Kay Agena
AN INTERVIEW WITH HERNANDO DE SOTO
KA :
In 1980 , you founded the Institute for Liberty and Democracy
in Peru . What were the factors that led you to create the Institute
and what are its goals?
HS:
Well , the factors that led myself and friends to create the In–
stitute were that we had just come out of a long dictatorship in Peru,
which lasted about twelve years , and we figured that unless there
were some radical changes, the nature of which still had to be ex–
plored, there was no reason why we wouldn't fall into a dictatorship
again , once what we called democracy and what we called free enter–
prise failed again in Peru. So the objective was to dig into the rea–
sons why democracy and liberty so frequently are thwarted in our
country and come up with solutions. That was the objective of
founding the Institute in 1980 .
KA :
There is a notion in international diplomatic circles that the
reason third world countries are economically backward is due to the
fact that they have wide-open, unregulated markets that have been
manipulated and exploited by foreign corporations or, on the other
hand , there is the belief that the developing countries are poor
because the people there lack sufficient initiative. Would you com–
ment on these notions and what your research at ILD has revealed
with respect to them.
HS:
What our research at ILD has revealed is that there are reasons
for lagging development other than those usually given. The exter–
nal debt , for example, has not been created by foreigners, but by
ourselves . As ILD has demonstrated, the price the state has paid for
certain infrastructure projects is nearly 100 percent higher, on the
average , than the prices paid by other consumers in other parts of
the world . So , what we're saying is that we have found sufficient
deficiences in our government and states, the way our public ap–
paratus works, to warrant rearranging or adjusting our capacity to
deal through our government before going out and saying that the
terms are set against us. In Peru, for example, only one fourth of the
foreign debt was incurred by the private sector, and the private sec–
tor didn't really need to have it rescheduled or renegotiated . It was
the public sector that incurred the debt.
It
wasn't due to the fact that
