Helanya and I spent six days in Lesotho just before Christmas. We had wanted a break from the usual South African holiday experience and booked a four day pony trek through the Mountain Kingdom. Starting at Malealea Lodge, about an hour South of Maseru, we trekked valleys, up mountains and down river gorges, spending three nights in remote villages. It was certainly not a luxurious holiday, but no less enjoyable.

Lesotho is still a predominantly agricultural country. 77% of the land is used for agriculture, ranked ninth in the world (South Africa is fifth with 88%), but only 8% of its GDP is from agricultural, 65th in the world (WDI 2011). This dependence on agricultural is obvious for any visitor; especially in the low-lying areas, maize is the staple crop, and nearly every inch of land that is not lost to erosion is under cultivation. In the higher mountain areas, pastoral goat and sheep farming is the primary economic activity, with mostly younger boys faithfully fulfilling their duty as herders (see picture). While the cultivated areas support larger villages, and perhaps higher standards of living, I was surprised to see that what must surely be surplus production each year does not translate into greater investments in physical and human capital, and resultant productivity increases in these areas. Asking our guide about this, he explains that the surplus is stored for winter and shared with those who might need it. Surely, though, competition would result in the better farmers winning and the weaker farmers losing land? No, not if the land belongs to the king. For the casual observer, land ownership certainly plays a critical role in inhibiting productivity improvements. Land sales in the rural areas are uncommon; even though Lesotho follows the British parliamentary model, the traditional leaders still have power in matters of land distribution. Foreigners are not allowed to own land. (Until recently, women were not allowed to either.) Without institutional changes, the current work of several development agencies in the country can at best only alleviate severe poverty; it cannot propel the country into a high-growth trajectory.

Even given its relative geographic disadvantages and small size, Lesotho is certainly a country that can be optimistic about the future. It has plenty of water, a resource that will only become more valuable. It also has plenty of fertile land. With some investment in infrastructure, the fruits of these two resources can be shipped globally. But to do that, the Basotho will have to allow (foreign) investment, will have to protect property rights and, perhaps, think about closer integration with South Africa. These changes will not be easy, but as the pony trek has taught me, hardship is not an infrequent visitor to the mountain people.