Developmental Economics Lesotho Is Like Other Developing

Developmental Economics

Lesotho is like other developing countries with respect to some of its characteristics which are common to most developing nations. For one foreign firm tend to have dominance in whichever sector they enter. For example even though Pakistan and India are known for their food, the local chains have been massively pressurized into submission by foreign chains like Pizza Hut, Burger King Etc. The same thing is happening with the textile industry of Lesotho. Secondly Lesotho is also faced with issues like political instability and disease and this is happening in most developing countries as their political environment is never stable and health is not a priority for government. World Bank and IMF can play an important role by offering loans for industry development and by suggesting monetary and fiscal regulations that would help build a better business environment.

The Regional Economy and Basic Industries:

Textile even though a sizeable sector of the economy doesn't account for much of the employment in the country. It is instead subsistence agriculture where 86% of Lesotho's 1.9 million populations is employed. Textile sector has more women workers than men. Mining and agriculture are other important sectors in the economy. Mining used to be a heavy employer with more than 112,000 people employed in that industry but when South Africa decided to replace half of the workforce with its own people, the employment contribution of mining industry was reduced significantly. Other major export of the country has been water and South Africa annually pays 180 million rand to get water from Lesotho. The country should invest more in upgrading its agriculture sector because that is an important part of the economy and it should also focus on development of mining industry. The country can gain competitive advantage in agriculture if it employs latest technology while it can also focus on improvement of hydropower stations and building dams that would allow for higher water exports and also take care of the electricity problems in the country.

Trade Barriers