Kathleen’s got the goods on Zedillo
and she’s blogging about it:
You have to admit that I might be allowed a wee bit of incredulity when it comes to anything Zedillo says. If the name Ernesto Zedillo isn’t ringing a bell, well, let me inform you: he was the last PRI (The Institutional Revolutionary Party—an oxymoron if there ever was one) President of Mexico. The guy that Vincente Fox replaced. He was also the guy who lost control of the government for the PRI, which is why he’s hanging out in New Haven now, as the Director for the Yale Center For the Study of Globalization, and not in Mexico City. I can’t think that Mexico is a good place for him to be right about now. Good thing Yale coughed up a job, eh?
I don’t know much about Zedillo’s background, or about his character, for that matter, but yesterday I posted about his Forbes article on reforming Latin American economies. Since Zedillo exhorted countries to invest more in human and physical infrastructure, guaranteeing the rule of law, and the removal of internal and external barriers to competition, I’m all for the proposal.
Sadly, Latin American economies are also saddled with a nationalism that prevents them from seeing beyond their borders. One could argue whether to include that in the barriers to competition, but it exists. For example, about a year ago I attended a lecture at the University on a proposed dam/power plant in Bolivia. Aside from the usual logistics, environmental, and human costs (moving people from their farms, etc) problems, which have put the kibosh on many such projects, one of the larger issues — you could say, an overriding issue — was that the work had to be done by Bolivians, and the investors (aside from the Bolivian government) had to be exclusively Bolivian. Considering how few companies around the world have the knowledge and resources to carry such a large-scale hydroelectric power project to completion, I was surprised about the first constraint, and amazed by the second. Bolivia is not a rich country, and power plants’ costs reach into the billions of dollars. I raised my hand and asked if a public stock offering had been considered, and was met with silence. I explained that, for instance, the Chinese Three Gorges Dam project had attracted a lot of investors, not only Chinese, and that here in the USA in the 1970s I had invested in Texas Utilities, which paid a nice dividend and was a win-win situation: the utility was able to finance the project, the Texans got their power, and the investors got a nice return on their initial investment (I sold at a profit after a few years — I haven’t followed the company since). I also remarked that no time in the trasactions had anyone inquired as to my nationality. In all, I was told that, to the Bolivians, that sort of thing was out of the question.
Last I heard, no power plant in Bolivia.
But back to Zedillo. Kathleen asks, “Why Forbes gives this guy column inches, I haven’t the foggiest idea.” I don’t either, but here’s a guy I propose: Hernando de Soto.