Nepal in Context Background Bordering two of the world’s fastest-growing economies – India and China – Nepal has eight of the world’s highest mountains, an abundance of natural resources (mainly fresh water), and multidimensional cultural heritage attracting tourists globally. Despite these enticing features, Nepal has not been able to tap into its growth potential due to prolonged political uncertainty, trade disruptions, and natural disasters (such as the twin earthquakes in 2015 and floods in 2017). Political instability had become a part of life for Nepali citizens, with the country changing its government up to 20 times since the introduction of democracy in 1990.1 That stated, Nepal has made significant progress on reforms with the adoption of a new Constitution in 2015, transitioning from a unitary to federal state, and election of a stable government. ● ● ● The country’s first-ever Local level elections for state assemblies and the Federal Parliament in 2017 marked a crucial and decisive move toward federalism and political stability. The new Constitution aims to turn around the economic and political situation, ensure double-digit economic growth over the next 10 years, 2 create an inclusive, pluralistic democracy, and mixedmarket economy. One of the key goals of the government is to graduate from its Least Developed Country (LDC) status by 2022 to become a middle-income economy by 2030.3 As such, the government has implemented several long-run policies and programs centered on the UN’s Sustainable Development Goals (SDGs). Macroeconomic Environment Nepal registered a steady GDP growth of 5% from 2010–2015. However, the massive earthquake of April 2015 significantly impacted the country’s economic development and GDP growth in FY 2015/16, dropping to 0.6%. 1 UNESCO 2 Constitution of Nepal, 2015 3 Envisioning Nepal 2030/ National Planning Commission, 2017 6