A mountainous and landlocked country entirely surrounded by South Africa, Lesotho is economically dependent on its larger neighbor. However, Lesotho is beginning to benefit from the export of energy from the recently completed Highlands Water Scheme. Elections in 1993 ended a period of military rule, but South Africa had to send in its troops when serious political unrest erupted in 1998.

The overwhelming majority of the population are Sotho, though there is a small community of European origin, as well as south Asian and Chinese minorities, which are active in the retailing business. Ethnic homogeneity and a strong sense of national identity have tended to minimize ethnic tension.

The export of male contract labor to South African mines means that women head 72% of households; they also run farming, regarded by Lesotho men as "women's work."

Strengths

Potential of educated workforce. Boom in textiles and other manufacturing. Membership of SACU. Future revenues from water sales.

Weaknesses

Dependent on South Africa. Weak agricultural sector. Loss of workers to mining in South Africa. Retail sector affected by sporadic disturbances. High unemployment.

The armed forces have been key political players in Lesotho since a bloodless coup in 1986. Although direct military rule ended in 1993, and a free and peaceful general election resulted in a sweeping victory for the Basotho Congress Party (BCP), the army maintained its powers over national security. Tensions between the army and the civilian administration escalated in 1994, when mutinous troops killed the deputy prime minister. King Moshoeshoe II was restored to the throne, and was succeeded by his son Letsie III in 1996.

Accusations of vote rigging and mass protests greeted a general election win in 1998 by the LCD. After an attempted coup in September, the South African military intervened to restore democracy, brokering an agreement between the king and Lesotho's 12 parties. When elections were finally held in 2002, the LCD retained its majority.

Foreign policy is dominated by the nature of Lesotho's relationship with South Africa. Lesotho currently has duty-free access to the EU for most manufactured goods, and also has preferential access to US and Scandinavian markets.

Lesotho's 2000-strong army relied on South African assistance to quell political violence in 1998.

The Highlands Water hydroelectric scheme has the capacity to supply all of Lesotho's energy requirements, as well as 63.3 cu. m (2200 cu. ft.) of water per second for South African use. Diamonds are mined in the northeast.

Climate and overgrazing have seriously eroded the land. The Highlands Water Scheme has flooded acres of peasant farmland. Supporters of this massive dam project stress encouragement for wildlife in reservoirs and on bird-friendly pylons.

Lesotho has to rely on South African road and rail outlets. New roads have been constructed to service the Highlands Water Scheme.

Private health organizations and NGOs account for half of all health services. A government-operated flying doctor service covers the highlands. An estimated 25% of the adult population is HIV positive and life expectancy is declining. Food shortages in 2002 exacerbated the country's health problems.

Lesotho has very high school enrollment levels and one of the highest literacy rates in Africa.

The 1998 political crisis increased crime levels, which previously were much lower than in South Africa.

Social mobility is limited in Lesotho; the ruling elite keeps a tight control on power and wealth. Over 90% of the population live below the poverty line and many are migrant laborers.

Tourists, mainly from South Africa, are attracted to Lesotho by its dramatic mountain scenery and for watersports on artificially created lakes. However, political violence in 1998 deterred many visitors.

As Basutoland, Lesotho became a British Crown colony in 1884.

• 1966 Independent kingdom.
• 1986 Military coup.
• 1990 King Moshoeshoe II exiled. Son installed as Letsie III.
• 1993 Free elections.
• 1994 Return of Moshoeshoe II.
• 1996 Letsie III succeeds to throne.
• 1998 New LCD wins polls. South Africa intervenes after coup attempt, and reconciles king and parties.
• 2002 Food emergency follows successive poor harvests. LCD wins long-postponed elections.