April 30, 2015
Nepal
Since a decade-long civil war against a Maoist insurgency
most observers agree that Nepal has conducted reasonably
ended in 2006, democratic institutions in Nepal have
peaceful elections, brought former Maoist insurgents into
developed more slowly than many observers had hoped. A
the political system, and in a broad sense, taken several
devastating April 2015 earthquake has multiplied the
large steps towards building a functioning democracy. That
challenges the country faces. Nepal has for several years
said, the continued impasse on the drafting of the new
struggled to find political consensus to draft a new
constitution has the potential to lead to increased political
constitution. The central issue blocking agreement appears
tensions and street protests.
to be whether a new federal structure should be based on
ethnic identity, as favored by the opposition, or on
Constitutional Reform Process
economic and geographic factors, as favored by the ruling
coalition. Some observers express concern that an identity-
In November 2013, Nepal held elections for a second CA.
based federalist state could weaken national integrity. U.S.
Efforts by the second CA to agree on a new constitution by
aid to Nepal has sought to help Nepal cement gains in
consensus appear to have failed, due to political infighting.
peace, security and democracy, and to become more
Before the earthquake, some observers speculated that the
prosperous. U.S. and other international assistance now is
government may seek to use its near two-thirds majority to
shifting to focus on earthquake recovery.
push a new constitution through. It is too early to tell how
the earthquake will affect constitutional reform.
April 2015 Earthquake
A 7.8 magnitude earthquake struck the central and western
NEPAL IN BRIEF
regions of Nepal on April 25, 2015. As of April 28, 2015,
Population: 31 million 2014 est.
the Government of Nepal estimates that more than 4,300
Area: 147,181 sq. km.; about the size and shape of
people have been killed and over 8,000 injured. (More than
Tennessee.
two dozen people were also reported killed in neighboring
Geography: Relatively flat river plain of the Terai in the
India, China and Bangladesh.) An estimated 2 million
south, central hill/mountain region and very mountainous
people in 11 districts have been severely affected. Priority
Himalaya region of the north.
needs include food, water, shelter, and medication. The
Capital: Kathmandu; 1.1 million people 2014 est.
Government of Nepal is leading the response efforts and
Ethnic/Caste Groups: 125 groups including: Brahman,
has requested international assistance. The U.N.
Chetri, Newar, Gurung, Magar, Tamang, Rai, Limbu, Sherpa,
humanitarian system is responding. The United States
Tharu, et al.
government has established a Disaster Assistance Response
Language: Nepali (official); about 12 others
Team (DART), which includes urban search-and-rescue
Religion: Hindu 81.3%; Buddhist 9%; Muslim 4.2% 2011 est.
personnel, and announced $10 million in humanitarian
Life Expectancy at Birth: 67.2 2014 est.
assistance. Nepal declined assistance from Taiwan. Some
Literacy: Total 57.4%; female 46.7%; male 71.1% 2011 est.
critics suggested it did so out of deference to its powerful
Per Capita income: $2,400 ppp 2014 est.
neighbor, China.
Gross Domestic Product growth: 5.5% 2014 est.
GDP by Sector: Agriculture 30.7%, industry 13.6%, services
Background
55.7% 2014 est.
Labor by Sector: Agriculture 75%, industry 7%, services
Nepal has undergone a radical political transformation since
18%. 2010 est.
2006, when a ten-year long armed struggle by Maoist
Urbanization: 18.2% with 3.2% annual rate of increase 2014
insurgents, which claimed at least 13,000 lives, officially
est.
came to an end. The country’s king stepped down in 2006,
Export partners: India 53.7%, U.S. 9.2%, China 4.9%,
and two years later Nepal declared itself a republic, electing
Germany 4.2%, Bangladesh 4.2% 2013 est.
a unicameral Constituent Assembly (CA) to write a new
Population below the poverty line: 25.2% 2011 est.
constitution. Observers have noted that since the transition
Source: CIA, World Factbook; The Economist Intelligence Unit.
from monarchy to republic, identity politics has become
more evident. The failure of the first CA to craft a new
constitution led to its demise in May 2012 when the
The CA has 601 seats, with 575 elected and 26 appointed
Supreme Court of Nepal, which at the CA’s inception had
by the cabinet. The Nepali Congress (NC), with 196 of 575
been given authority to extend the CA’s mandate, refused
elected seats, and the Communist Party of Nepal United
further extensions arguing that a fresh mandate was needed. Marxist Leninist (CPN-UML), with 175 seats, now lead the
government in coalition. The Communist Party of Nepal
Though the process of democratization beginning in 2006
Maoist (CPN-M), which was the largest party after the 2008
has had setbacks and has been marred by some violence,
election, is now the third largest party in the CA. Since
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Nepal
February 2014, Nepal’s Prime Minister has been Sushil
mounted from time to time with concomitant troop
Koirala, the leader of the NC. With 371 of 575 elected seats
buildups. Nepal’s reliance on these two giant neighbors
the NC and the CPN-UML together have close to the two-
leads it to seek amicable relations with both, though trade
thirds majority needed to endorse a new constitution.
and cultural ties with India have historically been closer. In
Ethnic, communal, ideological and regional cleavages
the view of some observers, ties with India may improve
continue to be sources of contention as the CA has
with the transition from the Communist Party of Nepal–
considered proposals for a new federal structure. Whether
Maoist (CPN-M) to the Nepali Congress (NC)–Communist
the government’s response to the earthquake may give rise
Party of Nepal United Marxist Leninist (CPN-UML)-led
to controversies that create additional cleavages remains
coalition government. Nepal and India also share Hindu
unclear. Initial media reports have included allegations of
traditions.
official incompetence, misconduct, and corruption in the
delivery of earthquake relief.
India and Nepal have a tradition of close cooperation in the
area of defense and foreign affairs. Nepal is also heavily
Nepal has made some progress in efforts to consolidate its
dependent on India as its primary source of imports and its
new democracy since 2013 with both the integration of
main market for exports, and for access to the sea through
former Maoist fighters into the armed forces and the
the port of Calcutta. A significant percentage of all foreign
successful completion of the second Constituent Assembly
investment in Nepal also comes from India. While the
elections. Voter turnout for the 2013 CA election increased
Himalayan mountain range along Nepal’s northern border
from 56.5% of registered voters in 2008 to 77.6% of
limits access to China, the 500-mile southern plains border
registered voters in 2013. These elections also marked a
with India is relatively open. India has concerns with its
shift to the center-right of Nepali politics with the Nepali
own Maoist insurgency. Kathmandu has at times sought to
Congress Party and the Communist Party of Nepal Marxist-
counterbalance what it considers undue pressure from India.
Leninist gaining relative to the Communist Party of Nepal-
Under Indian Prime Minister Narendra Modi, India has
Maoist, which had previously led the bloody armed struggle
moved to improve ties with Nepal. Modi’s state visit to
against the state. The CPN-M and other opposition parties
Nepal in August 2014 was the first by an Indian prime
have pledged opposition to efforts by the ruling coalition to
minister in 17 years. India extended $1 billion in
vote on a new constitution. They demonstrated their
concessionary loans to Nepal to develop hydropower and
strength through a political protest rally attended by tens of
infrastructure. China has made significant inroads in
thousands in Kathmandu on February 28, 2015. On March
developing ties in South Asia, including Nepal. Some,
29, 2015, police clashed with cadres of the Maoist-led
particularly in strategic circles in New Delhi, increasingly
coalition of opposition parties in several parts of the
view Chinese activity with geopolitical concern.
country. It is unclear what the CPN-M reaction would be
should a constitution be passed without its support.
Tibetan Refugees
The Maoists and other opposition parties reportedly seek to
For many years Nepal has been a transit country for
redraw the district map of Nepal based on ethnic identity in
Tibetans seeking to flee Chinese repression in Tibet. Many
order to address grievances of ethnic groups that feel they
of those entering Nepal from Tibet move on to settle in
have been underrepresented in the key institutions of the
India, home to Tibet’s exiled spiritual leader, the Dalai
state, particularly those living in the Terai region bordering
Lama. Nepal closely monitors Tibetan refugees, restricts
India. One concern with this approach is that it could
their freedom of assembly and expression, and makes it
exacerbate divisions within Nepali society by accentuating
difficult for them to obtain documents necessary for access
subnational ethnic, regional and linguistic identities over
to public services. Since 2008, Nepal has also stepped up
identification with the overall state of Nepal.
cooperation with China to stem the flow of new refugees
into Nepal.
One key regionally-based, socio-political cleavage in
Nepali society is between the Madhese people of the
U.S. Assistance
lowland Terai region and “hill” people. The Madhese of the
Terai, which spans the southern border with India, have not
Nepal is one of the poorest and least developed countries of
been pleased with the political status quo, which divides
the world, with approximately one in four living in poverty.
their region. Caste also plays a complex role in this. Any
United States assistance to Nepal “is focused on achieving a
redistricting in a new constitution that does not take into
more democratic, prosperous and resilient country.” All
account Madhese interests may not be well received by
U.S. assistance efforts seek to “promote resilience and
Madhese groups, some of which have engaged in violence
reduce Nepal’s susceptibility to shocks and stresses.”
in the past.
Bruce Vaughn, bvaughn@crs.loc.gov, 7-3144
International Relations

Nepal is a landlocked geopolitical buffer state, like Bhutan,
IF10216
that is caught between two Asian giants. India and China
fought a border war in 1962 in the Himalayan mountains
near Nepal, which led to ongoing territorial disputes
between them. Tensions along the India-China border have
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