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Published by Luis Delboy

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Published by: Luis Delboy on Jun 02, 2010
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Peru Riots Create Reform Opportunity, De Soto Says (Update1)
By Lester Pimentel
July 8 (Bloomberg) --Hernando de Soto, the Peruvianeconomist who wrote “The Mystery of Capital” and hasadvised governments from Russia to Egypt, said he will uselast month’s deadly indigenous revolt in the Andean countryto push for the expansion of property rights.De Soto said his Lima-basedInstitute for Liberty andDemocracywill begin an ad campaign in coming weeks tobuild support for development in the country’s rural areasthrough the granting of property rights to the poor.The indigenous protests over laws awarding oil companiesand loggers more land left 34 dead and prompted PresidentAlan Garcia’s cabinet to resign, creatingan “opportunity” to drum up interest in the issue, de Soto said in an interview in New York. He said hisinstitute hasn’t worked with the Peruvian government on this topic in a decade, focusing effortsinstead in countries such as Mexico, Libya, Nigeria and Tanzania.“This is our moment,” said de Soto, whose 2000 book popularized the term “dead capital” as a way todescribe the poor’s unrecognized property rights in developing countries. “This is the moment whenthe country is sensitive to the issue of land and property.”The indigenous protests forced companies such as Pluspetrol SA and Petroleos del Peru SA tosuspend oil pumping and led Peru’s Congress on June 18 to repeal the forestry and wildlife laws thatsought to grant more concessions in the Amazon. Garcia said yesterday that he will replace CabinetChief Yehude Simon as part of a cabinet reshuffle scheduled for this weekend.
‘Power of Film’
“The protests underscore the government’s insufficient institutional capacity to respond to the public’sneeds,” Michael Heydt and Fergus McCormick, analysts at Toronto-based ratings company DBRS,wrote in a report today. “In order to improve creditworthiness, Peru needs to establish a betterframework to manage land and resource rights in rural areas.”De Soto said his ad campaign will seek to build a consensus around the idea of extending propertyrights in the countryside, paving the way for legislation and implementation of reform.His institute will produce a video featuring indigenous people from places such as Alaska andMontana as part of the campaign, he said. He estimated the total cost at $200,000.“We’ve seen the power of film,” de Soto said.De Soto, who survived several assassination attempts by Peru’s Shining Path guerrillas, said he toldGarcia about his plans to push the property rights proposal now and received the president’s support.Friedman, Thatcher“I went to see the president and said ‘I’m going to do this; are you going to block me?’” de Soto said.“He said ‘no, we’re going to support you.’”Jose Chirito, Garcia’s head of public relations, wasn’t immediately available for comment.
De Soto’s “The Mystery of Capital,” which proposes providing more access to financing to micro-entrepreneurs in developing countries, was praised by late economist Milton Friedman and formerBritish Prime Minister Margaret Thatcher, according to the book’s jacket. De Soto was picked as oneof 100 leaders for the new millennium by Time magazine in 2004.He estimates as many as 4.5 billion people around the world don’t have legal property rights, leavingthem without the ability to borrow capital backed by their assets.To contact the reporter on this story:Lester Pimentelatlpimentel1@bloomberg.net 
Last Updated: July 8, 2009 17:46 EDT 

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