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Homeland Security

13 February 2003

Evans Outlines Importance of Economic Inclusion in Combating Terrorism

(Praises Peruvian's efforts to fight poverty, curb terror recruitment)
By Scott Miller
Washington File Staff Writer
Washington -- Freedom, free enterprise and democratic capitalism are
the solutions to the poverty that provides fertile ground for
terrorist recruitment, according to Secretary of Commerce Donald
In February 12 remarks before the conference "The Other Path: The
Economic Answer to Terrorism," Evans outlined the importance of
encouraging economic opportunity -- and the hope it inspires -- in
order to combat terrorism.
"There is not enough hope, too much poverty and too much despair in
too many parts of the world," Evans said. He argued that such
conditions offer a hospitable climate for terrorist recruitment and
cited President Bush's remarks at the United Nations International
Conference on Financing for Development in Monterrey, Mexico, in 2002
to explain the linkage between poverty and terrorism.
"We fight against poverty because hope is the answer to terrorism. We
fight against poverty because opportunity is a fundamental right,"
Evans said.
The secretary called on the development community, the corporate
sector and governments to aggressively address the challenge of
poverty. "The solution is freedom, free enterprise, and democratic
capitalism," he added.
Capitalism works, Evans said, by sparking the innovation that fosters
greater productivity. That greater productivity, in turn, spurs
economic growth and a better quality of life for all, he noted.
The creation of a healthy and inclusive capitalist system requires "a
strong commitment to good governance, sound legal and economic
systems, and economic policy that favors free enterprise," the
secretary said.
Because the president wants to encourage those developments, the White
House rejects "pouring money into failed, tired efforts that do little
to help the poor," Evans said. Instead, Bush has offered an
alternative known as the Millennium Challenge Account (MCA), announced
at the U.N. Development Conference in Monterrey.
Under the auspices of the MCA, the Bush Administration hopes to
increase foreign aid to $5 billion annually by 2006. The additional
monies would be used to reward countries that practice good governance
as demonstrated by a commitment to the rule of law, anti-corruption
measures, human rights and economic freedom.
"It is critical to encourage policies that create wealth, economic
freedom, political liberty, the rule of law and human rights," Evans
The Bush Administration's campaign to reduce global poverty and thus
curb terrorism, the secretary suggested, are consistent with the goals
of Hernando de Soto, the president of Peru's Institute for Liberty and
Democracy (ILD). Evans applauded de Soto for his organization's
efforts to make capitalism work and dramatically reduce terrorist
De Soto, whose organization co-hosted the February 12 event with the
Center for International Private Enterprise (CIPE) and the National
Democratic Institute (NDI), "offers economic answers to terrorism in
this world," Evans said.
De Soto's ILD was created in Peru in 1982 to counter the efforts of
Peru's Shining Path (Sendero Luminoso) terrorist group to recruit
among the nation's poor. The ILD encouraged property reforms that
empowered Peru's poor and provided them a stake in Peru's formal
economy by offering them access to the nation's legal system and
marketplace opportunities.
Moreover, de Soto's group encouraged four million Peruvians to acquire
legal titles to their land, and now 75 percent of Peru's real estate
industry and other businesses have attained legal status. The ILD's
efforts greatly diminished the ideological appeal of the Shining Path
and, according to CIPE's "Overseas Report," Shining Path leader
Abimael Guzman said in his official newspaper that his terrorist group
could no longer recruit due to the popularity of de Soto's book, "The
Other Path: The Economic Answer to Terrorism," at university campuses
in Peru.
Following its success in Peru, the ILD has spent the last two decades
promoting property reform and moving millions of businesses from the
informal economy into Latin America's economic mainstream.
More than 20 heads of state in developing nations and the former
Soviet republics have sought the advice of the ILD in implementing
reforms that provide the poor with property rights that they, in turn,
can leverage to create wealth and opportunities and raise living
The Bush Administration supports de Soto's efforts and initiatives
globally, since these "are the ideas that bring hope to billions,"
Evans said.
(The Washington File is a product of the Office of International
Information Programs, U.S. Department of State. Web site:

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