Saturday

Lesotho Economic Update | End Poverty

As uncertainty increases about where the global economy is headed and whispers grow about a "double-dip," spare a thought for Lesotho.

A small developing country (population less than 2 million), Lesotho is located in one of the most resource-poor parts of Southern Africa. Around 37% of households live on less than $1/day and about half are below the national poverty line. As a small and relatively undiversified economy, heavily dependent on foreign markets, Lesotho is very vulnerable to shocks. It is also ill-equipped to deal with them.

A small domestic market means that Lesotho perforce has to look to external markets for growth. It has done a reasonably good job of this, increasing its diamonds exports, selling water and power to South Africa , and exporting textiles to North America taking advantage of AGOA. These efforts have helped it transition from a predominantly subsistence economy to being at the verge of attaining middle income status today.

[source]