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The Economic Activity of Nepal

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The economy of Nepal is undeniably linked to that of her neighbor’s – India. As of 1989, Nepal ranked as one of the poorest countries in the world. There were several factors that greatly affected the Nepalese economy namely: terrain, lack of resource endowment, her land locked geographical position, lack of modernization institutions, weak infrastructure, unstable political climate, the trade and transit dispute with India in 1989, and the lack of definitive economic development plans.

Although agriculture still remains as Nepal's principal economic activity, employing 80% of the population and providing 37% of GDP, Nepal has remained committed to a program of economic growth and has made relentless efforts toward achieving sustainable economic development. In fact Nepal underwent a series of economic “five-year plans” which started in 1956, and with the 9th development plan being completed only in 2002, making its way through the help of her earnings in tourism, and external aid.

With Mount Everest along with the other seven of the world’s 10 highest mountain peaks, strong export performance, and industries including carpet, tourism, textile, oilseed mills, small rice, and jute sugar, cigarette, brick production and cement. Nepal made significant economic strides and helped her improve the overall balance-of–payments situation. Admittedly, these factors aside from the unrecorded border trades with India, Nepal’s export goods such as carpets, clothing, leather goods, jute goods, grain, and herbs was able to net a 2008 GDP (Gross Domestic Product) estimate of US $ 31.09 billion with a 5.6% GDP growth.

All being said, as of 2008, the economy of Nepal was able to yield a revenue worth of US$ 1.7 billion.

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