As with many developing nations, Lesotho must reconcile population growth with limited agricultural, infrastructure, and monetary resources. An isolated geographic location lacking access to the sea, overgrazing, and soil erosion are other severe problems. Failure to reverse these trends will impose severe economic hardship.
The AIDS epidemic, political unrest, and declining migrant remittances from South Africa also cloud the future. Ironically, South Africa's adroit transition to majority rule made that country more attractive to foreign investment and ended Lesotho's role as an island of racial freedom. As a result, foreign assistance was reduced and, in many cases, redirected to healing wounds in South Africa.
There are 3 phenomena that will largely determine Lesotho's future. First, the Highlands Water Project must continue expanding to generate more profit, domestic power and reliable employment. Second, sustaining political stability to attract additional foreign enterprise is critical to grow employment and domestic capital. Finally, achieving zero population growth through family planning (instead of HIV/AIDS and outmigration) will reduce pressure on agricultural and grazing lands. Accomplishing these objectives will situate this tiny nation in an excellent position to prosper when Africa begins to fully industrialize later this century.