<hdr>The World Factbook 1994: Nepal<nl>Economy</hdr><body>
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<item><hi format=bold>Overview:</hi> Nepal is among the poorest and least developed countries in the world. Agriculture is the mainstay of the economy, providing a livelihood for over 90% of the population and accounting for 60% of GDP. Industrial activity is limited, mainly involving the processing of agricultural produce (jute, sugarcane, tobacco, and grain). Production of textiles and carpets has expanded recently and accounted for 85% of foreign exchange earnings in FY94. Apart from agricultural land and forests, exploitable natural resources are mica, hydropower, and tourism. Agricultural production in the late 1980s grew by about 5%, as compared with annual population growth of 2.6%. More than 40% of the population is undernourished. Since May 1991, the government has been encouraging trade and foreign investment, e.g., by eliminating business licenses and registration requirements in order to simplify domestic and foreign investment. The government also has been cutting public expenditures by reducing subsidies, privatizing state industries, and laying off civil servants. Prospects for foreign trade and investment in the 1990s remain poor, however, because of the small size of the economy, its technological backwardness, its remoteness, and susceptibility to natural disaster. Nepal experienced severe flooding in August 1993 which caused at least $50 million in damage to the country's infrastructure.
<item><hi format=bold>National product:</hi> GDP—purchasing power equivalent—$20.5 billion (1993 est.)
<item><hi format=bold>National product real growth rate:</hi> 2.9% (FY93)
<item><hi format=bold>National product per capita:</hi> $1,000 (1993 est.)
<item>• <hi format=ital>consumption per capita:</hi> 50 kWh (1992)
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<item><hi format=bold>Industries:</hi> small rice, jute, sugar, and oilseed mills; cigarette, textile, carpet, cement, and brick production; tourism
<item><hi format=bold>Agriculture:</hi> accounts for 60% of GDP and 93% of work force; farm products—rice, corn, wheat, sugarcane, root crops, milk, buffalo meat; not self-sufficient in food, particularly in drought years
<item><hi format=bold>Illicit drugs:</hi> illicit producer of cannabis for the domestic and international drug markets; transit point for heroin from Southeast Asia to the West
<item><hi format=bold>Economic aid:</hi>
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<item>• <hi format=ital>recipient:</hi> US commitments, including Ex-Im (FY70-89), $304 million; Western (non-US) countries, ODA and OOF bilateral commitments (1980-89), $2.23 billion; OPEC bilateral aid (1979-89), $30 million; Communist countries (1970-89), $286 million
