Third World crushes its entrepreneurs

Carlos Alberto Montaner

Why isn't a Bill Gates or a Steve Jobs born in Honduras? I mean, why is it that creative people don't emerge in the Third World, capable of developing innovative products and building companies that market those products, create jobs, generate large profits and influence decisively the fate of this planet?

What we know about human intelligence and character features is that they're disseminated more or less equitably. The Finns who created Nokia and live in an opulent paradise in northern Europe are no more intelligent than the Dominicans or the Ecuadoreans who are crushed by poverty.

On the other hand, possibly, the number of people gifted by nature with an entrepreneurial spirit is also uniform: about 20 percent of the national census.

Alvaro Vargas Llosa attempted to answer that nagging question in a book that's extraordinarily important for the great debate over development: Lessons From the Poor, published by the Independent Institute.

The work -- which will appear in 2009 in Spanish, under the Espasa imprint -- begins by rebutting the previous premise. In the Third World, you do find those specimens once called ''captains of industry,'' entrepreneurial people who are psychologically marked by the need to create, convince and conquer in the market.

These are people with a keen eye to discover the needs of society and the indispensable energy to try to satisfy those needs with the right goods and services. People, in sum, who feel the urgency to triumph, to accumulate wealth, to be respected and admired by the community in which they live.

The book, written by several important economists, compiled and given a foreword by Alvaro, who heads the Center on Global Prosperity, compiles five cases of remarkable entrepreneurial successes achieved by poor people under very adverse conditions. Two of them occurred in Peru, another in Argentina and the others in Nigeria and Kenya.

The five cases involve very peculiar, intelligent, disciplined, hard-working and tenacious people who never carried out specialized studies but were compelled by the psychological need to achieve success and obtain social recognition; people who were guided by the only work method that really works in the economic world -- trial and error.

That's how businesses are born, grow and prosper -- on the run, experimenting, improvising, discovering, day in and day out, which roads are right and which will lead us to failure.

I shall never forget the example of Domingo Moreira, an entrepreneur of that type, basically intuitive, the creator in Cuba (probably before anyone else in the world) of fried-chicken restaurant chains, whom I visited shortly before his death at the age of almost 90. I showed up deeply moved for what I knew would be a farewell, but he devoted that final contact to explaining a plan he had for a new food industry utilizing the palmiche, the fruit of the palm tree.

Something similar happened to me earlier with Venezuelan entrepreneur Armando de Armas, the grand magnate of communications, who began his career distributing newspapers. He was 80-plus when death surprised him, even as he worked and dreamed about new projects. To those people who feel the fire of enterprise, the pleasure lay in creating, struggling and, of course, winning.

Now I reformulate the question with which I began this article. Why are there so few entrepreneurial people in the Third World? The answer is obvious.

Because the State is organized to foil the people who are fueled by this creative fire. It offers only hindrances, corruption, parasitic bureaucrats who demand bribes to not paralyze people's projects; it is manned by individuals well connected with the political power, who protect their businesses from free competition, thus harming the consumers.

When Bill Gates started Microsoft, or when Steve Jobs launched the Apple personal computer, they didn't have to bribe a public employee to register the trademarks or suborn the police to avoid a shakedown. And when they discussed with four friends in a garage how they were going to develop their plans, they took it for granted that they would never lack electricity, water or protection for their property rights.

Neither man, and none of the millions of other entrepreneurs in the First World, has to deal every day with the deficient moral and physical infrastructure that turns doing business into such an uphill struggle in almost all of Latin America and Africa.

The Third World is an implacable machine intent on exterminating entrepreneurs. It is not that they are not born; they are smothered in the crib. That's the problem.

Septiembre 02, 2008

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