Absence of property titles slows integration — De Soto

PERUVIAN economist Hernando de Soto met Housing Minister Lindiwe Sisulu yesterday to discuss SA’s problems in housing the poor, and said he would assist “SA in any way I can”, if asked.

De Soto met Sisulu last night at a reception also attended by Banking Council GM Cas Coovadia, FirstRand Bank CEO Paul Harris and other business people.

Sisulu’s spokesman said the ministry would “appreciate his assistance as one of the leading housing theorists in the world” and would try to make plans to work with De Soto.

De Soto has become one of the most influential economists when it comes to dealing with poverty in developing countries, and has worked closely with governments in Peru, Mexico and Tanzania.

His Institute for Liberty and Democracy has been rated as one of the top two global think-tanks, according to the Economist magazine.

Speaking yesterday at a conference organised by Investec Asset Management, De Soto conceded he did not have in-depth knowledge of SA’s economic framework. He said, however, “I know the sickness” of two separate economies, one for the rich and the other for the poor, which were struggling to integrate.

SA’s economic framework appeared, at first glance, to exhibit similar characteristics to many other poor countries, he said, as there was “lots of migration towards big cities like Johannesburg, yet most of the people are excluded from the legal system”.

De Soto said in other developing countries, his research showed that more than 70% of inhabitants were typically excluded from the formal legal system, which meant they did not enjoy property rights.

He said once those individuals were “legalised”, and could exercise legal property rights, it became easier to assimilate those excluded into the mainstream economy.

Article by: Rob Rose - http://www.businessday.co.za