Lesotho Case Study
Lesotho Case Study
The Market and the Mountain Kingdom: Change in Lesotho’s Textile Industry
Apartheid and the resulting sanctions against South Africa are what ultimately created the textile industry in Lesotho. Aside from the workers that have historically worked across the border in South African mines, the arrival of the textile industry gave Lesotho its first real participation in the global economy. Otherwise the Lesotho economy consists mostly of subsistence farming. The textile industry gives Lesotho an opportunity to participate in trade with the rest of the world and ideally benefit from globalization. Geographically, Lesotho is uniquely landlocked and in a complete enclave of the country of South Africa. It is the abundance of affordable labor that has attracted clothing manufacturing firms, mostly from Asia that then bring the finished products to the world markets, primarily the United States and Europe. Lesotho has been an appealing location for textile manufacturing in part because of world trade agreements such as the Multi-Fiber Arrangement (MFA), the Lomé Convention and the African Growth and Opportunity act (AGOA). All of these trade agreements have expired or are set to expire in some capacity as of the writing of the subject case study, The Market and the Mountain Kingdom: Change in Lesotho’s Textile Industry written in November of 2006. I will be examining these trade agreements and other factors to determine the costs and benefits of each. Lesotho is at a crucial stage of economic development and the decisions that the government makes will affect the quality of life for the people of Lesotho for years to come. Through this examination of the past there are many lessons to be learned from these previous trade policies. In some ways, these policies benefit other countries more than Lesotho. Hopefully these lessons can be applied to a plan of action for the government of Lesotho. It is my recommendation that the government of
The Market and the Mountain Kingdom: Change in Lesotho’s Textile Industry
Apartheid and the resulting sanctions against South Africa are what ultimately created the textile industry in Lesotho. Aside from the workers that have historically worked across the border in South African mines, the arrival of the textile industry gave Lesotho its first real participation in the global economy. Otherwise the Lesotho economy consists mostly of subsistence farming. The textile industry gives Lesotho an opportunity to participate in trade with the rest of the world and ideally benefit from globalization. Geographically, Lesotho is uniquely landlocked and in a complete enclave of the country of South Africa. It is the abundance of affordable labor that has attracted clothing manufacturing firms, mostly from Asia that then bring the finished products to the world markets, primarily the United States and Europe. Lesotho has been an appealing location for textile manufacturing in part because of world trade agreements such as the Multi-Fiber Arrangement (MFA), the Lomé Convention and the African Growth and Opportunity act (AGOA). All of these trade agreements have expired or are set to expire in some capacity as of the writing of the subject case study, The Market and the Mountain Kingdom: Change in Lesotho’s Textile Industry written in November of 2006. I will be examining these trade agreements and other factors to determine the costs and benefits of each. Lesotho is at a crucial stage of economic development and the decisions that the government makes will affect the quality of life for the people of Lesotho for years to come. Through this examination of the past there are many lessons to be learned from these previous trade policies. In some ways, these policies benefit other countries more than Lesotho. Hopefully these lessons can be applied to a plan of action for the government of Lesotho. It is my recommendation that the government of
References: The Harvard Business Review (2006). The Market and the Mountain Kingdom: Change in Lesotho’s Textile Industry. Looming Difficulties, July 19th 2007, From the Economist Print Edition Read more at Suite101: The Rise and Demise of The Lomé Convention: An Experiment in Dialogue and Development Between Europe and Africa http://international-politics.suite101.com/article.cfm/the_rise_and_demise_of_the_lome_convention#ixzz0fd0IhNd9 African Growth and Opportunity Act data retrieved on 02/18/2020 from: http://www.agoa.gov/eligibility/apparel_eligibility.html Loti and Rand currency information retrieved on 2/17/2010 from: http://www.gocurrency.com/countries/lesotho.htm Info on the Lesotho Central Bank retrieved on 2/18/2010 from: www.centralbank.org.ls/ Peace Corps Data retrieved on 2/19/2010 from: http://www.peacecorps.gov/index.cfm?shell=learn.wherepc.africa.lesotho