Nepal has continually sought to establish good relations and an identity with the world community. However, because most countries recognized the primacy of India's leadership in the region, Nepal's continued efforts to expand its international activities, were of little use in solving its problems with India.

Nepal's contacts with the oil-rich Arab countries had increased in the late 1980s. A number of Nepalese citizens worked in several Middle Eastern countries, particularly the United Arab Emirates and Kuwait, and remittances from Nepalese nationals were a source of hard currency. Nepal was one of the first South Asian countries to condemn Iraq's aggression and takeover of Kuwait in August 1990. Kuwait also was an important source of development aid to Nepal.

Of the West European countries, the Federal Republic of Germany (West Germany) was Nepal's largest donor and, through 1986, provided more than Rs5.6 billion in economic and technical assistance for more than forty different projects ranging from health programs to hydroelectricity. France also had a role in assisting economic development. During the 1990 prodemocracy movement, France expressed its readiness to write off all its loans to Nepal amounting to US$25 million as a gesture of goodwill. The Swiss government also indicated its support of the movement and that it would probably increase its aid.

Nepal also sought to improve its international status by emphasizing its religious connections. In 1983 Nepal enlisted its support for the International Lumbini Development Project to present Lumbini, the birth place of Siddhartha Gautama, the Buddha, as a symbol of peace. Nepal continued to highlight its role as the only Hindu kingdom in the world (as stipulated in the constitution) by periodically convening the World Hindu Meet. Nepal also hosted meetings of The World Fellowship of Buddhists in Kathmandu.

Data as of September 1991