main sources of foreign exchange.
Lebanon's economy made impressive gains since the launch in 1993 of
"Horizon 2000," the government's $20 billion reconstruction program.
Real GDP grew 8% in 1994, 7% in 1995, 4% in 1996 and in 1997, but
slowed to 1.2% in 1998, -1.6% in 1999, -0.6% in 2000, 0.8% in 2001,
1.5% in 2002, and 3% in 2003. During the 1990s, annual inflation
fell to almost 0% from more than 100%. Lebanon has rebuilt much of
its war-torn physical and financial infrastructure. The government
nonetheless faces serious challenges in the economic arena. It has
funded reconstruction by borrowing heavily - mostly from domestic
banks. In order to reduce the ballooning national debt, the
re-installed HARIRI government began an economic austerity program
to rein in government expenditures, increase revenue collection, and
privatize state enterprises. The HARIRI government met with
international donors at the Paris II conference in November 2002 to
seek bilateral assistance restructuring its domestic debt at lower
rates of interest. While privatization of state-owned enterprises
had not occurred by the end of 2003, massive receipts from donor
nations stabilized government finances in 2002-04.

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, but the government has strengthened its tax
system to reduce dependency on customs duties. Completion of a major
hydropower facility in January 1998 now permits the sale of water to
South Africa, also generating royalties for Lesotho. 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 and a
rapidly growing apparel-assembly sector. The economy is still
primarily based on subsistence agriculture, especially livestock,
although drought has decreased agricultural activity. The extreme
inequality in the distribution of income remains a major drawback.
Lesotho has signed an Interim Poverty Reduction and Growth Facility
with the IMF.

Liberia
Civil war and misgovernment have destroyed much of Liberia's
economy, especially the infrastructure in and around Monrovia. Many
businessmen have fled the country,