| I. | INTRODUCTION | 
Nepal, officially Kingdom of Nepal, constitutional  monarchy in South Asia. Locked within the rugged ranges of the Himalayas, Nepal  is bounded by the Tibet region of China on the north and India on the south,  east, and west. It was cut off from the rest of the world until the early 1950s,  when a palace revolution and the subsequent overthrow of the autocratic Rana  dynasty marked the beginning of Nepal’s emergence into the modern world.  Kathmandu is the capital and largest city.
Nepal
| I | INTRODUCTION | 
 
 Nepal: Flag and Anthem
Nepal, officially Kingdom of Nepal, constitutional  monarchy in South Asia. Locked within the rugged ranges of the Himalayas, Nepal  is bounded by the Tibet region of China on the north and India on the south,  east, and west. It was cut off from the rest of the world until the early 1950s,  when a palace revolution and the subsequent overthrow of the autocratic Rana  dynasty marked the beginning of Nepal’s emergence into the modern world.  Kathmandu is the capital and largest city.
| II | LAND AND RESOURCES | 
Geography of Nepal
| Area | 147,181 sq km 56,827 sq mi | 
| Coastline | 0 km 0 mi | 
| Highest point | Mount Everest 8,850 m/29,035 ft | 
Nepal covers an area of 147,181 sq km  (56,827 sq mi). It is divided into four topographical zones: the Great  Himalayas, the Middle Himalayas, the Outer Himalayas, and the Tarāi. The highest  zone is the Great Himalayas, in northern Nepal. Eight of the ten highest  mountains in the world are located either wholly or partially in this area.  These include Mount Everest (8,850 m/29,035 ft), Kānchenjunga (8,598 m/28,209  ft), Makālu (8,481 m/27,825 ft), Dhaulāgiri (8,172 m/26,811 ft), and Annapūrna 1  (8,091 m/26,545 ft).
To the south of the Great Himalayas are the  Middle Himalayas, dominated in Nepal by the Mahābhārat Range, with peaks  averaging less than 3,000 m (9,900 ft). Several rivers run through Nepal’s  Middle Himalayas including the Seti, Karnali, Bheri, Kali Gandaki, Trisuli, Sun  Kosi, Arun, and Tamur. In the Middle Himalayan zone most rivers converge and  form four main river systems: the Karnali, Narayani, Gandaki, and Kosi, which  traverse the Mahābhārat Range through deep gorges, making navigation difficult  or impossible.
 
 Himalayas, Nepal
The Himalayas, which comprise the highest mountain  system in the world, extend through most of Nepal and help shape its northern  border. Eight of the ten highest mountains in the world, including Mount Everest  (8,850 m/29,035 ft), are located either wholly or partially in the country. The  resulting geographic isolation has hindered the development of Nepal’s natural  resources.
Emil Muench/Photo  Researchers, Inc.
South of the Middle Himalayas lies the  Siwālik Range of the Outer Himalayas, with an average elevation of about 1,000  to 2,000 m (about 3,300 to 6,600 ft). This area of Nepal has a number of flat  valleys well suited to agriculture.
 
 Himalayan Village, Nepal
The towering snowy peaks of the Himalayas form a  magnificent backdrop for the Gurung village of Gandruk, perched on the steep  slopes of Annapūrna. One of several distinct ethnic groups in the west-central  region of Nepal, the Gurung raise cattle in pastures at about 3,660 m (about  12,000 ft) above sea level.
Jon Burbank/The Image  Works
The Tarāi, a generally flat, fertile  lowland, is the southernmost topographic zone in Nepal. Much of this area  comprises the northern extension of the Gangetic Plain of India. Rivers rising  in the Himalayas emerge in the Tarāi and continue southward, some of them  becoming tributaries of the Ganges in northern India. The Tarāi is susceptible  to flooding, which occurs regularly with the summer monsoon runoff from the  mountains. The fertile soils of the Tarāi make up a major agricultural area  where nearly half the country’s population lives.
| A | Plant and Animal Life | 
 
 Snow Leopard
The snow leopard, Panthera uncia, is found only in  coniferous forest scrub and mountain steppe regions of the Himalayas and  surrounding areas. Generally solitary in habit except during mating season, the  snow leopard may be found at 6000 m (19,000 ft) and higher in search of  migratory game such as wild sheep, ibex, and musk deer. It is considered an  endangered species.
Tim Davis/Photo  Researchers, Inc.
Forests occupy 25 percent of Nepal’s land  area. The Tarāi supports extensive hardwood and bamboo forests in areas not  cleared for agriculture or resettlement. On the lower slopes of the mountains,  pines flourish amid oaks and wildflowers. Firs and shrubs thrive in the higher  regions, most notably the tree rhododendron, Nepal’s national flower, which  produces beautiful red and pink blooms from March to April. Smaller plants, such  as mosses and grasses, grow at elevations above 3,700 m (12,000 ft). Above the  snow line of the Great Himalayas (higher than about 4,300 m/about 15,000 ft) no  vegetation grows.
 
 Clouded Leopard Climbing
The clouded leopard (Neofelis nebulosa) inhabits rain  forests of Asia and can be found in Nepal, Thailand, Indonesia, and Borneo. This  beautifully patterned wild cat hunts for birds and mammals usually in the early  morning and late afternoon. Amazing climbers, clouded leopards spend much of  their time in trees, sometimes hanging upside down from branches.
Ron Austing/Photo  Researchers, Inc.
Deforestation is a major problem in Nepal.  The country lost half its forests between 1950 and 1980 because of increased  demand for fodder, fuelwood, and land for agriculture and settlement. Much of  the deforestation has taken place in the Tarāi, although the Middle and Great  Himalayan regions have also experienced serious deforestation. With the  assistance of the United States and international agencies, Nepal has embarked  on several programs to extend and restore its forest cover.
 
 Gaur
The gaur is the largest species of wild ox. Also known  as the seladang, the gaur lives in the forests of India, Myanmar (formerly known  as Burma), Nepal, and the Malay Peninsula. The gaur eats grasses and shoots of  bamboo and trees.
E. Hanumantha Rao/Photo  Researchers, Inc.
The wildlife of the Tarāi includes tigers,  leopards, deer, and elephants. The Royal Chitwan National Park, located in the  Tarāi, was set aside to house and protect endangered wildlife such as the  rhinoceros, tiger, sloth bear, gaur (a large species of ox), and Ganges River  dolphin. Wild goats, sheep, and wolves live at higher elevations, and yak are  herded by local people.
| B | Natural Resources | 
 
 Nepal’s Fertile Tarāi Lowlands
The Tarāi is a fertile river plain extending along  Nepal’s southern border with India. Farmers in the Tarāi grow a variety of crops  and raise livestock such as poultry, cattle, and water buffalo. In addition to  farmland, the tropical Tarāi also contains many jungles and swamps.
David Weintraub/Photo  Researchers, Inc.
Fertile soils are limited to the Tarāi and  some of the larger valleys of the Middle Himalayas. Some 16.5 percent of the  country’s total land area is cultivated—a figure that includes hillsides with  thin, poor soils terraced for farming. Due to population pressure, the  percentage of Nepal’s cultivated area has increased from only 10 percent in the  1960s.
Nepal’s mineral resources are limited.  Low-grade deposits of iron ore are found in the mountains near Kathmandu. Small  deposits of copper exist in many areas and small reserves of mica have been  found in the hills northeast of Kathmandu. Mineral extraction and transport is a  major problem due to the country’s rugged terrain.
| C | Climate | 
Nepal’s climate varies according to  elevation. The Tarāi of southern Nepal has a tropical monsoon climate  characterized by rainy summers and the southwest winds of the monsoon, and  almost dry winters. The effect of the southern monsoon climate extends northward  into mountain valleys. In the Middle Himalayan valleys the amount of  precipitation varies with the extent of exposure to the rain-bearing monsoon  winds. Several high valleys located in the rain shadow (area where precipitation  is partially blocked by mountains) are dry. In the Kathmandu Valley the average  rainfall is about 2,300 mm (about 90 in), most of which occurs from June to  September. Between elevations of about 500 and 2,700 m (about 1,640 and 8,860  ft) there is a warm temperate climate; between about 2,700 and 3,000 m (about  8,860 and 9,840 ft) a cool temperate climate prevails. Between about 3,500 and  4,100 m (about 11,480 and 13,450 ft) summers are cool and winters are very cold.  Above 4,100 m (about 13,450 ft) a severely cold, alpine climate prevails.
| III | THE PEOPLE OF NEPAL | 
People of Nepal
| Population | 29,519,114 (2008 estimate) | 
| Population density | 206 persons per sq km 534 persons per sq mi (2008 estimate) | 
| Urban population distribution | 16 percent (2005 estimate) | 
| Rural population distribution | 84 percent (2005 estimate) | 
| Largest cities, with population | Kathmandu, 741,000 (2003 estimate) Birātnagar, 166,674 (2001 estimate) Lalitpur, 162,991 (2001 estimate) | 
| Official language | Nepali | 
| Chief religious affiliations | Hindu (Hinduism is the official religion), 86  percent Buddhist, 8 percent Muslim, 4 percent | 
| Life expectancy | 60.9 years (2008 estimate) | 
| Infant mortality rate | 62 deaths per 1,000 live births (2008 estimate) | 
| Literacy rate | 47.5 percent (2005 estimate) | 
Nepal had a population of 18,462,081 at the  time of the 1991 census. The average population density at the time was 125  persons per sq km (329 per sq mi), although nearly half the people were  concentrated in the narrow Tarāi region. In contrast, the 2008 population  estimate was 29,519,114. The population has grown rapidly since 1950, when there  were only 9 million people. Although the government has sponsored family  planning since the 1950s, these programs have been slow to affect Nepal’s  population growth. In 2008 the population was increasing at an annual rate of  2.1 percent. Only 16 percent of the population lived in urban areas in 2005.  Major cities include Kathmandu, Lalitpur (Patan), Bhaktapur, Birātnagar, and  Bīrganj.
| A | Ethnic Groups, Languages, and Religion | 
 
 Nepal’s Capital City
Kathmandu, Nepal’s capital and largest city, lies in a  valley in the Himalayan foothills. The country’s economic, political, and social  center, Kathmandu has some light industry but depends mainly on tourism for  revenue. Although most of the capital’s residents are Hindu, there is also a  significant Buddhist population.
Christian Grzimek/Photo  Researchers, Inc.
Nepal’s indigenous population consists of  two major groups, the Indo-Nepalese, whose ancestors migrated into the country  from the south, and the Tibeto-Nepalese, whose ancestors entered Nepal from the  north. Although intermingling between the two groups has occurred, cultural,  linguistic, and religious differences exist both between and within the two  groups. 
 
 Bodhnath Stupa in Kathmandu, Nepal
Situated on an early trade route between Kathmandu and  Lhasa, Bodhnath was a religious site as early as the 7th century. The present  stupa, Nepal’s largest, was constructed probably in the 14th century. Since the  invasion of Tibet by Chinese Communist troops in 1950, the migration of Buddhist  refugees to Bodhnath has made this stupa and its surrounding monasteries a world  center of Tibetan Buddhism.
Robert Harding Picture  Library
The Indo-Nepalese group comprises people  who speak Sanskrit-derived languages and are strict adherents to Hinduism.  Nepali, the official language, is derived from Sanskrit. Differences within the  Indo-Nepalese group are marked more by caste (a system of social hierarchy) than  by ethnicity. The Tibeto-Nepalese group comprises several different ethnic  groups including Newar, Bhutia, Sherpa, Gurung, Magar, Tamang, Rai, and Limbu  people. Although most of the Tibeto-Nepalese speak Nepali, each ethnic group  also has its own language. 
While the majority of Nepali people  practice Hinduism, the official religion, a strong shamanist element remains in  the religious practices of many Tibeto-Nepalese ethnic groups (see  Shaman). Buddhism is also important within the country. Buddha, the founder  of Buddhism, was born in Lumbinī, in present-day Nepal. There is also a small  Muslim population mainly located in the Tarāi.
| B | Education | 
 
 Nepalese Schoolchildren
School attendance in Nepal is required for  primary-school aged children, such as these students listening to a lesson in  their village classroom. Illiteracy is a major problem for the country’s adult  population, with about seven out of every ten people unable to read.
M Durrance/Photo  Researchers, Inc.
Under the Rana dynasty, which ruled Nepal  from 1846 to 1951, only the upper class had access to education. After the 1951  revolution, Nepal established an education system with free primary education  for all children. Primary school begins at the age of 6 and lasts until age 10.  Secondary education that follows lasts until the age of 15. Attendance of  primary school was nearly universal in 2002–2003. Secondary school enrollment  included only 45 percent (50 percent of the boys of that age group and 39  percent of the girls) in 2002–2003. 
 
 Education in Nepal
A Nepalese girl practices her writing. Although nearly  every country has adopted compulsory elementary education laws, many children in  Nepal and other developing nations still lack access to adequate schools.
Erol Gurian/Corbis
Formal schooling in Nepal is constrained  by economic and cultural factors such as a bias against educating girls and a  need for children to work at home or in the fields. In 2005 the literacy rate  was estimated at 47 percent of the adult population, with a large gap between  male and female literacy rates. Only 30 percent of the female population was  literate in 2005 compared to 65 percent of the males. Urban areas have higher  literacy rates than rural areas. In 1990 Nepal launched a 12-year literacy  program targeting 8 million people between the ages of 6 and 45 years old. 
Tribhuvan University, founded in  Kathmandu in 1959, is the only doctoral-granting institution of higher education  in Nepal. Nepal also has a number of colleges, all of which are either  affiliated with, or follow standards set by, Tribhuvan University.
| C | Way of Life | 
 
 Sherpa Weaving
A Sherpa woman in the mountains of Nepal weaves a woolen  blanket while her children look on. Sherpas are Buddhists who migrated south in  the 16th century from the region of Khām, in eastern Tibet. Sherpa is Tibetan  for "eastern people.
Nevada Wier/Corbis
Nepal’s society is predominantly rural.  Social life in the village revolves around the family, which is headed by the  father. Extended families sometimes break apart as sons separate from parents  and brothers from each other in search of additional land. Family property is  divided equally among sons at the time of separation. Consequently, family land  holdings are extremely fragmented. Villagers often pool resources and labor to  implement village-level projects such as irrigation ditches or channels. Rice is  the food staple in most parts of the country. Barley, millet, and potatoes are  important food staples in the Himalayas.
In Nepal women are generally subordinate  to men and have less access to education, economic resources, and political  power. Their plight, however, varies from one ethnic group to another. Among  Tibeto-Nepalese communities female status is relatively better than in  Indo-Nepalese communities. Generally, women work harder and longer than men,  taking care of household chores, fetching water and animal fodder, and farming.  Women in upper-class families, however, have maids who do household work and  other menial chores.
 
 Durbar Square Temples
Durbar Square, in the Nepalese capital city of  Kathmandu, has one of Nepal's richest collections of historical structures. The  focus of Kathmandu's tourism industry, this part of the city boasts a royal  palace, fascinating old residences, and more than 50 temples and shrines.
Thomas D. W.  Friedmann/Photo Researchers, Inc.
A revival of artistic and intellectual  expression occurred in Nepal after the overthrow of Rana rule in the early  1950s. Nepali works of poetry and literature emphasize patriotism and national  pride. Hindu and Buddhist religious values inspire the expression of Nepali  artists. The lives of gods, saints, and heroes and the relationship of the  individual to society and the universe are explored in sculpture, architecture,  and drama. Numerous temples and shrines in the Kathmandu Valley display the  skill and highly developed aesthetic sense of Nepali artists. Favorite  recreational activities of the Nepali include music and dance. Religious  ceremonies involve the use of drums and musical instruments preserved since  ancient times. In rural areas devotional songs are an important part of cultural  life. Radio Nepal schedules folk music programs to foster the traditional  culture of the country.
| IV | ECONOMY | 
 
 Nepalese Farmers
These women in Nepal prepare the soil for crops. The  economy of Nepal centers on agriculture. About 20 percent of the country’s land  is cultivated.
CARE
The United Nations (UN) classifies Nepal as  one of the least developed countries in the world. The country’s gross domestic  product (GDP) was $8.9 billion in 2006, with an estimated per capita GDP of  $323.40. Several factors have contributed to Nepal’s underdevelopment, including  its landlocked geography, rugged terrain, lack of natural resources, and poor  infrastructure. China, India, Japan, the United States, and several European  nations have made large investments in Nepal’s economy through foreign aid since  1952. Still, the country’s economic growth has been slow. 
Economy of Nepal
| Gross domestic product (GDP in U.S.$) | $8.9 billion (2006) | 
| GDP per capita (U.S.$) | $323.40 (2006) | 
| Monetary unit | 1 Nepalese rupee (NR), consisting of 100 paisa | 
| Number of workers | 10,835,579 (2006) | 
| Unemployment rate | 8.8 percent (2001) | 
Nepal’s economy is characterized by heavy  dependence on foreign aid, a narrow range of exports, increasing economic  disparity between the mountain areas and the more developed Tarāi region,  excessive governmental control and regulation, and inefficient public  enterprises and administration. In addition, the economy has not kept pace with  the country’s high population growth. In particular, the slow growth of  agriculture has resulted in food shortages and malnutrition for some of Nepal’s  people.
| A | Agriculture and Manufacturing | 
 
 Foothill Farms in Nepal
The Himalayas create a formidable barrier to  development, communication, and transportation in Nepal. As a result, most  Nepalese are confined to farming communities such as this one in the Himalayan  foothills. Their isolation forces residents to rely on their immediate resources  for sustenance; as a result, they use stones or mud bricks for constructing  their homes.
Emil Muench/Photo  Researchers, Inc.
Agriculture dominates Nepal’s economy. It  provides a livelihood for 79 percent of the population and contributes 34  percent of GDP. The Tarāi is the main farming region of the country. Rice and  corn are major food crops; potato, oilseed, sugarcane, jute, and tobacco are  major cash crops. Nepal’s industrial base is limited. Most industries are based  on agricultural raw materials or dependent on various imported materials, mostly  from India. Large manufacturing plants are owned and operated by the government.  Major manufactured products include jute, sugar, cigarettes, beer, matches,  shoes, cement, and bricks. Traditional cottage industries such as basket and  carpet weaving are also important to Nepal’s economy.
| B | Services | 
Tourism represents a growing sector of the  economy. Foreign tourism is primarily confined to Kathmandu Valley and major  national parks such as the Sagarmatha National Park (around the Mount Everest  area), Annapūrna Conservation Area, and Royal Chitwan National Park. Tourism has  created demands for services and materials that are slowly changing the ecology,  environment, and economy of the Himalayan region. Sherpas, well known for  assisting as guides on Himalayan treks and mountain-climbing expeditions,  benefit from Nepal’s growing popularity as a tourist destination.
A unique part of Nepal’s economy are the  famous Gurkha mercenaries. Beginning with a treaty signed with  British-controlled India in the early 1800s, young Nepali men served in the  British, and later Indian, armies. Known for their brave fighting skills, these  mercenaries have fought in nearly every major war, and with UN peacekeeping  forces. Nepal receives more than $50 million in hard currency annually from  soldiers’ salaries sent home, pensions, and other Gurkha-related payments.
| C | Energy | 
Most of the energy consumed in Nepal comes  from traditional sources such as fuelwood, the use of which contributes to  deforestation. Tremendous potential exists for hydroelectric power development,  but growth is inhibited by terrain, lack of infrastructure, and insufficient  capital investment. Nepal has harnessed only a fraction of its potential  hydropower; however, a major hydroelectric facility was under construction on  the Kali Gandaki River in western Nepal in the early 2000s. The country is  heavily reliant on India for imported, nonrenewable sources of power such as oil  and kerosene.
| D | Transportation and Communications | 
Nepal has a relatively underdeveloped  network of roads. There are some main roads, which connect major cities and  stretch to the borders of both India and China. However, the main means of  transportation is the network of footpaths and trails that interlace the  mountains and valleys. There is also a small railway along the Indian border.  The government-owned Royal Nepal Airlines was the only commercial airline until  1992, when the government permitted other airlines to operate. Now a number of  airlines provide domestic service between Nepal’s major cities as well as to its  remote regions. International service is available to India, Singapore, Hong  Kong, Thailand, Pakistan, and Japan. Tribhuvan International Airport outside  Kathmandu is the main airport. There are also several smaller airstrips serving  domestic air travel in Nepal.
Nepal has limited telecommunication  services. Postal services have improved in recent years but are still  inaccessible to many Nepalese. Few people own telephones, although most urban  areas have public telephone services. Radio Nepal broadcasts programs in Nepali  and English to more than 90 percent of the population. Television programming is  limited, but programs from overseas are available via satellite in remote parts  of the country. The major newspapers in Nepal include the Gorkhapatra,  Kantipur, and Daily Times; freedom of the press was guaranteed under  Nepal’s 1990 constitution.
| E | Foreign Trade | 
For geographical and historical reasons,  most of Nepal’s trade is with India. Attempts have been made to diversify trade  by making new agreements with China, Pakistan, Bangladesh, the United States,  the United Kingdom, Singapore, Thailand, Germany, and Japan. Nepal has a growing  trade deficit with India. Major exports are clothing, carpets, grain, and  leather goods. Major imports are petroleum products, fertilizer, and  machinery.
| F | Currency and Banking | 
Nepal’s monetary unit is the Nepalese  rupee (72.80 Nepalese rupees equal U.S.$1; 2006 average). It is issued  from the country’s central bank, Nepal Rastra Bank (founded in 1956). Indian  rupees are still used in Nepal, although less widely than before trade disputes  between the two countries in 1989.
| V | GOVERNMENT | 
Nepal’s government is a constitutional  monarchy. In response to major pro-democracy protests, Nepal adopted a new  constitution in 1990 that established a multiparty democracy but preserved the  king’s status as chief of state. The 1990 constitution ended nearly 30 years of  absolute monarchy in which the king dominated Nepal’s politics and political  parties were banned. Nepal has universal suffrage beginning at the age of  18.
| A | Executive and Legislature | 
Executive powers are vested in the king and  a council of ministers, composed of a prime minister and other ministers. In  2006 parliament forced the monarch to give up absolute power and rendered him  largely a figurehead. An interim constitution assigned most of the king’s powers  to the prime minister, the leader of the majority party in parliament. After  general elections in 2008, a constituent assembly was expected to draft a new  constitution and decide whether to retain the monarchy.
Nepal’s 1990 constitution established a  bicameral (two-chamber) legislature consisting of a house of representatives and  a national council. The House of Representatives had 205 members directly  elected by the voters. The National Council had 60 members: 10 nominated by the  king, 35 elected by the House of Representatives, and 15 elected by an electoral  council. Members of parliament served five-year terms unless the parliament is  dissolved earlier upon recommendation of the prime minister. 
| B | Judiciary | 
The judiciary is made up of three tiers:  the Supreme Court, appellate courts, and district courts. The Supreme Court is  the highest court. The chief justice was appointed by the king on the  recommendation of the Constitutional Council, but that power was granted to the  prime minister in 2006. Other judges of the three courts are appointed on the  recommendation of the Judicial Council.
| C | Political Parties | 
Major political parties include the Nepali  Congress Party (NCP), a reform-oriented centrist party, and the Communist Party  of Nepal (Unified Marxist-Leninist), or CPN-UML. Both of these parties operated  illegally in Nepal from exile in India until the 1990 reforms lifted the ban on  political parties. The royalist National Democratic Party (NDP) was formed prior  to the first democratic elections in 1991. In 1998 a faction within the CPN-UML  broke away to form a new party, the Communist Party of Nepal (Marxist-Leninist),  or CPN-ML. Also that year, the NDP split into two rival factions with the  creation of the NDP (Chand). In 2002 a breakaway faction of the NCP formed the  Nepali Congress Democratic (NCD). 
| D | Social Services | 
Nepal has significant health care problems  and receives aid through foreign agencies and religious groups. Diseases and  chronic infections have been particularly prevalent in rural areas, including  goiter, tuberculosis, and dysentery. Cases of leprosy continue to exist in some  areas. Another chronic problem in Nepal is malnutrition, which is particularly  severe in hill and mountain regions where people often experience food  shortages.
| E | Defense | 
In 2004 Nepal’s defense force consisted of  an army of about 69,000. There is no air force, although the army operates a  small military wing. Military service is not compulsory.
| F | International Organizations | 
Nepal has been a member of the United  Nations since 1955 and participates in several international agencies such as  the United Nations Food and Agricultural Organization (FAO); the United Nations  Educational, Scientific, and Cultural Organization (UNESCO); the World Health  Organization; and the Economic Council for Asia and the Far East. In 1961 Nepal  became a member of the International Bank for Reconstruction and Development  (World Bank). Kathmandu is the permanent seat of the South Asian Association for  Regional Cooperation.
| VI | HISTORY | 
 
 Lalitpur, Nepal
Lalitpur is an ancient city located in Nepal, on the  Bāghmati River. Pieces of wall and Hindu temples in the city date back to the  3rd century bc. The city of Lalitpur was founded in ad 650, as the capital of  the first traditional king of Nepal.
Frilet/Sipa Press/Woodfin  Camp and Associates, Inc.
Although Nepal emerged in history in the  first millennium bc, it was only  in the 18th century that Nepal developed as a country of the present size.  Archaeological remains suggest that areas of Nepal have been inhabited for more  than 10,000 years. The Kirant hill tribe people are thought to be the first  rulers of the Kathmandu area. The earliest undisputed Nepali dynasty is the  Licchavi dynasty, which was established in about ad 400. The Licchavi dynasty, which  probably migrated from present-day Vaishāli, India, was centered in the  Kathmandu Valley. The Licchavi dynasty expanded its influence to the Kali  Gandaki River in the west and Sun Kosi River in the east. The Licchavi period,  as well as the Malla period that followed, was deeply influenced by Indian  culture.
The Licchavi dynasty came to an end in the  late 9th century and was followed by the medieval period. The early medieval era  was unstable and poorly documented. It culminated in the Malla period (1200 to  1769) when three separate dynasties, divided into three kingdoms in the late  15th century, were conquered by the Shah dynasty in 1769, led by King Prithvi  Narayan Shah. Nepal’s southward expansion under the Shah dynasty resulted in a  clash with the English East India Company. The Anglo-Nepalese War (1814-1816)  reduced the country to its current size, although Nepal retained its  independence.
| A | Rana Autocracy | 
In the first half of the 19th century,  Nepal entered a short period of instability that culminated in the Kot Massacre,  in which fighting broke out among military personnel and administrators after  the assassination of a high-powered favorite of the queen. Jung Bahadur, a  strong pro-British leader, prevailed during the massacre and seized control of  the country. He declared himself prime minister and began the Rana dynasty of  rulers. The Rana rulers monopolized power by making the king a nominal figure.  They also made the office of the prime minister hereditary. 
Nepal gave valuable assistance to the  British during the Sepoy Rebellion (1857-1859) and during World War I  (1914-1918). The British government reaffirmed the independence of Nepal through  a treaty in 1923. A British resident (colonial official acting as an adviser to  the ruler of a protected state), stationed in Kathmandu, controlled Nepal’s  foreign relations. Nepal supported the Allied cause, with the contribution of  Gurkha soldiers, during World War II (1939-1945). Nepal and the United States  established diplomatic relations in 1948.
The Rana autocracy was increasingly  criticized in the late 1940s, particularly by dissidents residing in India. The  political-reform movement, which was approved by the Indian government and  directed by the newly created Nepali Congress Party (NCP), won the support of  King Bir Bikram Tribhuvana. Like his predecessors under the Ranas, he possessed  purely nominal powers. His intervention in domestic politics deepened the  crisis, however, and he was removed from the throne in 1950 by Prime Minister  Maharaja Mohan Shumsher Rana. A few days later the king fled to India and NCP  insurgents began military operations along the southern frontier. In 1951 Prime  Minister Rana allowed a reorganization of the Nepalese government along  democratic lines and the king was reinstalled. Friction between the Rana and  Congress Party factions culminated in November 1951 when Prime Minister Rana was  removed from power and the NCP formed a government headed by Matrika Prasad  Koirala.
| B | Absolute Monarchy | 
 
 Birendra Bir Bikram Shah Dev
Birendra Bir Bikram Shah Dev became king of Nepal in  1972. He allowed a democratic, multiparty system of government to be instituted  in 1990. He was killed in a shooting incident in 2001. 
REUTERS/Corbis
After the Rana autocracy ended, Nepal  embarked on a mission of economic and social development. However, political  parties organizing the government during the 1950s were not effective. King  Mahendra, crowned in 1955, seized absolute control of the government in 1960  after a decade of political unrest. King Mahendra dismissed the government and  suspended parliament, calling it corrupt and inefficient. Considering a  parliamentary system unsuited to Nepal, the king proclaimed a new constitution  in 1962 that banned the formation of political parties and allowed for the  autocratic rule of the king through a nonparty system of councils, or  panchayats. The government then instituted social reforms, including land  reforms and modernization of the legal code, which helped alleviate some caste  discrimination.
When the king died in 1972, he was  succeeded by his son Birendra Bir Bikram, who was formally crowned in 1975. The  young king initially exercised strong control over the government, attempting to  repress the reform movement led by former prime minister Bisheswar Prasad  Koirala. As antimonarchist sentiments grew in the late 1970s and serious riots  challenged his authority, the king relaxed his control.
In a 1980 referendum on the form of  government, the voters decided to retain the nonparty panchayat system with  certain modifications. Among the reforms was a constitutional amendment  providing for the king to appoint a prime minister upon the recommendation of  the National Assembly. Elections under the new provisions were held in 1981 and  1986. Although all candidates ran as independents, reports indicated that  Marxist-Leninist members of the Communist Party won a number of seats in  parliament.
| C | Constitutional Monarchy | 
Following a wave of pro-democracy  protests spearheaded by Nepal’s banned political parties, Birendra agreed in  1990 to allow political activity. An interim government drafted a new  constitution that provided for multiple political parties. In November 1990,  with the adoption of a constitution stating the powers of the monarch, Nepal  became a constitutional monarchy. 
In 1991 the Nepali Congress Party (NCP)  won the country’s first democratic election in 32 years, and the party’s general  secretary, Girija Prasad Koirala, brother of former prime minister Bisheswar  Prasad Koirala, became prime minister. Koirala resigned in 1994 after his  coalition government lost its parliamentary majority. In new elections the  Unified Marxist-Leninist (UML) branch of Nepal’s Communist Party won the  majority of seats. The UML remained in power less than a year before a coalition  government replaced it. 
In 1996, a radical leftist party called  the Communist Party of Nepal—Maoist (CPN-M), unhappy with the pace and direction  of change, launched a “people’s war” aimed at overthrowing the government,  abolishing the monarchy, and establishing a people’s republic. Incidents of  violence were at first confined to remote mountain regions but by the late 1990s  had spread to more than half the country. 
| C1 | Political Instability | 
A period of political instability  followed the declaration of the “people’s war” in 1996. One prime minister  succeeded another in a series of unstable coalition governments. Internal  fighting weakened the coalitions, as did their inability to control the Maoist  rebellion. 
| C2 | Royal Massacre | 
 
 Bir Bikram Shah Dev Gyanendra
The king of Nepal, Bir Bikram Shah Dev Gyanendra, left,  receives a report of the inquiry into the 2001 massacre of the royal family. The  inquiry concluded that Crown Prince Dipendra killed his parents, the king and  queen, and other family members before shooting himself. Afterward, Gyanendra  succeeded to the throne.
Reuters NewMedia  Inc./Corbis
In early June 2001 King Birendra and  eight other members of the royal family, including Queen Aiswarya, were fatally  shot in the royal palace in Kathmandu. An official investigation of the massacre  concluded that Crown Prince Dipendra had killed his family members in a drunken  rage and then committed suicide. Birendra’s younger brother, Gyanendra Bir  Bikram Shah, succeeded to the throne. 
The Maoist insurgency intensified  following the massacre, fueled in part by popular conspiracy theories  surrounding the incident. Prime Minister Koirala, in office for the third time,  was widely criticized for embarrassing setbacks at the hands of the rebels and  for a perceived failure to provide adequate protection for the royal family. His  government was also mired in a bribery scandal. 
| C3 | Insurgency and Crisis | 
Koirala stepped down as prime minister  in July 2001 and was succeeded by Sher Bahadur Deuba, a former prime minister  known for his willingness to work with opposition parties. Deuba began a series  of reforms, including distribution of land to the poor, and introduced plans to  criminalize discrimination against Dalits (“Untouchables”) and to end the caste  system. Deuba also initiated peace talks with the Maoist rebels, and both sides  agreed to a ceasefire. But the ceasefire ended in November 2001 after Deuba  rejected Maoist demands for a new constitution that would abolish the monarchy.  Fighting renewed and as the violence continued, King Gyanendra declared  emergency rule, which enabled him to send the royal army to fight the  insurgency. In 2002 Gyanendra dismissed Deuba, dissolved parliament, and assumed  full power over the government before appointing a new prime minister. 
In January 2003 the government and the  Maoists agreed to a ceasefire and renewed negotiations. However, the ceasefire  collapsed in August, after seven months. Meantime, the political parties, which  had been excluded from the government after the dissolution of parliament, led  demonstrations in the capital, and in June 2003 Deuba was reappointed prime  minister. 
The Maoist rebels intensified their  insurgency after the ceasefire collapsed in August 2003. They refused to enter  peace negotiations with Deuba, insisting on direct talks with the king, and  staged two week-long blockades of Kathmandu. In February 2005 Gyanendra again  imposed a state of emergency. He assumed full executive power, dismissing Deuba  and his government. The king also suspended many constitutional rights and  freedoms, including freedom of speech and the press. 
In April 2006 massive protests took  place against direct rule by the king. In Kathmandu street demonstrations drew  hundreds of thousands of people, and government forces responded by firing into  crowds, killing more than a dozen people. The protests were spearheaded by a  seven-party opposition alliance that included the Maoist insurgents. Faced with  daily protests, a general strike, and road blockades that cut off Kathmandu from  fuel and food supplies, Gyanendra announced that he would restore parliament,  which he had dissolved four years earlier. On the recommendation of the  seven-party alliance, Gyanendra named Koirala as prime minister. The newly  reinstated parliament soon began to strip the king of his powers. The Maoist  rebels declared a three-month truce and began talks with Koirala. 
| C4 | Peace Agreement | 
The Maoist rebels reached a peace  agreement with the Nepalese government in November 2006, ending a decade-long  revolt during which an estimated 13,000 people were killed. Under United Nations  supervision, the Maoists turned over their weapons and confined their troops in  camps. As part of the agreement, a government commission was set up to  investigate human rights abuses by both sides in the long conflict. Koirala  assigned 5 of the 22 cabinet posts in the interim government to Maoists, who  joined the government in April 2007. The government planned to nationalize the  monarch’s assets while allowing Gyanendra to keep property he owned before he  came to the throne.
Elections for a constituent assembly,  chosen by the people, were scheduled for June 2007. The assembly was to rewrite  Nepal’s constitution and decide whether Nepal would remain a monarchy or become  a republic. The Maoists, who had been pushing for an end to the monarchy, agreed  to abide by the constituent assembly’s decision. However, the elections were  subsequently postponed due to two new demands made by the Maoists: the abolition  of the monarchy ahead of the elections, and the implementation of a proportional  system of voting for the elections. The new demands contradicted the earlier  agreement and created a political deadlock. The Maoists withdrew from the  governing coalition in September 2007, and the elections were further delayed.  However, the Maoists rejoined the interim government after all of the main  parties agreed to abolish the monarchy immediately after the elections, which  were scheduled for April 2008. 
 
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