This Report discusses the state of human development in Lesotho at the turn of this new millennium. Almost seven years into this century, Lesotho has been faced with a combination of problems that do not seem to be amenable to easy solution, and that threaten to hold back, even reverse, its socio -economic progress. The nexus of the mutually reinforcing effects of chronic poverty, inequality and food insecurity is being compounded by the impact of the pervasive and growing HIV epidemic.