PIP: Focus in this discussion of Nepal is on the following: geography; the people; history; the government; political conditions; the economy; defense; foreign relations; and relations between Nepal and the US. In 1986 the population was estimated to be 17 million with an annual growth rate of 2.6%. The Nepalese are descendants of 3 major migrations from India, Tibet, and Central Asia. About 1/3 of the population lives in the Terai -- about 20% of the land area -- while 2/3 live in the central or hilly region. Officially, Nepal is a Hindu kingdom, but Hinduism has been influenced by and has had an influence on a large Buddhist minority. The result is a synthesis of the 2 religions. Modern Nepal was created in the latter half of the 18th century when Prithvi Narayan Shah, the ruler of the small principality of Gorkha, formed a unified country from a number of independent hill states. Efforts were made throughout the 1950s to frame a constitution for Nepal which would establish a representative form of government, patterned on a modified British model. Such a constitution was issued by King Mahendra in early 1959, and the 1st democratic elections were held for a national assembly shortly thereafter. According to the constitution, the king (chief of state) is the sole source of authority for all government institutions, exercising broad powers over the country's partyless "panchayat" (councils) system of government. In April 1986, Prime Minister Chand and his cabinet resigned in order to contest the elections for the second 5-year term of the directly elected National Panchayat, and an interim cabinet was appointed to oversee the Mah elections. The election brought the defeat of a majority of the incumbents seeking relations. Despite the 1980 referendum confirming the partyless panchayat system, the role of the banned parties continues to be an important political issue. Nepal, which ranks among the world's poorest countries, has a per capita income of about $160. Due to government efforts and substantial amounts of external assistance, mainly from China, India, and the US, a start has been made toward laying the foundation for economic growth. Nepal's military establishment consists of an army of about 30,000 troops. The country's foreign policy focuses on China and India, and Nepal has worked to develop and maintain a policy of close and friendly relations with both countries. Relations between Nepal and the US have been friendly since their formal establishment in 1947. The US has provided over $300 million in economic assistance since 1951.