Peruvian born world renowned economist, Henando De Soto, is coming to Pakistan to discuss country's economic issues on the invitation of President General Pervez Musharraf.
An early assessment team of De Soto is already working with the Finance Ministry on the SME sector to suggest recommendations for making them vibrant and dynamic entities.
De Soto, who met Finance Minister Shaukat Aziz in Dubai where the minister had gone to attend Bretton Woods Institutions' meeting, would deliver a lecture to top officials of the country and would also meet the President.
He has authored a famous book "The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else", triggering a debate on the issue.
He opines that maturing of the system of titles of property led to manifold uses in capital market and enhanced multiplicity of capital and its proper use.
Developing countries lack system and keep themselves busy in litigation and, thus, found their urban and rural lands as dead stocks unable to create means of production for their assets.
"Hernando De Soto's book is insightful and written in a captivating style. It explains that poverty lingers in the Third World because of the failure to create a system of recognising and organising each citizen's property that will allow for it to be converted into dynamic capital usable to produce wealth.
For instance, in much of the Third World, if you don't have a legal address; then you cannot use your house as collateral for a loan to open a business," according to a review of the book.
In an interview on determining a system of formalised property rights and ensuring the benefit of new system to everyone including those without any informally-held property to begin with, de Soto said: "The first step is to figuring out who owns what, and that is not always clear because record-keeping systems for assets, whether real estate or business, do not necessarily reflect reality.
The only way you can get the owners to come out and say: "Yes, I own this", is by giving them a property right that is more efficient than the existing system and that allows them to defend their property claims."
Second issue on which De Soto's team is working is cumbersome process entails in facilitating the SMEs.
SMEs do not go for registration and avoid legal hassles because of non-facilitation from government set-ups. The team has recently worked in Cairo on SMEs.