Arrival City_ How the Largest Migration in History Is Reshaping Our World - Doug Saunders [146]
For this family to get a middle-class berth required a network of property enterprises and a highly leveraged financing arrangement of staggering complexity. It has left them with a home, but in a fragile way: Their monthly expenses, including $200 for the loan, $15 in maintenance fees, $80 for Prateek’s college tuition, and $12 for Rohan’s secondary-school fees, are about the same as Manohar’s salary; they have absolutely no leeway for disasters or setbacks. “It’s difficult to get by—we have had to borrow so much, and our income barely meets our expenses,” says Manohar. “We are really counting on our sons for everything.” At this, Prateek, practicing his Java programming on the computer in the corner of the room, looks over nervously.
The secret to a successful urban arrival for the Magalhães and Parab families, as for Sabri Koçyigit in Istanbul and the Tafader family in London, has involved full and legal ownership of property. This gave them not only a secure place to live but also a source of equity. The arrival city’s middle-class transition is very often built on real-estate values.
And if those values prove to be illusory, social mobility can grind to a halt. While most people living in the world’s arrival cities have paid someone for their property and believe themselves to be the full owners, many of them are not legal or secure owners: They could be evicted by government authorities or private-sector agents at any moment, and their property carries no official financial value, so it cannot be leveraged for other uses. One study estimates that in the developing cities of Asia, Latin America, sub-Saharan Africa, and the Arab states, between 25 and 70 percent of the urban population is living on land with no clear title.19
For a great many politicians and economists during the past 20 years, the major issue surrounding arrival cities has been the question of property ownership. That, they believe, is the beginning and the end of the social-mobility issue. The debate began in the 1980s, when a Peruvian economist began a drive to turn that country’s millions of rural-arrival squatters into property owners. Hernando de Soto established a network of formalization committees, which turned the jumble of arrival-city land titles into proper deeds and allowed people to form small businesses in a few days with a couple of forms, rather than the hundreds of days and scores of forms previously required. It was an exercise in immersing the very poor in a real economy. In 1989, de Soto described this process in a book provocatively titled The Other Path. Its title was a reference to the Shining Path guerrillas, the extreme Marxist-Maoist group that had become Peru’s principal oppositional force in politics. As with so many other movements, they threatened the integrity of the state by mobilizing the frustrated and trapped arrival-city second generation into violent action. His book argued that the simple granting of property ownership to rural-migrant squatters in the outskirts, and easing the process of forming businesses for them, was a far better method of ending poverty and creating a middle class than the radical collectivizations offered by the Shining Path or the more bureaucratic state-driven solutions offered by populist governments.20
De Soto’s message had a dramatic effect, not just in South America but especially in Washington. His methods became orthodox among governments across the developing world, and it is likely that hundreds of millions of people in the periphery have received secure land title because of his influence. It helped that de Soto, in his early works, was opposed to most forms of state redistribution, a message that appealed to the U.S. Republican administrations of the time. It also helped that his ideas came to be championed by Alberto Fujimori, the conservative, Washington-friendly president of Peru.