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I live in Peru, next door (give or take a few thousand miles), and completely agree with you w.r.t. Chile being very start-up and generally business-friendly, w

I live in Peru, next door (give or take a few thousand miles), and completely agree with you w.r.t. Chile being very start-up and generally business-friendly, which does indeed involve government staying out of wealth creators' way, and setting up a couple of programs like Startup Chile. Setting up a new company in Chile can be done in a couple of days now, and much of it online. Peru is following in Chile's footsteps and has had amazing growth for the last 20 years as a result of a radical reforming of government in the 90s, precisely to kill stifling bureaucracy and red tape. Where there was 50% poverty in the mid-90s, there is now about 20%. Even remote farmers are online via their smartphones, and now know what to grow, when to grow it, how to grow it, where to sell it, etc. Tech and free markets have substantially improved people's lives, to the point that anyone who visited around the year 2000 would just not recognise the place today. It's clear to me that free markets work, and that Chile and Peru are living proof of it. Sure, it's not first world levels yet, but both countries are certainly getting there at turbo speed. Anyone who doubts this should look at the number of highly qualified migrants going not from Chile and Peru to Spain, but in the other direction: from Spain to Chile and Peru. They see it as a place of opportunity where the old and sclerotic welfare systems of Europe have let them down.

dash2 11y ago
That radical reform in the 1990s - was it down to Fujimori? I thought he was corrupt. Would be interested to hear your opinion.
- 1337biz 11y ago
  Would love to hear some thoughts on that too. I remember watching quite a while ago some really fascinating documentary movie on Fujimori. Really interesting situation, e.g. highly corrupt but without the public questioning their support of him.
- nationcrafting 11y ago
  Hello das2, sorry for the late reply. Yes, it was down to Fujimori. It's true that Fujimori is in jail right now, but not for corruption. He's in jail for his overzealous approach to the antiterrorist campaigns that took place in the early 90s. When the Sendero Luminoso (Shining Path, a Maoist terrorist group that nearly managed to overthrow the state in the late 80s/early 90s) were at their peak, Fujimori came to power. Very shortly thereafter, the SL hijacked the Japanese embassy on a night when they had a big event on, kidnapping everyone from the Japanese ambassador to the directors of large Japanese corporations (Toyota, Sony, etc.). Fujimori ordered a replica of the embassy to be built in the desert, and special forces trained there for weeks in preparation to storm the embassy. The operation was a great success, the kidnappers were killed, only one soldier died, none of the hostages died. High on this amazing success, Fujimori ordered more campaigns against SL, and managed to pretty much eradicate them from the country. Two campaigns, however, did not go as planned. One at a university called La Cantuta, one in a poor district of Lima called Barrios Altos. Innocent people died in these campaigns, which had received his direct, personal go-ahead. That is what he went to trial for, and the reason he's in jail now. Fujimori took over when the state itself was a failed state: hyperinflation of both the old Sol and the new Inti, had all but destroyed everyone's savings, political processes were sclerotic, there was enormous bureaucracy, no foreign investment, etc. Fujishock, as it has come to be called, was the process of undoing all this. Fujimori created the new Sol currency which has been a very stable currency ever since. Parliament was closed and replaced with one single congress and a super-simple process of election that elects both the percentage of parliamentary representatives and the president. Bureaucrats were sent home and the machinery of government simplified a great deal. A lot of investment went into infrastructure, too: where it used to take more than a day for a farmer to take his produce to the nearest city, it can now take just 3 or 4 hours, which means they don't just go once a year but once every month, which puts them more in touch with the market and more responsive to price signals. Many things that would take forever to start (companies, brand registrations, etc.) can now be done online in a couple of days. The country has seen between 6 and 9% annual growth ever since the mid-90s, reducing poverty from over 50% to around 20% today.
  - danielrpa 11y ago
    Some corrections about the "embassy" crisis... It wasn't SL, it was Tupac Amaru. It wasn't an embassy, it was an official residence. 1 hostage and 2 soldiers died... It's all on wikipedia.
  - dash2 11y ago
    Thank you for your very informative comment!

dash2 11y ago

That radical reform in the 1990s - was it down to Fujimori? I thought he was corrupt. Would be interested to hear your opinion.

1337biz 11y ago
Would love to hear some thoughts on that too. I remember watching quite a while ago some really fascinating documentary movie on Fujimori. Really interesting situation, e.g. highly corrupt but without the public questioning their support of him.
nationcrafting 11y ago
Hello das2, sorry for the late reply. Yes, it was down to Fujimori. It's true that Fujimori is in jail right now, but not for corruption. He's in jail for his overzealous approach to the antiterrorist campaigns that took place in the early 90s. When the Sendero Luminoso (Shining Path, a Maoist terrorist group that nearly managed to overthrow the state in the late 80s/early 90s) were at their peak, Fujimori came to power. Very shortly thereafter, the SL hijacked the Japanese embassy on a night when they had a big event on, kidnapping everyone from the Japanese ambassador to the directors of large Japanese corporations (Toyota, Sony, etc.). Fujimori ordered a replica of the embassy to be built in the desert, and special forces trained there for weeks in preparation to storm the embassy. The operation was a great success, the kidnappers were killed, only one soldier died, none of the hostages died. High on this amazing success, Fujimori ordered more campaigns against SL, and managed to pretty much eradicate them from the country. Two campaigns, however, did not go as planned. One at a university called La Cantuta, one in a poor district of Lima called Barrios Altos. Innocent people died in these campaigns, which had received his direct, personal go-ahead. That is what he went to trial for, and the reason he's in jail now. Fujimori took over when the state itself was a failed state: hyperinflation of both the old Sol and the new Inti, had all but destroyed everyone's savings, political processes were sclerotic, there was enormous bureaucracy, no foreign investment, etc. Fujishock, as it has come to be called, was the process of undoing all this. Fujimori created the new Sol currency which has been a very stable currency ever since. Parliament was closed and replaced with one single congress and a super-simple process of election that elects both the percentage of parliamentary representatives and the president. Bureaucrats were sent home and the machinery of government simplified a great deal. A lot of investment went into infrastructure, too: where it used to take more than a day for a farmer to take his produce to the nearest city, it can now take just 3 or 4 hours, which means they don't just go once a year but once every month, which puts them more in touch with the market and more responsive to price signals. Many things that would take forever to start (companies, brand registrations, etc.) can now be done online in a couple of days. The country has seen between 6 and 9% annual growth ever since the mid-90s, reducing poverty from over 50% to around 20% today.
- danielrpa 11y ago
  Some corrections about the "embassy" crisis... It wasn't SL, it was Tupac Amaru. It wasn't an embassy, it was an official residence. 1 hostage and 2 soldiers died... It's all on wikipedia.
- dash2 11y ago
  Thank you for your very informative comment!