ABSTRACT
In this chapter, the authors summarize some of their main findings, with a particular emphasis on Lesotho's opportunities for economic development in the shadow of a surrounding South Africa. They discuss some of the most important issues that are likely to arise should the customs union agreement be renegotiated in the foreseeable future. The authors focus on some of the most important issues: revenue sharing, industrialization and labor mobility, followed by some speculations regarding the possible consequences for the customs union of the recent political liberalization in South Africa. The passive role of the British administration and the strategy of cooperation and economic and institutional integration with South Africa created dependence rather than economic autonomy. In the traditional theory of customs unions, the gains from integration derive from changes in the existing pattern of production and trade and improved exploitation of economics of scale, resulting in a more efficient utilization of productive resources.
