Central Development Region

The Central Development Region contains the Kathmandu Valley—Nepal's political, economic, and cultural heartland that generates a disproportionate share of national output and absorbs most development investment. This 1970s planning designation was replaced by provinces in 2015 but remains useful for understanding Nepal's stark regional disparities. The region receives significantly higher remittances than poorer areas, and its road density exceeds 50 kilometers per 100 square kilometers compared to under 20 in the far west. Kathmandu, Lalitpur, and Bhaktapur form the historic valley core, while the Terai lowlands to the south provide agricultural hinterland. The concentration creates Nepal's most acute urban-rural divide: seven UNESCO World Heritage monuments within the valley, international air connections, university education, and government services contrast sharply with villages a few hours away lacking electricity. Private consumption drives 80% of Nepal's GDP, and this region captures the largest share of that spending. The region's dominant position raises federalism questions: how can provincial governments compete when the center holds such accumulated advantage? By 2026, the Central Development Region's trajectory depends on whether federal restructuring redistributes resources, whether Kathmandu's infrastructure can handle continued in-migration, and whether the region's concentration of educated youth translates into productivity growth or just more emigration to Gulf states.