Nepal

NEPAL, A KINGDOM situated at the southern part of the Himalayan Mountains between India and China (Tibet), has been a constitutional monarchy since 1959 (under English influence). The real transition to multiparty democracy started only in the spring of 1990. This late transition influenced Nepal's economic development, because there is a lack of governmental coherence and ability to efficiently use domestic revenues.

Nepal is divided into three ecological zones: the terraces, hills, and mountains. Not all zones can be used agriculturally, so—with a population of 24 million, growing at 2.3 percent per year—the ratio of population to arable land is one of the highest in the world.

These are some of the reasons why Nepal remains one of the poorest countries in the world (despite improvements in the past two decades) with a per capita annual income of about $250r. The level of absolute poverty is among the highest in Asia: more than nine million people, accounting for about 40 percent of the population, are estimated to live below the national poverty line ($77 per year).

Not only is income poverty very severe in Nepal, but so is nonincome poverty: almost two-thirds of the adult population is illiterate, and only 71 percent of the total population have access to safe drinking water. The country has the highest infant mortality rate in south Asia, at 75 deaths per 1,000 live births. Even malnutrition is widespread: about half of all children below 5 years of age are underweight.

Large disparities appear when comparing the various geographic regions and the different socioeconomic groups. Income poverty, as well as human development poverty, is higher in rural areas than in urban ones, being the highest in the midwestern and far western hill and mountain districts.

Another very important reason for severe poverty is social exclusion referring to gender, ethnicity, and caste. Gender-based exclusion is deep-rooted in Nepal, with discrimination against women in all aspects of poverty, including even their physical survival, medical care, education opportunities, ownership of assets, mobility, and social reputation.

There is a long tradition of being socially excluded because of belonging to the lower caste (referring to the Hindu caste hierarchy), though recent laws (the new civil code of 1963 and the constitution of Nepal in 1990) ensure equality for all citizens irrespective of caste, creed, or gender. Even today the Dalits (untouchables) earn their living through tasks considered unclean by other castes/social groups, so it is very difficult for the Dalits to escape income and nonincome poverty (that is, lack of education and healthcare).

Ethnicity also is often intertwined with poverty; some ethnic groups still have their own language and cultural roots (Janajaties), some of them are indigenous, and some groups are migrants (for example, of Tibetan origin). They do not belong to the Hindu-based caste hierarchy, some of them live as nomads, and access to education and healthcare opportunities is limited. Political instability, like rapidly changing governments, and the Maoist insurgency contribute to economic decline.

About 50 years ago, Nepal's rulers started to modernize the country. Through the 1990s there was some progress, but during the most recent years, poverty has increased because of serious social and political instability, including the Maoist insurgency, lack of good governance, and changing governments.

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