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Background: In 1951, the Nepali monarch ended the century-old system of rule by hereditary p remiers and instituted a cabinet

system of government. Reforms in 1990 establish ed a multiparty democracy within the framework of a constitutional monarchy. An insurgency led by Maoist extremists broke out in 1996. The ensuing 10-year civil war between insurgents and government forces witnessed the dissolution of the c abinet and parliament and assumption of absolute power by the king. Several week s of mass protests in April 2006 were followed by several months of peace negoti ations between the Maoists and government officials, and culminated in a Novembe r 2006 peace accord and the promulgation of an interim constitution. Following a nationwide election in April 2008, the newly formed Constituent Assembly (CA) d eclared Nepal a federal democratic republic and abolished the monarchy at its fi rst meeting the following month. The CA elected the country's first president in July. Between 2008 and 2011 there have been four different coalition government s, led twice by the United Communist Party of Nepal-Maoist, which received a plu rality of votes in the Constituent Assembly election, and twice by the Communist Party of Nepal-United Marxist-Leninist. In August 2011, Baburam BHATTARAI of th e United Communist Party of Nepal (Maoist) became prime minister. After the CA f ailed to draft a constitution by the May 2012 deadline, BHATTARAI dissolved the CA and called for new elections. Months of negotiations failed to produce a new election date. Finally, in March 2013, the chief justice of Nepal's Supreme Cour t, Khil Raj REGMI, was sworn in as Chairman of the Interim Council of Ministers for Elections to lead an interim government and charged with holding Constituent Assembly elections by December 2013. Location: Southern Asia, between China and India Geographic coordinates: 28 00 N, 84 00 E Map references: Asia Area: total: 147,181 sq km country comparison to the world: 94 land: 143,351 sq km water: 3,830 sq km Country name: conventional long form: Federal Democratic Republic of Nepal conventional short form: Nepal local long form: Sanghiya Loktantrik Ganatantra Nepal local short form: Nepal Government type: federal democratic republic Capital: name: Kathmandu geographic coordinates: 27 43 N, 85 19 E time difference: UTC+5.75 (10.75 hours ahead of Washington, DC during Standard T ime) Administrative divisions:

14 zones (anchal, singular and plural); Bagmati, Bheri, Dhawalagiri, Gandaki, Ja nakpur, Karnali, Kosi, Lumbini, Mahakali, Mechi, Narayani, Rapti, Sagarmatha, Se ti Independence: 1768 (unified by Prithvi Narayan SHAH) National holiday: Republic Day, 29 May Constitution: 15 January 2007 (interim Constitution); note - in April 2008, the Constituent As sembly (CA) was elected as an interim parliament to draft and promulgate a new c onstitution by May 2010; the deadline was extended four times, mostly recently u ntil May 2012 when the CA was dissolved without completing a new constitution Legal system: English common law and Hindu legal concepts International law organization participation: has not submitted an ICJ jurisdiction declaration; non-party state to the ICCt

Nepalese Civil War In February 1996, the Communist Party of Nepal (Maoist) started a bid to replace the parliamentary monarchy with a people's new democratic republic, through a M aoist revolutionary strategy known as the people's war, which led to the Nepales e Civil War. Led by Dr. Baburam Bhattarai and Pushpa Kamal Dahal (also known as "Prachanda"), the insurgency began in five districts in Nepal: Rolpa, Rukum, Jaj arkot, Gorkha, and Sindhuli. The Communist Party of Nepal (Maoist)established a provisional "people's government" at the district level in several locations. On June 1, 2001 after the assassination of royal family, including King Birendra and Queen Aishwaya . Prince Gyanendra (Birendra's brother) inherited the throne , according to tradition. Meanwhile, the rebellion escalated, and in October 200 2 the king temporarily deposed the government and took complete control of it. A week later he reappointed another government, but the country was still very un stable. In the face of unstable governments and a siege on the Kathmandu Valley in Augus t 2004, popular support for the monarchy began to wane. On February 1, 2005, Gya nendra dismissed the entire government and assumed full executive powers, declar ing a "state of emergency" to quash the revolution. Politicians were placed unde r house arrest, phone and internet lines were cut, and freedom of the press was severely curtailed. The king's new regime made little progress in his stated aim to suppress the ins urgents. Municipal elections in February 2006 were described by the European Uni on as "a backward step for democracy", as the major parties boycotted the electi on and some candidates were forced to run for office by the army.[6] In April 20 06 strikes and street protests in Kathmandu forced the king to reinstate the par liament. A seven-party coalition resumed control of the government and stripped the king of most of his powers. As of 15 January 2007, Nepal was governed by an unicameral legislature under an interim constitution. On December 24, 2007, seve n parties, including the former Maoist rebels and the ruling party, agreed to ab olish the monarchy and declare Nepal a Federal Republic.[7] In the elections hel d on 10 April 2008, the Maoists secured a simple majority, with the prospect of forming a government to rule the proposed 'Republic of Nepal'.

Federal Democratic Republic On May 28, 2008 the newly elected Constituent Assembly declared Nepal a Federal Democratic Republic, abolishing the 240-year-old monarchy. The motion for abolit ion of monarchy was carried by a huge majority; out of 564 members present in th e assembly, 560 voted for the motion while 4 members voted against it.[8] Finall y, on June 11, 2008 ex-king Gyanendra left the palace.[9] Ram Baran Yadav of the Nepali Congress became the first president of the Federal Democratic Republic o f Nepal on July 23, 2008. Similarly, Pushpa Kamal Dahal, popularly known as Prac handa, of the Unified Communist Party of Nepal (Maoist) was elected as the first Prime Minister on August 15, 2008, defeating Sher Bahadur Deuba of the Nepali C ongress Party. Ruling UCPN-Moaist party suspended Prakash Dahal, son of the Prim e Minister Prachanda, from the membership of the party and from the powerful sta te afiars committee over his alleged extra-marital affair with a student leader.

Economy of Nepal An isolated, agrarian society until the mid-20th century, Nepal entered the mode rn era in 1951 without schools, hospitals, roads, telecommunications, electric p ower, industry, or civil service. The country has, however, made progress toward sustainable economic growth since the 1950s and is committed to a program of ec onomic liberalization. Nepal has used a series of five-year plans in an attempt to make progress in eco nomic development. It completed its ninth economic development plan in 2002; its currency has been made convertible, and 17 state enterprises have been privatiz ed. Foreign aid accounts for more than half of the development budget. Governmen t priorities over the years have been the development of transportation and comm unication facilities, agriculture, and industry. Since 1975, improved government administration and rural development efforts have been emphasized. Agriculture remains Nepal's principal economic activity, employing 80% of the po pulation and providing 37% of GDP. Only about 20% of the total area is cultivabl e; 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. Economic development in social services and infrastructure has not made dramatic progress due to GDP dependency on India. A countrywide primary education system is under development, and Tribhuvan University has several campuses. Please see Education in Nepal for further details. Although eradication efforts continue, malaria had been controlled in the fertile but previously uninhabitable Terai re gion in the south. Kathmandu is linked to India and nearby hill regions by road and an expanding highway network. The capital was almost out of fuel and transpo rt of supplies caused by a crippling general strike in southern Nepal on Februar y 17, 2008.[4] Major towns are connected to the capital by telephone and domestic air services. The export-oriented carpet and garment industries have grown rapidly in recent years and together now account for approximately 70% of merchandise exports. Nepal was ranked 54th worst of 81 ranked countries (those with GHI > 5.0) on the Global Hunger Index in 2011, between Cambodia and Togo. Nepal's current score o f 19.9 is better than in 2010 (20.0) and much improved than its score of 27.5 in 1990.

Foreign investments and taxation Huge number of Small Foreign Investment comes to Nepal via the Non Resident Nepa li, who are investing in Shopping Mall, Plaza, Real Estate Business, Tourism etc . Nepal has huge capacity of Hydroelectricity due to which huge number of foreig n companies in line but the political instability has stop the process at the sa me time its growing own its own. Nepal entered into agreement for avoidance of d ouble taxation (all in credit method) with 10 countries (PSRD) since 1987. Simil arly, it has Investment protection agreement with 5 countries (PSRD) since 1983

Imports and exports Nepal's merchandise trade balance has improved somewhat since 2000 with the grow th of the carpet and garment industries. In the fiscal year 2000-2001, exports p osted a greater increase (14%) than imports (4.5%), helping bring the trade defi cit down by 4% from the previous year to $749 million. Recently, the European Un ion has become the largest buyer of ready-made garments (RMG) from Nepal. Export s to the EU accounted for 46.13 percent of the country s garment exports.[6] The annual monsoon rain, or lack of it, strongly influences economic growth. Fro m 1996 to 1999, real GDP growth averaged less than 4%. The growth rate recovered in 1999, rising to 6% before slipping slightly in 2001 to 5.5%. Strong export performance, including earnings from tourism, and external aid hav e helped improve the overall balance of payments and increase international rese rves. Nepal receives substantial amounts of external assistance from the United Kingdom, the United States, Japan, Germany, and the Scandinavian countries. Seve ral multilateral organizations, such as the World Bank, the Asian Development Ba nk, and the UN Development Programme also provide assistance. In June 1998, Nepa l submitted its memorandum on a foreign trade regime to the World Trade Organiza tion and in May 2000 began direct negotiations on its accession.

Resources Progress has been made in exploiting Nepal's natural resources, tourism and hydr oelectricity. With eight of the world's 10 highest mountain peaks, including Mou nt Everest at 8,848 m. In the early 1990s, one large public sector project and a number of private projects were planned; some have been completed. The most sig nificant private sector financed hydroelectric projects currently in operation a re the Khimti Khola (60 MW) and the Bhote Koshi Project (36 MW).The project is s till undergoing and has dependency on India to take the further steps. The environmental impact of Nepal's hydroelectric projects has been limited by t he fact that most are "run-of-the-river" with only one storage project undertake n to date. The largest hydroelectic plant under consideration is the West Seti ( 750 MW) storage project dedicated to exports to be built by the private sector. Negotiations with India for a power purchase agreement have been underway for se veral years, but agreement on pricing and financing remains a problem. Currently demand for electricity is increasing at 8-10% a year whereas Nepal's option to have agreement with India will make this fulfillment against demand. Population pressure on natural resources is increasing. Over-population is alrea dy straining the "carrying capacity" of the middle hill areas, particularly the Kathmandu Valley, resulting in the depletion of forest cover for crops, fuel, an d fodder and contributing to erosion and flooding. Although steep mountain terra in makes exploitation difficult, mineral surveys have found small deposits of li mestone, magnesite, zinc, copper, iron, mica, lead, and cobalt.

The development of hydroelectric power projects also cause some tension with loc al indigenous groups, recently[when?] empowered by Nepal's ratification of ILO C onvention 169

Flag Description red with a blue border around the unique shape of two overlapping right triangle s; the smaller, upper triangle bears a white stylized moon and the larger, lower triangle displays a white 12-pointed sun; the color red represents the rhododen dron (Nepal's national flower) and is a sign of victory and bravery, the blue bo rder signifies peace and harmony; the two right triangles are a combination of t wo single pennons (pennants) that originally symbolized the Himalaya Mountains w hile their charges represented the families of the king (upper) and the prime mi nister, but today they are understood to denote Hinduism and Buddhism, the count ry's two main religions; the moon represents the serenity of the Nepalese people and the shade and cool weather in the Himalayas, while the sun depicts the heat and higher temperatures of the lower parts of Nepal; the moon and the sun are a lso said to express the hope that the nation will endure as long as these heaven ly bodies Mount Everest is the Earth's highest mountain, with a peak at 8,848 metres (29,029 ft) above s ea level It is located in the Mahalangur section of the Himalayas. The internat ional border between China and Nepal runs across the precise summit point. Its m assif includes neighboring peaks Lhotse, 8,516 m (27,940 ft); Nuptse, 7,855 m (2 5,771 ft) and Changtse, 7,580 m (24,870 ft).

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