Nepal is a landlocked country that shares its borders with India and China, two of the world’s largest populations and fastest-growing economies. The country is made up of three strikingly different areas: the Terai to the south, the Himalaya to the north and the Kathmandu valley in the central region.
The Terai contains about one-third of Nepal’s population and makes up about one-fourth of the total area. It comprises both cultivable land and dense jungle, inhabited by a wide range of South Asian fauna. The Himalaya is the second, and by far the largest, part of Nepal and is formed by the Mahabharat, Churia, and Himalayan mountain ranges, extending from east to west. The Kathmandu valley is a high central region between the main Himalayan and Mahabharat ranges, extending nearly 900 square kilometres. The valley has fertile soil and temperate climate, supporting a thriving agriculture and most of the country’s population.
Nepal’s elevation ranges from less than 100 metres above sea level in the Terai to nearly 9,000 metres at the summit of Mount Everest, the highest point on earth, all within about 150 kilometres. Nepal’s unique topography includes eight of the world’s highest mountains, an abundance of natural resources and gives rise to climatic conditions ranging from sub-tropical to Arctic.
Nepal’s rich cultural heritage encompasses the various traditions belonging to the 125 distinct ethnic groups present in the country. Nepal’s linguistic heritage has evolved from three major language groups: Indo-Aryan, Tibeto-Burman and indigenous. The official language is Nepali, which is spoken as a mother tongue by about 45 percent of the population and used as a lingua franca by the remainder.
The 2011 census identified 80 percent of the population as Hindu, with Buddhism practiced by a further nine percent. Nepal’s Hindu and Buddhist traditions go back more than two millennia. Nepal has unique historic cities, buildings and structures with intricate ornamentation displaying craftsmanship in brick, stone, timber and bronze that are some of the most highly developed in the world.
Four of its cultural and natural heritage sites have been inscribed on the UNESCO World Heritage List, including Lumbini, birthplace of the Buddha, the Kathmandu valley (comprising seven individual temples and squares) and two national parks, attracting over one million tourists annually. In addition to an outstanding built heritage, Nepal’s treasure of artworks, antiquities and documentary heritage is housed in some 50 public and private museums, art galleries and libraries. Nepal also has a rich tradition of music and dance, for example the Kartik Nach is a dance recital that has been performed each year since the 17th century.
Nepal’s population has grown from ten million people in 1960 to nearly 30 million today. High population growth in Nepal has long been regarded as one of the critical challenges inhibiting economic growth. However, the expansion of mass education, rising economic opportunities, urbanization, growth in female labour force participation and delayed marriages are leading to declines in fertility rates and slowing population growth. The average age of the population is 25 years - 64 percent is of working age, 30 percent are under 14 and only six percent are over 65 years.
Nepal is one of the poorest nations in the world with circa 15 percent of the population living below the national poverty line and 50 percent earning below three dollars per day. This is primarily due to socio-economic conditions where almost 80 percent of Nepal’s population lives in rural areas, have large families and small landholdings, and lack access to primary healthcare, education, safe drinking water, sanitation and other necessities.
A high dependence on agriculture and geographical issues such as rugged terrain, lack of rainfall and poor soil quality were compounded in 2015 by the earthquake that caused widespread devastation. Despite this, Nepal has gained significant ground in alleviating poverty in the past five years, in large part due to high levels of remittances from Nepalese who have migrated overseas.
Nepal has made strong progress in improving its education system, increasing net primary school enrolment rates from 68 percent to 96 percent from 1991 to 2019. However, secondary and tertiary education levels remain low and adult literacy is only 60 percent.
So far most of Nepal’s recent infrastructure and socioeconomic development has been achieved in urban areas, while people in remote rural areas remain underserved, resulting in lower economic growth and sustainable development than achieved by other countries in the South Asia region.
The government has recognised the need to extend the reach of its services and development agenda to rural areas to drive inclusive growth and achieve its vision of “Prosperous Nepal, Happy Nepali” and it sees the growth of the digital economy as an enabler of this.
Nepal has made significant reforms with the adoption of a new Constitution in 2015, transitioning from a unitary to federal state, and the election of a stable government. The Constitution aims to turn around the economic and political situation and ensure double-digit economic growth over the following ten years, in order to create an inclusive, pluralistic democracy and mixed market economy.
In 2015 the government also set the objective for Nepal to graduate from Least Developed Country status to become a Middle-Income Country by 2030, with the aim of doing so through the pursuit of the UN Sustainable Development Goals. However the government judged that Nepal’s historic growth rate of circa five percent per annum would be insufficient to reach this target and that a rate of 8 to 10 percent per annum would be needed.
Recognising the link between digital connectivity and economic growth, the government launched the Digital Nepal initiative to promote the integration of digital technology across the whole economy and public services. The Digital Nepal Framework outlines eight sectors and 80 digital initiatives that in theory could boost economic growth by an additional 800 billion rupees (USD 6.5 billion) by 2022.
Nepal’s focus on disruptive digital technologies is intended to accelerate its progress towards the Sustainable Development Goals and the Framework report explicitly maps digital initiatives to advance the 17 Goals and 169 underlying targets.
In November 2021, the UN General Assembly recognised the progress that Nepal had made and resolved that it would graduate from the LDC category by December 2026, following the completion of a five-year preparatory period.