Hernando de Soto, a pioneering Peruvian economist, argued in the Wall Street Journal that military might alone won’t defeat Islamic State and its ilk, but rather the U.S. needs to promote economic empowerment.
Using an example from recent history, Hernando describes how by 1990 a Marxist-Leninist terrorist organisation called Sendero Luminoso, or Shining Path, had seized control of most of his home country, Peru, where he served as the president’s principal adviser.
Fashionable opinion had it that capitalism couldn’t work outside of the West, when in fact reforms gave indigenous entrepreneurs and farmers control over their assets and a new, more accessible legal framework – thus spurring an unprecedented rise in living standards
Hernando argues that the same economic and cultural pessimism about the Arab world can be transformed by economic reform. He points out that “to make this agenda a reality, the only requirements are a little imagination, a hefty dose of capital (injected from the bottom up) and government leadership to build, streamline and fortify the laws and structures that let capitalism flourish. As anyone who’s walked the streets of Lima, Tunis and Cairo knows, capital isn’t the problem—it is the solution.”
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