Lesotho began a structural economictransformation in the early 1990s. The transformation hasbrought higher, more secure incomes to households while thegovernment succeeded in dramatically improving access toservices such as education, health, water, andtransportation. Yet today, Lesotho faces a number of seriousdevelopment challenges, including a high rate of chronicpoverty, entrenched income inequality, and most troublingone of the highest HIV/AIDS prevalence rates in the world.This report focuses on three main areas: i) livelihoodpatterns among Lesotho's households and how thesecorrelate with opportunity and exclusion; ii) how thegovernment could make access to public services and overallsocial development more equitable; and iii) how the economicand social vulnerabilities of households, includingHIV/AIDS, could be alleviated in order to reduce poverty. Inthis report concludes that it is possible for Lesotho toreduce poverty and to continue its transition to aneconomically diverse middle-income country by undertakingthree key strategies: continuing to develop the investmentclimate for labor-intensive production; implementingprograms to support commercial agriculture and reduce landdegradation in rural areas; and developing a strategy tosupport socioeconomic and geographic mobility of workersinto higher-productivity sectors. Public funds should bebetter targeted towards assisting the poor to build humancapital and manage risks. Other recommendations to improvethe plight of the people of Lesotho include creating a moreequitable and inclusive society, especially for women, anddeveloping a more effective campaign against HIV/AIDS.
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