Identifier
Created
Classification
Origin
07MASERU595
2007-11-02 08:00:00
UNCLASSIFIED
Embassy Maseru
Cable title:
LESOTHO OCTOBER 2007 ECONOMIC ROUNDUP: JOB LOSSES,
how-toVZCZCXRO6156 RR RUEHBZ RUEHDU RUEHJO RUEHRN DE RUEHMR #0595/01 3060800 ZNR UUUUU ZZH R 020800Z NOV 07 FM AMEMBASSY MASERU TO RUEHC/SECSTATE WASHDC 3432 INFO RUCNSAD/SADC COLLECTIVE RUEHMR/AMEMBASSY MASERU 3833
UNCLAS SECTION 01 OF 02 MASERU 000595
SIPDIS
SIPDIS
DEPT ALSO FOR AF/S, AF/EPS;
E.O. 12958: N/A
TAGS: ECON EAGR PGOV EIND ETRD LT
SUBJECT: LESOTHO OCTOBER 2007 ECONOMIC ROUNDUP: JOB LOSSES,
SUBSIDIES, AND FIGHTING CORRUPTION
REF: Maseru 589
MASERU 00000595 001.2 OF 002
October Issues:
- Textile Industry Loses 1,800 Jobs
- GOL Spends US$1.5 Million to Subsidize Staple Foods
- U.S. Embassy Supports National Nutrition Survey
- Anti-Corruption Groups Join Forces
---------------------------------
Textile Industry Loses 1,800 Jobs
---------------------------------
UNCLAS SECTION 01 OF 02 MASERU 000595
SIPDIS
SIPDIS
DEPT ALSO FOR AF/S, AF/EPS;
E.O. 12958: N/A
TAGS: ECON EAGR PGOV EIND ETRD LT
SUBJECT: LESOTHO OCTOBER 2007 ECONOMIC ROUNDUP: JOB LOSSES,
SUBSIDIES, AND FIGHTING CORRUPTION
REF: Maseru 589
MASERU 00000595 001.2 OF 002
October Issues:
- Textile Industry Loses 1,800 Jobs
- GOL Spends US$1.5 Million to Subsidize Staple Foods
- U.S. Embassy Supports National Nutrition Survey
- Anti-Corruption Groups Join Forces
--------------
Textile Industry Loses 1,800 Jobs
--------------
1. In October, representatives of Lesotho's textile industry
acknowledged the retrenchment of 1,800 workers from three major
factories. Lesotho's textile industry faces increasing
challenges due to the rise in global garment and textile
competition following the recent removal of many quotas on
Chinese products. The president of the Factory Allied Workers
Union indicated that Lesotho's exports currently do not compete
well with Chinese products in terms of quality, price, or
timeliness of delivery to the United States market. He further
noted that labor rates in Lesotho are higher than in China, and
that China's textile industry is technologically more advanced
that the industry in Lesotho. Under AGOA, Lesotho has had
considerable success in accessing the U.S. market. Despite the
recent decline in employment, Lesotho's garment and textile
sectors employ some 40,000 workers.
-------------- --------------
GOL Spends US$1.5 Million to Subsidize Staple Foods
-------------- --------------
2. In response to rising food prices caused by drought
conditions, the Government of Lesotho has embarked on a major
food subsidy program. To counter food inflation (reftel),
especially with regard to maize meal, milk, and grains, the
government has provided approximately US$1.5 million(M10
million) to subsidize grains and milk prices nationally.
Government subsidies have lowered the price of 80 kilograms of
maize meal from US$34 to US$26. Furthermore, all value added
taxes have been dropped on subsidized products so long as they
are not exported. The subsidies are set to expire in March 2008.
3. The price of milk now averages 60% higher than one year ago,
and the price of maize increased by 50% over last year. This
situation is anticipated to last throughout the 2007/2008
harvest period. In addition to subsidies, the Government of
Lesotho is attempting to deal with the situation through the
acceptance of international food aid donations. In addition to
the effect of drought conditions, increasing international oil
prices have also driven up food prices by raising transportation
costs.
-------------- --
U.S. Embassy Supports National Nutrition Survey
-------------- --
4. Following Embassy Maseru's declaration of a food insecurity
disaster in July 2007, USAID will provide financial support to
facilitate a National Nutrition Survey in Lesotho. The survey
aims to glean nutritional data necessary for the Government of
Lesotho (GOL) and the international donor community to
adequately respond to the current food crisis. The study's
primary objective is to evaluate the malnutrition rate of
children between the ages of 6 and 59 months, providing a
MASERU 00000595 002.2 OF 002
baseline for a new nutrition surveillance system in Lesotho.
The survey will also retrospectively calculate the mortality
rate in Lesotho's population under five years of age. The
survey results will identify the nation's most vulnerable
communities and households and the most important risk factors
threatening their nutritional security. The survey is a joint
effort between the GOL (through the Disaster Management
Authority) and development partners including World Vision,
UNICEF, Action Against Hunger, and the USG.
--------------
Anti-Corruption Groups Join Forces
--------------
5. On October 11, the Chief Executive Officer of the Lesotho
Institute of Accountants (LIA) and the Director General of the
Directorate on Corruption and Economic Offenses (DCEO) signed a
Memorandum of Understanding in Maseru to create a framework for
cooperation in their mutual fight against corruption. The two
bodies will coordinate their work against corruption in both the
public and private sectors. The MOU stipulates that DCEO will
outsource specialized assignments, such as the auditing of firms
and individual accountants, to LIA members when appropriate.
DCEO committed to assisting the LIA to provide continuing
professional training to its members so that they can achieve
world investigative standards on their cooperative work with
DCEO.
NOLAN
SIPDIS
SIPDIS
DEPT ALSO FOR AF/S, AF/EPS;
E.O. 12958: N/A
TAGS: ECON EAGR PGOV EIND ETRD LT
SUBJECT: LESOTHO OCTOBER 2007 ECONOMIC ROUNDUP: JOB LOSSES,
SUBSIDIES, AND FIGHTING CORRUPTION
REF: Maseru 589
MASERU 00000595 001.2 OF 002
October Issues:
- Textile Industry Loses 1,800 Jobs
- GOL Spends US$1.5 Million to Subsidize Staple Foods
- U.S. Embassy Supports National Nutrition Survey
- Anti-Corruption Groups Join Forces
--------------
Textile Industry Loses 1,800 Jobs
--------------
1. In October, representatives of Lesotho's textile industry
acknowledged the retrenchment of 1,800 workers from three major
factories. Lesotho's textile industry faces increasing
challenges due to the rise in global garment and textile
competition following the recent removal of many quotas on
Chinese products. The president of the Factory Allied Workers
Union indicated that Lesotho's exports currently do not compete
well with Chinese products in terms of quality, price, or
timeliness of delivery to the United States market. He further
noted that labor rates in Lesotho are higher than in China, and
that China's textile industry is technologically more advanced
that the industry in Lesotho. Under AGOA, Lesotho has had
considerable success in accessing the U.S. market. Despite the
recent decline in employment, Lesotho's garment and textile
sectors employ some 40,000 workers.
-------------- --------------
GOL Spends US$1.5 Million to Subsidize Staple Foods
-------------- --------------
2. In response to rising food prices caused by drought
conditions, the Government of Lesotho has embarked on a major
food subsidy program. To counter food inflation (reftel),
especially with regard to maize meal, milk, and grains, the
government has provided approximately US$1.5 million(M10
million) to subsidize grains and milk prices nationally.
Government subsidies have lowered the price of 80 kilograms of
maize meal from US$34 to US$26. Furthermore, all value added
taxes have been dropped on subsidized products so long as they
are not exported. The subsidies are set to expire in March 2008.
3. The price of milk now averages 60% higher than one year ago,
and the price of maize increased by 50% over last year. This
situation is anticipated to last throughout the 2007/2008
harvest period. In addition to subsidies, the Government of
Lesotho is attempting to deal with the situation through the
acceptance of international food aid donations. In addition to
the effect of drought conditions, increasing international oil
prices have also driven up food prices by raising transportation
costs.
-------------- --
U.S. Embassy Supports National Nutrition Survey
-------------- --
4. Following Embassy Maseru's declaration of a food insecurity
disaster in July 2007, USAID will provide financial support to
facilitate a National Nutrition Survey in Lesotho. The survey
aims to glean nutritional data necessary for the Government of
Lesotho (GOL) and the international donor community to
adequately respond to the current food crisis. The study's
primary objective is to evaluate the malnutrition rate of
children between the ages of 6 and 59 months, providing a
MASERU 00000595 002.2 OF 002
baseline for a new nutrition surveillance system in Lesotho.
The survey will also retrospectively calculate the mortality
rate in Lesotho's population under five years of age. The
survey results will identify the nation's most vulnerable
communities and households and the most important risk factors
threatening their nutritional security. The survey is a joint
effort between the GOL (through the Disaster Management
Authority) and development partners including World Vision,
UNICEF, Action Against Hunger, and the USG.
--------------
Anti-Corruption Groups Join Forces
--------------
5. On October 11, the Chief Executive Officer of the Lesotho
Institute of Accountants (LIA) and the Director General of the
Directorate on Corruption and Economic Offenses (DCEO) signed a
Memorandum of Understanding in Maseru to create a framework for
cooperation in their mutual fight against corruption. The two
bodies will coordinate their work against corruption in both the
public and private sectors. The MOU stipulates that DCEO will
outsource specialized assignments, such as the auditing of firms
and individual accountants, to LIA members when appropriate.
DCEO committed to assisting the LIA to provide continuing
professional training to its members so that they can achieve
world investigative standards on their cooperative work with
DCEO.
NOLAN