One of the things I am most thankful for in life is the chance to meet with and learn from all sorts of people from all walks of life. One of these fortunate opportunities arose recently when Hernando De Soto, the renowned Peruvian economist, spoke on Necker Island.
It was fascinating to hear his thoughts on the informal economy, and why he places business and property rights as one of the most important issue that needs improving to reduce poverty and fight terrorism. As the president of the Institute for Liberty and Democracy and through his writings, Hernando has done sterling work highlighting property rights issues, challenging overzealous bureaucracy and putting his theories into action.
I was interested to read his suggestions for what the Pope should say to Donald Trump in Fortune, offering a five step guide. As Hernando wrote: “Five billion of the world’s seven billion people don´t have the documents to live in a particular place. To be precise, they don’t have the legal property rights required to reside, own assets or do business in their own or any other country…Only one billion people living in the West, Japan, Singapore and the like, and another billion in the westernized areas of developing and former Soviet nations have the documents to protect and leverage their rights.”
He argues that this is a huge obstacle to the growth of business and entrepreneurship, as many businesses are started by a businessperson using their home as collateral to raise capital. Being unable to use property as collateral to borrow money could be holding back millions of entrepreneurs.
His views on how improving property rights as a way of “winning the war of ideas in the Middle East and North Africa” are also well worth reading. “As we saw in the Arab Spring in 2011, the reason the martyrs who started the uprising were revolting in the streets was to protest the continual and arbitrary expropriation of their property by governments and their cronies. The Arab Spring is to a great extent a huge – and ongoing – social uprising to create respect for property borders. The West and its allies must help the 80% of the population whose survival depends on the boundaries needed to protect them and their assets.”
We also got on to talking about alternative economies, Blockchain, Bitcoin and the future of finance. I’m sure there will be many big changes to come that will have far reaching effects throughout the world. I love learning, and listening, and will continue to do so on my travels, and from the many visitors we welcome to the British Virgin Islands.
If you want to look up Hernando’s work, be sure to also take a look at his namesake, the Spanish explorer who was the first documented European to cross the Mississippi River. From business to history, the adventure continues!