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Nepal Country Report

Country Risk Level

Medium

Overview

Executive Summary

Nepal’s government under Prime Minister KP Sharma Oli is currently highly unstable with co-chair of the Standing Committee of the Nepal Communist Party (NCP) Pushpa Kamal Dahal demanding Oli’s resignation. Although it is unclear whether the Standing Committee can force Oli’s resignation, the prime minister prorogued the budget session in the Nepali parliament, temporarily avoiding a confidence motion that he would likely lose.In June 2020, Nepal redrew its political map to include Limpiyadhura, Lipulekh, and Kalapani districts, all of which comprise disputed territory on the border with India. The dispute comes amid a steady weakening of India-Nepal relations since 2015 but is unlikely to lead to major commercial disputes, such as a closure of commercial trade zones along the India-Nepal border or a cancellation of India-backed projects in Nepal’s hydropower and transportation sectors. India remains Nepal’s biggest trade partner and largest source of foreign investment, despite growing Chinese influence in the country. IHS Markit assesses that Nepal’s GDP growth will grow to 6.40% in fiscal year 2020. However, with Nepal’s economy closely tied to that of India (including a currency peg with the Indian rupee), we anticipate that slowing economic momentum in India will lead to weaker exports and private consumer spending growth in Nepal. Government capital and social spending are also likely to moderate, which would further contain Nepal’s domestic demand growth.In May 2019, three improvised explosive devices (IEDs) detonated at different locations in Nepal’s capital Kathmandu. The explosives were allegedly made by the Communist Party of Nepal (Maoist) and detonated prematurely during preparation. The failed attacks could highlight Maoist insurgents’ limited IED-making capabilities, but a marginal increase in the rate of attacks in 2019 indicates growing intent. These attacks will remain focused on publicly accessible government and commercial infrastructure over the coming year, with an elevated risk for foreign investor-led projects.

Operational Outlook

Nepal's strong leftist tradition has generated several trade unions and frequent strike action. A number of umbrella unions – the General Federation of Nepalese Trade Unions (GeFONT), the Democratic Confederation of Nepalese Trade Unions (DeCONT), and the Federation of Trade Unions of Nepal (FTUN) – have become focal points for wage negotiations. The Maoist-affiliated All-Nepal Trade Union Federation-Revolutionary is the most likely to organise strike action in the one-year outlook. Bribe demands are likely in government procurement, but also accompany the issuance of licences and permits in most sectors.

Terrorism

Although Maoist-led attacks in Nepal have largely reduced since the civil war ended in 2006, a recent uptick in intent indicates that small-scale attacks remain likely in the one-year outlook. Maoist groups, primarily the Communist Party of Nepal (Maoist) led by Netra Bikram Chand 'Biplab', mostly aspire to target government and foreign investor assets, but this is limited by lack of capability. Further attempts to revive the insurgency will be constrained by limited local support and heavy-handed tactics to disrupt their networks.

Crime

Theft of personal property is common, and reports of minor sexual harassment are increasing. Banditry seldom involves serious injury or kidnapping; the robbery of personal property in remote rural area is possible. Police forces are thinly distributed and poorly equipped in many mountainous and rural areas. Human trafficking for sexual exploitation or indentured labour through organised criminal syndicates is common, with Nepal a supplier of sex workers to India and through India to countries further west. Nepal has enacted strict anti-drugs laws. The use and trafficking of narcotics has increased in recent years, according to Nepal's Narcotics Control Bureau.

War Risks

A return to the civil war, as noted before the November 2006 Comprehensive Peace Accord, is highly unlikely. The Nepalese Army confiscated most of the (mainly small‐arms) weapons of the most active faction of Maoist militants. Political protests by the minority Madhesi and Tharu ethnic groups occasionally involve arson, crude IEDs, and fighting with police. However, these groups do not have the capability or public support to launch an insurgency. Nepal is highly unlikely to engage in a military conflict in the coming year. Minor skirmishes are likely with India given the recent border dispute but remains highly unlikely with China.

Social Stability

High

Protests over political representation are likely to continue through 2019–20. Forced closure of businesses and building of road blocks for up to week-long disruptions of cargo are most common. Businesses and drivers who do not comply are often threatened with arson. Major foreign commercial assets, including Chinese-funded hydropower plants, are generally well-protected and unaffected by protesters. Rallies in Kathmandu are less frequent and more peaceful, prompted mostly by fuel shortages and rising prices, lasting more than a couple of days.

Health Risk

Vaccinations required to enter the country

Proof of vaccination against yellow fever is required for all individuals traveling from a country with risk of yellow fever transmission.

Routine Vaccinations

Hepatitis A: A vaccine is available for anyone over one year of age. The vaccine may not be effective for certain people, e.g. those born before 1945 and who lived as a child in a developing country and/or have a past history of jaundice (icterus). These people can instead get a shot of immune globulin (IG) to boost their immunity against the disease.

Hepatitis B: A vaccine is available for children at least two months old.

Diphtheria-Tetanus-Polio: A booster shot should be administered if necessary (once every ten years).

Other Vaccinations

Typhoid Fever: If your travels take you to regions with poor sanitary conditions (for children two years old and up).

Rabies: For prolonged stays in an isolated region (for children from when they can walk).

Japanese Encephalitis: For stays of longer than one month in a rural zone during the rainy season (for children over the age of one). The vaccine is administered in a local medical facility.

Malaria: Recommended preventive medication - chloroquine and proguanil (sometimes marketed as Paludrine ) or proguanil and atovaquone (sometimes marketed as Mepron).

For Children: All standard childhood immunizations should be up-to-date. In the case of a long stay, the BCG vaccine is recommended for children over one month and the MMR (measles-mumps-rubella) vaccine for children over nine months.

Natural Risks

Nepal is a country subject to various natural hazards. In addition to earthquakes, violent storms are frequent and especially dangerous at high elevations. Monsoon season, which lasts from June to September, brings heavy rains that cause destructive floods and landslides every year (e.g. in August-September 2014). Casualties and disruptions to transportation are common throughout the country during this period, and roads and airports may be closed.

A deadly and destructive earthquake - magnitude 8.0 on the Richter scale, the most violent observed in the country for 80 years - struck the Kathmandu valley/capital region in late April 2015. The powerful earthquake and its various aftershocks resulted in at least 7000 deaths and destroyed several thousand homes, buildings, historic sites, and religious temples. Infrastructure (roads, bridges, electricity and water supplies, telecommunications) has also been severely damaged, limiting the Nepalese authorities' and international aid groups' ability to respond to the disaster (e.g., assistance to Internally Displaced Persons [IDPs], emergency services, reconstruction efforts). Two years later, the country is still recovering; traces of the tragedy remain apparent in infrastructure damages, including at tourist sites.

It should be noted that all non-essential travel to the districts of Gorkha, Dolakha, Sindhupalchok, Manaslu, and the Langtang Valley (north), where seismic tremors and aftershocks are observed, is discouraged.

Transportation

Ground transportation, as well as air travel, can prove dangerous. Roads are in poor condition and landslides are common. Electricity infrastructure is also poor, and outages are common. These transportation issues are further exacerbated by a general lack of resources and investment in infrastructure in Nepal.

Practical Information

Climate

The climate is tropical in the south, temperate in the valleys, and cold in the mountains.

The rainy season (monsoon) lasts from June until September, and rainfall is abundant and often torrential. During this time temperatures are elevated and mountain summits are foggy. The interior valleys and the northwest receive the least amount of rain during the monsoon season. From October until March, days are sunny and dry with violent winds on summits. In the Himalayas winters are cold and summers relatively cool.

Useful Numbers

Country Code: +977
Police, Fire Dept.: 4 247041 (this unit has been specifically created to help tourists in trouble, with the exception of traffic accidents).

Electricity

Voltage: 230 V ~ 50 Hz

Outlets:

Risk Level
Critical High Medium Low Minimal