iously damaged Lebanon's economic
infrastructure, cut national output by half, and all but ended
Lebanon's position as a Middle Eastern entrepot and banking hub. In
the years since, Lebanon has rebuilt much of its war-torn physical
and financial infrastructure by borrowing heavily - mostly from
domestic banks. In an attempt to reduce the ballooning national
debt, the Rafiq HARIRI government in the 1990s began an austerity
program, reining in government expenditures, increasing revenue
collection, and privatizing state enterprises, but economic and
financial reform initiatives stalled and public debt continued to
grow despite receipt of more than $2 billion in bilateral assistance
at the 2002 Paris II Donors Conference. The Israeli-Hizballah
conflict in July-August 2006 caused an estimated $3.6 billion in
infrastructure damage, and prompted international donors to pledge
nearly $1 billion in recovery and reconstruction assistance. Donors
met again in January 2007 at the Paris III Donor Conference and
pledged more than $7.5 billion to Lebanon for development projects
and budget support, conditioned on progress on Beirut's fiscal
reform and privatization program. An 18-month political stalemate
and sporadic sectarian and political violence hampered economic
activity, particularly tourism, retail sales, and investment, until
a new government was formed in July 2008.

Lesotho
Small, landlocked, and mountainous, Lesotho relies on
remittances from miners employed in South Africa and customs duties
from the Southern Africa Customs Union for the majority of
government revenue. However, the government has recently
strengthened its tax system to reduce dependency on customs duties.
Completion of a major hydropower facility in January 1998 permitted
the sale of water to South Africa and generated royalties for
Lesotho. Lesotho produces about 90% of its own electrical power
needs. As the number of mineworkers has declined steadily over the
past several years, a small manufacturing base has developed based
on farm products that support the milling, canning, leather, and
jute industries, as well as a rapidly expanding apparel-assembly
sector. The latter has grown significantly mainly due to Lesotho
qualifying for the trade benefits contained in the Africa Growth and
Opportunity Act. The economy is still primarily based on subsistence
agriculture, especially li