US: chief of mission: Ambassador
Ralph FRANK

embassy: Pani Pokhari, Kathmandu

mailing address: use embassy street address

telephone: [977] (1) 411179, 410531

FAX: [977] (1) 419963

Flag description: red with a blue border around the unique shape of
two overlapping right triangles; the smaller, upper triangle bears a
white stylized moon and the larger, lower triangle bears a white
12-pointed sun

Nepal Economy

Economy - overview: Nepal is among the poorest and least developed
countries in the world with nearly half of its population living
below the poverty line. Agriculture is the mainstay of the economy,
providing a livelihood for over 80% of the population and accounting
for 41% of GDP. Industrial activity mainly involves the processing
of agricultural produce including jute, sugarcane, tobacco, and
grain. Production of textiles and carpets has expanded recently and
accounted for about 80% of foreign exchange earnings in the past
three years. Agricultural production is growing by about 5% on
average as compared with annual population growth of 2.3%. Since May
1991, the government has been moving forward with economic reforms,
particularly those that encourage trade and foreign investment,
e.g., by reducing business licenses and registration requirements in
order to simplify investment procedures. The government has also
been cutting expenditures by reducing subsidies, privatizing state
industries, and laying off civil servants. More recently, however,
political instability - five different governments over the past few
years - has hampered Kathmandu's ability to forge consensus to
implement key economic reforms. Nepal has considerable scope for
accelerating economic growth by exploiting its potential in
hydropower and tourism, areas of recent foreign investment interest.
Prospects for foreign trade or investment in other sectors will
remain poor, however, because of the small size of the economy, its
technological backwardness, its remoteness, its landlocked
geographic location, and its susceptibility to natural disaster. The
international community's role of funding more than 60% of Nepal's
development budget and more than 28% of total budgetary expenditures
will likely continue as a major ingredient of growth.

GDP: purchasing power parity - $33.7 billion (2000 est.)

GDP - real growth rate: 3.7% (2000 est.)

GDP - per capita: purchasing power parity - $1,360 (2000 est.)

GDP - compo