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FDI, AGOA and Manufactured Exports by a Landlocked, Least Developed African Economy: Lesotho

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  • Sanjaya Lall

Abstract

Lesotho, a resource-poor country located inside South Africa, is now Africa's largest exporter of apparel to the US. Its performance, very unusual for Africa, relies heavily on Asian investors and trade privileges. This article traces the origins of FDI in Lesotho and the determinants of its export competitiveness, showing that apparel production suffers from low productivity, poor skills and weak local links. Its prospects after AGOA (the African Growth and Opportunities Act) remain uncertain unless the government addresses these structural problems. Lesotho holds important lessons for industrial development in Africa, going beyond creating a good investment environment.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Journal of Development Studies.

Volume (Year): 41 (2005)
Issue (Month): 6 ()
Pages: 998-1022

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Handle: RePEc:taf:jdevst:v:41:y:2005:i:6:p:998-1022

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Cited by:
  1. Garth Frazer & Johannes Van Biesebroeck, 2010. "Trade Growth under the African Growth and Opportunity Act," The Review of Economics and Statistics, MIT Press, vol. 92(1), pages 128-144, February.
  2. Rotunno, Lorenzo & Vézina, Pierre-Louis & Wang, Zheng, 2013. "The rise and fall of (Chinese) African apparel exports," Journal of Development Economics, Elsevier, vol. 105(C), pages 152-163.
  3. Cornelia Staritz & Mike Morris, 2013. "Local embeddedness, upgrading and skill development: global value chains and foreign direct investment in Lesotho’s apparel industry," Brooks World Poverty Institute Working Paper Series ctg-2013-20, BWPI, The University of Manchester.
  4. Lawrence Edwards & Robert Lawrence, 2014. "AGOA Rules: The Intended and Unintended Consequences of Special Fabric Provisions," NBER Chapters, in: African Successes: Modernization and Development National Bureau of Economic Research, Inc.
  5. Sanjaya Lall & Manuel Albaladejo & Jinkang Zhang, 2004. "Mapping fragmentation: Electronics and automobiles in East Asia and Latin America," Oxford Development Studies, Taylor & Francis Journals, vol. 32(3), pages 407-432.
  6. Amendolagine, Vito & Boly, Amadou & Coniglio, Nicola Daniele & Prota, Francesco & Seric, Adnan, 2013. "FDI and Local Linkages in Developing Countries: Evidence from Sub-Saharan Africa," World Development, Elsevier, vol. 50(C), pages 41-56.
  7. Sanjaya Lall (QEH), . "Is African Industry Competing?," QEH Working Papers qehwps122, Queen Elizabeth House, University of Oxford.
  8. Cornelia Staritz, 2011. "Making the Cut? Low-Income Countries and the Global Clothing Value Chain in a Post-Quota and Post-Crisis World," World Bank Publications, The World Bank, number 2547, October.
  9. Phelps, Nicholas A. & Stillwell, John C.H. & Wanjiru, Roseline, 2009. "Broken Chain? AGOA and Foreign Direct Investment in the Kenyan Clothing Industry," World Development, Elsevier, vol. 37(2), pages 314-325, February.

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