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if he were Prince Borgia, and, of course, he and the vested interests
will sign whatever is convenient for them. So good rule-making,
which is understanding that democracy is more than just elections,
means participation in the making of rules and the immediate
accountability of public officials for all the decisions they make eco–
nomically; it will greatly minimize the creation of future debt. The
next thing is deregulation.
In terms of the developed countries, I really don't have many
recommendations for them because I'm personally more concerned
with the developing countries. I would simply say that they should
make sure that when they call for structural adjustments, they take
into consideration these enormous obstacles, instead of giving lip
service to principles that are too vague to be useful or understood in
the context of developing countries.
KA:
A recent U .S. Presidential Task Force Report on Latin Amer–
ica and the Caribbean has made a strong case for encouraging
employee stock option plans, that is, for converting inefficient state–
owned industries into privatized enterprises owned by the workers.
What do you think of this idea?
HS:
I think that if people want that to happen, it's terrific. I think
that employee stock options or share options have always been one of
the alternatives that free enterprise has had to motivate its own peo–
ple, and where available, it should be used. I don't think it's the only
solution, however. I think that if we go throughout Latin America
and find out that there are at least 289 days before you can actually
set up your own business, there's not only the obstacle of not having
access to the shares in your enterprise, there's also the problem of
simply being able to do business. If, for example, we look at my
country at where there is organized labor that could participate in
employee stock ownership, it's less that 5 percent of the population;
while if we look at the informal sector, it's more than 60 percent of
the population. Therefore, my immediate reaction to what you're
saying is that it's very good to have employee ownership programs,
but what's needed for the people in my country is simply to be able to
own their own businesses to start off with, and the problem there is
one of bureacracy and excessive regulation .
KA:
President Garcia has recently nationalized the banks in Peru,
after much controversy in which the novelist Mario Vargas Llosa
felt compelled to involve himself and protest against the nationaliza–
tion plan. What effect has the nationalization had on future pros–
pects for democracy and economic development in Peru?
