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to increase the magnitude of GNI from a diminu� ve US$ 13 billion (as of
2009) to US$ 100 billion and transform the economy from extremely low
GNI per capita (US$ 440) to a higher GNI per capita (US$ 3,000) at par
with middle income countries by achieving a high, sustainable, broad,
and inclusive economic growth and elimina� ng absolute poverty by 2025
and, ul� mately, make Nepal the “Switzerland” of Asia. Despite numerous
structural constraints, there are ample opportuni� es for nepal to gear up
the economy by s� mula� ng its major founda� ons comprising hydropower,
tourism, biodiversity and remi� ances through foreign employment in
coopera� on with the private sector.
Introduc� on
Nepal is a � ny landlocked Himalayan country with a size of 147,181
square kilometers ranging from 70 to 8,848 meters al� tude (Mt. Everest)
surrounded by rapidly expanding two neighborhood economies viz., India in
the East, West, and South and China in the North. Nepal’s geo-physical se� ng
and � me-zone loca� on assume strategic signifi cance in South Asia (Dahal,
2004). Nepal’s territory runs all along 885 kms from east to west having nonuniform,
mean width of 193 kms north to south at the la� tude of 26022 ’
N to 30027 ’ N and longitude 8004 ’ E to 88012 ’ E. The country encompasses
three ecological regions: mountain, hills and terai (plain) blessed with
tremendous bounty of nature. Nepal is rich in biodiversity comprising ecosystem,
species, and a broad variety of topography experiencing tropical,
mesothermal, microthermal, � ga and tundra climates, which provide 60-
80 percent of rainfall during the monsoon season from July to September
(Dahal and Inoue, 1994).
The na� on possesses 2.3 percent of the world’s hydro resources
a� ributable to four principal river systems, the life-line of Nepalese economy
viz., Koshi (east), Gandaki (central), Karnali (Far-west) and Mahakali (Farwest).
The theore� cal hydropower poten� al is es� mated to be 83,000 MW,
and per capita hydropower capacity is assumed to be second highest next
to Brazil. Nepal, the Shangri-La of the World, is bestowed with gorgeous
mountains, magnifi cent panorama of fl ora and fountains, beau� ful lakes,
valleys and basins, medicinal herbs, precious stones, and sub-tropical forest.
Nepal possesses magnifi cent biodiversity especially the forest resources,
which are of great value from the point of economic development.
Nepal is the most popular tourist hub and a global des� na� on for tourists
from all over the world. There exists a vast poten� al for heritage tourism,
white-water tourism, eco-friendly tourism, health tourism, mountain tourism,
safari and adventure tourism. In addi� on, Lumbini- the birth place of Lord
Buddha, rich cultural heritage, pagoda and stupa style art and architecture,
gateway to Tibet and Bhutan, and pleasant climate in most parts of the
country are basic and prominent characteris� cs of tourism instrumental to
a� ract a large number of tourists in Nepal. Preliminary geological surveys
reveal that subterranean resources such as iron, copper, mica, gold, lead
and zinc, limestone, slate, mineral oil and gas, coal nickel, sulphur, graphite,
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Changing paradigms of aid eff ec� veness in Nepal