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Nepal is a landlocked sovereign state located in South Asia. With an area of 147,181 square kilometres (56,827 sq mi) and a population of approximately 27 million (and nearly 2 million absentee workers living abroad), Nepal is the world’s 93rd largest country by land mass and the 41st most populous country. It is located in the Himalayas and bordered to the north by the People’s Republic of China, and to the south, east, and west by the Republic of India. Specifically, the Indian states of Uttarakhand, Uttar Pradesh, Bihar, West Bengal, and Sikkim border Nepal, while across the Himalayas lies the Tibetan Autonomous Region. Nepal is separated from Bangladesh by the narrow Indian Siliguri corridor. Kathmandu is the nation’s capital and largest metropolis.
The mountainous north of Nepal has eight of the world’s ten tallest mountains, including the highest point on Earth, Mount Everest, called Sagarmatha in Nepali. It contains more than 240 peaks over 20,000 ft (6,096 m) above sea level. The southern Terai region is fertile and humid. Lumbini, the birthplace of Lord Gautam Buddha, is located in this region. Lumbini is one of the holiest places of one of the world’s great religions, and its remains contain important evidence about the nature of Buddhist pilgrimage centres from as early as the 3rd century BC.
Hinduism is practiced by about 81.3% of Nepalis, making it the country with the highest percentage of Hindus, Buddhism is linked historically with Nepal and is practiced by 9%, Islam by 4.4%, Kirat 3.1%, Christianity 1.4%, and animism 0.4%.
A monarchy throughout most of its history, Nepal was ruled by the Shah dynasty of kings from 1768, when Prithvi Narayan Shah unified its many small kingdoms, until 2008; a decade-long Civil War involving the Communist Party of Nepal (Maoist) (Now known as the Unified Communist Party of Nepal (Maoist)) and several weeks of mass protests by all major political parties led to the 12-point agreement of November 22, 2005. The ensuing elections for the constituent assembly on 28 May 2008 overwhelmingly favored the abolition of the monarchy and the establishment of a federal multiparty representative democratic republic.
In recent developments, political parties of Nepal have agreed on forming an interim election government under the leadership of Chief Justice Khil Raj Regmi in order to hold Constituent Assembly elections by June 21, 2013 to end the political deadlock by announcing election dates for November.
Nepal’s gross domestic product (GDP) for 2012 was estimated at over $17.921 billion (adjusted to Nominal GDP). In 2010, agriculture accounted for 36.1%, services comprise 48.5%, and industry 15.4% of Nepal’s GDP. While agriculture and industry is contracting, the contribution by service sector is increasing. Agriculture employs 76% of the workforce, services 18% and manufacturing/craft-based industry 6%. Agricultural produce – mostly grown in the Terai region bordering India – includes tea, rice, corn, wheat, sugarcane, root crops, milk, and water buffalo meat. Industry mainly involves the processing of agricultural produce, including jute, sugarcane, tobacco, and grain. Its workforce of about 10 million suffers from a severe shortage of skilled labor.
Nepal’s economic growth continues to be adversely affected by the political uncertainty. Nevertheless, real GDP growth is estimated to increase to almost 5 percent for 2011/2012. This is a considerable improvement from the 3.5 percent GDP growth in 2010/2011 and would be the second highest growth rate in the post-conflict era. Sources of growth include agriculture, construction, financial and other services. The contribution of growth by consumption fueled by remittances has declined since 2010/2011. While remittance growth slowed to 11 percent (in Nepali Rupee terms) in 2010/2011 it has since increased to 37 percent. Remittances are estimated to be equivalent to 25–30 percent of GDP. Inflation has been reduced to a three-year low to 7 percent.
The proportion of poor people has declined substantially in recent years. The percentage of people living below the international poverty line (people earning less than US$1.25 per day) has halved in only seven years. At this measure of poverty the percentage of poor people declined from 53.1% in 2003/2004 to 24.8% in 2010/2011. With a higher poverty line of US$2 per-capita per day, poverty declined by one quarter to 57.3%. However, the income distribution remains grossly uneven. In a recent survey, Nepal has performed extremely well in reducing poverty along with Rwanda and Bangladesh as the percentage of poor dropped to 44.2 percent of the population in 2011 from 64.7 percent in 2006–4.1 percentage points per year, which means that Nepal has made significant improvement in sectors like nutrition, child mortality, electricity, improved flooring and assets. So if the progress of reducing poverty continues in this rate, then it’s predicted that Nepal will halve the current poverty rate and eradicate it within the next 20 years.
The spectacular landscape and diverse, exotic cultures of Nepal represent considerable potential for tourism, but growth in this hospitality industry has been stifled by political instability and poor infrastructure. Despite these problems, in 2012 the number of international tourists visiting Nepal was 598,204, a 10% increase on the previous year. The tourism sector contributed nearly 3% of national GDP in 2012 and is the second biggest foreign income earner after remittances.