These steps left Peru’s terrorists without a solid constituency in the cities. One legislative package alone gave official recognition to 380,000 informal businesses, thus bringing above board, from 1990 to 1994, some 500,000 jobs and $8 billion in tax revenue. Peru reduced by 75% the red tape blocking access to economic activity, provided ombudsmen and mechanisms for filing complaints against government agencies and recognized the property rights of the majority. This new way of seeing economic reality led to major constitutional and legal reforms. They accounted for 62% of Peru’s population and generated 34% of its gross domestic product-and they had accumulated some $70 billion worth of real-estate assets. Instead, most of them were small entrepreneurs, operating off the books in Peru’s “informal” economy. What changed the debate, and ultimately the government’s response, was proof that the poor in Peru weren’t unemployed or underemployed laborers or farmers, as the conventional wisdom held at the time. Guzmán cast himself as the savior of proletarians who had languished for too long under Peru’s abusive capitalists. The group initially appealed to some desperately poor farmers in the countryside, who shared their profound distrust of Peru’s elites. Here’s the Peru story in brief: Shining Path, led by a former professor namedĪttempted to overthrow the Peruvian government in the 1980s.

As anyone who’s walked the streets of Lima, Tunis and Cairo knows, capital isn’t the problem-it is the solution. 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. Just as Shining Path was beaten in Peru, so can terrorists be defeated by reforms that create an unstoppable constituency for rising living standards in the Middle East and North Africa. Today we hear the same economic and cultural pessimism about the Arab world that we did about Peru in the 1980s.

The blind prophet co pisac