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WEEKLY NEWSLETTER
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Nepal
Index
Figure 8. Nepal: Shares of Gross Domestic Product, 1989.
Source: Based on information from World Bank, Trends in Developing
Economies, 1990, Washington, 1990, 386.
During the 1950s and 1960s, Kathmandu received aid
commitments
from Moscow and Beijing. During the 1960s, Soviet and
Chinese aid
also supported development of a few government-owned
industries.
Most of the industries established used agricultural
products such
as jute, sugar, and tea as raw materials. Other industries
were
dependent on various inputs imported from other countries,
mainly
India.
As a result of the 1989-90 trade dispute with India,
many
inputs were unavailable, causing lower capacity
utilization in some
industries. During the same period, Nepal also lost India
as its
traditional market for certain goods. Because of the lack
of
industrial materials, such as coal, furnace oil,
machinery, and
spare parts, there was a considerable adverse impact on
industrial
production.
Industry accounted for less than 20 percent of total
GDP in the
1980s
(see
fig. 8). Relatively small by international
standards,
most of the industries established in the 1950s and 1960s
were
developed with government protection. Traditional cottage
industries, including basket-weaving as well as cotton
fabric and
edible oil production, comprised approximately 60 percent
of
industrial output; there also were efforts to develop
cottage
industries to produce furniture, soap, and textiles. The
remainder
of industrial output came from modern industries, such as
jute
mills, cigarette factories, and cement plants.
Data as of September 1991
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