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About Nepal

Nepal Economic, Political and Social Scenario

Economic Scenario

The Kingdom of Nepal perhaps one of the least developed countries in the world is inhabited by 23 million people, 86% living in rural areas, and 50% in the hills and mountains. Agriculture employs 80% of the population. Nepal remains an LDC (GDP per capita $250), ranking 142 Human Development Index. Despite the huge potential for exporting hydropower and tourism, Nepal still depends on agro-based economy with small and medium enterprises at its disposal.

Political Scenario

In 1990 Nepal began a new democratization process, when a constitutional monarchy was established, incorporating a multi-party system with a legislature and locally elected bodies. However, due to immaturity amongst the political leaders of the country, the Kingdom has witnessed frequent change in government over the years.

The instability in the government has contributed severely in the forthcoming of both the domestic investment as well as the foreign direct investment.

Since the dawn of multiparty democracy in Nepal in 1991, the country as never before, walked through a period of uncertainty. Thanks to the bad governance, basic requirements such as health, primary education, food, clean water and electricity are inadequate and infrastructure of the country is in ruins. This has, in turn, provided a fertile ground for the Maoist insurgency, which originated in the western part of the country and now spread throughout the countryside and into urban areas as well. It is high time the civil society, government and business houses addressed the development issues of the country, before the country itself hits rock bottom.

Our co-operation strategy with EU Chamber will be linkedto the economic and political situation in Nepal through appropriate initiatives in favor of the country’s lasting development.

Social Scenario

Statistics shows that of about 7 million children between 5-14 years of age are economically active and working as domestic help, factory workers, street children, bonded laborers etc. They are the economic engines of our country and without them being provided proper health, education and food the country can never ever move forward in terms of sound economic activities.

Women are no better, though they are referred as goddess Laxmi, in reality women have a very low status and little say in decision-making. The list of disadvantages among rural women in Nepal is very long indeed. The situation is aggravated by poverty, lack of education and outdated culturally accepted social norms. Women are treated as second-class citizens suffering from alcohol related violence from their spouse to being trafficked to Indian brothels. Gender exploitation and violence is an integrated effect of social, cultural and economic factors in certain communities. In remote parts of Nepal , women are deprived of all their rights and are dominated in every way.

The literacy rates among women, especially those in the rural areas, are very low. Functional education is often not considered a priority. This has obvious consequences on the capacity of women to take part in broader decision-making activities outside their homes. Therefore, functional literacy is an essential pre-requisite for women’s empowerment and advancement of communities as a whole.

The uneven development plan of Nepal over the last 14 years has translated into a disproportionate access of people to the resources of the state. The resultant regional imbalance, wide spread poverty, unemployment, unequal income distribution, agricultural decay, unplanned urbanization and marginalization of the citizens should be self-explanatory. Despite attempts to decentralize power and empower the rural population through a democratic process the reality has remained that paternalistic planning is still executed from the top, which has done very little for the grass root people. The focus of development has lacked a clear vision on eliminating gross violations of human rights like the bonded labor system, let alone providing the majority of people the requisite freedom and social justice.

People in Nepal expect more government involvement in social sector, but they do forget, in the process, that more than half of the social services are provided by the private sectors through out the world. In that respect, we have to involve private sector participation in providing social services in the country by prioritizing our needs. We have to prioritize the importance of primary education vis-à-vis the tertiary education, primary health care vis-à-vis hospital health care. Poverty can be reduced only if the disadvantaged and the underprivileged communities of Nepal are targeted. We must focus primarily on social inclusion, with particular emphasis on reaching women, girls, children, socially excluded castes, and other underprivileged communities. We must target these groups through projects on community-based water supply and sanitation, rural microfinance, and education to increase equitable access to an improved learning environment especially for disadvantaged groups, ethnic minorities, and girls.

In that respect the charter will also be advocating & networking with the business houses of the country to contribute more in the development of social sector of the country to see twinkle in the eyes and life in the face of marginalized society of our country. Human being is born equal and should be treated with equal dignity.


Working out the Nepal’s economic growth rate for the coming 20 years is to capitalize on almost double digit growth of its two largest neighbors India and China (emerging markets of the world). They can be catalyst to elevate the country’s economy as two wheels of the cart. The European Union can use the vast natural resources, cheap human resources, convenient trade policy and preferential trade agreement with China and India in order to manufacture and export goods/products to India and China.

Nepal has tremendous potential in hydropower, telecommunications, infrastructure development and tourism. Most of these projects are aided either by bilateral or multilateral donor agencies coming from the European Union. The government of Nepal in recent past has also introduced investment friendly acts such as Public Private Partnership, Build Own & Transfer (BOT) Schemes and easy foreign currency repatriation on profits. We feel that there is a huge potential for European Union member states to take advantage of the business opportunities that Nepal has in offering.