NEPAL: The Economy
A Nepalese porter carrying supplies for a trek
NEPAL IS ONE OF THE POOREST COUNTRIES in the world and
listed as the eleventh poorest among 121 countries in
Estimates of its per capita income for 1988 ranged from
US$180. Various factors contributed to the economic
underdevelopment--including terrain, lack of resource
landlocked position, lack of institutions for
infrastructure, and a lack of policies conducive to
Until 1951 Nepal had very little contact with countries
than India, Tibet, and Britain. Movement of goods or
one part of the country to another usually required
India, making Nepal dependent on trade with or via India.
mountains to the north and the lack of economic growth in
(China's Xizang Autonomous Region after 1959) meant very
trade was possible with Nepal's northern neighbor.
Prior to 1951, there were few all-weather roads, and
transportation of goods was difficult. Goods were able to
Kathmandu by railroad, trucks, and ropeways, but for other
the country such facilities remained almost non-existent.
of infrastructure made it hard to expand markets and
economic growth. Since 1951 Nepal has tried to expand its
with other countries and to improve its infrastructure,
the lack of significant progress was still evident in the
The effects of being landlocked and of having to
through India continued to be reflected in the early
1990s. As a
result of the lapse of the trade and transit treaties with
March 1989, Nepal faced shortages of certain consumer
materials, and other industrial inputs, a situation that
led to a
decline in industrial production.
Data as of September 1991