The Middle East is enduring yet another wave of terror and political change, spurring countless Western analysts and elites to offer their preferred strategies and solutions, most of which involve military force, foreign aid, or some mixture of the two.
In last weekend’s Wall Street Journal, Peruvian economist Hernando De Soto sets forth a less predictable path, arguing for “an aggressive agenda for economic empowerment,” similar to that which was promoted in Peru during the 1990s.
I know something about this. A generation ago, much of Latin America was in turmoil. By 1990, a Marxist-Leninist terrorist organization called Sendero Luminoso, or Shining Path, had seized control of most of my home country, Peru, where I served as the president’s principal adviser. Fashionable opinion held that the people rebelling were the impoverished or underemployed wage slaves of Latin America, that capitalism couldn’t work outside the West and that Latin cultures didn’t really understand market economics.
The conventional wisdom proved to be wrong, however. Reforms in Peru gave indigenous entrepreneurs and farmers control over their assets and a new, more accessible legal framework in which to run businesses, make contracts and borrow—spurring an unprecedented rise in living standards… Over the next two decades, Peru’s gross national product per capita grew twice as fast as the average in the rest of Latin America, with its middle class growing four times faster.