More Small Business Is Not the Answer for Peru

摘要: Governments in Canada, Australia, the U.S., Singapore, and elsewhere have viewed formation of small businesses encouragement entrepreneurship as a solution to national economic stagnation, but link between business prosperity nation does not always hold true. Perhaps best illustration exemplify this is case Peru. Many readers may associate Peru primarily with its history architectural treasures such ancient city Cuzco, capital Incan Empire for centuries. When Europeans conquered Cuzco 1533, it was one largest cities world, most important centers Western Hemisphere. Half Peru's population are descendants Incas, research on practices reveals what be root socioeconomic problems that plague today. History For millenia, has existed among civilizations around world. In our culture, Bible describes early transactions trade individuals. These were scale, eventually led birth large Europe. Ultimately gave rise firms, which turn grew become multinational enterprises Small business, however, relatively new concept South America. The Incas apparently had no within each community. Rather than individuals, they traded groups communities. Within settlement, inhabitants shared had. excess collectively exchange other goods elsewhere. Only arrival did learn about noncollective, one-to-one business. urbanized became increasingly intrigued entrepreneurial values, rejected traditional communal approach. Among non-rural inhabitants, novelty working oneself, replaced style trading Incas. Since independence 1821, experienced an exponential increase urban population. As result, now suffers from number well beyond optimal lack sufficientnumbers associated economies scale. aggravated by increasing urbanization. April l968, Agrarian Land Reform expropriated farms belonging few families controlled economy effort redistribute wealth. Thriving plantations employed thousands peasants subdivided into many lots distribution masses. Yet individuals land preferred wages subsistence farmers them selves. They given fertile farm free, educationobligatory education introduced only 1974-nor start-up capital. Nor scale possible any longer. Field size could justify acquisition machinery. rural workers left their fields weeds moved cities, looking jobs. By 1970, one-third abandoned land. Sugar, major export until 1975, imported; feeding fewer people, consumers turning more fish inexpensive food source. (Previously, tuna mackerel caught mostly export, demand local market. Tuna sell 65 cents kilo, whereas sea bass, flounder beef all $4 per kilo.) Until 1965, guano birds nested along shoreline entrepreneurs sold fertilizer. Now less plentiful due increased consumption, remain Peruvian coast feed depleted stock. result there bird dung export. …