The LHWP is a typical scenario where there are “huge benefits to a few with few benefits to the many”. In every situation involved with globalization, there are costs and benefits which have to be evaluated before a firm decision is made. In this case, different people may argue that the benefits exceed the costs, while others will argue otherwise. Considering the fact that many people in South Africa and the South African industry is benefiting from just the first phase of this project, wouldn’t we all agree that this project has a lot of benefits (in terms of the number of people it i helping)? Furthermore, we have the World Bank giving us all these figures, claiming that, 4.8% of Lesotho’s GDP was from the first phase of the project, 9,000 local jobs have been created, amongst others.
On the other hand, we have all these poor people telling us about how they were forced to move from their homes with the hopes of moving into better, if not equal living conditions, people contracting HIV/AIDS. These people were obviously part of the population of Lesotho that fall in the lower class. The initiation of just the first part of the project caused so many people’s living situations to get worse. The implementation of the next three phases could cause far more detrimental effects to the lower classes. It is interesting to note that, although the GDP rose by 4.8%, the income gaps probably worsened, with the rich getting richer, and the poor getting poorer.
The social costs seem to outweigh the benefits in Lesotho, but how can we tell? What instruments can be used to measure if the project has caused more harm than good? Economic growth evidence seems to support the fact that it has done more to benefit the Lesotho people than to harm them. How can we tell if this project is even worth it in the first place?
(click on link below to see full economic breakdown)