The Himalayan kingdom is one of the poorest countries in the world and has just returned to democracy after mass protests last month forced King Gyanendra to give up absolute power and reinstate parliament four years after he dissolved it.

Nepal has faced a decade-long insurgency by Maoist rebels, which has killed thousands; but the rebels say they will join talks with the new multi-party government to try to end the uprising.

Rameshore Prasad Khanal, joint secretary in the finance ministry, said: "Our preliminary estimates show that we will need about $1.2 billion for post-conflict reconstruction."
 
"We are appealing to everybody," said Khanal, who is representing Nepal at the ongoing 39th annual meeting of the Asian Development Bank in the southern Indian city of Hyderabad.

Exports, tourism

Nepal has a per capita annual income of just above $250 and up to 80% of its 26 million people depend on farming.

It also exports textiles, handicrafts, vegetable oil and carpets.

Remittances from overseas Nepalis bring in about $1.3 billion annually.

Tourism and aid are principle
sources of foreign exchange

Tourism and aid are two other principal sources of foreign exchange, but some donors slowed lending when the king cracked down on a campaign to restore democracy.

Tourist arrivals have also fallen because of the unrest.

Khanal said the immediate priority was to improve rural infrastructure and undertake rehabilitation of people affected by the conflict.

He said the government would soon launch a campaign to woo back tourists.

"The Tourism Board will launch the campaign soon in China and India and later in other countries."

Tourism accounted for about 4% of the country's $6.3 billion gross domestic product in 2004.

Hydro-electric power

Khanal said the government was also working on a strategy to boost hydro-electricity production to end chronic power shortages and wanted private sector firms from other countries to join in projects with the government.

He says the economy has the resilience to bounce back.

"(In) 1990 we grew close to 5.0% but in 2001 growth declined to 2.0%. Once the conflict is resolved we can clearly go up to 6.0% and maybe 7.0-8.0% later."