Chapter 27 Chapter Ten Our Lady of Guadalupe (2)

If this trend continues, this number is expected to drop to 16 million by 2015.In South Asia, India, Pakistan and Bangladesh, the number of people living in extreme poverty fell from 462 million in 1990 to 431 million in 2001 and is projected to drop to 216 million by 2015.The opposite is true in sub-Saharan Africa, where the pace of economic globalization has been very slow.The number of people living in extreme poverty rose from 227 million in 1990 to 313 million in 2001 and is projected to rise further to 340 million in 2015. When a country has basically completed wholesale reforms, new problems will arise.In the 1990s, some countries believed that as long as wholesale reforms were fully implemented, such as privatization of state-owned enterprises, deregulation of public utilities, reduction of taxes and fees, and encouragement of exports, etc., then China would embark on economic development from now on.But as the world gets smaller and flatter, China starts to compete with rivals around the world in manufacturing, India starts exporting its tech talent around the world, and companies can outsource to anywhere in the world , the individual competes with everyone in the world like never before.All this suggests that wholesale reforms alone are no longer enough if a country is to sustain economic growth.Deeper reforms - reforms that change education, infrastructure and regulation in more profound ways need to be on the agenda.

The only way to grow is through retail reform What would the world look like if it shrunk to a city?I would describe it like this: "Western Europe is a residential area with good living facilities, where a group of elderly people are cared for by Turkish nurses, enjoying family happiness. The United States is like a community with large iron gates. Metal detectors, lots of people sitting in front yards complaining about how lazy everyone else is and no one is paying attention, fences being hacked open by immigrants from Mexico and other countries, and because of their work, this heavily guarded community It works well. Latin America is the city's entertainment scene, full of clubs, starting work at 10 pm every night, and then sleeping until noon the next day. This is the most livable place, no commercial noise, except In the streets where Chileans gather, you can't see any new shops opening. The owners here don't reinvest in the property, but deposit all profits in the bank.

The streets of Arabia are very dark, except for a few alleys called Dubai, Jordan, Bahrain, Qatar and Morocco, outsiders dare not stay here.In the Arab quarters, the only new businesses are gas stations, whose owners, like their Latin American counterparts, are as seldom eager to expand their investments.People who live here always draw the curtains, close the shutters, and put up a sign on their front lawn, which reads; 'It's a different story in Asia, a big emerging market of small shops and one-room factories mixed in with Kaplan and all kinds of engineering college.They all live in big families, and all of them don't sleep when they work. They want to change their destiny through hard work and hard work.On the street called China, there are no mandatory traffic laws, but all the roads are neatly paved, there are no potholes, and the street lights are always on.

The streets of India are the opposite. No one repairs the broken street lamps. The roads are full of grooves caused by wheels, but the police are loyal to their duties and enforce the law strictly. If you want to open a lemonade shop on the street, you must show a permit certificate.Fortunately, you can bribe the local police to get what you want.Here, all successful entrepreneurs must configure their own generators to ensure the power needs of the factory, and must bring their own mobile phones to communicate with the outside world, because the local power poles are all down.The streets of Africa are miserable, where all the shops are closed, the life expectancy of the population is falling, and the only new buildings are health clinics. "One thing to note is that each region has its own strengths and weaknesses, and a certain level of retail reform is necessary. What is retail reform? We just talked about promoting foreign trade, promoting investment, and changing macroeconomic policies Wholesale-type reforms, retail-type reforms refer to the adjustment of four key social policies on the basis of wholesale-type reforms, including: infrastructure, management institutions, education and cultural construction. In this way, people will Freedom to innovate, start a business, and actively collaborate with people anywhere in the world.

Michael Michael, chief economist at the International Finance Corporation, a division of the World Bank.The team led by Klein completed a report that made an in-depth analysis of many aspects of retail reform.What do we gain from the results of their work?First, putting everyone to work doesn't guarantee that your country will escape poverty. Every year, Egypt guarantees 100% employment for university graduates, but nearly 50 years of slow economic growth have plunged the country into a quagmire of poverty. "If Escaping Poverty Was Just a Matter of Job Quantity, It Would Be Too Simple." Klein and Beata.In their study for the World Bank, "The Private Sector in Development," Hadji-Michael said, "For example, state-owned enterprises could absorb all the unemployed if needed. The real problem is not just employment, but The employment achieved under the premise of efficient production can improve the standard of living. The state-owned enterprises and private enterprises receiving state subsidies are not enough to support more jobs than they actually need, and the excessive burden makes it difficult for them to contribute to economic growth. contribute.” Simply attracting foreign capital into the country won’t solve the problem, not even massive investment in education.

"Increasing productivity and getting rid of poverty cannot be solved simply by piling up various resources," Klein and Haji-Michael said, "It's more about how to use these resources well." In other words, after wholesale reforms, the government must continue to provide people with a legally protected, game-playing environment. Only when the economic environment enables private enterprises and individuals to engage in various competitions with confidence, will real economic growth come.Only when more and more people become entrepreneurs, and more and more people continue to innovate, will the number of companies gradually grow and form a favorable support for economic development.The real jobs are generated from here.Educational reform is only a necessary condition for economic take-off, but it is not a sufficient condition.Only when people feel that starting a business is easy and profitable, that there is no limit to the hiring and firing of labor, that the credit system is perfect, and that there is a sound legal system that protects capital ownership from encroachment, will the conditions for reform be complete. .Companies under competitive pressure can only survive by innovating more and faster.

The International Finance Corporation came to this conclusion after conducting research on more than 130 countries. The title of the study is called "Doing Business 2004". The International Finance Corporation asked five basic questions in each country: ①From Is it easy or difficult to start a company in light of local laws, market rules and license fees? ②Are workers free to fire and hire? ③Is it difficult to execute the contract? ④Is the credit system perfect? ⑤Is there a sound enterprise exit system?All countries that are relatively successful in these five aspects must have carried out retail reforms. On the contrary, countries that only stay at the stage of wholesale reforms will not prosper in a flat world.IFC's judging criteria got Hernando.Great support from De Soto, Hernando.De Soto has also made fruitful research in this area.His research in Peru and other developing countries has shown that if you change the business environment and straighten out the rules of the game so that poor people have the opportunity to cooperate, things will get better.

"Doing Business 2004" tries to illustrate its point of view with some vivid examples:.Teku is an entrepreneur in Jakarta who wants to start a textile factory.He had already contacted customers, imported machinery and equipment, and worked out a promising business plan.When it came time for Teku to register his business, dealings with the government began.He first received a standard form from the Ministry of Justice, filled it out, and made a notarization to prove that he is a local resident and has no criminal record.He then obtains a tax ID number, applies for a business license, and deposits the minimum registered capital (three times per capita national income) at a designated bank.

Then, he published the articles of association in the official bulletin, paid the printing fee, and registered with the Ministry of Justice. After 90 days, he needs to fill out documents related to Social Security. After 168 days, his business is finally legally open.During this period of time, the client he had previously contacted had already signed a contract with another company... Ina, an entrepreneur in Panama, registered her construction company in just 19 days.Since the company's business is booming, Ina wants to hire more people and sign a two-year contract.However, the local law requires that a fixed-term employment contract must be a special job position, and the maximum duration is one year.At the same time, a worker in Aina's company often leaves early without reason, which affects the overall work and causes huge losses.

In order to replace the worker, she had to notify the union in advance, get the union's consent, and then pay five months' severance pay.After thinking about it, Aina decided not to hire more capable candidates, or let this incompetent worker stay in the company... Look at Ali, a businessman in the United Arab Emirates, who can hire and fire workers freely .But one of his customers refused to pay for equipment that was delivered three months late.It took 27 procedures and more than 550 days for the court to resolve this payment dispute.Almost all proceedings must be in writing, must provide substantial legal justification, and must retain an attorney.

After this incident, Ali decided to only deal with old and familiar customers in the future...Tim Nite is a young entrepreneur in Ethiopia.She wants to develop her promising consulting firm with a bank loan. Since there is no personal credit history in the local area, she cannot prove her credit status.At the same time, although her company has a large amount of accounts receivable, the law prohibits using it as collateral to borrow from the bank.In the end, the bank argued that if Timnett broke his promise, the bank could not recover the loan because the courts were inefficient and the law did not give creditors sufficient protection.The loan application was rejected, and the company's development could only stand still... Indian businessman Avik registered the company, hired workers, signed a contract, and got a loan.But when he found that the company could not make a profit and could not continue to operate, he had to face bankruptcy proceedings that lasted for 10 years.In the end, Avik escaped, leaving unattended workers, unpaid bank loans and taxes owed... If you're wondering why some districts haven't reduced poverty and created more jobs after 20+ years of macroeconomic reforms, it's because they haven't done retail reforms.According to the report of the International Finance Organization, if you want to create productive jobs (jobs that lead to higher living standards) and if you want to promote the growth of new companies (that can innovate, compete and generate wealth), then You need a market environment with perfect and reasonable rules of the game. In such an environment, it is very easy to start a company, and you can adjust your business according to market changes at any time. Due to the perfect market exit mechanism, companies that are not doing well can close their doors at any time. Capital is released and used in areas that can create value.The International Finance Corporation is not calling for a total repudiation of existing mechanisms, but for reforming various institutions related to economic development to create a favorable economic environment for people to take advantage of various opportunities for cooperation to survive in a flat world. According to the International Finance Corporation, “It takes only two days to start a business in Australia, 203 days in Haiti, 215 days in the Democratic Republic of the Congo, no fees to set up a new business in Denmark, and 203 days in Cambodia. The fee paid is equivalent to 5 times the per capita income, and the fee paid in Sierra Leone is 13 times the per capita income. Hong Kong, Singapore, Thailand and other economies that account for more than 30% of the world do not set minimum capital requirements for new companies. On the contrary, in In Syria, the minimum capital amount is equivalent to 56 times the per capita income...Czech and Danish companies are free to sign workers requiring fixed-term contracts only for special jobs, for a period of up to one year...In Tunisia, when there is a default, the courts The time to enforce the original contract was only 7 days, 39 days in the Netherlands and almost 1500 days in Guatemala. Less than 1% of the disputed contract amount was spent enforcing the contract in Austria, Canada and the United Kingdom, but in Burki In Nafaxo, the Dominican Republic, Indonesia and the Philippines, the fee accounts for 100% of the contract value. . The credit regulatory authorities in New Zealand, Norway and the United States hold the credit history of almost every adult, but in Cameroon, Ghana, Pakistan, Nigeria, In Serbia and Montenegro, people with credit history account for less than 1% of the adult population. When debtors go bankrupt, the British guarantee law and bankruptcy law will provide strong support for creditors and help them recover losses as much as possible. In Colombia, the Democratic Republic of the Congo Creditors do not have these rights in the Republic, Mexico, Oman and Tunisia. In Ireland and Japan, bankruptcy proceedings take less than 6 months, while in Brazil and India it takes more than 10 years. In Finland, the Netherlands, Norway and Singapore Bankruptcy proceedings cost as little as 1 percent of the underlying assets, compared to almost 50 percent in Chad, Panama, the Kingdom of Macedonia, Venezuela, Serbia, Montenegro and Sierra Leone.” International financial organizations pointed out that excessive rules were originally intended to protect vulnerable groups, but in fact they are very detrimental to vulnerable groups, and the rich and those with background connections can bypass cumbersome rules by spending money and robbing. In countries where the labor market is strictly regulated, companies cannot hire and fire employees casually, especially for women. "Good rules do not mean no rules," said the study by the International Finance Organization. "The ideal degree of regulation is not laissez-faire, but it may be less regulated than in most countries today, especially those poor countries. Too much.” The measures pointed out in the study coincide with the retail reforms I advocate: one is to simplify the principles and deregulate competition as much as possible.Because competition can achieve the survival of the fittest, while excessive regulation will open the door to bureaucratic corruption and bribery. “Angola has adopted the employment law enacted by Portugal, which is considered to be one of the strictest employment laws. But if Portugal itself has revised its employment law twice, there is no reason for Angola to cling to the old law. The second is to focus on strengthening the protection of property rights.Under de Soto's initiative, the Peruvian government has granted 1.2 million urban households title to the land they occupy in the last decade. "The protection of property ownership enables parents to leave home to find a job without worrying about leaving home. The main benefit is their children, who can go to school." The third is to use Internet technology into management. It can make the process faster, more transparent and less prone to bribery scandals.The fourth is to reduce court involvement in commercial disputes.Finally, the reform must be continuous, it cannot be achieved overnight, nor can it be done once and for all.Countries that perform well in surveys by international financial organizations follow this principle. With regard to the IFC criteria, it is important to note that many people think it is aimed at countries such as Peru and Argentina, but in fact, countries with very low scores include developed countries such as Germany and Italy (Germany The government even protested some of the findings in the study). LEARNING from Ireland The best example of how Ireland has leapfrogged through retail-oriented reforms in regulation, infrastructure and education is Ireland.Some things you might not know: Ireland is today the wealthiest country in Europe after Luxembourg.A country known for hundreds of years for poor immigration, famine, civil war and goblin legends, today has a higher per capita GDP than Germany, France and Great Britain. What about the patients who leaped to become the rich in Europe?The transformation in Ireland began in the late 1960s, when the Irish government removed fees for secondary education, allowing more working-class children to pursue higher education. After Ireland joined the European Union in 1973, Ireland already had a large number of workers who were more educated than the previous generation.By the mid-1980s, although Ireland had gained some benefits from joining the European Union, such as more subsidies, better infrastructure, and a larger market to sell its products. But because Ireland has been overprotective for years, it doesn't have enough merchandise to sell competitively. Ireland is on the brink of bankruptcy and most of its university students have emigrated. "We continue to borrow, spend and tax unrestrainedly, and it's almost bankrupting us," said Deputy Prime Minister Marie Marie during my visit to Dublin in June 2005.Haney said to me. "It was also because we were almost bankrupt that we had the courage to change." Ireland did change.The government, major trade unions, farmers and industrialists came together and agreed on an austere fiscal package, with corporate tax cut to 12.5% ​​(a much lower rate than in other European countries), and the government beginning to rein in Wages and prices rose, and foreign investment was heavily absorbed. In 1996 Ireland announced that public universities would basically be tuition-free, thus creating more educated workers.The results of these measures have been astounding.Today, 9 of the world's top 10 pharmaceutical companies, 16 of the top 20 medical device companies, and 7 of the top 10 software companies have started operations in Ireland.By 2004, Ireland received more foreign direct investment from the United States than China from the United States, and the country's tax revenues increased steadily. Michael, the founder of Dell Computer Corporation.Dale explained to me in an email, “We invested in Ireland in 1990, what attracted us? A well-educated workforce with good universities nearby. Ireland has industry and tax policies that are independent of political blocs and that are consistently supportive of business.Ireland also has a very good transport and logistics industry and a good location - enabling us to ship our products easily and quickly to key European markets. "Finally, adds Michael Dell, "they're very competitive and want to succeed, but they're eager and know how to succeed.Our factory is in Limerick, but we also have thousands of sales and technical staff outside Dublin.Irish talent is a pretty good resource for us.We are also the largest exporter in Ireland. Intel established its first chip factory in Ireland in 1993.Intel Corporation Vice President James.Jarrett said Intel was attracted by well-educated workers in Ireland, and that low corporate taxes and other favorable policies had saved Intel about $1 billion over the past 10 years.Ireland's national health insurance did not harm the company's interests, but greatly reduced Intel's health insurance obligations. "We now have 4,500 workers in 4 factories there, and we have been designing high-end chips with Irish engineers in Shannon." Baxter International, a pharmaceutical equipment manufacturer with many investments in Ireland Harry Jr., the former chief executive."The work ethic, the level of taxation and the flexibility of the labor supply all make Ireland much more attractive for investment than France or Germany, where the cost of laying off a worker is considerable," Kramer explained. He added that the Irish are confident that with flexible labor laws, while some jobs may be lost, new jobs will continue to be created.And it is.While Ireland has been aggressive in its employment policies, Germany and France have remained defensive, and the more protective they are, the harder it is to create new jobs. In 1990, the total employment in Ireland was 1.1 million people.By the end of 2005, this number had reached about 2 million people. Ireland has been just as aggressive on other policy reforms, with Ireland's Education Minister Mary.Hanafin explained that the country wants to take education reform to the next level.Ireland is set to double its number of PhDs in science and engineering by 2010 and has established various funds to attract global companies and talents of all kinds to Ireland for research.Ireland is now actively recruiting Chinese scientists."For our own high caliber students, to be able to talk to high caliber students from abroad and hope that they will one day build a business or invent a product," Hanafin said. From 2001 to 2005, the Irish Science Foundation has helped to establish More than 160 research groups, 34 of these research groups came to Ireland from foreign laboratories.By the way, the first leader of the Irish Science Foundation was an American working for the National Science Foundation. Ireland's story tells us the fact that money doesn't just move around the world in search of the cheapest labor.If so, all foreign capital would go to Haiti and Bangladesh.Money is looking for the most productive labor that is also the cheapest, says Cisco Systems CEO John John.Chambers said it very well: "Jobs will go to places with a well-educated workforce, competitive infrastructure, a creative environment and a supportive government. People in those places will have the best standard of living. The countries that the jobs are going to may or may not be the ones that led the Industrial Revolution." The role of culture: Globalization Today, the benefits of retail reforms will be higher than in the past, and most countries have understood this. Wholesale reforms can be promoted from top to bottom through executive orders.But retail reforms need a broader public base and strong parliamentary support if they are to overcome established economic and political interests. Why are some countries able to mobilize various interest groups and the public to carry out retail reforms to the end, while others give up halfway? The answer is culture. It is absurd to completely attribute the performance of a country's economic development to culture, but it is also unreasonable not to consider its cultural factors when analyzing a country's economic achievements, so many economists and political scientists want to include cultural influences own field of research.Of course, this research method is controversial. Cultural factors are like the elephant in the house. Everyone knows it exists, but they are reluctant to mention it.I mention the cultural factor because as the world becomes flatter, more and more collaborative tools become available to people.Some cultures encourage people to quickly acquire and use these tools, while others do not.The flattening of the world will amplify the differences between these two types of cultures, which in turn will lead to completely different development outcomes. On this question, the most important book is the economist David.Landers's "Wealth of Nations and Poor Nations". He pointed out in the book that although climate, natural resources and geographical environment can all explain why some countries can make the leap from agricultural society to industrial society while others do not, the most critical reason is their different cultural endowments, especially a The society's values ​​of industriousness, thrift, honesty, patience and perseverance, and the degree to which these values ​​are deeply rooted in the hearts of the people. You can agree or disagree with the idea that cultural customs and other factors combine to affect a country's economic situation.But Landes insists on raising cultural issues to unprecedented heights, and rejects the idea that the continued stagnation of certain countries is simply the result of Western colonization, geography, or legacy.His perspective lifted my spirits. In my opinion, in a flat world, culture affects the development of different groups of people in two ways.One is the extroversion of the culture: to what extent is it receptive to other cultures?How well does it perform in terms of combining globalization with localization?The second is the degree of introversion of culture.To what extent do people identify with the so-called national unity and concentrate on the economic development of the country; Can the elite in China care about the general public and are willing to give back to their motherland, or ignore the poverty of the country and only care about making money abroad? The more outward-looking a country's culture is, the easier it is to absorb new foreign ideas and technologies and integrate them with its own traditions. India, the United States, Japan, and Chinese culture in recent years have outstanding capabilities in this regard.For example, from the perspective of Indians, the Mongols came and the Mongols went; the British came and the British went. But Indian culture still stands, Indians still eat curry, Indian women still wear saris, and Indians still live in families with generations living together.This is the best example of the combination of globalization and localization. "In this world, an open culture and a culture that doesn't reject new elements will prevail," said Jayses, chief executive of Mphasis, which runs India's high-tech trade federation.Rao said, "My great-grandmother was illiterate, my grandmother only went to 2nd grade. My mother didn't go to college. And my sister got a master's degree in economics, and my daughter is currently studying at the University of Chicago. We witnessed Seeing these changes, and we are willing to make changes... You must have your own inherent culture, but also accept the integration of other cultures.People who stick to their own culture and reject others are at a very disadvantaged position.Come to think of it, when the emperor of China kicked out the British diplomats, who was hurt in the end?is China.Clinging to one's own culture is very dangerous. "It's very important for a country to be open," Rao added, "because it means you start getting access to talented people.When you're talking to a developer in another part of the world, you don't know the color of his or her skin, and you connect based on mutual recognition of talent rather than race or ethnicity.If you live in a country that advocates this kind of cultural outlook, this culture will subtly change your view of the entire human society. "This could explain why many Muslim countries are struggling with unease as the world flattens out. Due to complex cultural and historical reasons, except for Turkey, Lebanon, Bahrain, Dubai, Indonesia and Malaysia, which have gradually become more and more secular, many Muslim countries cannot effectively combine globalization with their own traditions. In today's world, only an adaptable and inclusive culture can truly benefit. Think about Ben.The guiding ideology of bin Ladenists.They want to remove all foreigners and foreign influence from Saudi Arabia.This is exactly the opposite of openness and cooperation.Tribal culture and ideas still dominate in many Arab countries.In a flat world, the division of labor is increasingly complex, with more and more people collaborating with people they don't know or will never even meet.If you want to participate in the modern division of labor, you have to have more trust in strangers. David.Landes said that in the Arab Muslim world, certain cultural concepts have become obstacles to social development, especially some concepts that prohibit women from appearing in public places and from participating in economic activities.In such a society, men are born with privileges over their sisters and all female members of the society, which is very detrimental to men as they develop a sense of self-righteousness which deprives them of advancement, advancement and fulfillment motivation.Of course, this sexism is not limited to the Middle East.In fact, similar social phenomena have appeared in different stages of historical development around the world, even in the so-called modern industrial society. The resistance to globalization in the Arab Muslim world has drawn some Arab attention. On May 5, 2004, Arabian News, an English-language daily published in Saudi Arabia, published a report by Saudi Arabian journalist Raed.Gustacia's article titled "How long do I have to wait before taking the first step?" "In Saudi Arabia, terrorist attacks have become a daily occurrence in the news. Whenever I hope and pray that it will not happen again, the situation will only get worse." Turki, editor-in-chief of "Riyadh News". Al Su Dali analyzed the root causes of these terrorist incidents.He said, "Those who carried out the terrorist mission are believed to be Juhaiman (Juhaiman) Followers of the movement, which swept major Islamic monasteries in the 1970s.This movement sees infidels as abhorrent, and believers should be freed from the death penalty for infidels, whether they are Westerners or traditional Arab Muslims who are unwilling to comply with their wishes.Al Sudali said: Faced with this situation, what should Saudi Arabia do?If a country refuses to delve into the underlying causes, as we have been doing for the past 20 years, it is only a matter of time before another group of saboteurs armed with the same ideology gains strength.