The agricultural economy has failed to make the transition from subsistence farming , and is still largely dependent on weather conditions. Despite its undeveloped nature, agriculture supplied 41 percent of the country's GDP in 1998. The industrial sector only involves a minority of the population. In recent years, successive governments have passed legislation intended to encourage investment and privatization. Industry contributed some 22 percent to GDP in 1998. In contrast to the stagnation in both these sectors, the service industry derives major impetus from tourism, where the Himalayan kingdom enjoys a comparative advantage rivaled by few other nations.
All told, the services sector contributed 37 percent to GDP in 1998. While the particular configuration of Nepal's topography and landlocked status have acted as limiting factors on the full development of its economy, this alone cannot explain the problems that continue to trouble a country with one of the highest per capita shares of foreign aid in the world today.