Nepal economy: Aiming for steady growth.

The Himalayan Kingdom of Nepal is one of the poorest countries of the world, with over 40% of the population living below the poverty line, and over 46% of the workforce out of work. The fact that the country is landlocked adds to its problems in terms of free access to markets around the world.

An agricultural economy, Nepal producesd barely, fruits, medicinal herbs, rice, tobacco, etc. Among the important industries are cement, cigarettes, garments, jute spinning, and of course tourism. Tourism is a major foreign exchange earner, and Nepal is not embarking on a controversial plan to boost alternate sex tourism. That is to attract gay and lesbian tourists from around the world, through special tourist packages. Until now, adventure toursim was the mainstay of the tourism industry, attratcting the adventorous from around the globe that are fascinated by the Himalayas. The country received over half a million tourists this year, and aims for the one million figure by 2011.

Nepal exports carpets, jute, leather goods, rice, sugar, timber, etc., and imports foodstuffs, machinery, transport equipment, etc. India is Nepal’s major trading partner.

The country’s GDP is expected to grow by 4.7% in fiscal 2009, while inflation is running at 7.7%. Industrial growth is around 7% for 2009. Deforestration is a major problem that is having several side effects, including flooding. Political instability, of late, has aggravated the economic problems of the country.

Nepal is a regular receipient of foreign aid that has helped the country in its developmental efforts. However, the tough geographical location, and the shortage of skilled manpower, coupled with infrastructural bottlenecks hinders the country’s march towards economic development and progress.

Nepal faces tough choices in its efforts at economic development, and must adopt prudent economic policies, aimed at creating a pool of trained manpower, and attracting foreign investment, especially in the infrastructure field, to ensure its future development. The Government appears to be alive to this challenge and taking tentative steps in this direction.