Strolling around the districts of Lima, the City of Kings, one gets the busy vibe of a big city. People whip pass you in a frenetic frenzy to get to where they need to be, even though our culture is infamous for being late. You hear a cacophony of sounds. The shrill of horns honking, thinking that by doing so will make the congestion of vehicles move faster. The transit police blowing their whistles to decongest the traffic, that in fact only causes more noise pollution and creates more anxiety among the pedestrians or drivers. Once you manage to get your sense of sound under control, you look around and on every corner of the city you spot our so-called ‘entrepreneurs.’
The culture of entrepreneurship is very much embedded in the Peruvian culture; I assume so since the ancient times of the Inca Empire, where trading played an important role in the civilization. But sometimes entrepreneurship becomes a misconception here. By definition an entrepreneur is a person who organizes and operates a business or businesses, taking on greater than normal financial risks in order to do so. We have great examples of successful entrepreneurs in Peru, such as Isaac Lindley, founder of our trademark soda Inca Kola, and Erasmo Wong, founder of the city-wide supermarkets Wong. There are many other stories about Peruvian entrepreneurs who started from nothing and have risen up to unimaginable heights. I should also mention the Gamarra Emporium, the money making machine where thousands of people are employed.
So let me clarify about this misconception of entrepreneurship. Although I appreciate the fact that entrepreneurship is encouraged by the government in a big way, our society and our not-so-perfect system allows for informality to reign. If we compare the economic situation from the 1990s to now, we are certain to say that the country has been able to overcome some serious obstacles, such as beating hyperinflation and consolidating external debt. We sure have gone forward economically in the last two decades but there is a trend that still persists and that is the informality. It is shocking to know that about 80% of our labor is informal. That means that out of every 100 Peruvians, 80 work in an informal manner.
For some of us who have owned businesses in other countries (in my case the States), it is difficult to conceive and accept the modus operandi of Peruvian entrepreneurs. Let me start by saying that the rules and regulations are much stricter in the land of Uncle Sam. There is no way to open up a diagnostic center there in the way we do here. Everything in the medical field is about licensure. It took me over six months to get my occupational license (which is very expensive by the way), plus all the other permits one needs to get (not to mention having to get a licensed Medical Director on board). They also perform a very rigorous background check on the owner and every member of staff. It would be silly to think that one can just set up camp in any given corner of a city and start selling food, snacks or whatever you want. Guaranteed you will be taken in for littering, loitering and operating a business illegally.
Informality is imbedded in every district of the city. I would also like to add how ridiculous it is to have the informal currency exchange people walking around with wads of cash in their hands, putting their lives at risk and the people around them. I have seen slight effort from some municipalities but the laws and rules lack consistency and enforcement. One way for the government to generate revenue would be to impose a hefty fine to street vendors. Everyone should have an occupational license and also pay their owed taxes. This would definitely help to add more structure to the society and that would benefit us all.
I feel that entrepreneurship is a great asset to the economy and that everyone has the right to make a living, but let’s get organized and have everyone play by the same rules.