Yesterday, the Washington Post ran a front-page article on Bolivian land reform. Property in Latin America is more unevenly distributed than any other region in the world. Bolivia is quite arguably one of the worst. As part of his campaign pledge, Evo Morales has begun a program to redistribute up to 20% of the land from wealthy landowners, to hardworking peasants, many of them indigenous. Indeed, many of the intended recipients live in utter squalor restrained within a social structure that is oddly reminiscent of sharecropping system of the antebellum South.
This redistribution of wealth will bolster entrepreneurship. Small farmers will be better able to make decisions about the proper use of resources as they are much more informed of the reality of the crops and the land, than the old patrons who often live in distant cities or countries. These farms are, in essence, small enterprises. Each farmer has a much larger stake, and in theory will work harder to promote his own benefit. Similar land reform in China boosted agricultural output and has been the driving force that lifted 200 million people out of poverty to date.
Furthermore, Bolivia is a nation with significant Kichwa- and Aymara-speaking indigenous groups. Their cultural heritage, as well as the ejido system introduced by the Spaniards, values shared work and shared property among equals. Creating a system that promotes private growth among the farmers as well as incorporates age-old customs will ultimately lead to sustainable economic growth.
Certainly, land reform is a very touchy issue. Only weeks ago landless peasants stormed the Brazilian congress. The MST (Movimento Sem Terra) in Brazil has encountered extreme resistance among landowners who have hired mercenaries to protect their lands and have, at times, used violence to squelch unrest. Nonetheless, the lack of land reform in Latin America is retarding economic innovation and growth. The more small business owners and farmers who can be given a hand up, the more likely those economies will be to succeed.
Published Date: June 21, 2006