The decision by Alan García’s government to nationalize banks, insurance, and financial companies is the most important step taken in Peru to keep this country underdeveloped and in poverty, and to ensure that the incipient democracy it has been enjoying since 1980, rather than perfecting, devolves, becoming a lie.
According to the regime’s reasons for this divestment, which will turn the state into the owner of credits and insurance, and allow the state to use the shares of the nationalized entities to extend its tentacles through innumerable private industries and businesses, it is being carried out to transfer those companies from “a group of bankers to the Nation,” and begs the response: “That is demagoguery and lies.” This is the truth. Those companies are seized—against the letter and spirit of the Constitution, which guarantees property and economic pluralism and prohibits monopolies—from those who created and developed them, to be entrusted to bureaucrats who, at some point, as happens with all bureaucracies of all underdeveloped countries without a single exception, will manage them for their own gains and those of the political power under whose shadow they operate.
In all underdeveloped countries, like in all totalitarian countries, the distinction between the state and the government is a legal mirage. It is a reality only in advanced democracies. In those countries, the laws and constitutions, as well as official rhetoric, aim to separate them. In practice, they are as interchangeable as two drops of water. Those who hold positions of government take over the state and use its resources at will. What better proof than that of the famous Sinacoso (Sistema Nacional de Comunicación Social/National Social Communication System), built by the military dictatorship and, since then, a docile ventriloquist for the governments that have followed? Does that chain of radio stations, newspapers, and television stations by chance in any way speak directly to the state, in other words, to all Peruvians? No. That media publicizes, flatters, and manipulates information exclusively in favor of those who govern, colossally ignorant of what the rest of Peru thinks and believes.
The inefficiency and immorality accompanying them, as a twin, to the state takeovers and nationalizations mainly come from the servile dependence in which the company transferred to the public sector finds itself in political power. We Peruvians know it all too well since the time of Velasco’s dictatorship, which, betraying the reforms we all longed for, through expropriations and confiscations, managed to break industries—such as fishing, cement, or sugar mills—that had reached a level of notable efficiency, and made us importers of even the potatoes that our industrious ancestors created to the world’s joy. Extending the public sector from fewer than 10 to almost 170 companies, the dictatorship—alleging, as justification, “social justice”—increased poverty and inequality and gave an irresistible boost to the practice of bribery and illicit business. Both have proliferated since then like a cancer, becoming the greatest obstacle to the creation of wealth in our country.
This is the model that President Garcia has made his brand on our economy, with the nationalization of banks, insurance, and financial companies, a level of state control that places us immediately after Cuba and almost on a par with Nicaragua. It is clear that I have not forgotten that, in contrast to General Velasco, Alan García is a legitimately elected leader at the polls. But I have not forgotten, either, that Peruvians elected him, overwhelmingly, as we are aware, so that he would consolidate our political democracy with social reforms; not so that he would make a quasi-socialist “revolution” that would do away with it.
For there is no democracy that could survive with such an exorbitant accumulation of economic power in the hands of political power. Just ask the Mexicans, where a nationalization law will grant the American Popular Revolutionary Alliance (APRA) government vast control over the public sector if approved.
Its first victim will be freedom of expression. The government will not need to proceed as Velasco did, attacking, gun in hand, newspapers and radio and television stations, although we cannot rule it out: we have already confirmed that their promises are gone with the wind, like feathers, echoes … Converted into the country’s premier announcer, it will be enough for it to blackmail them with advertisements. Or, to bring them to their knees, to close off the lines of credit without which no company can operate. There is no doubt that faced with the prospect of dying of consumption, many in the media will choose silence or submission; the dignified will perish. And when criticism disappears from public life, the full-throttle congenital vocation of growing and becoming eternal has the means to become reality. Once again, the ignored silhouette of the “philanthropic ogre” (as Octavio Paz has called the PRI) can be made out on the Peruvian horizon.
The progress of a country consists in the extension of property and freedom to the greatest number of citizens and in the strengthening of the rules of the game—legality and customs—that value effort and talent; stimulate responsibility, initiative, and honesty; and penalize parasitism, rentierism, apathy, and immorality. All of this is incompatible with a multiheaded state in which the main actor in economic activity is the government official instead of the businessman and the worker; and where, in the majority of its fields, competition has been replaced by a monopoly. A state of this kind is demoralizing, crushes any business initiative, and makes the traffic of influence and professional favors more desirable and profitable. This is the path that has led so many third-world countries to drown in stagnation and to turn into ferocious satrapies.
Peru is still far from this, fortunately. But measures such as the one I criticize could catapult us in this direction. We must say so loudly so that the poor—who will be its scapegoats—hear us and try to prevent it through all of the legal means within our reach. Without being frightened by the tirades launched currently against government critics by mercenaries in the press or by “the masses” that the APRA party, speaking through its secretary-general, threatens to bring to the streets to intimidate those of us who protest. Both things disquietingly foreshadow what will happen in our country if the government concentrates absolute economic power in its hands, which is always the first step toward political absolutism.
As citizens, institutions, and democratic parties, we should try to avoid letting our country—which already suffers so many misfortunes—become a pseudo-democracy led by incompetent bureaucrats where only corruption will prosper.
Lima, August 1987