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Commentary

Lessons from the Rubble


     
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WASHINGTON—Earthquakes and hurricanes tend to invite two cliches—that nature hits the poor hardest, and that the government is incapable of performing its basic functions. Like most cliches, these contain an element of truth. They have now re-emerged in Peru in the wake of the Aug. 15 earthquake that killed more than 500 people, injured more than 1,000 and left more than 100,000 homeless. Rebuilding alone will cost between 0.5 percent and 1 percent of the country’s gross domestic product.

As in other natural catastrophes around the world, self-help efforts on the part of the population, along with private-sector and foreign assistance, have made up for the failure of governments—national, regional and local—to respond effectively. It wasn’t for lack of trying and much less for lack of resources—the Peruvian state is awash with cash thanks to an export boom. There is so much money nowadays that many regional and local governments are spending only half their budgets because they don’t know how to spend the rest. The central government in Lima is running a surplus, has built up record reserves and has reduced the ratio of debt to GDP below 30 percent.

It wasn’t because of a lack of personnel, either. There is one public employee for every 28 citizens in Peru—a country that has three times more civil servants than does Chile with a population that is only 1.8 times larger. If we also consider that the epicenter of the earthquake was less than three hours south of Lima, rather than a remote volcano in the highlands, the government’s inadequate response comes across as pitiful.

Some say that the privatizations of the 1990s reduced the state to rubble long before this earthquake leveled the port city of Pisco. Baloney! The size of the government increased in the 1990s. Regional governments more than made up for the small reductions in central bureaucracy, and a barrage of regulatory bodies, social programs and new ministries replaced the public service companies sold off to private interests. Fiscal spending rose substantially and the trend has continued. The payroll is so bloated that the government spends almost all of the money in salaries and pensions—its “investments” don’t even add up to 3 percent of the nation’s GDP.

Those who complain that Peru lacks “enough government” because the system of civil defense failed during this earthquake mistake the symptom for the cause, which is too much government for too long. Nevertheless, government often fails to deliver—in recent years, the absence of law and order in poor neighborhoods of the nation’s capital has led to the spontaneous lynching of thieves and rapists. Anyone watching the news or traveling to where the earthquake hit hardest will be amazed at the amount of government representatives on site—politicians, bureaucrats, soldiers, police. It looks as if the entire state had set up camp in the region known as “Little South.”

The system of civil defense relies heavily on local and regional as well as central government structures, and partly on the military. All of those structures were in place during and after the earthquake. If they did not perform properly, it can only be because the government is a poor civil defense system.

This is not to say that private companies are beyond reproach. The reasons given by Telefonica for the collapse of all the phone lines is half acceptable. True, any service hit by a massive upsurge in demand will have a hard time running things smoothly (3 million phone lines went dead in the wake of Hurricane Katrina in the United States). But the extent of the collapse reflects inefficiencies that may have to do with the monopoly conditions under which that company operated for many years.

In any case, the cliche is back—this government doesn’t work. For some years, there has been talk of “reforming” the Peruvian government, which is the child of over half a million contradictory, overlapping and utopian laws passed by governments that periodically tried to reinvent the wheel since Peru gained its independence in 1824. But getting the government to do fewer things with less bureaucracy will take a monumental amount of political courage.

Under the current circumstances, with an export boom, a government receiving record revenue and a tragedy that has many people lamenting the lack of “enough government,” there is no way Peru will opt for the painful sacrifices that a true reform would require so that the next earthquake doesn’t catch the authorities so unprepared.


Alvaro Vargas Llosa is Senior Fellow of The Center on Global Prosperity at The Independent Institute. He is a native of Peru and received his B.S.C. in international history from the London School of Economics. His Independent Institute books include Global Crossings: Immigration, Civilization, and America, Lessons From the Poor: Triumph of the Entrepreneurial Spirit, The Che Guevara Myth and the Future of Liberty, and Liberty for Latin America.

(c) 2007, The Washington Post Writers Group

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