In this wealth creation process, not a square foot of land is created, but it makes a big difference in transferring latent state land to a large number of “squatters”.
This is the model advocated by Peruvian economist Hernando de Soto who has advised many governments. His line of reasoning was that the poor who “squat” on state land in Third World countries had houses to live in or farms to work on, but did not own them – land titles would enable them to sell the property or use them as collateral for bank loans.
Such a programme would unlock the values of squatters' land, which to de Soto's estimate, total more than US$9 trillion worldwide. This creation of capital for “squatters” is of crucial consequence in a capitalist system.
It would also narrow the disparity in income and assets between poor “squatters” and those in the towns and suburbs, an important endeavour in any economic policy.
De Soto's model is applicable, of course, only where state land, and not privately owned land, is involved and where the “squatters” have lived or worked the land for many years or decades.
Thailand, under former prime minister Thaksin Shinawatra, implemented a Capital Creation Scheme in 2003, following de Soto's advice. Bill Clinton had told Thaksin about de Soto's views when the former US president visited Thailand in 2002, according to Internet reports. The effects of the scheme in Thailand are not known.
http://star-space.com/news/story.asp?file=/2008/4/7/pnews/20842660&sec=pnews
