Nepal is among the poorest and least developed countries in the world with almost one-third of its
population living below the poverty line. Agriculture is the mainstay of the economy, providing a
livelihood for three-fourths of the population and accounting for 38% of GDP. Industrial activity mainly
involves the processing of agricultural produce including jute, sugarcane, tobacco, and grain. Security
concerns relating to the Maoist conflict have led to a decrease in tourism, a key source of foreign exchange.
Nepal has considerable scope for exploiting its potential in hydropower and tourism, areas of recent foreign
investment interest. Prospects for foreign trade or investment in other sectors will remain poor, however,
because of the small size of the economy, its technological backwardness, its remoteness, its landlocked
geographic location, its civil strife, and its susceptibility to natural disaster.