	Recent Developments

		Earthquake

A 7.8 magnitude earthquake struck the Central and Western Regions of Nepal on April 25, 2015. An estimated half a million homes were destroyed. A Nepal National Reconstruction Authority was established by ordinance, but reportedly has been slow to distribute the approximately $4 billion pledged for reconstruction at an international donors conference held in June 2015. New Constitution

Many observers believe the devastation wrought by the April 2015 earthquake acted as an impetus for the second Constituent Assembly, elected in 2013, to reach agreement on a new constitution. United States-Nepal Relations

The United States recognized an independent Nepal in 1947 and established diplomatic ties in 1948. Relations between the two nations are described by the State Department as friendly. As such, it has a great need for economic development and foreign assistance. The caucus serves as "an informal group of Members dedicated to educating the American public and policymakers on U.S. policy objectives toward Nepal including supporting democratic institutions and economic liberalization, promoting peace and stability in South Asia, supporting Nepalese territorial integrity, and alleviating poverty and promoting development." Unrest in the Terai

An estimated 45 people were killed in violent protests over the Nepali constitution in August and September 2015. This has led to severe fuel shortages in Nepal, which Kathmandu has blamed on India. Transport linkages between Nepal and China are limited at present. The view reportedly held by many in Nepal—that the agitation in the Terai is in some way backed by India—may well have the effect of delegitimizing Madhese or Tharu demands in the eyes of much of the rest of the country. In November 2006, the Seven Party Alliance and the Maoists reached a peace agreement, ending a decade-old insurgency that claimed over 13,000 lives. A second CA was elected in 2013 to draft a new constitution. The Economy

Nepal's economy faces the twin challenge of rebuilding after the April 2015 earthquake while also dealing with the economic impact of the political unrest in the Terai that is limiting cross-border trade with India. Rebuilding damaged and destroyed housing and infrastructure caused by the earthquake will likely take years. Hydropower

Nepal's substantial hydropower potential is viewed by many analysts as an important means of stimulating economic growth and development. With 6,000 rivers of various sizes, many with steep gradient, Nepal is estimated by some to have 40,000 MW of hydropower potential. Human Rights

There are a number of human rights concerns about Nepal. This led to over 100,000 Lhotshampa refugees in Nepal by 2006. Diplomatic pressure from China following a wave of protests across the Tibetan plateau in 2008 led the government of Nepal to suppress Tibetan political activism in Nepal and, according to HRW, "Restrictions on Tibetans' rights in Nepal and on the Nepal-China border have grown much more stringent since 2008." The Environment

Nepal can be divided ecologically into the lowland Terai, the intermediate hill, and mountainous Himalaya regions. Global Climate Change Initiative. External Affairs

Nepal is a landlocked geopolitical buffer state, like nearby Bhutan, that is situated between two Asian giants. Nepal's reliance on these two huge neighbors leads it to seek amicable relations with both, though trade, religious, and cultural ties with India have historically been closer. To some observers it appears that India will have to change its policy if it wishes to remove incentives for Nepal to seek to further develop its energy, trade, and other linkages with China. Nepal-China Relations

China has in recent years made significant inroads in developing ties with South Asian and Indian Ocean littoral states.
Nepal is a poor country of an estimated 31 million people that has undergone a radical political transformation since 2006, when a 10-year armed struggle by Maoist insurgents, which claimed at least 13,000 lives, officially came to an end. The country's king stepped down in 2006, and two years later Nepal declared itself a republic, electing a Constituent Assembly (CA) in 2008 to write a new constitution. A second CA elected in 2013 reached agreement on a new constitution in September 2015. Though the process of democratization begun in 2006 has had setbacks and has been marked by violence, Nepal has conducted reasonably peaceful elections, brought former insurgents into the political system, and, in a broad sense, taken several large steps toward establishing a functioning democracy.
New provincial demarcations contained in the new constitution, along with other provisions, have met with opposition by the minority Madhese people of the lowland Terai border region with India. This has led to violent protests and disruptions to cross-border trade that have led to economic hardship and fuel shortages in Nepal. Kathmandu has asserted that the Indian government is playing a role in this unrest. Some media coverage described this as an unofficial blockade of Nepal. In part as a result of these developments, Nepal is seeking closer energy and trade linkages with China.
Among the drivers of congressional interest in Nepal are the country's still-unfolding democratization process, geopolitical and humanitarian concerns, and its location as a landlocked state situated between India and China. The United States and Nepal established diplomatic ties in 1948 and relations between the two countries are friendly. U.S. policy objectives toward Nepal include supporting democratic institutions and economic liberalization, promoting peace and stability in South Asia, supporting Nepalese territorial integrity, alleviating poverty, and promoting development.
Nepal's status as a relatively small, landlocked buffer state situated between India and China largely defines the context of its foreign policy. This geopolitical dynamic is changing somewhat as Nepal appears to be the site of more intense diplomatic and economic activity by both India and China. Historically, Nepal's ties with India have been closer than its ties with China. Recent developments in the Terai, however, have encouraged Nepal to seek closer relations with China. China is developing trade, transport and development linkages with Nepal and has reportedly pressured Nepal to constrain the activities of Tibetan refugees in Nepal.
Nepal was devastated by a massive 7.8 magnitude earthquake on April 25, 2015. The disaster killed over 8,000 and destroyed much of Nepal's housing and infrastructure. By one estimate, over half a million homes were destroyed. Reconstruction costs are estimated by some at $7 billion. The devastation wrought by the earthquake is compounded by economic hardship stemming from the ongoing discontent in the Terai. An international donors conference held in June 2015 led to significant pledges of assistance to help Nepal rebuild.
Nepal faces other challenges, as well as potential opportunities. Trafficking remains a key human rights concern. Nepal also faces challenges related to demographic and climate change driven pressures on the environment. Nepal has extensive and underutilized hydropower potential that, if developed, could hold the promise of improved economic development for the nation.