Nepal

E

Foreign Trade

For geographical and historical reasons, most of Nepal’s trade is with India. Attempts have been made to diversify trade by making new agreements with China, Pakistan, Bangladesh, the United States, the United Kingdom, Singapore, Thailand, Germany, and Japan. Nepal has a growing trade deficit with India. Major exports are clothing, carpets, grain, and leather goods. Major imports are petroleum products, fertilizer, and machinery.

F

Currency and Banking

Nepal’s monetary unit is the Nepalese rupee (71.40 Nepalese rupees equal U.S.$1; 2005 average). It is issued from the country’s central bank, Nepal Rastra Bank (founded in 1956). Indian rupees are still used in Nepal, although less widely than before trade disputes between the two countries in 1989.

V

Government

Nepal’s government is a constitutional monarchy. In response to major pro-democracy protests, Nepal adopted a new constitution in 1990 that established a multiparty democracy but preserved the king’s status as chief of state. The 1990 constitution ended nearly 30 years of absolute monarchy in which the king dominated Nepal’s politics and political parties were banned. Nepal has universal suffrage beginning at the age of 18.

A

Executive and Legislature

Executive powers are vested in the king and a council of ministers, composed of a prime minister and other ministers. In 2006 parliament forced the monarch to give up absolute power and rendered him largely a figurehead. An interim constitution assigned most of the king’s powers to the prime minister, the leader of the majority party in parliament. After general elections in 2008, a constituent assembly was expected to draft a new constitution and decide whether to retain the monarchy.

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Nepal’s 1990 constitution established a bicameral (two-chamber) legislature consisting of a house of representatives and a national council. The House of Representatives had 205 members directly elected by the voters. The National Council had 60 members: 10 nominated by the king, 35 elected by the House of Representatives, and 15 elected by an electoral council. Members of parliament served five-year terms unless the parliament is dissolved earlier upon recommendation of the prime minister.

B

Judiciary

The judiciary is made up of three tiers: the Supreme Court, appellate courts, and district courts. The Supreme Court is the highest court. The chief justice was appointed by the king on the recommendation of the Constitutional Council, but that power was granted to the prime minister in 2006. Other judges of the three courts are appointed on the recommendation of the Judicial Council.

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