| Nepal,s GDP for the year 2005 was estimated at just over $39 billion (adjusted to Purchasing Power Parity), making it
the 83rd-largest economy in the world. Agriculture accounts for about 40% of Nepal,s GDP, services comprise 41% and
industry 22%. 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. Her workforce of about 10 million suffers from a severe shortage of skilled labour. The spectacular landscape and
diverse, exotic cultures of Nepal represent considerable potential for tourism, but growth in this hospitality industry has
been stifled by recent political events. The rate of unemployment and underemployment approaches half of the working-age
population. Thus many Nepali citizens move to India in search of work; the Gulf countries and Malaysia being new sources of
work. Nepal receives $50 million a year through the Gurkha soldiers who serve in the Indian and British armies and are highly
esteemed for their skill and bravery. The total remittance value is worth around $1 billion, including money sent from
Persian Gulf and Malaysia, who combined employ around 700,000 Nepali citizens. A long-standing economic agreement underpins a
close relationship with India. The country receives foreign aid from India, Japan, the United Kingdom, the United States, the
European Union, China, Switzerland, and Scandinavian countries. Poverty is acute; per-capita income is less than $ 300. The
distribution of wealth among the Nepalis is consistent with that in many developed and developing countries: the highest 10%
of households control 39.1% of the national wealth and the lowest 10% control only 2.6%.
The government,s budget is about $1.153 billion, with expenditures of $1.789bn (FY05/06). The Nepalese rupee has been
tied to the Indian Rupee at an exchange rate of 1.6 for many years. Since the loosening of exchange rate controls in the
early 1990s, the black market for foreign exchange has all but disappeared. The inflation rate has dropped to 2.9% after a
period of higher inflation during the 1990s.
Nepal,s exports of mainly carpets, clothing, leather goods, jute goods and grain total $822 million. Import commodities
of mainly gold, machinery and equipment, petroleum products and fertilizer total $2 bn. India (53.7%), the US (17.4%), and
Germany (7.1%) are its main export partners. Nepal,s import partners include India (47.5%), the United Arab Emirates
(11.2%), China (10.7%), Saudi Arabia (4.9%), and Singapore (4%).
Nepal remains isolated from the world’s major land, air and sea transport routes though, within the country, aviation is in a
better state, with 48 airports, ten of them with paved runways; flights are frequent and support a sizeable traffic. Hilly
and mountainous terrain in the northern two-thirds of the country has made the building of roads and other infrastructure
difficult and expensive. There were just over 8,500 km of paved roads, and one 59 km railway line in the south in 2003. There
is only one reliable road route from India to the Kathmandu Valley. The only practical seaport of entry for goods bound for
Kathmandu is Kolkata in India. Internally, the poor state of development of the road system (22 of 75 administrative
districts lack road links) makes volume distribution unrealistic. Not only its landlocked location and technological
backwardness but also the long-running civil war have prevented Nepal from fully developing its economy.
There is less than one telephone per 19 people. Landline telephone services are not adequate nationwide but are concentrated
in cities and district headquarters. Mobile telephony is in a reasonable state in most parts of the country with increased
accessibility and affordability; there were around 175,000 Internet connections in 2005. After the imposition of the "state
of emergency", intermittent losses of service-signals were reported, but uninterrupted Internet connections have resumed
after Nepal,s second major people,s revolution to overthrow the King,s absolute power.
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