Mike Moore, former Director-General of the World Trade Organisation and Prime Minister of New Zealand, today said he was excited by the possibilities of a U.N. high level Commission on the legal empowerment of the poor that he has been invited to join.

The Commission will be co-chaired by Peruvian economist, Hernando De Soto, and former U.S. Secretary of State, Madeleine Albright. Other members of the Commission include former Presidents of Tanzania, Ireland, Mexico, Brazil, head of the World Bank, and Nobel laureates (the full list of Commissioners will be announced when the Commission is formally launched in New York in September).

“We have learnt what works and what does not in the struggle against global poverty, those countries that have done the best are those that respect property rights, have independent courts, a professional public service, accountable, replaceable politicians, democracy and human rights. They are key factors in development, economic progress as well as good in themselves,” said Mr. Moore.

“I know Hernando De Soto very well, his landmark studies and book, ‘The Mystery of Capital’ which explains that the poor in poor countries have assets and succeed mainly in the informal economy outside the legal system is one of the most important studies in the past 20 years. The story of successful economies is their capacity to protect private investment and allow people to borrow against their assets. Most start-up businesses in the West are based on loans against properties. Yet most jobs and businesses in poor countries are outside the legal system because they don’t trust Governments, stated Mr. Moore”

• Throughout Latin America 80% of all real estate is held outside the law.
• The extra-legal sectors in the developing world account for 50-70% of all working people and are responsible for one-fifth to more than 2/3’rds of the total output of the Third World.
• The assets of the poor in Egypt alone are more than 50 times all the foreign investment ever recorded including the funding of the Suez Canal and the Aswan Dam.
• In Haiti the value of the extra-legal real estate was 10 times the value of the holdings of the Haitian Government. The assets of the poor are still 150 times greater than all the foreign investment received in 200 years.

But in Haiti it can take 65 bureaucratic steps and 2 years to lease land for 5 years with the right to purchase.

In Egypt it can take 77 bureaucratic procedures at 31 public and private agencies to acquire and register a ‘lot’ on state-owned desert land. This takes 5 to 14 years.

“This explains why millions build their homes and businesses illegally,” explained Mr. Moore.

The evidence is overwhelming that the model which delivers the best results in lifting living standards is where rights are upheld, corruption exposed by competition, and an active civil society polices these policies. Studies of the poorest countries show that the most democratic do the best.

“This work folds neatly into other work I’m now doing overseas,” concluded Mr. Moore.

Mike is also a member of the U.N.’s Global Commission on International Migration.