Narrow, diesel-choked streets wind through Nepal's capital, Kath-mandu, past carved wooden temples, with gods and goddesses in passionate embrace. The chaotic din of the city's streets presents a stark contrast to the still, graded Himalayan foothills and the magnificent peaks beyond.

Since the 1960s Westerners have been drawn to Nepal for its ancient unyielding culture and its breathtaking landscapes. The country has changed enormously since then, politically, environmentally and socially. The 1990s have witnessed Nepal, on shaky and uncertain legs, attempting to climb to its feet with a new democracy.

Traditionally, Nepal was ruled by an ineffective monarchy. In the 1950s the first experiments with democracy were largely unsuccessful and in 1962 King Mahendra introduced the Panchayat system, prohibiting political parties and surrendering Nepal back to the power of the palace.

In 1979 an often violent national protest movement began and finally on 9 November 1990 it succeeded in achieving a new constitution, with King Birendra as constitutional monarch.

Since the first election in May 1991, won by the Nepali Congress, the political system has been plagued by corruption and internal strife; several coalition governments have formed and disintegrated, contributing to an ever-increasing sense of political insecurity. The latest of these coalitions was the unlikeliest, as pragmatic Congress joined forces with the Communist Party of Nepal/United Marxist-Leninist. The experiment lasted less than a year and in the latest elections this May Congress won an overwhelming majority with the Communists again in opposition.

The elections saw approximately ten people killed and accusations of corruption - as well as threatened violence in outlying areas by Maoist terrorist groups - though both politicians and the Nepalese media described the election as 'peaceful'.

Congress has made some positive changes in Nepal, with falling infant-mortality rates, improved medical facilities and increased access to clean water. Despite this, 60 per cent of the population still lives in poverty. Government strategies have so far mainly benefited the urban population and though a still-powerful aristocracy is now mingling with a new business élite, the gap between rich and poor remains substantial. Nepal has higher levels of child malnutrition than its main South Asian neighbours, as well as weaker health facilities - not to mention the worst adult-literacy rate in the world.

A growing population, depleting resources, increased development and impossible terrain, mean that life is getting tougher for those in rural villages. Environmental devastation has slowed down recently, but Nepalese soil and forests are still being exploited at alarmingly unsustainable levels. Most of Nepal's population is dependent on agriculture and the worsening conditions are forcing large numbers of peasant families to leave their land for an urban existence in Kathmandu and other centres.

In contrast, farming families in the Terai region (along the border with India) will often demonstrate great dignity in refusing to grow cash crops, claiming that it is sufficient to have food, shelter and access to maybe a radio and a bike.

The outlook is not all bleak: the Nepalese poor now have a political voice and though corruption is still a problem, they have increased power to choose who governs them. Although Nepal's flailing democracy has achieved limited success so far, it is still preferable to its autocratic past.

Suzanne Strong

AT A GLANCE

LEADER: Prime Minister: Krishna P Bhattarai; Head of State: King Birendra. ECONOMY: GNP per capita $210 (India $380; Japan $40,940). Monetary unit: Rupee. Main exports: Woollen carpets and garments, jute products, hides, handicrafts. Publicity on the use of child labour in carpet making hit exports in 1995 but sales recovered the following year (without much change on the child-labour front). PEOPLE: 22.6 million. HEALTH: Infant mortality 75 per 1,000 births (South Asian average 78, Australia 5). Until recently Nepal was one of very few countries where men's life expectancy was greater than that of women: now they are just equal. CULTURE: The Nepalese descend from Indian, Tibetan and Mongolian migrants. Nepalese 53%; Bihari 18%; Tharu 5%; Tamang 5%; Newar 3%. Religion: Hindu 86%; Buddhist 8%; Muslim 4%. But the dominant Hindu faith has been heavily influenced by both Tibetan Buddhism and animism. Language: Nepali (official). But half the population speak their cultural language first. Sources The Economist Intelligence Unit; The World Guide 1999-2000; State of the World's Children 1999; Kathmandu Post & The Rising Nepal April - May 1999. Previously profiled January 1988