Nepal has deposed its king and declared a republic but is struggling to maintain peace
Nepal's territory can be divided roughly into three bands descending from north to south. The northernmost band includes the Great Himalayas dominated by Mount Everest at 8,848 metres. The central band has the lower Mahabharat range and a number of major river systems and valleys, including the densely-settled Kathmandu Valley. The band along the southern border with India has forested lower slopes that descend to the fertile Terai plain.
Nepal's people comprise more than 70 ethnic groups that can be considered in two sets. The first and smaller, the Tibeto-Nepalese, are the result of immigration from Tibet. They are found in the bleak high mountain areas as well as in the middle band, and are usually Buddhist. The larger set, of Indo-Aryan ancestry, have immigrated from India and elsewhere, and are largely Hindu and rigidly stratified into higher and lower castes.
In recent years, the Nepalese have become even poorer. Despite economic growth, 30% of the population live below the poverty line. Standards of education and health are very low: only 51% of the population are literate, 40% have no access to safe sanitation, and around 40% of children are malnourished.
The situation is particularly severe for women. While in most countries women's biological advantage enables them to live longer than men, in Nepal women's lifespan is somewhat shorter. This is the outcome of many kinds of discrimination, especially in health care, which results in high rates of maternal mortality—830 mothers die in childbirth per 100,000 live births.
Survival in Nepal depends primarily on agriculture, which generates about 33% of the country's GDP and involves 80% of the workforce—primarily cultivating rice, maize, and wheat, as well as raising livestock. But productivity is low and output is erratic. Cultivation is particularly arduous in the terraced farms of the hilly regions. Land holdings are small, irrigation is difficult, and the situation is being aggravated by soil erosion and deforestation. The position is somewhat better in the land of the Terai plain, which accounts for about half the cultivable land and where there are better prospects for irrigation. But land ownership here is highly concentrated so the benefits are unevenly spread. The government in 2001 announced fresh plans for land reform and there are officially new ceilings on landholdings, but so far nothing has happened.
Most of Nepal's industry is on a small scale for local consumption. One of the main export industries is carpet weaving, but carpet sales in Europe have been affected by accusations of the exploitation of child labour. Some Indian garment manufacturers have also established factories to take advantage of Nepal's quotas. The service sector has been growing too but this is primarily the result of government development expenditure, 70% of which is financed by foreign aid.
Few tourists get much further than Kathmandu
Another important source of income is tourism. However, the industry has been hard hit by worries about law and order. In 2005 there were 277,000 arrivals. At the best of times it is difficult to travel around Nepal, and the vast majority of tourists get little further than Kathmandu. The government has been trying to encourage more arrivals, but even with peace it is doubtful that the infrastructure could cope with many more people.