of vehicles on the roads has increased by approximately 15 percent per year. Many drivers are neither properly licensed nor trained. Many vehicles are poorly maintained, and public vehicles are generally overloaded. Sidewalks and pedestrian crossings are nonexistent in most areas, and drivers do not yield the right-of-way to pedestrians. Pedestrians account for over 40% of all traffic fatalities in Nepal.

Visit the web site of Nepal's national tourist office at www.welcomenepal.com.

Aviation Safety Oversight: As there is no direct commercial air service between the United States and Nepal, the U.S. Federal Aviation Administration (FAA) has not assessed Nepal's Civil Aviation Authority for compliance with International Civil Aviation Organization (ICAO) aviation safety standards. For more information, travelers may visit the FAA's web site at http://www.faa.gov.

Special Circumstances: The Government of Nepal has authorized the Trekking Agency Association of Nepal (TAAN) and the Nepal Tourism Board (NTB) to implement a new system for foreign hikers called the Trekkers' Information Management System (TIMS). Beginning January 1, 2008, foreign visitors on hiking trips in Nepal, including those not with organized hiking groups, need to have a valid TIMS card issued by TAAN, its member agencies, or NTB. In the case of an emergency, the new system will help authorities ascertain the whereabouts of trekkers. TIMS cards are available free of charge through authorized trekking companies, the TAAN office in Kathmandu or Pokhara, and the NTB office.

Robberies, extortion and intimidation continue as in previous years throughout the Kathmandu Valley and the trekking areas in Nepal. Risks of encounters with Maoist groups, or groups posing as Maoists, are very high in nearly all trekking routes of Nepal, and injuries to foreigners for arguing or failing to pay extortion demands continue to occur. Checkpoints established by Maoist-affiliated groups where armed individuals demand payment for “trekking permits” still occur and pose a risk to travelers. Groups posing as Maoists have used violent tactics to intimidate tourists who initially refused to pay or were seen as argumentative. Americans are urged to refrain from arguing with such individuals or “talking back” to them, as such a response may increase the risk of violence.

U.S. citizens should never hike alone or become separated from larger traveling parties while on a trail. Solo trekking has contributed to injuries and deaths, and makes one more vulnerable to criminals. The safest option for all trekkers is to join an organized group and/or use a reputable firm that provides an experienced guide and porters who communicate in both Nepali and English. Destruction of telephone services to many trekking areas by the Maoist insurgents often complicates efforts to locate U.S. citizens and make arrangements for medical evacuations. U.S. citizens are strongly encouraged to contact the Embassy in Kathmandu for the latest security information and to register their itinerary before undertaking treks outside the Kathmandu Valley. Trekkers are also advised to leave their itinerary with family or friends in the U.S. and to check in at police checkpoints where trekking permits are logged.

Trekking in Nepal involves walking over rugged, steep terrain, where one is exposed to the elements, often at high altitudes. Many popular trekking routes in Nepal cross passes as high as 18,000 feet. The U.S. Embassy in Kathmandu strongly recommends that U.S. citizens exercise extreme caution when trekking at high altitudes. Only experienced mountain travelers should tackle the Himalayas. Trekkers of all ages, experience, and fitness levels can experience Acute Mountain Sickness (AMS), which can be deadly.

Trekkers should also be alert to the possibility of avalanches and landslides, even when trails are clear. Avalanches at the narrow gorge above Deurali on the route to the Annapurna Base Camp regularly result in the deaths of trekkers and climbers. Avalanches and landslides caused by severe storms have killed many foreign trekkers and their Nepalese guides, and have stranded hundreds of others. Trekking in Upper Mustang in certain National Park areas may require a special permit from the Government of Nepal and a fee. Americans are encouraged to check on the fees and permits prior to their travels.

A number of tourists have drowned while swimming in Phewa Lake and other adjoining lakes in Pokhara due to flash floods triggered by monsoon rains or after becoming entangled in submerged tree branches or roots.

Before leaving Kathmandu, trekkers can check with the Himalayan Rescue Association (phone: (977) (1) 4440-292/4440-293) or the U.S. Embassy for reliable information about trail conditions and possible hazards in the high country.

Many Nepal-based volunteer organizations have recently formed and maintain websites. However, the Embassy has received reports from a number of American volunteers complaining that such organizations have swindled them after arriving in Nepal to work as volunteers. Americans are cautioned to be aware of this practice and encouraged to research the legitimacy of such organizations. The Social Service Council of the Government of Nepal maintains a list of legitimate volunteer organizations and information can be verified by emailing inquiries to swc@info.com.np.

Nepal has a controlled, or fixed, currency exchange rate with the Indian Rupee. To manage this rate of exchange, the Government of Nepal requires travelers to declare either the import or export of currency. As of this writing, travelers must declare any cash currency carried that exceeds $2,000 in value by filling out a custom's declaration form. The Nepalese Department of Immigration has reported an increasing number of foreigners being arrested for currency violations. Travelers should ensure that they keep a copy of the declaration form after customs officials have put the endorsement on the form to prevent any problems upon departure. Please note that this requirement is subject to change and travelers should contact the Embassy of Nepal in Washington to obtain the latest information. Consequences for violating this requirement could include seizure of all cash carried, fines, and imprisonment. It is illegal to possess 500 or 1,000 Indian Rupee notes in Nepal.

Nepalese customs authorities may enforce strict regulations concerning importation (even temporary) into or export from Nepal of items such as valuable metals, articles of archeological and religious importance, wildlife and related articles, drugs, arms and ammunition, and communications equipment. It is advisable to contact the Embassy of Nepal in Washington or Nepal's Consulate General in New York for specific information regarding customs requirements.

Nepal is prone to earthquakes, landslides, and flooding. The Government of Nepal's ability to respond is limited. General information about natural disaster preparedness is available via the Internet from the U.S. Federal Emergency Management Agency (FEMA) at http://www.fema.gov.

Criminal Penalties: While in a foreign country, a U.S. citizen is subject to that country's laws and regulations, which sometimes differ significantly from those in the United States and may not afford the protections available to the individual under U.S. law. Penalties for breaking the law can be more severe than in the United States for similar offenses. Persons violating Nepalese laws, even unknowingly, may be expelled, arrested or imprisoned. Penalties for possession, use, or trafficking in illegal drugs in Nepal are severe, and convicted offenders can expect long jail sentences and heavy fines. Engaging in sexual conduct with children or using or disseminating child pornography in a foreign country is a crime, prosecutable in the United States.

Children's Issues: For information on international adoption of children and international parental child abduction, see the Office of Children's Issues website at http://travel.state.gov/family

Registration and Embassy Locations: Americans living or traveling in Nepal are encouraged to register with the nearest U.S. Embassy or Consulate through the State Department's travel registration web site so that they can obtain updated information on travel and security within Nepal. Americans without Internet access may register directly with the U.S. Embassy. By registering, American citizens make it easier for the Embassy or Consulate to contact them in case of emergency.

The U.S. Embassy is located in Maharajgunj in Kathmandu, telephone (977) (1) 400-7200. The Consular Section can be reached through the Embassy switchboard at (977) (1) 400-7200, directly by fax at (977) (1) 400-7281 or email at con-sktm@state.gov. The U.S. Embassy's web site is http://nepal.usembassy.gov

Travel Warning

September 24, 2007

This Travel Warning provides updated information on the security situation in Nepal. The Department of State remains concerned about the security situation in Nepal and urges American citizens contemplating a visit to Nepal to obtain updated security information before they travel and to be prepared to change their plans at short notice. This supersedes the Travel Warning issued on May 7, 2007.

Nepal continues to experience sporadic incidents of terrorism and politically-motivated violence in major urban areas. On September 2, 2007, near-simultaneous blasts at three locations in the capital, Kathmandu, killed three persons and injured scores of commuters and bystanders, many of them seriously. Nepal Police believe that the Improvised Explosive Devices were planted intentionally where people congregate, and in a moving microbus carrying passengers. American citizens are reminded to remain on high alert, avoid public transportation (including travel by microbus), and be cautious of unattended baggage in public places, including airports and bus depots.

Despite the signing of the November 21, 2006 Comprehensive Peace Agreement by the Government and the Communist Party of Nepal (Maoist)—a U.S. designated terrorist organization—and the insurgents' entry into an interim government, Maoists continue to engage in violence, extortion, and abductions. The Young Communist League, a Maoist subgroup, continues to extort and abuse people, including threatening Kath-mandu-based personnel of a U.S. Non-Governmental Organization. In November 2006, numerous resident American citizens reported to the U.S. Embassy first-hand accounts of Maoist cadres demanding food and lodging, often accompanied by threats of physical violence. In some instances, Nepalese staff of Americans who resisted such demands were beaten. Since the cease-fire in May 2006, hotels and businesses frequented by American citizens have been targets of extortion demands, forced closures, and have become the focus of demonstrations.

Various armed groups have sprung up in 2007, primarily in the Terai region along the southern border with India, and insurgent violence has affected trade and travel in that area. Violent clashes between Maoists and indigenous groups have taken place since January 2007 in the Terai region, in one case resulting in many deaths. Ethnic tensions in the Terai region have spawned violent clashes with police, strikes, demonstrations and closures of the border with India. The U.S. Embassy strongly recommends against nonessential travel to this region. Clashes between Maoists and groups who oppose them also recently have extended into Kathmandu.

While widespread protests have abated, the potential for demonstrations and disruptions remains high. During demonstrations, protestors have used violence, including burning vehicles, throwing rocks and burning tires to block traffic. Given the nature, intensity and unpredictability of disturbances, American citizens are urged to exercise special caution during times when demonstrations are announced, avoid areas where demonstrations are occurring or crowds are forming, avoid road travel, and maintain a low profile. Curfews can be announced with little or no advance notice, and American citizens are urged to consult media sources and the Embassy's website http://nepal.usembassy.gov for current security information.

Crime in the Kathmandu Valley, including violent crime and harassment of women, has increased since April 2006. Travel via road in areas outside of the Kathmandu Valley is still dangerous and should be avoided. Police have reported a number of robberies by armed gangs; in some cases victims were attacked and injured. The U.S. Embassy reports an increase in crime in some popular tourist areas. Visitors to Nepal should practice good personal security when moving about, especially at night, and avoid walking alone after dark and carrying large sums of cash or wearing expensive jewelry. In several reported incidents tourists have had their belongings stolen from their rooms while they were asleep. In late 2005, two European women were murdered in Nargarjun Forest, a popular tourist destination in the Kathmandu Valley. The murders occurred within weeks of each other and both involved women hiking alone. Solo trekkers have been robbed by small groups of young men, even on some popular trails. Crime, including violent crime, has further increased in 2007, and police are unwilling or unable to arrest criminals who claim Maoist affiliation.

U.S. official personnel generally do not travel by road outside the Kathmandu Valley. All official travel outside the Kathmandu Valley, including by air, requires specific clearance by the U.S. Embassy's Regional Security Officer. As a result, emergency assistance to U.S. citizens may be limited. Active duty U.S. military and Department of Defense contractors must obtain a country clearance for official and unofficial travel to Nepal.

Although the Government of Nepal no longer considers the Maoists to be terrorists, the U.S. Government's designation of the Communist Party of Nepal (Maoist) as a “Specially Designated Global Terrorist” organization under Executive Order 13224 and its inclusion on the “Terrorist Exclusion List” pursuant to the Immigration and Nationality Act remain in effect. These two designations make Maoists excludable from entry into the United States and bar U.S. citizens from transactions such as contribution of funds, goods, or services to, or for the benefit of, the Maoists.

U.S. citizens who travel to or reside in Nepal are urged to register with the Consular Section of the Embassy by accessing the Department of State's travel registration site at https://travelregistration.state.gov or by personal appearance at the Consular Section, located at the U.S. Embassy on Maharajgunj, Kathmandu. The Consular Section can provide updated information on travel and security, and can be reached through the Embassy switchboard at (977) (1) 400-7200 or directly by fax (977) (1) 400-7281. Email: consktm@state.gov, web site: http://nepal.usembassy.gov.

U.S. citizens also should consult the Department of State's Country Specific Information for Nepal and Worldwide Caution Travel Alert via the Internet on the Department of State's home page at http://travel.state.gov or by calling 1-888-407-4747 toll free in the United States and Canada, or, for callers outside the United States and Canada, a regular toll line at 1-202-501-4444.

International Adoption

August 2006

The information in this section has been edited from a report of the State Department Bureau of Consular Affairs, Office of Overseas Citizens Services. For more information, please read the International Adoption section of this book and review current reports online at http://travel.state.gov/family.

Disclaimer: The information in this flyer relating to the legal requirements of specific foreign countries is based on public sources and current understanding. Questions involving foreign and U.S. immigration laws and legal interpretation should be addressed respectively to qualified foreign or U.S. legal counsel.

U.S. citizens wishing to adopt a child in Nepal must meet both U.S. requirements and the requirements set by the Nepalese government. Procedures for foreign adoptions in Nepal are unpredictable and the Nepalese government requirements are not enforced uniformly. The Nepalese government frequently changes requirements with little notice. Due to the high levels of visa fraud in Nepal, fabricated documents or real documents fraudulently obtained are readily available. As a result, the U.S. Embassy in Kathmandu must carefully investigate all orphan visa cases to determine whether the child meets the definition of an orphan under U.S. immigration law. The need for investigations may result in delays in the visa process and issuing the visa. Cases deemed not clearly approvable by the U.S. Embassy in Kathmandu will be referred to the Department of Homeland Security (DHS) for review.

Under Nepalese law, single mothers or married mothers who have been left by their husbands must meet stringent requirements regarding the relinquishment of their children for adoption. Fathers have twelve years from the child's birth to claim the child and assert custody rights. Unless a mother identifies the father and he agrees, in writing, to the child's adoption, the child will not be eligible for adoption. This can result in uncertainties as to a whether a child is actually eligible for adoption and may result in further investigations and delays.

The U.S. Embassy regularly meets with the Nepalese government, and specifically the Ministry of Women, Children and Social Welfare (WCS), on a variety of adoption issues and to advocate for the general interests of U.S. adopting parents. The U.S. Embassy is not able, however, to intervene on behalf of individual cases or expedite the Nepalese government adoption process.

Patterns of Immigration: Please review current reports online at http://travel.state.gov/family.

Adoption Authority: The Ministry of Women, Children and Social Welfare (WCS) is the Nepalese Government office responsible for adoptions in Nepal. Officially, the Ministry has recognized the Nepal Children's Organization (NCO), also known as Bal Mandir, to process adoptions, although adoptions through other orphanages are possible.

Ministry of Women, Children and Social Welfare
Singha Durbar, Kathmandu
Tel: 977-1-424-1465, 977-1-424-1728
Fax: 977-1-424-1516
Email: mwcsw@ntc.net.np

Eligibility Requirements for Adoptive Parents: Nepalese law sets out the following age and civil status requirements:

• The age difference between prospective parents and the adoptive child must be at least 30 years;
• The couple must have been married for at least 4 years prior to filing an application and be “infertile;”
• Single women between the age of 35 and 55 may also adopt. Single men may not adopt Nepalese children.

Eligibility for Children to be Adopted: Children (either male or female) under the age of 16 may be adopted. If the prospective parents already have a child or children of their own, Nepalese government regulations state they only adopt a Nepalese child of the opposite sex of their biological child or children. Siblings of the opposite sex can be adopted together if other qualifica-tions are met.

Residency Requirements: There are no residency requirements for adopting an orphan from Nepal.

Time Frame: Most orphanages in Nepal will not assign a child to prospective adoptive parents until there is evidence that the I-600A and fingerprints (evidence of no criminal record) have been approved by DHS (United States Citizenship and Immigration Services, USCIS). Once the I-600A and fingerprints have been approved by DHS, the U.S. Embassy in Kathmandu will receive a Visas 37 cable from DHS. The Embassy cannot issue the Guarantee Letter until the Visas 37 cable has been received. The process from the approval of the I-600A and the issuance of the Guarantee Letter to the approval of the adoption by the Nepalese government varies in length from six months to two years. Adoptive parents adopting children over the age of three years sometimes find their cases are completed in a shorter time period. The timing is often uneven and inconsistent; changes in the security situation or the government may lead to additional delays.

Some adoptions in Nepal may be completed with one trip to Nepal; however, many adoptive parents travel to Nepal twice or more. On the first visit, they meet the child and complete initial paperwork required by the Nepalese government. They then return to Nepal when the adoption is approved by the Nepalese government to file for the immigrant visa.

Adoption Agencies and Attorneys: Most adoptive families work with an adoption agency in the U.S. to adopt from an orphanage in Nepal. Some orphanages have established relationships with specific adoption agencies in the U.S. and work only with those agencies. The U.S. Embassy in Kathmandu encourages all parents to work through a U.S. agency, as the adoption process in Nepal is quite complex. The Nepalese government does not require adoptive parents to work with specific agencies in the U.S. or Nepal. Only designated orphanages in Nepal are approved to process intercountry adoption cases. The U.S. Embassy in Kathmandu does not maintain a list of U.S. agencies or Nepalese orphanages processing intercountry adoption cases in Nepal as these may change frequently and any such list would be very difficult to keep up-to-date.

Adoption Fees: The Ministry of Women, Children and Social Welfare charges a fee of $300 for the adoption of an orphan from Nepal. Orphanages and local facilitators in Nepal often charge additional fees to process the adoption and to care for the child once the child has been assigned to adoptive parents but prior to the Nepalese government approval of the adoption by the Nepalese government. These fees vary widely. Adoptive parents have reported a wide variance in fees (between $3,000—$17,000) charged by Nepalese orphanages, which are largely unregulated by the Nepalese government. Many parents have reported that orphanages have charged them new and unexpected fees once the parents arrive in Nepal. Prospective parents are advised to obtain detailed receipts for all fees and donations paid to orphanages, either by the parents directly or through their U.S. adoption agencies. The U.S. Embassy requires a copy of receipts and information on fees paid in the U.S. and in Nepal at the time of the immigrant visa interview.

Adoption Procedures: Prospective parents may adopt through Nepal Children's Organization (Bal Mandir) or through a private agency. Nepal Children's Organization reviews applications and makes determinations if parents are eligible to adopt. The U.S. Embassy has no authority to challenge or change a decision by NCO to deny an application. Denial by NCO does not mean a definitive end to the process; parents may still able to proceed with a private agency.

The Nepalese government requires that all adoptive parents complete and sign a “Guarantee Letter.” This letter, which is made part of the dossier that is submitted to the WCS serves to assure the Nepalese Government that the adoptive parents have been approved by the U.S. Government to be adoptive parents and that, if legally qualified, the child will be eligible to immigrate to the United States. This letter is completed after the child is assigned to the parents by the Nepalese orphanage or authority. The Guarantee Letter is a requirement of the Nepalese government, not of the United States Government. Once a Guarantee Letter has been issued, the U.S. Embassy should be contacted with any changes to the case.

Once NCO or another private agency has reviewed the case, a committee at the Ministry of Women, Children and Social Welfare reviews each adoption file. If the committee deems that everything is in order, it will recommend the case to the legal section of WCS for further processing. Once the legal section reviews the case and issues a positive recommendation, the Secretary of the WCS issues and signs the final adoption decree in English. Adoptive parents must be physically present in Nepal to take custody of the child once the final adoption is pronounced.

Once adoptive parents obtain the adoption decree, they will also need to obtain a travel document for the child through the Nepalese Ministry of Foreign Affairs. Generally, the Nepalese travel document is valid only for one-way travel to the United States and countries en route.

Please see the International Adoption section of this book for more details and review current reports online at http://travel.state.gov/family.

Required Documents: If an adoption is processed through a private agency, in addition to the information listed above for NCO adoptions, the parents must also obtain

• a favorable recommendation from the District Administrative Officer (Chief District Officer) where the child resides; and
• a death certificates and/or a affidavits of consent and irrevocable release of the child of biological parents for purposes of emigration and adoption.

Once a child is identified, the adoption can be handled directly through WCS. Many who choose the private adoption route find it useful to have an adoption lawyer or contact person in Nepal to help navigate the process.

The Nepalese Embassy in Washington, DC
2131 Leroy Place, N.W.
Washington, DC 20008
Tel. 202-667-4550
info@nepalembassyusa.org

Nepalese Consulate General New York
820 Second Avenue, 17th Floor
New York N.Y.10017
Tel: 212-370-3988, 212-370-3989
Fax: 212-953-2038
Email: nepal@un.int, nplun@undp.org

U.S. Immigration Requirements: Prospective adoptive parents are strongly encouraged to consult USCIS publication M-249, The Immigration of Adopted and Prospective Adoptive Children, as well as the Department of State publication, International Adoptions. Please see the International Adoption section of this book for more details and review current reports online at http://travel.state.gov/family.

Embassy of the United States of America

Yak & Yeti Hotel Complex

Durbar Marg

Kathmandu, Nepal

Tel.: 977-1-444-5577

Fax: 977-1-444-4981

e-mail: adoptionsnepal@state.gov

website: http://nepal.usembassy.gov

Additional Information: Specific questions about adoption in Nepal may be addressed to the Consular Section of the U.S. Embassy in Nepal, 977-1-444-5577 or adoptionsnepal@state.gov. General questions regarding international adoption may be addressed to the Office of Children's Issues, U.S. Department of State, CA/OCS/CI, SA-29, 4th Floor, 2201 C Street, NW, Washington, D.C. 20520-4818, toll-free Tel: 1-888-407-4747.

NEPAL

Compiled from the August 2005 Background Note and supplemented with additional information from the State Department and the editors of this volume. See the introduction to this set for explanatory notes.

Official Name:
Kingdom of Nepal

PROFILE

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.

Religion:

Hinduism (80.6%), Buddhism (10.7%), Islam (4.2%), and others (4.2%).

Language:

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 (2003/04):

$6.73 billion.

Annual growth rate of real GDP:

3.74%.

Per capita income:

$279.

Avg. inflation rate (Consumer Price Index):

4.9%.

Natural resources:

Water, hydropower, scenic beauty, limited but fertile agricultural land, timber.

Agriculture (39% of GDP):

Products—rice, wheat, maize, sugarcane, oilseed, jute, millet, potatoes. Cultivated land—25%.

Industry (10% of GDP):

Types—carpets, pashmina garments, cement, cigarettes, bricks, sugar, soap, matches, jute, hydroelectric power.

Trade (2003/04):

Exports—$740.46 million: carpets, pashmina, garments. Major markets—Germany, U.S. Imports—$1.89 billion: manufactured goods. Major supplier—India.

Central gov. budget (FY 2004/2005):

$1.56 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 figure-head. 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 began 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 were 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 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 Ministers (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 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. There have not been any parliamentary elections since 1999. 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 personnel 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. After the royal takeover on February 1, 2005 and subsequent imposition of the "State of Emergency," the security forces have arrested many political leaders, student leaders, journalists, and human rights activists under the Public Security Act of 1989.

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. After the royal takeover on February 1, 2005, the Ministry of Information and Communications issued a notice invoking the National Broadcasting Act of 1992, stating no media can publish interviews, articles, or news items against the spirit of the royal proclamation of February 1 for six months. A second notice invoking the Press and Publications Act of 1991 was issued on February 3 stating that no media can publish news items supporting terrorist and destructive activities for six months.

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

Principal Government Officials

Last Updated: 12/8/2005

King: GYANENDRA (Bir Bikram Shah Dev)
Prime Minister:
Vice Chmn., Council of Ministers: Kirti Nidhi BISTA
Vice Chmn., Council of Ministers: Tulsi GIRI
Min. of Agriculture & Cooperatives: Keshar Bahadur BISTA
Min. of Defense:
Min. of Education & Sports: Radha Krishna MAINALI
Min. of Environment, Science, & Technology: Prakash KOIRALA
Min. of Finance: Rup JYOTI
Min. of Foreign Affairs: Ramesh Nath PANDEY
Min. of Forest & Land Conservation: Salim Miya ANSARI
Min. of Health & Population: Mani LAMA
Min. of Home: Kamal THAPA
Min. of Industry, Commerce, & Supplies: Buddiman TAMANG
Min. of Information & Communications: Shreesh Shumsher RANA
Min. of Labor & Transport Management: Rabindra KHANAL
Min. of Land Reform & Management: Narayan Singh PUN
Min. of Law & Justice: Niranjan THAPA
Min. of Local Administration: Badri MANDAL
Min. of Local Development: Tanka DHAKAL
Min. of Physical Planning & Management: Brajesh Kumar GUPTA
Min. of Royal Palace Affairs:
Min. of Tourism, Culture, & Civil Aviation: Yangkila SHERPA
Min. of Water Resources: Tulsi GIRI
Min. of Women, Children, & Social Welfare: Durga POKHAREL
Min. without Portfolio: Buddhi Raj BAJRACHARYA
Governor, Central Bank:
Ambassador to the US: Kedar Bhakta SHRESTHA
Permanent Representative to the UN, New York (Acting): Arjun Bahadur THAPA

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 76% of the population and providing 39% 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 8.81% in FY 2003/04 compared to an increase of 5.54% in FY 2002/03. Imports grew by 8.21% in FY 2003/04 compared with 18.04% in FY 2002/03. The increase in exports is only marginal due to the fact that there has been a significant drop in exports of Nepal's main export, ready-made textile products. The trade deficit for FY 2002/03 was $1.0 billion, which widened to $1.18 billion in FY 2003/04. 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 below 5%. In 2002 the GDP recorded a negative growth rate of 0.6%, largely because of the Maoist insurgency. GDP grew 3.1% in 2003 and 3.74% in 2004, according to Nepal Rasta Bank (Nepal's Central 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 became 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 12.8% in 2004 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. Kali Gandaki A started commercial operation n August 2002. 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 solely of the 85,100 strong Royal Nepalese Army (RNA) organized into six divisions (Far Western, Mid Western, Western, Central, Eastern and the Valley Division) with separate Aviation, Parachute and Royal Palace Brigades as well as equivalent brigade-sized directorates encompassing air defense, artillery, engineers, logistics and signals also providing general support to the RNA. The King is the Supreme Commander of the RNA while the Prime Minister normally serves as Minister of Defense. General Pyar Jung Thapa is Chief of the Army Staff (COAS).

The RNA has contributed more than 45,000 peacekeepers to 28 peacekeeping missions such as the UN Interim Force in Lebanon (UNIFIL), the UN Protection 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 Maoist insurgency within Nepal, RNA units are also presently serving in the UN Mission in Sierra Leone (UNAMSIL), the UN Mission in the Democratic Republic of the Congo (MONUC), and the UN Mission in Haiti (MINUSTOH), among others. 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 and security assistance with Nepal through the Office of Defense Cooperation. U.S. military assistance to the RNA consists of $21.95 million in grant Foreign Military Financing (FMF) since 2002, annual professional and technical training provided under the grant International Military Education and Training Program (IMET) ($650,000 in FY05), additional training provided under Counter Terrorism (CT) Fellowship ($200,000 for FY04), and approximately $2 million to date under Enhanced International Peace-keeping Capabilities (EIPC) funding to increase the pool of international peacekeepers and promote interoperability. Many RNA officers attend U.S. military schools to include the U.S. Army War College, the U.S. Army Command and General Staff College (CGSC) and various conferences and seminars to include those provided by the National Defense University (NDU) and the Asia Pacific Center for Strategic Studies (APCSS). The U.S. suspended provision of lethal military assistance to Nepal after the royal takeover of February 1, 2005.

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 temporarily suspended activities in 2004 due to increasing security concerns.

Principal U.S. Embassy Officials

KATHMANDU (E) Address: Panipokhari, Kathmandu; Phone: (977) 1-441-1179; Fax: (977) 1-441-9963; INMARSAT Tel: 808-559-1213 and 808-659-0920; Workweek: Mon-Fri/0800-1700; Website: www.southasia.com/usa.

TRAVEL

Consular Information Sheet

September 14, 2005

Country Description:

Nepal is a developing country with extensive tourist facilities, which vary widely in quality and price. The capital is Kathmandu. The government of Nepal suffers from political instability and is currently engaged in a violent struggle with Maoist insurgents.

Entry/Exit Requirements:

A passport and visa are required. Travelers may obtain visas prior to travel. Visas and information on entry/exit requirements can be obtained from the Embassy of Nepal at 2131 Leroy Place, N.W., Washington, D.C. 20008, telephone (202) 667-4550 or the Consulate General in New York at (212) 370-3988. Active duty U.S. military and Department of Defense contractors must obtain a country clearance for official and unofficial travel to Nepal.

Tourists may also purchase two-month, single-entry visas or two-month, multiple-entry visas upon arrival at Tribhuvan International Airport in Kathmandu and at the following land border points of entry: Kakarvitta, Jhapa District (Eastern Nepal), Birgunj, Parsa District (Central Nepal), Kodari, Sindhupalchowk District (Northern Border), Belahia, Bhairahawa (Rupandehi District, Western Nepal), Jamunaha, Nepalgunj (Banke District, Mid-Western Nepal), Mohana, Dhangadhi (Kailali District, Far Western Nepal), and Gadda Chauki, Mahendranagar (Kanchanpur District, Far Western Nepal). Upon departure from Tribhuvan International Airport, all foreigners must pay an airport exit tax, regardless of the length of their stay. Tourists may stay in Nepal no longer than 150 days in any given calendar year.

Travelers occasionally report immigration difficulties with Chinese authorities when crossing the Nepal-China border overland in either direction. Chinese authorities often require American and other foreign tourists to organize "group" tours through established travel agencies as a pre-requisite for obtaining visas and entry permits into Tibet. U.S. citizens planning to travel to Tibet from Nepal may contact the U.S. Embassy in Kathmandu for current information on the status of the border-crossing points. Travelers may also wish to check with the Embassy of the People's Republic of China in Nepal for current regulations on entry into Tibet.

Visit the Embassy of Nepal web site for the most current visa information. The Internet address of the Embassy of Nepal is http://www.nepalembassyusa.org/. Travelers may also obtain entry and exit information from the Nepalese Department of Immigration website at http://www.immi.gov.np/.

Safety and Security:

The Department of State has issued a Travel Warning advising U.S. citizens to defer non-essential travel to Nepal. On September 10, 2004, two bombs exploded at the American Center compound in Kathmandu. There were no injuries, but the blasts damaged the facility. Shortly thereafter, on September 14, 2004, the Peace Corps announced the temporary suspension of its operations in Nepal, which continues.

Since November 2001, Maoist insurgents have carried out attacks on Nepali security forces, government facilities, and private businesses in most parts of the country. Maoist cadres also have engaged in a variety of guerrilla and terrorist tactics that have victimized and, in many cases, brutalized civilians. The insurgents have detonated explosive devices both within and outside the Kathmandu Valley, causing numerous injuries and some fatalities.

The Department of State has designated the Communist Party of Nepal (Maoist) as a Terrorist Organization under the "Terrorist Exclusion List" of the Immigration and Nationality Act and under Executive Order 13224. These two designations make Maoists excludable from entry into the United States and bar U.S. citizens from transactions such as contribution of funds, goods, or services to, or for the benefit of the Maoists.

The U.S. Embassy reports attacks on the property of several businesses perceived to have an affiliation with the United States, and continuing anti-American rhetoric by the Maoist leadership threatening U.S. citizens in Nepal, particularly outside the Kathmandu Valley. Maoist supreme commander Prachanda issued a press statement on July 1, 2004, threatening to use "more violent means" if peace talks with the Government of Nepal are not forthcoming or are unsuccessful. The U.S. Department of State continues to regard this as an ongoing statement of intent. The Embassy has periodically received information that the Maoists might attempt to attack or take actions specifically against U.S. citizens, particularly in regions of the country where Maoists are active.

Maoists have exhibited a willingness to harass and attack established tourist facilities and infrastructure, and on a number of occasions have burned or bombed tourist resorts after the foreigners staying there were given short notice to evacuate. Maoists have detonated bombs within Kathmandu, including in Thamel, a well-known tourist hub. The random, indiscriminate, and unpredictable nature of these attacks creates the risk of U.S. citizens in Nepal being caught in the wrong place at the wrong time.

In most areas outside the Kathmandu Valley, the situation is tense and uncertain. Of Nepal's 75 Districts, all but one have suffered violence related to the Maoist insurgency. Armed rebel attacks, landmine explosions and vehicle burnings have occurred sporadically on main highways, including the roads linking Kathmandu with the Chinese and Indian borders and with the tourist destinations of Pokhara, Annapurna Conservation Area, and Chitwan National Park. On June 6, 2005 Maoist members detonated a landmine underneath a crowded bus in the Chitwan district, killing or injuring over a hundred people. There have been attacks in the countryside involving foreigners. Maoist extortion of tourists along some popular hiking trails continues. Trekkers and other individuals who resist Maoist extortion demands are threatened, sometimes assaulted and risk being detained. Visitors throughout Nepal, including in Kathmandu, should use metered taxis and avoid public buses.

U.S. citizens are advised to avoid road travel outside the Kathmandu Valley unless they have reliable information that they can proceed safely in specific areas at specific times. Maoist leaders occasionally announce road closures (blockades) in certain districts of Nepal and forcibly block major roads throughout the country, including roads to Tibet, India, Chitwan, Pokhara, and Jiri. In late Spring 2004, Maoists forcibly blocked all traffic in areas surrounding Pokhara, preventing the departure of tourists for an extended period and causing some to miss their international flights from Kathmandu. In August and December 2004, the Maoists instituted a virtual blockade around Kathmandu Valley. Other district centers have been blockaded without warning. U.S. citizens are encouraged to contact the U.S. Embassy in Kathmandu for the latest security information, and to travel by air whenever possible.

Maoists have attacked the offices of several non-governmental organizations (NGOs), their local partners, and multinational businesses working in Nepal. NGO workers report widespread harassment and extortion by rebels. Some workers have left their projects in rural areas because of direct threats or concerns about possible rebel violence. A statement by the Maoists on October 21, 2003 threatened attacks against or disruption of NGOs funded by "American imperialism." In a November 2002 press release, the Maoists claimed responsibility for targeting and murdering two locally-hired U.S. Embassy security guards.

In addition to security risks associated with Maoist violence, political demonstrations by agitating political parties and/or student organizations frequently interrupt normal life in the Kathmandu Valley and cause security concerns. Political parties occasionally stage demonstrations in Kathmandu, which stop traffic and sometimes turn violent. The disturbances usually occur in Kathmandu's city center, but incidents of violence and road blockages also occur in other areas.

The U.S. Embassy in Kathmandu requires pre-clearance of all travel outside the Kathmandu Valley by U.S. Government employees. U.S. citizens who decide to travel outside the Valley are strongly urged to contact the U.S. Embassy in Kathmandu to discuss and register their planned itinerary and to receive the most recent security information before traveling. Nighttime road travel should be strictly avoided outside the Kathmandu Valley and minimized within Kathmandu.

Visitors in areas on or near the rim of the Kathmandu Valley, such as Shivapuri National Park, should be particularly cautious when traversing military camps or checkpoints and carefully follow the commands of security personnel. Military installations and checkpoints are often protected with defensive explosive devices. Movement in such areas at or after dusk should not be undertaken.

Bandhs (General Strikes):

A "bandh" (forced closure of businesses, schools and halting of vehicular traffic) is a longstanding form of political expression in Nepal, which has been frequently used by the Maoists. Bandhs are enforced through intimidation and violence, with past bandhs resulting in the shutdown of businesses, schools, offices and vehicular traffic. Both within and outside the Kathmandu Valley, the rebels have established a pattern of bombings, targeted assassinations (usually of security personnel), and other acts of intimidation prior to scheduled bandhs. In the lead-up to past bandhs, Maoists have attacked public buses, private vehicles, Nepalese Government vehicles and offices, schools and private businesses with firebombs and explosive devices in an effort to terrorize the population into observing the strike. In anticipation of a bandh planned for May 2004, for example, Maoists detonated several small bombs in the heart of Kathmandu, including one on a public bus, injuring over 20 people and killing one.

Bandhs called by the political parties tend to be unpredictable. Such bandhs typically draw thousands of demonstrators into the streets that may attempt to incite or initiate violence. The demonstrations tend to focus on the central areas of Kathmandu, but bandh-related violent disturbances by protesting parties may occur throughout the Kathmandu Valley, as well as other major towns.

During bandhs, U.S. citizens are urged to pay attention to the volume of traffic on the roads, waiting until a pattern of traffic is well established before undertaking travel, and to maintain a low profile throughout bandh periods. Buses, taxis, and other forms of public transportation may not operate during a bandh. Observance of bandhs, particularly in the transportation sector, may be higher outside the Valley, where a number of private buses and trucks have been stopped, torched, and their drivers beaten. U.S. citizens are strongly urged to avoid road travel outside the Kathmandu Valley at all times and especially during scheduled bandhs. American citizens should exercise additional caution both during the lead-up to and during bandhs. If you are planning air travel to or from Nepal during scheduled bandhs be aware that transportation to and from airports throughout Nepal could be affected. Consult the U.S. Embassy web site at http://nepal.usembassy.gov for up-to-date information on upcoming bandhs as well as the latest security information.

For the latest security information, Americans traveling abroad should regularly monitor the Department's Internet web site at http://travel.state.gov where the current Travel Warnings and Public Announcements, including the Travel Warning for Nepal and the Worldwide Caution Public Announcement, can be found. Up-to-date information on safety and security can also be obtained by calling 1-888-407-4747 toll free in the U.S., or for callers outside the U.S. and Canada, a regular toll-line at 1-202-501-4444. These numbers are available from 8:00 a.m. to 8:00 p.m. Eastern Time, Monday through Friday (except U.S. federal holidays).

Crime:

Although the rate of violent crime is low in Kathmandu, relative to that in comparably-sized American cities, street crime does occur in Kathmandu as well as in other areas frequented by foreigners. Solo trekkers have also been robbed by small groups of young men, even on some popular trails. Visitors should avoid walking alone after dark and carrying large sums of cash or wearing expensive jewelry. In addition, visitors should consider exchanging money only at banks and hotels and limiting shopping to daylight hours. Valuables should be stored in the hotel safety deposit box and should never be left unattended in hotel rooms. Travelers should be especially alert at or near major tourist sites, where most pick-pocketing occurs. Passports and cash should be carried in a protected neck pouch or money belt—not in a backpack or handbag.

Information for Victims of Crime:

The loss or theft abroad of a U.S. passport should be reported immediately to the local police and the nearest U.S. Embassy or Consulate. If you are the victim of a crime while overseas, in addition to reporting to local police, please contact the nearest U.S. Embassy or Consulate for assistance. The Embassy/Consulate staff can, for example, assist you to find appropriate medical care, contact family members or friends and explain how funds could be transferred. Although the investigation and prosecution of the crime is solely the responsibility of local authorities, consular officers can help you to understand the local criminal justice process and to find an attorney if needed.

Medical Facilities and Health Information:

Medical care in Nepal is limited and is generally not up to Western standards. Serious illnesses often require evacuation to the nearest adequate medical facility (in Singapore, Bangkok or New Delhi). Illnesses and injuries suffered while on trek in remote areas often require evacuation by helicopter to Kathmandu. Travelers should be aware that emergency services such as evacuations and rescues from remote areas have been compromised by Maoist attacks on helicopters and airfields and the destruction of regular phone service in most trekking areas. Moreover, emergency helicopter evacuations may be impeded by restrictions limiting helicopter landings generally to locations where an armed police force with a contingent of at least 30 personnel is present. Those trekking in remote areas of Nepal should factor the high costs of a potential helicopter rescue into their financial considerations. Travelers are urged to consider purchasing medical evacuation insurance if they plan to visit remote areas. There is minimal mental-health care available in Nepal. Americans with mental health problems are generally stabilized and transported to the U.S. for care.

Information on vaccinations and other health precautions, such as safe food and water precautions and insect bite protection, may be obtained from the Centers for Disease Control (CDC) and Prevention's hotline for international travelers at 1-877-FYI-TRIP (1-877-394-8747) or via the CDC's Internet site at http://www.cdc.gov/travel. For information about outbreaks of infectious diseases abroad consult the World Health Organization's (WHO) website at http://www.who.int/en. Further health information for travelers is available at http://www.who.int/ith.

Medical Insurance:

The Department of State strongly urges Americans to consult with their medical insurance company prior to traveling abroad to confirm whether their policy applies overseas and whether it will cover emergency expenses such as a medical evacuation.

Traffic Safety and Road Conditions:

While in a foreign country, U.S. citizens may encounter road conditions that differ significantly from those in the United States. The information below concerning Nepal is provided for general reference only, and may not be totally accurate in a particular location or circumstance.

American citizens are strongly warned against undertaking any road travel outside the Kathmandu Valley at night or during or immediately preceding bandhs (general strikes). Additionally, American citizens should be extremely cautious when traveling overland in Nepal, especially by bus. A number of public buses have been held up and/or burned by Maoists. On June 6, 2005 Maoist members detonated a landmine underneath a crowded bus in the Chitwan district, killing or injuring over a hundred people. In addition, there have been attacks in the countryside involving foreigners.

In general, roads are in poor condition and lack basic safety features. Many mountain and hill roads are impassable during monsoon season (June-September) due to landslides, and are hazardous even in the best weather. Avoid travel on night buses; fatal accidents are frequent. In the Kathmandu Valley, motor vehicles, bicycles, pedestrians and animals, all traveling at different speeds, congest narrow roads. Traffic is poorly regulated, and the volume of vehicles on the roads has been increasing by 15 percent a year. Many drivers are neither properly licensed nor trained. Many vehicles are poorly maintained. Sidewalks and pedestrian crossings are non-existent in most areas, and drivers do not yield the right-of-way to pedestrians. Pedestrians account for over 40% of all traffic fatalities in Nepal.

Visit the website of Nepal's national tourist office at http://www.welcomenepal.com/.

Aviation Safety Oversight:

As there is no direct commercial air service between the United States and Nepal, the U.S. Federal Aviation Administration (FAA) has not assessed Nepal's Civil Aviation Authority for compliance with ICAO international aviation safety standards. For more information, travelers may visit the FAA's internet web site at http://www.faa.gov/safety/programs_initiatives/oversight/iasa.

In 2003, the Civil Aviation Authority of Nepal grounded several domestic airlines for failing to meet minimal aircraft safety equipment requirements.

Special Circumstances:

Foreign trekkers and climbers, including a number of American citizens, continue to be robbed, extorted from, intimidated and injured by armed Maoists on the trails. Risks of a Maoist encounter are very high on nearly all trekking routes in Nepal, and injuries to foreigners by Maoists for arguing or failing to pay extortion demands have occurred. On some trails, Maoists have announced that U.S. citizens are not welcome and are demanding proof of citizenship from foreigners when extorting money. On a number of occasions, Maoists have forcibly detained Americans, in one case for several days.

In the Annapurna region, numerous military confrontations between the Maoists and government security forces have occurred on trails to the Annapurna Base Camp and throughout the southern portions of the Annapurna Circuit. In March 2004, there was a large-scale attack in the town of Beni, astride a main trail into the Annapurna trekking area from the southwest. Unexploded Maoist ordnance has been reported along several portions of the Annapurna trails. There are many reports of Maoist extortion, including at gun-point, and encounters with large groups of armed insurgents in the Annapurna region, especially on the route to the Annapurna Base Camp and on the popular Poon Hill. Moreover, the Maoist insurgents have also forced the closure of Annapurna Conservation Area Project offices and police posts, which have traditionally provided security, information and emergency services for Annapurna trekkers. The Embassy advises against trekking to the Annapurna Base Camp or along the Annapurna Circuit (except between Manang and Jomsom) until Maoist extortion and attacks end.

U.S. citizens should never hike alone or become separated from larger traveling parties while on a trail. Solo trekking has contributed to injuries and deaths, and makes one a more vulnerable target to trail hoodlums as well as rebels. The safest option for all trekkers is to join an organized group and/or use a reputable firm that provides an experienced guide and porters who communicate in both Nepali and English. Also, Americans are urged to refrain from arguing with or "talking back" to Maoists, as any rebel encounter involves a risk of violence. Maoist cadres have pointed weapons at foreigners and/or beaten with sticks those who initially refused to pay or were seen as argumentative.

Maoist destruction of telephone services to many trekking areas complicates efforts to locate U.S. citizens and make arrangements for medical evacuations. U.S. citizens are strongly encouraged to contact the Embassy in Kathmandu for the latest security information and to register their itinerary before undertaking treks outside the Kathmandu Valley (see Registration/Embassy Location section below). Trekkers are also advised to leave their itinerary with family or friends in the U.S. and to check in at police checkpoints where trekking permits are logged.

Trekking in Nepal involves walking over rugged, steep terrain, where one is exposed to the elements, often at high altitudes. Many popular trekking routes in Nepal cross passes as high as 18,000 feet. The U.S. Embassy in Kathmandu strongly recommends that U.S. citizens exercise extreme caution when trekking at higher altitudes. Only experienced mountain travelers should tackle the Himalayas. Trekkers of all ages, experience, and fitness levels can experience Acute Mountain Sickness (AMS), which can be deadly.

Trekkers should also be alert to the possibility of avalanches and landslides, even when trails are clear. Avalanches at the narrow gorge above Deurali on the route to the Annapurna Base Camp regularly result in the deaths of trekkers and climbers. Avalanches and landslides caused by severe storms have killed many foreign trekkers and their Nepalese guides, and have stranded hundreds of others. Trekking in Upper Mustang requires a special permit from the Government of Nepal at a minimum cost of $700 per person.

Before leaving Kathmandu, trekkers can check with the Himalayan Rescue Association (phone (977) (1) 4440-292/4440-293) or the U.S. Embassy for reliable information about trail conditions and possible hazards in the high country.

Nepal has a controlled, or fixed, currency exchange rate with the Indian Rupee. In order to manage this rate of exchange, the Government of Nepal requires travelers to declare either the import or export of currency. As of this writing, travelers must declare any currency carried that exceeds $2,000 in value. Please note that this requirement is subject to change and travelers should contact the Embassy of Nepal in Washington to obtain the latest information. Consequences for violating this requirement could include seizure of all cash carried, fines, and imprisonment.

Nepal is prone to earthquakes, landslides, and flooding. The Government of Nepal's ability to respond is limited. General information about natural disaster preparedness is available via the Internet from the U.S. Federal Emergency Management Agency (FEMA) at http://www.fema.gov.

Nepalese customs authorities may enforce strict regulations concerning importation (even temporary) into or export from Nepal of items such as valuable metals, articles of archeological and religious importance, wildlife and related articles, drugs, arms and ammunition, and communications equipment. It is advisable to contact the Embassy of Nepal in Washington or Nepal's Consulate General in New York for specific information regarding customs requirements.

Criminal Penalties:

While in a foreign country, a U.S. citizen is subject to that country's laws and regulations, which sometimes differ significantly from those in the United States and may not afford the protections available to the individual under U.S. law. Penalties for breaking the law can be more severe than in the United States for similar offenses. Persons violating Nepali laws, even unknowingly, may be expelled, arrested or imprisoned. Penalties for possession, use, or trafficking in illegal drugs in Nepal are severe, and convicted offenders can expect long jail sentences and heavy fines. Proselytizing is illegal in Nepal and those found guilty could be sentenced from three to six years in prison and deported after they have served their sentence. Engaging in illicit sexual conduct with children or using or disseminating child pornography in a foreign country is a crime, prosecutable in the United States. For more information http://travel.state.gov/travel/cis_pa_tw/cis/cis_1467.html.

Children's Issues:

For information on international adoption of children and international parental child abduction, see the Office of Children's Issues website at http://www.travel.state.gov/family/family_1732.html.

Registration/Embassy Location:

Americans living or traveling in Nepal are encouraged to register with the nearest U.S. Embassy or Consulate through the State Department's travel registration website, https://travelregistration.state.gov, and to obtain updated information on travel and security within Nepal. Please include the following information under Comments or Purpose of Visit: travel/medevac insurance information; travel or trekking agency contact in Nepal; planned itinerary in Nepal; and traveling companions' names and nationalities. Americans without Internet access may register directly with the nearest U.S. Embassy or Consulate. By registering, American citizens make it easier for the Embassy or Consulate to contact them in case of emergency. The U.S. Embassy is located at Pani Pokhari in Kathmandu, telephone (977) (1) 441-1179. The Consular Section is located at the Yak and Yeti Hotel complex on Durbarmarg Street. The section can be reached directly at (977) (1) 444-5577; fax (977) (1) 444-4981 or through the Embassy switchboard.

Travel Warning

December 15, 2005

This Travel Warning is being issued to alert American citizens to ongoing security concerns in Nepal. The Department of State continues to urge American citizens to defer non-essential travel to Nepal. This supersedes the Travel Warning issued on June 24, 2005.

The Department of State remains concerned about the security situation in Nepal, and continues to urge American citizens to defer non-essential travel to Nepal. Travel via road in some areas outside of the Kathmandu Valley continues to be dangerous and should be avoided. On June 6, 2005 Communist Party of Nepal (Maoist) members detonated a landmine underneath a crowded bus in the Chitwan district, killing or injuring over a hundred people. In addition, there have been attacks in the countryside involving foreigners. Maoist extortion of tourists along some popular hiking trails continues. Trekkers and other individuals who resist Maoist extortion demands are threatened, sometimes assaulted and risk being detained.

The Department of State also is concerned by the threat to the personal safety of Americans in Nepal posed by recent demonstrations. Political parties have indicated that they plan to continue to hold protests and/or mass demonstrations against the government. Protestors in the past have used violence, including burning vehicles, throwing rocks during street demonstrations, and burning tires to block traffic. In some cases, police have responded with tear gas and baton charges. Given the nature, intensity and unpredictability of these disturbances, American citizens are urged to exercise special caution during times when demonstrations are announced, avoid areas where demonstrations are occurring or crowds are forming, avoid road travel and maintain a low profile.

Maoist supreme commander Prachanda issued a press statement on July 1, 2004, threatening to use "more violent means" if peace talks with the Government of Nepal are not forthcoming or are unsuccessful. The U.S. Department of State continues to regard this as an ongoing statement of intent. The Embassy has periodically received information that the Maoists might attempt to attack or take actions specifically against U.S. citizens, particularly in regions of the country where Maoists are active.

On a number of occasions, Maoists have burned or bombed tourist resorts after the foreigners staying there were given short notice to evacuate. The Maoists also periodically detonate bombs within Kathmandu itself.

U.S. citizens are advised to avoid road travel outside the Kathmandu Valley unless they have reliable information that they can proceed safely in specific areas at specific times. During recent road closures, Maoist cadres have attacked commercial trucks, buses and private vehicles defying their blockades, sometimes killing or severely injuring drivers. In April 2005, two Russian tourists were injured when a bomb exploded on the highway near their taxi while driving east toward Jiri, Dolakha district. During announced road closures in the past, the Embassy received widespread reports of Maoists forcibly blocking major roads throughout the country, including roads to Tibet, India, Chitwan, Pokhara, and Jiri. During some closures, some districts were blockaded without warning. Maoists have forcibly blocked all traffic coming into and out of the Kathmandu Valley. U.S. citizens are encouraged to contact the U.S. Embassy in Kathmandu for the latest security information, and to travel by air whenever possible.

Because of heightened security risks, U.S. official personnel do not generally travel by road outside the Kathmandu Valley. All official travel outside the Kathmandu Valley, including by air, requires specific clearance by the Regional Security Officer. As a result, emergency assistance to U.S. citizens may be limited. Active duty military and Department of Defense contractors must obtain a country clearance for official and unofficial travel to Nepal.

The Department of State has designated the Communist Party of Nepal (Maoist) as a "Specially Designated Global Terrorist" organization under the "Terrorist Exclusion List" of the Immigration and Nationality Act and under Executive Order 13224. These two designations make Maoists excludable from entry into the United States and bar U.S. citizens from transactions such as contribution of funds, goods, or services to, or for the benefit of, the Maoists.

U.S. citizens who travel to or reside in Nepal despite this Travel Warning should factor the potential for violence into their plans, avoid public demonstrations and maintain low profiles while in Nepal. U.S. citizens are urged to register with the Consular Section of the Embassy by accessing the Department of State's travel registration site at https://travelregistration.state.gov or by personal appearance at the Consular Section. The Consular Section is located at the Yak and Yeti Hotel complex on Durbarmarg Street. The section can be reached directly at (977) (1) 444-5577 or through the Embassy switchboard. The U.S. Embassy is located at Pani Pokhari in Kathmandu, telephone (977) (1) 441-1179; fax (977) (1) 444-4981, website http://kathmandu.usembassy.gov. The Consular Section can provide updated information on travel and security.

U.S. citizens should also consult the Department of State's Consular Information Sheet for Nepal and Worldwide Caution Public Announcement via the Internet on the Department of State's home page at http://travel.state.gov or by calling 1-888-407-4747 toll free in the United States, or, for callers outside the United States and Canada, a regular toll line at 1-202-501-4444. These numbers are available from 8:00 a.m. to 8:00 p.m. Eastern Time, Monday through Friday (except U.S. federal holidays).

International Adoption

December 2004

The information below has been edited from a report of the State Department Bureau of Consular Affairs, Office of Overseas Citizens Services. For more information, please read the International Adoption section of this book and review current reports online at www.travel.state.gov/family.

Disclaimer:

The information in this flyer relating to the legal requirements of specific foreign countries is based on public sources and our current understanding. Questions involving foreign and U.S. immigration laws and legal interpretation should be addressed respectively to qualified foreign or U.S. legal counsel.

U.S. citizens wishing to adopt a child in Nepal must meet both U.S. requirements and the requirements set by the Government of Nepal (GON). Procedures for foreign adoptions in Nepal are unpredictable and the Government of Nepal's requirements are not enforced in a uniform manner. The GON frequently changes requirements with little notice. Visa fraud of all types is at high levels in Nepal and is a significant problem facing potentially adoptive parents. As a result of high levels of visa fraud, the U.S. Embassy in Kathmandu must carefully investigate orphan visa cases to determine whether the child meets the definition of an orphan under U.S. immigration law. The need for investigations may result in delays in issuing the visa. If based on the investigation the Embassy determines that the child does not meet the definition of orphan under U.S. immigration law, the US Embassy in Kathmandu may refer the case to the Department of Homeland Security for review and further action.

Potential adoptive parents should be aware that under Nepalese law, single mothers or married mothers who have been left by their husbands are faced with stringent requirements regarding the relinquishment of their children for adoption. Fathers have twelve years from the child's birth to claim the child and assert custody rights. Unless a mother identifies the father and he agrees in writing to the child's adoption, either willingly or through a court order, the child will not be eligible for adoption. This can result in uncertainties as to a whether a child is actually eligible for adoption and may result in further investigations.

Patterns of Immigration of Adopted Orphans to the U.S.:

Recent U.S. immigrant visa statistics reflect the following pattern for visa issuance to orphans:

Fiscal Year: Number of Immigrant Visas Issued
FY 2004: 73
FY 2003: 42
FY 2002: 12
FY 2001: 5
FY 2000: 13

Adoption Authority in Nepal:

The Ministry of Women, Children and Social Welfare is the Nepalese Government office responsible for adoptions in Nepal. Officially, the Ministry has recognized the Nepal Children's Organization (NCO), also known as Bal Mandir, to process adoptions, although adoptions through orphanages other than NCO/Bal Mandir are possible.

Ministry of Women, Children and Social Welfare
Singha Durbar, Kathmandu
Telephone No. 4241465, 4240408, 4241728
Fax. No. 977-1-4241516
Email: mwcsw@ntc.net.np.

Eligibility Requirements for Adoptive Parents:

Nepalese law sets out the following age and civil status requirements:

• The age difference between prospective parents and the adoptive child must be at least 30 years;
• The couple must have been married for at least 4 years prior to filing an application and be "infertile;"
• Single women between the age of 35 and 55 may also adopt.

Children (either male or female) under the age of 16 may be adopted. If the prospective adoptive parents already have a child of their own, GON regulations state they can adopt a Nepali child of the opposite sex of their first child. Siblings of the opposite sex can be adopted together if other qualifications are met. Families that already have two children may not adopt in Nepal, as the total number of children in a family after the adoption cannot exceed two.

Residential Requirements:

There are no residency requirements for adopting an orphan from Nepal.

Time Frame:

Most orphanages in Nepal will not assign a child to adoptive parents until there is evidence that the I-600A has been approved by USCIS. The process from the approval of the I-600A by USCIS to the approval of the adoption by the GON varies in length from 6 months to 2 years. Adoptive parents adopting children over the age of 3 years often find their cases are completed in 6 to 9 months.

Adoptions in Nepal may be completed with one trip to Nepal; however, some adoptive parents elect to travel to Nepal twice. On the first visit, they meet the child and complete initial paperwork. They then return to Nepal when the adoption is approved by the GON to file the immigrant visa petition.

Adoption Agencies and Attorneys:

Most adopting families work with an adoption agency in the US to adopt from an orphanage in Nepal. Some orphanages have established relationships with specific adoption agencies in the US and only work with those US international adoption agencies. There are orphanages that will process an adoption directly with the adopting parent, without the assistance or work of a US adoption agency. The Government of Nepal does not require adopting parents to work with specific agencies in the US or in Nepal.

For U.S.-based agencies, it is suggested that prospective adoptive parents contact the Better Business Bureau and licensing office of the Department of Health and Family Services in the state where the agency is located. The U.S. Embassy in Nepal is currently compiling a list of agencies known to work in Nepal and a list of English-speaking Nepali attorneys that are available upon request. The Department of State does not assume any responsibility for the quality of services provided by these private adoption agencies, attorneys or their employees.

Adoption Fees in Nepal:

The Ministry of Women, Children and Social Welfare has a fee of $300.00 for the adoption of an orphan from Nepal. Orphanages and local facilitators in Nepal often charge additional fees to process the adoption and care for the child once the child has been assigned to an adoptive parent but prior to the approval of the adoption by the GON. These fees vary widely. Adoptive parents have reported a wide variance in fees (between $3,000 – 17,000) charged by Nepalese orphanages, which are largely unregulated by the Government of Nepal. Many parents have reported that orphanages have charged them new and unexpected fees once the parents arrive in Nepal. Prospective parents are advised to obtain detailed receipts for all fees and donations paid to orphanages, either by the parents directly or through their U.S. adoption agencies.

Adoption Procedures:

Prospective parents may adopt through Nepal Children's Organization (Bal Mandir) or through a private agency.

Adoptive parents in Nepal sign many documents in the process of completing an adoption. Many of these documents are in Nepali and English translations are not routinely provided. Parents are encouraged to have documents translated before they are signed.

NCO will review your application and determine if you are eligible to adopt. The U.S. Embassy has no authority to challenge or change a decision by NCO to deny an application. Denial by NCO does not mean a definitive end to the process; parents may be still able to proceed with a private agency.

Adoption Guarantee Letter:

The GON requires that all adoptive parents complete and sign a "Guarantee Letter". This letter, which is made part of the dossier that is submitted to the Ministry of Women, Children and Social Welfare, serves to assure the GON that the adoptive parent(s) have been approved by the US Government to be adoptive parents and that, if legally qualified, the child will be a US Citizen. The letter must be signed by the adoptive parent(s) and by a consular officer at the US Embassy in Kathmandu. The letter must be accompanied by notarized copies of the adoptive parents' passport(s) with original signatures of the parent and the notary and photographs of the child and parent(s). This letter is completed after the child is assigned to the parents.

Government of Nepal–Next Steps:

Once the case has been reviewed by the NCO or another private agency, a 5-member committee at the Ministry of Women, Children and Social Welfare reviews each adoption file. The frequency of these meetings depends on the availability of the committee members. If the committee deems that everything is in order, they will recommend the case to the Legal Section of the Ministry for further processing. Once the Legal Section reviews the case and issues a positive recommendation, the Secretary of the Ministry of Women, Children and Social Welfare issues and signs the final adoption decree in English. Adoptive parents must be physically present in Nepal to take custody of the child once the final adoption is pronounced.

This step in the process varies in length. While some cases are processed in as little as three weeks, some take as long as six months, depending on the political situation and the circumstances of an individual case. Further questions about the adoption process on the Nepalese side should be addressed to a foreign legal counsel.

Documents Required for Adoption in Nepal:

If an adoption is processed through a private agency, in addition to the information listed above for NCO adoptions, the parent(s) must also obtain

• a favorable recommendation from the District Administration Office where the child resides; and
• a death certificate(s) and/or a affidavit(s) of consent and irrevocable release of the child of biological parent(s) for purposes of emigration.

Once a child is identified, the adoption can be handled directly through the Ministry of Women, Children and Social Welfare. Many who choose the private adoption route find it useful to have an adoption lawyer or contact person in Nepal to help navigate the process.

Authenticating U.S. Documents to be Used Abroad:

Presently, the GON does not require all documents to be authenticated, although some documents may need to be. All U.S. documents submitted to the Nepalese government/court must be authenticated. Visit the State Department website at travel.state.gov for additional information about authentication procedures.

Nepalese Embassy and Consulate in the United States:

The Royal Nepalese Embassy in Washington, DC
2131 Leroy Place, N.W.
Washington, DC 20008
Tel. 202-667-4550
info@nepalembassyusa.org

Royal Nepalese Consulate General New York
820 Second Avenue, 17 th Floor
New York N.Y.10017
Tel: 212-370-3988, 212-370-3989
Fax: 212-953-2038
Email: nepal@un.int, nplun@undp.org

U.S. Immigration Requirements:

Please see the International Adoption section of this book for more details and review current reports online at travel.state.gov/family.

Additional Information:

Specific questions about adoption in Nepal may be addressed to the U.S. Embassy in Nepal.

General questions regarding international adoption may be addressed to the Office of Children's Issues, U.S. Department of State, CA/OCS/CI, SA-29, 4 th Floor, 2201 C Street, NW, Washington, D.C. 20520-4818, toll-free Tel: 1-888-404-4747.

NEPAL

Compiled from the February 2005 Background Note and supplemented with additional information from the State Department and the editors of this volume. See the introduction to this set for explanatory notes.

Official Name:
Kingdom of Nepal

PROFILE

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.

Administrative 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 Englishlanguage 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

Last Updated: 2/17/05

King: GYANENDRA (Bir Bikram Shah Dev)
Prime Minister:
Dep. Prime Min.:
Min. of Agriculture and Cooperatives: Min. of Construction & Physical Planning:
Min. of Culture, Tourism, & Civil Aviation: Buddhi Raj BAJRACHARYA
Min. of Defense:
Min. of Education & Sports: Radha Krishna MAINALI
Min. of Finance: Madhukar Shumsher RANA
Min. of Foreign Affairs: Ramesh Nath PANDEY
Min. of Forest & Soil Conservation:
Min. of General Administration: Krishna Lal THAKALI Min. of Health:
Min. of Home: Dan Bahadur SHAHI
Min. of Industry, Commerce, & Supplies:
Min. of Information & Communications: Tanka DHAKAL
Min. of Labor & Transport Management: Ram Narayan SINGH
Min. of Land Reform & Management:
Min. of Law, Justice, & Parliamentary Affairs: Dan Bahadur SHAHI
Min. of Local Development: Karga BAHADUR
Min. of Physical Planning & Works:
Min. of Population & Environment:
Min. of Royal Palace Affairs:
Min. of Science & Technology:
Min. of Trade, Commerce, & Supplies:
Min. of Water Resources:
Min. of Women, Children, & Social Welfare: Durga SHRESTHA
Governor, Central Bank:
Ambassador to the US: Kedar Bhakta SHRESTHA
Permanent Representative to the UN, New York: Murari Raj SHARMA

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 Attaché 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. Embassy Officials

KATHMANDU (E) Address: Panipokhari, Kathmandu; Phone: (977) 1-441-1179; Fax: (977) 1-441-9963; INMARSAT Tel: 808-559-1213 and 808-659-0920; Workweek: Mon–Fri/0800-1700; Website: www.southasia.com/usa

TRAVEL

Consular Information Sheet

February 15, 2005

Country Description: Nepal is a developing country with extensive tourist facilities, which vary widely in quality and price. The capital is Kathmandu. The government of Nepal (constitutional monarchy) suffers from political instability and is engaged in an ongoing violent struggle with Maoist insurgents. On February 1, 2005 the King dismissed the government and appointed a new cabinet headed by himself.

Entry/Exit Requirements: A passport and visa are required. Travelers may obtain visas prior to travel. Visas and information on entry/exit requirements can be obtained from the Royal Nepalese Embassy at 2131 Leroy Place, N.W., Washington, D.C. 20008, telephone (202) 667-4550 or the Consulate General in New York at (212) 370-3988. The Internet address of the Embassy of Nepal is http://www.nepalembassyusa.org/. Travelers may also obtain entry and exit information from the Nepalese Department of Immigration website at http://www.immi.gov.np/. Active duty U.S. military and Department of Defense contractors must obtain a country clearance for official and unofficial travel to Nepal.

Tourists may also purchase two-month, single entry visas or two-month, multiple entry visas upon arrival at Tribhuvan International Airport in Kathmandu and at the following land border points of entry: Kakarvitta, Jhapa District (Eastern Nepal), Birgunj, Parsa District (Central Nepal), Kodari, Sindhupalchowk District (Northern Border), Belahia, Bhairahawa (Rupandehi District, Western Nepal), Jamunaha, Nepalgunj (Banke District, Mid Western Nepal), Mohana, Dhangadhi (Kailali District, Far Western Nepal), and Gadda Chauki, Mahendranagar (Kanchanpur District, Far Western Nepal). Upon departure from Tribhuvan International Airport, all foreigners must pay an airport exit tax, regardless of the length of their stay. Tourists may stay in Nepal no longer than 150 days in any given calendar year.

Travelers occasionally report immigration difficulties with Chinese authorities when crossing the Nepal-China border overland in either direction. Chinese authorities often require American and other foreign tourists to organize "group" tours through established travel agencies as a pre-requisite to obtaining visas and entry permits into Tibet. U.S. citizens planning to travel to Tibet from Nepal may contact the U.S. Embassy in Kathmandu for current information on the status of the border-crossing points. Travelers may also wish to check with the Embassy of the People's Republic of China in Nepal for current regulations on entry into Tibet.

See our Foreign Entry Requirements brochure for more information on Nepal and other countries. Visit the Royal Nepalese Embassy web site for the most current visa information. Read our information on dual nationality and the prevention of international child abduction at http://travel.state.gov/travel/cis_entry_exit.html. For Customs Information see http://travel.state.gov/travel/cis_pa_tw/cis/cis_1468.html.

Safety and Security: The Department of State has issued a Travel Warning advising U.S. citizens to defer non-essential travel to Nepal. On September 10, 2004, two bombs exploded at the American Center compound in Kathmandu. There were no injuries, but the blasts damaged the facility.

Since November 2001 Maoist insurgents have carried out attacks on Nepali security forces, government facilities, and private businesses in most parts of the country. Maoist cadres also have engaged in a variety of guerrilla and terrorist tactics that have victimized and, in many cases, brutalized civilians. The insurgents have detonated explosive devices both within and outside the Kathmandu Valley, causing numerous injuries and some fatalities.

The Department of State has designated the Communist Party of Nepal (Maoist) under the "Terrorist Exclusion List" of the Immigration and Nationality Act and under Executive Order 13224. These two designations make Maoists excludable from entry into the United States and bar U.S. citizens from transactions such as contribution of funds, goods, or services to, or for the benefit of the Maoists.

The U.S. Embassy reports attacks on the property of several businesses perceived to have an affiliation with the United States, and continuing anti-American rhetoric by the Maoist leadership threatening U.S. citizens in Nepal, particularly outside the Kathmandu Valley. In addition, the Maoists have exhibited a willingness to harass and attack established tourist facilities and infrastructure, and on a number of occasions, have burned or bombed tourist resorts after the foreigners staying there were given short notice to evacuate. Maoists have detonated bombs within Kathmandu including in Thamel, a well-known tourist hub. The random, indiscriminate, and unpredictable nature of these attacks creates the risk of U.S. citizens in Nepal being caught in the wrong place at the wrong time.

In most areas outside the Kathmandu Valley, the situation is tense and uncertain. Armed rebel attacks, landmine explosions and vehicle burnings have occurred sporadically on main highways, including the roads linking Kathmandu with the Chinese and Indian borders and with the tourist destinations of Pokhara, Annapurna Conservation Area, and Chitwan National Park. Visitors throughout Nepal, including in Kathmandu, should use metered taxis and avoid public buses.

U.S. citizens are advised to avoid road travel outside the Kathmandu Valley. In March 2004, Maoist leaders announced road closures (blockades) in certain western and southern districts of Nepal. However, the Embassy received widespread reports of Maoists forcibly blocking major roads throughout the country, including roads to Tibet, India, Chitwan, Pokhara, and Jiri. In late Spring 2004, Maoists forcibly blocked all traffic in areas surrounding Pokhara, preventing the departure of tourists for an extended period and causing some to miss their international flights from Kathmandu. In August and again in December 2004, the Maoists instituted a virtual blockade around Kathmandu Valley. Other district centers have been blockaded without warning. U.S. citizens are encouraged to contact the U.S. Embassy in Kathmandu for the latest security information, and to travel by air whenever possible.

Maoists have attacked the offices of several non-governmental organizations (NGOs), their local partners, and multinational businesses working in Nepal. NGO workers report widespread harassment and extortion by rebels. Some workers have left their projects in rural areas because of direct threats or concerns about possible rebel violence. A statement by the Maoists on October 21, 2003, threatened attacks against or disruption of NGOs funded by "American imperialism." In a November 2002 press release, the Maoists claimed responsibility for targeting and murdering two locally hired U.S. Embassy security guards.

In addition to security risks associated with Maoist violence, political demonstrations by agitating political parties and/or student organizations frequently interrupt normal life in the Kathmandu Valley and cause security concerns. Political parties occasionally stage demonstrations in Kathmandu, which stop traffic and sometimes turn violent. The disturbances usually occur in Kathmandu's city center, but incidents of violence and road blockages also occur in other areas.

The U.S. Embassy in Kathmandu requires pre-clearance of all travel outside the Kathmandu Valley by U.S. Government employees. U.S. citizens who decide to travel outside the Valley are strongly urged to contact the U.S. Embassy in Kathmandu to discuss and register their planned itinerary and to receive the most recent security information before traveling. Nighttime road travel should be strictly avoided outside the Kathmandu Valley and minimized within Kathmandu.

Visitors in areas on or near the rim of the Kathmandu Valley, such as Shivapuri National Park, should be particularly cautious when traversing military camps or checkpoints and carefully follow the commands of security personnel. Military installations and checkpoints are often protected with defensive explosive devices. Movement in such areas at or after dusk should not be undertaken.

Bandhs (General Strikes): A "bandh" (forced closure of businesses, schools and vehicular traffic) is a longstanding form of political expression in Nepal, which has been frequently used by the Maoists. Bandhs are enforced through intimidation and violence, with past bandhs resulting in the shutdown of businesses, schools, offices and vehicular traffic. Both within and outside the Kathmandu Valley, the rebels have established a pattern of bombings, targeted assassinations (usually of security personnel), and other acts of intimidation prior to scheduled bandhs. In the lead-up to past bandhs, Maoists have attacked public buses, private vehicles, Nepalese Government vehicles and offices, schools and private businesses with firebombs and explosive devices in an effort to terrorize the population into observing the strike. In anticipation of a bandh planned for May 2004, for example, Maoists detonated several small bombs in the heart of Kathmandu, including one on a public bus, injuring over 20 people and killing one.

Bandhs called by the political parties tend to be unpredictable. Such bandhs typically draw thousands of demonstrators into the streets that may attempt to incite or initiate violence. The demonstrations tend to focus on the central areas of Kathmandu, but bandh-related violent disturbances by protesting parties may occur throughout the Kathmandu Valley.

During bandhs, U.S. citizens are urged to pay attention to the volume of traffic on the roads, waiting until a pattern of traffic is well established before undertaking travel, and to maintain a low profile throughout bandh periods. Buses, taxis, and other forms of public transportation may not operate during a bandh. Observance of bandhs, particularly in the transportation sector, may be higher outside the Valley, where a number of private buses and trucks have been stopped, torched, and their drivers beaten. U.S. citizens are strongly urged to avoid road travel outside the Kathmandu Valley at all times and especially during scheduled bandhs. American citizens should exercise additional caution both during the lead-up to and during bandhs. If you are planning air travel to or from Nepal during scheduled bandhs be aware that transportation to and from airports throughout Nepal could be affected. Consult the U.S. Embassy web site at http://kathmandu.usembassy.gov for up-to-date information on upcoming bandhs as well as the latest security information.

For the latest security information, Americans traveling abroad should regularly monitor the Department's Internet web site at http://travel.state.gov where the current Worldwide Caution Public Announcement, Travel Warnings and Public Announcements can be found. Up-to-date information on safety and security can also be obtained by calling 1-888-407-4747 toll free in the U.S., or for callers outside the U.S. and Canada, a regular toll-line at 1-317-472-2328. These numbers are available from 8:00 a.m. to 8:00 p.m. Eastern Time, Monday through Friday (except U.S. federal holidays).

The Department of State urges American citizens to take responsibility for their own personal security while traveling overseas. For general information about appropriate measures travelers can take to protect themselves in an overseas environment, see the Department of State's pamphlet A Safe Trip Abroad at http://travel.state.gov/travel/tips/safety/safety_1747.html.

Crime: Although the rate of violent crime is low in Kathmandu, relative to that in comparably sized American cities, street crime does occur in Kathmandu as well as in other areas frequented by foreigners. Visitors should avoid walking alone after dark and carrying large sums of cash or expensive jewelry. In addition, visitors should consider exchanging money only at banks and hotels and limiting shopping to daylight hours. Valuables should be stored in the hotel safety deposit box and should never be left unattended in hotel rooms. Travelers should be especially alert at or near major tourist sites, where most pick pocketing occurs. Passports and cash should be carried in a protected neck pouch or money belt—not in a backpack or handbag.

Information for Victims of Crime: The loss or theft abroad of a U.S. passport should be reported immediately to the local police and the nearest U.S. Embassy or Consulate. If you are the victim of a crime while overseas, in addition to reporting to local police, please contact the nearest U.S. Embassy or Consulate for assistance. The Embassy/Consulate staff can, for example, assist you to find appropriate medical care, to contact family members or friends and explain how funds could be transferred. Although the investigation and prosecution of the crime is solely the responsibility of local authorities, consular officers can help you to understand the local criminal justice process and to find an attorney if needed. See our information on Victims of Crime at http://travel.state.gov/travel/tips/emergencies/emergencies_1748.html.

Medical Facilities and Health Information: Medical care in Nepal is limited and is generally not up to Western standards. Serious illnesses often require evacuation to the nearest adequate medical facility (in Singapore, Bangkok or New Delhi). Illnesses and injuries suffered while on trek in remote areas often require evacuation by helicopter to Kathmandu. Mental health care is minimal, with Americans requiring stabilization and transport to the United States. Travelers should be aware that emergency services like evacuations and rescues from remote areas have been compromised by Maoist attacks on helicopters and airfields and the destruction of regular phone service in most trekking areas. Moreover, emergency helicopter evacuations may be impeded by restrictions limiting helicopter landings generally to locations where an armed police force with a contingent of at least 30 personnel is present. Those trekking in remote areas of Nepal should factor the high costs of a potential helicopter rescue into their financial considerations.

Information on vaccinations and other health precautions, such as safe food and water precautions and insect bite protection, may be obtained from the Centers for Disease Control and Prevention's hotline for international travelers at 1-877-FYI-TRIP (1-877-394-8747); fax 1-888-CDC-FAXX (1-888-232-3299), or via the CDC's Internet site at http://www.cdc.gov/travel. For information about outbreaks of infectious diseases abroad consult the World Health Organization's (WHO) website at http://www.who.int/en. Further health information for travelers is available at http://www.who.int/ith.

Medical Insurance: The Department of State strongly urges Americans to consult with their medical insurance company prior to traveling abroad to confirm whether their policy applies overseas and whether it will cover emergency expenses such as a medical evacuation. Please see our information on medical insurance overseas at http://travel.state.gov/travel/cis_pa_tw/cis/cis_1470.html.

Traffic Safety and Road Conditions: While in a foreign country, U.S. citizens may encounter road conditions that differ significantly from those in the United States. The information below concerning Nepal is provided for general reference only, and may not be totally accurate in a particular location or circumstance.

American citizens are strongly warned against undertaking any road travel outside the Kathmandu Valley at night or during or immediately preceding bandhs (general strikes). Additionally, American citizens should be extremely cautious when traveling overland in Nepal, especially by bus. A number of public buses have been held up and/or burned by Maoists.

In general, roads are in poor condition and lack basic safety features. Many mountain and hill roads are impassable during monsoon season (June-September) due to landslides, and are hazardous even in the best weather. Avoid travel on night buses; fatal accidents are frequent. In the Kathmandu Valley, motor vehicles, bicycles, pedestrians and animals, all traveling at different speeds, congest narrow roads. Traffic is poorly regulated, and the volume of vehicles on the roads has been increasing by 15 percent a year. Many drivers are neither properly licensed nor trained. Many vehicles are poorly maintained. Sidewalks and pedestrian crossings are non-existent in most areas, and drivers do not yield the right-of-way to pedestrians. Pedestrians account for over 40% of all traffic fatalities in Nepal.

Please refer to our Road Safety page for more information at http://travel.state.gov/travel/tips/safety/safety_1179.html. Visit the website of the country's national tourist office and national authority responsible for road safety at http://www.welcomenepal.com/.

Aviation Safety Oversight: As there is no direct commercial air service between the United States and Nepal, the U.S. Federal Aviation Administration (FAA) has not assessed Nepal's Civil Aviation Authority for compliance with ICAO international aviation safety standards. For more information, travelers may visit the FAA's Internet web site at www.faa.gov/avr/iasa/index.cfm.

Special Circumstances: Foreign trekkers and climbers, including a number of American citizens, continue to be robbed, extorted from, intimidated and injured by armed Maoists on the trails. Risks of a Maoist encounter are very high on nearly all trekking routes in Nepal, and injuries to foreigners by Maoists for arguing or failing to pay extortion demands have occurred. On some trails, Maoists have announced that U.S. citizens are not welcome and are demanding proof of citizenship from foreigners when extorting money. On a number of occasions, Maoists have forcibly detained Americans, in one case for several days.

In the Annapurna region, numerous military confrontations between the Maoists and government security forces have occurred on trails to the Annapurna Base Camp and throughout the southern portions of the Annapurna Circuit. In March 2004, there was a large-scale attack in the town of Beni, astride a main trail into the Annapurna trekking area from the southwest. Unexploded Maoist ordnance has been reported along several portions of the Annapurna trails. There are many reports of Maoist extortion, including at gunpoint, and encounters with large groups of armed insurgents in the Annapurna region, especially on the route to the Annapurna Base Camp and on the popular Poon Hill. Moreover, the Maoist insurgents have also forced the closure of Annapurna Conservation Area Project offices and police posts, which have traditionally provided security, information and emergency services for Annapurna trekkers. The Embassy advises against trekking to the Annapurna Base Camp or along the Annapurna Circuit (except between Manang and Jomsom) until Maoist extortion and attacks end.

U.S. citizens should never hike alone or become separated from larger traveling parties while on a trail. Solo trekking has contributed to injuries and deaths, and makes one a more vulnerable target to trail hoodlums as well as rebels. The safest option for all trekkers is to join an organized group and/or use a reputable firm that provides an experienced guide and porters who communicate in both Nepali and English. Also, Americans are urged to refrain from arguing with or "talking back" to Maoists, as any rebel encounter involves a risk of violence. Maoist cadres have pointed weapons at foreigners and/or beaten with sticks those who initially refused to pay or were seen as argumentative.

Maoist destruction of telephone services to many trekking areas complicates efforts to locate U.S. citizens and make arrangements for medical evacuations. U.S. citizens are strongly encouraged to contact the Embassy in Kathmandu for the latest security information and to register their itinerary before undertaking treks outside the Kathmandu Valley (see Registration/Embassy Location section below). Trekkers are also advised to leave their itinerary with family or friends in the U.S. and to check in at police checkpoints where trekking permits are logged.

Trekking in Nepal involves walking over rugged, steep terrain, where one is exposed to the elements, often at high altitudes. Many popular trekking routes in Nepal cross passes as high as 18,000 feet. The U.S. Embassy in Kathmandu strongly recommends that U.S. citizens exercise extreme caution when trekking at higher altitudes. Only experienced mountain travelers should tackle the Himalayas. Trekkers of all ages, experience, and fitness levels can experience Acute Mountain Sickness (AMS), which can be deadly.

Trekkers should also be alert to the possibility of avalanches and landslides, even when trails are clear. Avalanches at the narrow gorge above Deurali on the route to the Annapurna Base Camp regularly result in the deaths of trekkers and climbers. Avalanches and landslides caused by severe storms have killed many foreign trekkers and their Nepalese guides, and have stranded hundreds of others.

Trekking in Upper Mustang requires a special permit from the Government of Nepal at a minimum cost of $700 per person.

Before leaving Kathmandu, trekkers can check with the U.S. Embassy or the Himalayan Rescue Association (phone (977) (1) 4440-292/4440-293) for good information about trail conditions and possible hazards in the high country.

Nepalese customs authorities may enforce strict regulations concerning importation (even temporary) into or export from Nepal of items such as valuable metals, articles of archeological and religious importance, wildlife and related articles, drugs, arms and ammunition, and communications equipment. It is advisable to contact the Embassy of Nepal in Washington or Nepal's Consulate General in New York for specific information regarding customs requirements.

Nepal is prone to earthquakes, landslides, and flooding. The Government of Nepal's ability to respond is limited. General information about natural disaster preparedness is available via the Internet from the U.S. Federal Emergency Management Agency (FEMA) at http://www.fema.gov.

Nepal has a controlled, or fixed, currency exchange rate with the Indian Rupee. In order to manage this rate of exchange, the Government of Nepal requires travelers to declare either the import or export of currency. As of this writing, travelers must declare any currency carried that exceeds $2,000 in value. Please note that this requirement is subject to change and travelers should contact the Royal Nepalese Embassy in Washington to get the latest information. Consequences for violating this requirement could include seizure of all cash carried, fines, and imprisonment. Please see our information on customs regulations.

Criminal Penalties: While in a foreign country, a U.S. citizen is subject to that country's laws and regulations, which sometimes differ significantly from those in the United States and may not afford the protections available to the individual under U.S. law. Penalties for breaking the law can be more severe than in the United States for similar offences. Persons violating Nepalese laws, even unknowingly, may be expelled, arrested or imprisoned. Penalties for possession, use, or trafficking in illegal drugs in Nepal are severe, and convicted offenders can expect long jail sentences and heavy fines. Engaging in illicit sexual conduct with children or using or disseminating child pornography in a foreign country is a crime, prosecutable in the United States. For more information visit http://travel.state.gov/travel/cis_criminal.html.

Children's Issues: For information on international adoption of children and international parental child abduction, see the Office of Children's Issues website at http://travel.state.gov/family/family_1732.html.

Registration/Embassy Location: Americans living or traveling in Nepal are encouraged to register with the U.S. Embassy through the State Department's travel registration website, https://travelregistration.state.gov, and to obtain updated information on travel and security within Nepal. Americans without Internet access may register directly with the Consular Section of the U.S. Embassy in Kathmandu. By registering, American citizens make it easier for the Embassy to contact them in case of emergency. The U.S. Embassy is located at Pani Pokhari in Kathmandu, telephone (977) (1) 441-1179; fax (977) (1) 444-4981.

Travel Warning

October 26, 2004

This Travel Warning is being issued to alert Americans to continuing security concerns in Nepal. On October 26, the Department of State lifted the authorized departure of nonemergency personnel and family members of the U.S. Embassy. The suspension of Peace Corps activities, which was announced on September 14, 2004, will continue until further notice.

The Department of State urges U.S. citizens to defer non-essential travel to Nepal. Maoist supreme commander Prachanda issued a press statement on July 1, 2004, threatening to use "more violent means" if peace talks with the Government of Nepal are not forthcoming or are unsuccessful. The Embassy has received information that the Maoists may attempt to attack or take actions specifically against U.S. citizens as part of that contingency, particularly in regions of the country under Maoist control. On September 10, two bombs exploded at the American Center compound. There were no injuries, but the blasts damaged the facility.

The Department of State has designated the Communist Party of Nepal (Maoist) as a Terrorist Organization under the "Terrorist Exclusion List" of the Immigration and Nationality Act and under Executive Order 13224. These two designations make Maoists excludable from entry into the United States and bars U.S. citizens from transactions such as contribution of funds, goods, or services to, or for the benefit of the Maoists.

On a number of occasions, Maoists have burned or bombed tourist resorts after the foreigners staying there were given short notice to evacuate. Maoists also detonate bombs periodically within Kathmandu itself. Several bombs have exploded in Thamel, a tourist hub.

U.S. citizens are advised to avoid road travel outside the Kathmandu Valley unless they have reliable information that they can proceed safely in specific areas at specific times. In March 2004, Maoist leaders announced road closures (blockades) in certain western and southern districts of Nepal. However, the Embassy received widespread reports of Maoists forcibly blocking major roads throughout the country, including roads to Tibet, India, Chitwan, Pokhara, and Jiri. In late Spring 2004, Maoists forcibly blocked all traffic in areas surrounding Pokhara, preventing the departure of tourists for an extended period and causing some to miss their international flights from Kathmandu. Other district centers have been blockaded without warning. U.S. citizens are encouraged to contact the U.S. Embassy in Kathmandu for the latest security information, and to travel by air whenever possible.

Because of heightened security risks, U.S. official personnel do not generally travel by road outside the Kathmandu Valley. All official travel outside Kathmandu Valley, including by air, requires specific clearance by the Regional Security Officer. As a result, emergency assistance to U.S. citizens may be limited. Active duty military and DoD contractors must obtain a country clearance for official and unofficial travel to Nepal.

U.S. citizens who travel or reside in Nepal despite this Travel Warning should factor the potential for violence into their plans, avoid public demonstrations and maintain low profiles while in Nepal. U.S. citizens are urged to register with the Consular Section of the Embassy by accessing the Embassy's home page at http://www.south-asia.com/USA, by e-mail to WardenKTM@state.gov, or by personal appearance at the Embassy. The U.S. Embassy is located at Pani Pokhari in Kathmandu, telephone (977) (1) 441-1179; fax (977) (1) 444-4981. The Consular Section can provide updated information on travel and security.

U.S. citizens should also consult the Department of State's Consular Information Sheet for Nepal and Worldwide Caution Public Announcement via the Internet on the Department of State's home page at http://travel.state.gov or by calling 1-888-407-4747 toll free in the United States, or, for callers outside the United States and Canada, a regular toll line at 1-317-472-2328. These numbers are available from 8:00 a.m. to 8:00 p.m. Eastern Time, Monday through Friday (except U.S. federal holidays).

Public Announcement

February 2, 2005

This Public Announcement is being issued to alert American citizens to the possibility of civil unrest in and around Kathmandu and other urban centers in Nepal in reaction to the dissolution of Prime Minister Deuba's government on February 1 and the declaration of a State of Emergency throughout Nepal. This Public Announcement supplements the Travel Warning for Nepal issued October 26, 2004 and expires May 2, 2005.

On February 1, the King of Nepal dissolved the government of Prime Minister Deuba and declared a State of Emergency throughout Nepal. According to the State of Emergency declaration, except for fundamental rights mentioned in the Nepali constitution, all other rights have been suspended. While there is no indication of any direct threat to private or official American citizens in Nepal, the Department of State alerts Americans to the possibility of unrest in Kathmandu and other urban centers in response to the State of Emergency Declaration and continues to urge U.S. citizens to defer non-essential travel to Nepal. U.S. citizens in Nepal are urged to maintain a low profile, to avoid all road travel in and around Kathmandu Valley, and to exercise extra caution until the situation stabilizes. Kathmandu's international airport has reopened. Nepali authorities may impose curfews with little if any notice. Land and mobile telecommunications may be inoperational at times. From time to time, the U.S. Embassy may close to the public for security reasons.

International Adoption

December 2004

The information below has been edited from a report of the State Department Bureau of Consular Affairs, Office of Overseas Citizens Services. For more information, please read the International Adoption section of this book and review current reports online at www.travel.state.gov/family.

Disclaimer: The following is intended as a very general guide to assist U.S. citizens who plan to adopt a child in Nepal and apply for an immigrant visa for the child to come to the United States. Questions involving foreign and U.S. immigration laws and legal interpretation should be addressed respectively to qualified foreign or U.S. legal counsel.

U.S. citizens wishing to adopt a child in Nepal must meet both U.S. requirements and the requirements set by the Government of Nepal (GON). Procedures for foreign adoptions in Nepal are unpredictable and the Government of Nepal's requirements are not enforced in a uniform manner. The GON frequently changes requirements with little notice. Visa fraud of all types is at high levels in Nepal and is a significant problem facing potentially adoptive parents. As a result of high levels of visa fraud, the U.S. Embassy in Kathmandu must carefully investigate orphan visa cases to determine whether the child meets the definition of an orphan under U.S. immigration law. The need for investigations may result in delays in issuing the visa. If based on the investigation the Embassy determines that the child does not meet the definition of orphan under U.S. immigration law, the US Embassy in Kathmandu may be refer the case to the Department of Homeland Security for review and further action.

Potential adoptive parents should be aware that under Nepalese law, single mothers or married mothers who have been left by their husbands are faced with stringent requirements regarding the relinquishment of their children for adoption. Fathers have twelve years from the child's birth to claim the child and assert custody rights. Unless a mother identifies the father and he agrees in writing to the child's adoption, either willingly or through a court order, the child will not be eligible for adoption. This can result in uncertainties as to a whether a child is actually eligible for adoption and may result in further investigations.

Patterns of Immigration of Adopted Orphans to the U.S.: Recent U.S. immigrant visa statistics reflect the following pattern for visa issuance to orphans

FY 2004: 73
FY 2003: 42
FY 2002: 12
FY 2001: 5
FY 2000: 13

Adoption Authority in Nepal: The Ministry of Women, Children and Social Welfare is the Nepalese Government office responsible for adoptions in Nepal. Officially, the Ministry has recognized the Nepal Children's Organization (NCO), also known as Bal Mandir, to process adoptions, although adoptions through orphanages other than NCO/Bal Mandir are possible.

Ministry of Women, Children and Social Welfare,
Singha Durbar,
Kathmandu
Telephone No. 4241465, 4240408,4241728;
Fax. No. 977-1-4241516
Email: mwcsw@ntc.net.np.

Eligibility Requirements for Adoptive Parents: Nepalese law sets out the following age and civil status requirements:

1. The age difference between prospective parents and the adoptive child must be at least 30 years;
2. The couple must have been married for at least 4 years prior to filing an application and be "infertile;"
3. Single women between the age of 35 and 55 may also adopt.

Children (either male or female) under the age of 16 may be adopted. If the prospective adoptive parents already have a child of their own, GON regulations state they can adopt a Nepali child of the opposite sex of their first child. Siblings of the opposite sex can be adopted together if other qualifications are met. Families that already have two children may not adopt in Nepal, as the total number of children in a family after the adoption cannot exceed two.

Residential Requirements: There are no residency requirements for adopting an orphan from Nepal.

Time Frame: Most orphanages in Nepal will not assign a child to adoptive parents until there is evidence that the I-600A has been approved by USCIS. The process from the approval of the I-600A by USCIS to the approval of the adoption by the GON varies in length from 6 months to 2 years. Adoptive parents adopting children over the age of 3 years often find their cases are completed in 6 to 9 months.

Adoption Agencies and Attorneys: Most adopting families work with an adoption agency in the US to adopt from an orphanage in Nepal. Some orphanages have established relationships with specific adoption agencies in the US and only work with those US international adoption agencies. There are orphanages that will process an adoption directly with the adopting parent, without the assistance or work of a US adoption agency. The Government of Nepal does not require adopting parents to work with specific agencies in the US or in Nepal.

Adoption Fees in Nepal: The Ministry of Women, Children and Social Welfare has a fee of $300.00 for the adoption of an orphan from Nepal. Orphanages and local facilitators in Nepal often charge additional fees to process the adoption and care for the child once the child has been assigned to an adoptive parent but prior to the approval of the adoption by the GON. These fees vary widely. Adoptive parents have reported a wide variance in fees (between $3,000 – 17,000) charged by Nepalese orphanages, which are largely unregulated by the Government of Nepal.

Adoption Procedures: Prospective parents may adopt through Nepal Children's Organization (Bal Mandir) or through a private agency.

Adoptive parents in Nepal sign many documents in the process of completing an adoption. Many of these documents are in Nepali and English translations are not routinely provided. Parents are encouraged to have documents translated before they are signed.

NCO will review your application and determine if you are eligible to adopt. The U.S. Embassy has no authority to challenge or change a decision by NCO to deny an application. Denial by NCO does not mean a definitive end to the process; parents may be still able to proceed with a private agency. Please review current reports online at www.travel.state.gov/family for more detailed information.

Adoption Guarantee Letter: The GON requires that all adoptive parents complete and sign a "Guarantee Letter". This letter, which is made part of the dossier that is submitted to the Ministry of Women, Children and Social Welfare, serves to assure the GON that the adoptive parent(s) have been approved by the US Government to be adoptive parents and that, if legally qualified, the child will be a US Citizen. The letter must be signed by the adoptive parent(s) and by a consular officer at the US Embassy in Kathmandu. The letter must be accompanied by notarized copies of the adoptive parents' passport(s) with original signatures of the parent and the notary and photographs of the child and parent(s). This letter is completed after the child is assigned to the parents.

Nepalese Travel Document: Once adoptive parents obtain the adoption decree, they will also need to obtain a travel document (passport) for the child through the Nepalese Ministry of Foreign Affairs.

Documents Required for Adoption in Nepal: If an adoption is processed through a private agency, in addition to the information listed above for NCO adoptions, the parent(s) must also obtain a favorable recommendation from the District Administration Office where the child resides; and a death certificate(s) and/or a affidavit(s) of consent and irrevocable release of the child of biological parent(s) for purposes of emigration.

Once a child is identified, the adoption can be handled directly through the Ministry of Women, Children and Social Welfare. Many who choose the private adoption route find it useful to have an adoption lawyer or contact person in Nepal to help navigate the process.

Authenticating U.S. Documents To Be Used Abroad: Presently, the GON does not require all documents to be authenticated, although some documents may need to be. All U.S. documents submitted to the Nepalese government/court must be authenticated. Please visit our Web site at travel.state.gov for additional information about authentication procedures.

Nepalese Embassy and Consulate in the United States:
The Royal Nepalese Embassy in Washington, DC
2131 Leroy Place, N.W.
Washington, DC 20008
Tel. 202-667-4550
info@nepalembassyusa.org

Royal Nepalese Consulate General New York
820 Second Avenue, 17 th Floor
New York N.Y.10017
Tel: 212-370-3988, 212-370-3989;
Fax: 212-953-2038
Email: nepal@un.int, nplun@undp.org

U.S. Embassy in Nepal: As soon as prospective adopting parents arrive in Nepal, they should contact the Consular Section of the U.S. Embassy in order to register their presence in Nepal. The Consulate Section is located at: U.S. Embassy in Kathmandu, Nepal; Pani Pokhari, Maharajgunj; Kathmandu, Nepal; Tel. 977-1-441-1179; Fax 977-1-444-4981; email: consktm@state.gov; Website: http://www.south-asia.com/USA

Additional Information: Specific questions about adoption in Nepal may be addressed to the U.S. Embassy in Nepal. General questions regarding international adoption may be addressed to the Office of Children's Issues, U.S. Department of State, CA/OCS/CI, SA-29, 4 th Floor, 2201 C Street, NW, Washington, D.C. 20520-4818, toll-free Tel: 1-888-404-4747.