ctivity. 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 government mismanagement have destroyed much
of Liberia's economy, especially the infrastructure in and around
Monrovia. Many businessmen have fled the country, taking capital and
expertise with them. Some have returned, but many will not. Richly
endowed with water, mineral resources, forests, and a climate
favorable to agriculture, Liberia had been a producer and exporter
of basic products - primarily raw timber and rubber. Local
manufacturing, mainly foreign owned, had been small in scope.
President JOHNSON SIRLEAF, a Harvard-trained economist, has taken
steps to reduce corruption, build support from international donors,
and encourage private investment. An embargo on timber exports has
been lifted, opening a source of revenue for the government, but
diamonds remain under UN sanctions. The reconstruction of
infrastructure and the raising of incomes in this ravaged economy
will largely depend on generous financial support and technical
assistance from donor countries.

Libya
The Libyan economy depends primarily upon revenues from the
oil sector, which contribute about 95% of export earnings, about
one-quarter of GDP, and 60% of public sector wages. Substantial
revenues from the energy sector coupled with a small population give
Libya one of the highest per capita GDPs in Africa, but little of
this income flows down to the lower orders of society. Libyan
officials in the past four years have made progress on economic
reforms as part of a broader campaign to reintegrate the country
into the international fold. This effort picked up steam after UN
sanctions were lifted in September 2003 and as Libya announced in
December 2003 that it would abandon programs to build weapons of
mass destruction. Almost all US unilateral sanctions against Libya
were removed in April 2004, helping Libya attract more foreign
direct investment, mostly in the energy sector. Libyan oil and gas
licensing rounds continue to draw high international interest. Libya
faces a long road ahead in liberalizing the socialist-oriented
economy, but initial steps - including applying for WTO membership,
reducing some subsidies, and announcing plans for privatization -
are laying the groundwork