In 1951, the Nepalese monarch ended the century-old system of rule by hereditary premiers and instituted a cabinet system of government. Reforms in 1990 established a multiparty democracy within the framework of a constitutional monarchy.

A Maoist insurgency, launched in 1996, gained traction and threatened to bring down the regime, especially after a negotiated cease-fire between the Maoists and government forces broke down in August 2003. In 2001, the crown prince massacred ten members of the royal family, including the king and queen, and then took his own life.

In October 2002, the new king dismissed the prime minister and his cabinet for "incompetence" after they dissolved the parliament and were subsequently unable to hold elections because of the ongoing insurgency. While stopping short of reestablishing parliament, the king in June 2004 reinstated the most recently elected prime minister who formed a four-party coalition government.

Citing dissatisfaction with the government's lack of progress in addressing the Maoist insurgency and corruption, the king in February 2005 dissolved the government, declared a state of emergency, imprisoned party leaders, and assumed power. The king's government subsequently released party leaders and officially ended the state of emergency in May 2005, but the monarch retained absolute power until April 2006.

After nearly three weeks of mass protests organized by the seven-party opposition and the Maoists, the king allowed parliament to reconvene in April 2006. Following a November 2006 peace accord between the government and the Maoists, an interim constitution was promulgated and the Maoists were allowed to enter parliament in January 2007. The peace accord calls for the creation of a Constituent Assembly to draft a new constitution.

On Dec. 28, 2007, the Interim Parliament passed a bill and declared Nepal to be a Federal Democratic Republic. The first meeting of the Constituent Assembly officially implemented that declaration on May 28, 2008.Source: CIA World Fact Book, Associated Press

Population: 28,901,790 (July 2007 est.)

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Age structure: 0-14 years: 38.3% (male 5,721,720/female 5,360,391) 15-64 years: 57.9% (male 8,597,037/female 8,134,115) 65 years and over: 3.8% (male 528,113/female 560,414) (2007 est.)

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Median age: total: 20.5 years male: 20.3 years female: 20.6 years (2007 est.)

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Population growth rate: 2.132% (2007 est.)

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Birth rate: 30.46 births/1,000 population (2007 est.)

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Death rate: 9.14 deaths/1,000 population (2007 est.)

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Net migration rate: 0 migrant(s)/1,000 population (2007 est.)

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Sex ratio: at birth: 1.05 male(s)/female under 15 years: 1.067 male(s)/female 15-64 years: 1.057 male(s)/female 65 years and over: 0.942 male(s)/female total population: 1.056 male(s)/female (2007 est.)

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Infant mortality rate: total: 63.66 deaths/1,000 live births male: 61.87 deaths/1,000 live births female: 65.54 deaths/1,000 live births (2007 est.)

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Life expectancy at birth: total population: 60.56 years male: 60.78 years female: 60.33 years (2007 est.)

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Total fertility rate: 4.01 children born/woman (2007 est.)

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HIV/AIDS - adult prevalence rate: 0.5% (2001 est.)

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HIV/AIDS - people living with HIV/AIDS: 61,000 (2001 est.)

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HIV/AIDS - deaths: 3,100 (2003 est.)

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Nationality: noun: Nepalese (singular and plural) adjective: Nepalese

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Ethnic groups: Chhettri 15.5%, Brahman-Hill 12.5%, Magar 7%, Tharu 6.6%, Tamang 5.5%, Newar 5.4%, Muslim 4.2%, Kami 3.9%, Yadav 3.9%, other 32.7%, unspecified 2.8% (2001 census)

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Religions: Hindu 80.6%, Buddhist 10.7%, Muslim 4.2%, Kirant 3.6%, other 0.9% (2001 census) note: only official Hindu state in the world

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Languages: Nepali 47.8%, Maithali 12.1%, Bhojpuri 7.4%, Tharu (Dagaura/Rana) 5.8%, Tamang 5.1%, Newar 3.6%, Magar 3.3%, Awadhi 2.4%, other 10%, unspecified 2.5% (2001 census) note: many in government and business also speak English (2001 est.)

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Literacy: definition: age 15 and over can read and write total population: 48.6% male: 62.7% female: 34.9% (2001 census)

Nepal is among the poorest and least developed countries in the world with almost one-third of its population living below the poverty line. Agriculture is the mainstay of the economy, providing a livelihood for three-fourths of the population and accounting for 38% of GDP. Industrial activity mainly involves the processing of agricultural produce including jute, sugarcane, tobacco, and grain. Security concerns relating to the Maoist conflict have led to a decrease in tourism, a key source of foreign exchange. Nepal has considerable scope for exploiting its potential in hydropower and tourism, areas of recent foreign investment interest. Prospects for foreign trade or investment in other sectors will remain poor, however, because of the small size of the economy, its technological backwardness, its remoteness, its landlocked geographic location, its civil strife, and its susceptibility to natural disaster.

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GDP (purchasing power parity): $41.18 billion (2006 est.)

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GDP (official exchange rate): $6.948 billion (2006 est.)

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GDP - real growth rate: 1.9% (2006 est.)

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GDP - per capita (PPP): $1,500 (2006 est.)

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GDP - composition by sector: agriculture: 38% industry: 20% services: 42% (FY05/06 est.)

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Labor force: 11.11 million note: severe lack of skilled labor (2006 est.)

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Labor force - by occupation: agriculture: 76% industry: 6% services: 18% (2004 est.)

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Unemployment rate: 42% (2004 est.)

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Population below poverty line: 31% (FY03/04)

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Household income or consumption by percentage share: lowest 10%: 2.6% highest 10%: 39.1% (2003-2004)

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Distribution of family income - Gini index: 37.7 (FY04/05)

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Inflation rate (consumer prices): 8.6% (November 2006 est.)

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Budget: revenues: $1.153 billion expenditures: $1.927 billion; including capital expenditures of $NA (FY06/07)

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Agriculture - products: rice, corn, wheat, sugarcane, jute, root crops; milk, water buffalo meat

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Industries: tourism, carpet, textile; small rice, jute, sugar, and oilseed mills; cigarettes, cement and brick production

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Industrial production growth rate: 2.2% (FY05/06)

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Electricity - production: 2.511 billion kWh (2006)

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Electricity - consumption: 1.96 billion kWh (2006)

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Electricity - exports: 101 million kWh (2006)

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Electricity - imports: 266 million kWh (2006)

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Oil - production: 0 bbl/day (2005 est.)

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Oil - consumption: 11,550 bbl/day (2006 est.)

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Oil - exports: NA bbl/day

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Oil - imports: 11,530 bbl/day (2006 est.)

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Oil - proved reserves: 0 bbl

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Natural gas - production: 0 cu m (2006 est.)

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Natural gas - consumption: 0 cu m (2006 est.)

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Exports: $822 million f.o.b.; note - does not include unrecorded border trade with India (2005 est.)

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Exports - commodities: carpets, clothing, leather goods, jute goods, grain

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Exports - partners: India 59%, US 13.9%, Germany 5.9% (2006)

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Imports: $2 billion f.o.b. (2005 est.)

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Imports - commodities: gold, machinery and equipment, petroleum products, fertilizer

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Imports - partners: India 49%, China 12.4%, UAE 11.7%, Saudi Arabia 5.2%, Kuwait 4.4% (2006)

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Debt - external: $3.07 billion (March 2006)

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Economic aid - recipient: $533 million (FY04/05)

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Currency (code): Nepalese rupee (NPR)

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Exchange rates: Nepalese rupees per US dollar - 72.446 (2006), 72.16 (2005), 73.674 (2004), 76.141 (2003), 77.877 (2002)

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Fiscal year: 16 July - 15 July