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Globalisation - why a majority cannot join
Why does globalisation seem to work for countries like Switzerland, but bring little benefit to the majority of the world's population? Award-winning economist Hernando de Soto, a key participant at this week's meeting of the World Economic Forum in Davos, shares his thoughts on the issue. De Soto says more than four billion people are not only deprived access to the global economy, but also "locked out" of their own national markets. In an interview with swissinfo, he expresses sympathy for critics of globalisation, but says their demands are still largely irrelevant to the needs of people in developing countries. De Soto, who was brought up in Geneva and worked there for
several years before returning to his native Peru, is the founder of
the Institute for Liberty and Democracy (ILD) - described by The
Economist newspaper as one of the two most important think tanks
worldwide.
Switzerland used to be a poor country, Peru still is. Why is that?I think a lot has to do with the legal system. When we started our research work in Peru, we found it took 289 days to register a sewing business. In Egypt, to open a bakery takes 549 days. If it took that long in Switzerland, you wouldn't have bakeries. Is it really that simple - are there other reasons?I'm sure there are, but I'm thinking about those we can identify and remedy. Let's take cultural differences. When I came to Switzerland, in 1949, I read Tintin's aventures in The Blue Lotus, and it was all about the incapacity of Asians as businessmen - that has certainly changed! What about Western trade protectionism. Is that not a major cause of today's differences?Yes, of course it is. Barriers should be as low for agriculture as for intellectual property - otherwise the system is not fair. However, even if the developed nations lowered all their barriers to trade, 70 per cent of the world population still could not enter the global economy. If it's that easy to improve things, why aren't the governments of the world rushing to your doorstep?But they are. Well, not rushing, but walking. I now have working arrangements with 29 heads of state and I didn't go looking for them. If you consider that we are not a large corporation, but a small non-profit organisation located in Peru, we're doing OK. And don't forget, real progress does take time. What about differences at the political level - what role do they play?One obvious difference is that if I come to Switzerland to do business, the first question you ask is: how good is your business? If you come to Peru and you're in, say, the energy business, the first question you ask is, who's the energy minister? These differences have a lot to do with decentralisation and democracy, and that's why I'm a fan of many aspects of the Swiss political system. So is democracy crucial to economic success?Of course. But it's not just a question of elections. We invited guests once from Hong Kong and were surprised to find that, while they didn't have elections, it never occurred to them to put rules into place without some form of local participation. That's the other aspect of democracy, and it's something you find in very few developing countries. The Peruvians tried once to "import" Zurich's public transport system. What went wrong?Many years ago, statistics in Peru showed that road vehicles caused 11 times more deaths than in Germany and Switzerland. A parliamentary commission came to Zurich and observed that traffic was well organised - so they translated the laws into Spanish and put them into our system. But we carried on killing just as many people as before! Turning to Davos, what would be your main message to the participants there - and at the "rival" Porto Alegre forum?In Davos, I will repeat that the market economy in my part of the world is extremely restricted; that those with the chips to come into the poker game are a very small minority and that is not sustainable over time.
swissinfo-interview: Chris Lewis
URL of this story: swissinfo.org
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