Wells That Run Dry

Lesotho is undergoing a turbulent period: the results of the last elections in June 1998 were contested by the opposition, which obtained only 1% of the seats with one third of the votes. The strikes that followed led to mutiny in part of the army. On the basis of a military aid agreement, the SADC armies, under the aegis of South Africa, invaded the small mountain kingdom. The opposition carried out a scorched-earth policy, setting fire to the main buildings of Maseru before the foreign troops arrived to re-establish the government.

The Kingdom of Lesotho used to be an enclave in an ocean of apartheid. Some embassies, which refused the South African system of the time, had established their headquarters there. Lesotho received significant amounts of aid from every provider of funds. The political changes in South Africa have made it a country that people can now associate with and Lesotho is experiencing the departure of the large embassies and their aid programmes in the direction of Pretoria.

The European Union is the leading provider of funds. It has financed the construction of a hydroelectric energy plant which should allow Lesotho to be energy self-sufficient and even to sell it to their powerful neighbour.

Lesotho is going through a serious economic crisis. The easing of international trade restrictions has come at a troubled time, generating a lack of confidence in the private sector. In this highly centralised state, imagining a favourable macro-economic context for a market economy is almost impossible - taxation, business law, banking systems. Instead, the providers of funds often impose their priorities, ranging from the environment to gender problems, whereas the country is not even running properly.

Lesotho’s chief asset lies in the low cost of labour (30% less expensive)compared to South Africa. But the overcharge on basic services, the lack of technical training and the country’s isolation negatively offset this situation.

The drop in South African mining activity has dried up the country’s main source of income, as most of its men benefited by going to work there.

Re-establishing confidence must be done through the political process. New elections should be taking place, but before they do, the electoral system must be changed to allow for better representation or even greater sharing of power.

Political cleavages run very deep and confirm religious divisions between Catholics and Protestants, and divisions between intellectuals and traditional chiefs.

The involvement of the Delegation of the European Union in micro-projects has been highly eclectic. In co-operation with schools or churches, small projects to improve infrastructure have yielded positive results. On the other hand, the support for economic activities given to small groups has had very limited impact. These initiatives seldom have the support of a dynamic group and their impact remains micro-local. When meeting with the actors in the field, one realises that everyone has mastered"development-speak"in the villages.

With a limited number of expatriates (about ten), the EUD’s expenditures were 4 times higher than those of the United Nations, which employs 10 times more people.

There are still good local human resources and corruption has remained marginal.

In general, Lesotho puts European aid to good use, but it does not try to take advantage of the various possibilities of funding. Small-scale manufacturing and rural development are the two sectors in which the most progress could be made, provided that trust is re-established and private operators -farmers or entrepreneurs- are allowed to take charge of these sectors.