For García, it's down to business

Carlos Alberto Montaner

Television host Jaime Bayly says that the political panorama in Peru is worsening and the country is turning into a kind of giant reality show secretly directed by confrontational TV host Laura Bozzo. In 2001, Peruvians had to vote for Alejandro Toledo so as not to elect Alan García. In 2006, they had to vote for García so as not to elect Ollanta Humala.

Bayly fears that in 2001 Peruvians may have to vote for Ollanta to keep Humala's brother Antauro, a psychopath imprisoned for killing policemen, from reaching the presidency, or to crown Bozzo Queen Laura I of Peru amid a monumental brouhaha, like the ones that explode in her program.

Maybe nothing like that will happen. García has five years to improve confidence in the republic's institutions. All Peruvians -- beginning with García himself -- know that his first presidential term (1985-1990) was a pauperizing series of mistakes, but he insists that he learned his lesson.

Let's hope so. The hyperinflation rampant at the time rose to 7,000 percent and caused between $5 billion and $10 billion to evaporate. García took the most expensive governance course in history. It would be a relief to learn that at least he will put it to good use.

Private enterprise

What can García do in the next five years? If he listens to the clamor of Peruvians, the universal demand is for work. Peruvians want job opportunities. But there are only two ways to generate jobs, and one of them -- public employment -- is almost always suicidal. The other is the only truly valid way: employment created by private enterprise, or self-employment.

If García wants his compatriots to work and wages to rise gradually, all he has to do is to furiously promote the creation of businesses. He must cut the red tape, reduce and eliminate taxes, protect business people from graft, establish systems of arbitration to settle trade conflicts, build the necessary infrastructure and zealously protect property rights.

In addition, he must spend little and balance the budget, so the interest rates won't rise and the currency will keep its value.

I expect that, at this stage in his life, García has learned that almost all the prosperous nations have reached their enviable level of wealth because they have a strong, diversified and extended entrepreneurial fabric. It isn't that they have many businesses because they're rich. Rather, it's the opposite: They're rich because they have many businesses.

García already knows that there is no such thing as a Japanese miracle or a German miracle. Adults don't believe in miracles. Miracles are called Toyota and Sony, Volkswagen and Bayer. Surely, in his prolonged exile, García learned that businesses involve major investments and shrewd feasibility studies, but almost always they began with three persistent and hard-working fellows who locked themselves in a garage until, little by little, their business grew and evolved as they accumulated experience and capital. Some businesses fail, others triumph, but that's the way prosperity expands.

Argentine political thinker Juan Bautista Alberdi said that to govern was to populate. When he said that, in the first half of the 19th century, the vast territory of Argentina was practically empty. A compatriot, writer-politician Domingo Faustino Sarmiento, opined that to govern was to educate. He was appalled to see the multitudes of illiterate and semi-savage peasants with whom it was very difficult to build a modern nation.

Grow and pay taxes

Some people affirm that to govern is to impart justice, or maintain peace or distribute equitably. No question about it, to govern means many things. But if the objective is to combat poverty and contribute to development and prosperity, to govern is -- in essence -- to promote the creation of businesses.

Of course, Peruvians also want running water, food, electricity, telephones, security, good schools, efficient hospitals, acceptable housing and paved streets. And those aspirations can be satisfied. But all of them depend on one thing: the prior existence of businesses that generate profits, grow and pay taxes.

Without this requirement, governance is not just difficult; it's impossible.

Junio 12, 2006

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