Chapter 108: That Time I Handed Out Investment Money in South America (2)

TL: Skye

The cabinet meeting room of the Presidential Palace.

Two weeks since the Export Golden Pyramid Plan had been approved.

The ministries began reporting their implementation plans.

"The Ministry of Foreign Affairs intends to assemble a pool of interpreters to support export activity by private companies."

"Interpreters?"

At Yu-jin's question, Sophia spread her documents open.

"Yes. At present, only a very small number of San Marcos citizens can speak English. Interpretation is essential for trade with any country outside the Portuguese- or Spanish-speaking world, and private operators simply don't have the means to hire interpreters on their own."

Sophia looked at Yu-jin.

"So we propose a system that dispatches Foreign Ministry interpreters and Korean-capable personnel to private export firms. Free of charge for the first six months, with the support period extended thereafter according to export performance."

"Good. Go ahead and push it forward."

Yu-jin nodded with a satisfied expression, and the Senior Secretary for Construction hurriedly stepped in.

"The Ministry of Construction would like to provide office space for startup companies."

The Construction Senior Secretary pulled out a blueprint and spread it across the table.

"We plan to develop a complex of small startup offices inside the industrial park. If we use Tortilla Construction's idle materials, we can cut building costs dramatically. Offices of roughly thirty-three square meters could be leased at a third of the market rate."

"That's a good policy too. Proceed."

The mood was excellent.

Inwardly, Yu-jin was impressed.

'Do something long enough and you do get better at it, huh.'

This was no longer the San Marcos that had once proposed encouraging the farmers as its drought contingency policy.

Since Yu-jin's administration, the caliber of the senior secretaries, and of every ministry, had risen noticeably.

He was nodding along in that contented frame of mind when Ricardo, the Senior Secretary for Finance, raised a hand.

"Your Excellency, the support measures are excellent, but... before that, I believe I have to raise one fundamental problem."

"Go ahead."

Yu-jin nodded, and Ricardo rose from his seat.

"Interpreters matter, offices matter, but in the end, starting a business takes money."

"Which is exactly why we're offering low-interest loans."

"Loans won't get us to the level Your Excellency is aiming for."

"Hm? Why not?"

Ricardo said, adjusting his glasses.

"A business has to begin from the desire for a better life. But right now, the people of San Marcos are living through the most prosperous period in their history."

Ricardo paused for a moment.

"A loan is, at the end of the day, money that has to be repaid. Happy people don't take that kind of gamble."

"......"

The meeting room fell silent in an instant.

It was true.

The people of San Marcos today had no notion of what a better life even was.

Five years ago they had been starving, but now they were warm and well fed, and on top of that, their children were attending school.

Which meant there was no reason to go into debt to start a business.

"Ah..."

Yu-jin nodded.

Ricardo was right.

A loan was a risk.

Telling a person who was already happy to take on risk was not a persuasive proposition.

Aman, the Senior Secretary for Industry, nodded and added his support.

"The Ministry of Industry ran into the same problem. We surveyed the current students and graduates of San Marcos National University, and not a single person expressed any wish to start a business."

"Not one?"

"No. Most of them wanted jobs with a Tortilla affiliate or a government agency."

A natural enough result, in a way.

Yu-jin leaned back in his chair and let out a sigh.

"So what's the alternative?"

"Not loans. Investment."

"Investment... you say?"

"Yes. The state puts up the seed money in exchange for equity in the company being founded."

"So the state becomes a kind of angel investor."

Yu-jin narrowed his eyes, and Ricardo hurried to explain.

"It removes the risk. It isn't debt, it's investment capital, so even if the venture fails there's nothing to repay. For someone sitting on the fence about whether to try, it's a shove in the back."

Yu-jin folded his arms and sank into thought. The logic held.

But.

"Won't that invite moral hazard?"

He was afraid of the side effects.

"If it's money that never has to be repaid, someone could just play at being an entrepreneur to pocket the cash."

At Yu-jin's words, Sophia spoke up in agreement.

"Precisely. There is almost no case of this kind of policy succeeding in Latin America. Venezuela, Argentina, Bolivia. Every one of them opened the taps and ended up with nothing but ruined finances."

It was a fair point.

Handouts make people lazy.

Just as the atmosphere in the room was turning heavy, Ricardo and Aman both laughed at once.

"Hahahaha."

Sophia looked puzzled.

"What's so funny?"

Ricardo spoke.

"Senior Secretary Sophia's concern is entirely legitimate. In any country other than San Marcos."

"......"

"But surely a people who have received Your Excellency's grace would never commit such an act?"

Everyone gave a small nod.

The patriotism of the citizens of San Marcos was, at this point, without parallel anywhere in the world.

That such people would harm the state was difficult even to imagine.

And.

"We simply write a clause into the terms of investment. If the funds are used for anything other than their stated purpose, or if the recipient fails to report business results, the full amount is repaid through labor. And the site of that labor repayment would, naturally... be Tortilla Farm."

San Marcos had Tortilla Farm.

The place where criminals, corrupt officials, and social misfits were sent.

The place where debts were worked off with labor in an endless sugarcane field, from before dawn until sundown.

In this country, being sent to the Farm was the most terrifying punishment short of execution.

A strange silence settled over the room.

The senior secretaries looked at one another.

Moral hazard?

In this country?

Take the investment, live it up, and get hauled off to the Farm?

Who on earth would do that?

They'd sooner hand over their life.

Sophia was left with nothing to say.

Yu-jin unfolded his arms as he spoke.

"There's something to that. Let's pursue it properly. Senior Secretary Ricardo, work out concrete disbursement criteria and scale. Senior Secretary Aman, build the review system."

"Yes, Your Excellency."

"Yes."

And so the first state-led Startup Investment System in the history of San Marcos was born.

***

A few days later.

Downtown Libertad, Café El Sol.

The first graduating class of San Marcos National University had gathered.

"I applied to Tortilla Energy."

"Did you get in?"

"Yeah. Starting as a trainee."

Isa, from the education faculty, spoke up.

"I've been assigned to an elementary school down south. I head down next week."

"Elementary school? That's going to be rough."

"Somebody has to do it."

Camila sipped her coffee.

"I'm studying for the Ministry of Justice civil service exam. Apparently they're hiring because they have to draft a whole new commercial code."

Diego, from the engineering faculty, cut in.

"I applied to Taeyang Apparel. The pay's decent."

Every last one of them was talking about jobs.

Tortilla Energy, Taeyang Apparel, the Ministry of Justice, the Ministry of Education.

Landing somewhere stable came first.

For the 487 members of the first graduating class, the word startup was still a distant thing.

Ricardo had been right.

They were happy enough as it was.

There was no reason to gamble.

But not all of them thought that way.

The young man who had been quietly drinking his coffee in the corner of the table opened his mouth.

"I'm going to start a business."

Every gaze swung toward him.

Tesio Marques, business administration.

Upper-middle of the pack, grade-wise. Not a student who had ever conspicuously stood out.

But the story of how his graduation thesis had impressed that notoriously exacting President James Mikel was fairly well known among his classmates.

"Doing what?"

"Tourism."

"Tourism?"

"Selling San Marcos tours to foreigners."

Diego snorted.

"Think that'll sell?"

"It's the Caribbean. Beaches, great weather, and the security situation's stable now. Put together a proper package and it'll sell like wildfire, guaranteed."

Camila asked.

"What about money? Hiring staff and getting an office is going to take a serious amount."

"I'm going to apply to the Ministry of Industry for investment."

"Investment?"

"Apparently if you want to start a business, the state invests in you."

Ernan, from the engineering faculty, set down his coffee cup and showed off what he knew.

"I heard about that. They put up seed money in exchange for equity in the company, right?"

"Right. I'm going to apply for it and give this a real shot."

The classmates looked at one another.

Half worry, half curiosity.

Ernan clapped Tesio on the shoulder.

"You lunatic. I'm rooting for you."

"Thanks."

Tesio finished off his long-cold coffee.

*

It went without saying that university students weren't the only ones eligible for investment.

Working professionals could receive it too, as long as they met the qualifying criteria.

And right now, Nicolas Herrera, a journalist with San Marcos State Broadcasting, had come to the Ministry of Industry to apply.

"Good afternoon. I'm here for a consultation. Ah, and this is what I currently do."

The ministry official looked over the business card and nodded.

"You're a journalist? Have you already left the broadcaster?"

"Not yet. But if the investment is confirmed, I intend to resign."

"Sensible. There's no guarantee you'll clear the review, and quitting your job first would leave you with no way out."

Nicolas took out his business plan and set it on the table.

[Libertad Daily — San Marcos's First Private Newspaper]

The official looked at the cover and tilted his head.

"You want to found a newspaper?"

"Yes."

Nicolas said as he took a seat.

"A country of ten million people has exactly one news outlet. No newspapers, no radio news, no internet media. State Broadcasting is all of it."

"Well, that's true enough."

The official nodded.

It was a fact.

Private media did not exist in San Marcos.

State Broadcasting was the only news channel, and the people knew the world through it alone.

"I've felt it over these last three years. The people want more information."

Nicolas opened the business plan.

"I'll cover regional news, practical daily information, economic news, all the things State Broadcasting can't touch."

The official turned a page and asked.

"And personnel?"

"I have four people ready to join me."

"Revenue model?"

"Advertising. The number of companies in San Marcos is growing, isn't it? Once people start founding businesses on these subsidies, those businesses are going to need somewhere to place their ads."

The official nodded, impressed.

The companies created by this policy would take out ads, those ads would keep the newspaper running, and the internet paper's articles would in turn promote still other companies.

A virtuous cycle for the private economy.

"Your business plan is solid. The revenue structure is clear too."

The official set the documents down and spoke.

"Very well. I'll submit it for review."

"Thank you."

Nicolas rose from his seat and asked a question.

"May I ask one thing, though?"

"Please."

"If private media comes into existence... the government wouldn't find that uncomfortable, would it? Ah! Naturally, I have no intention whatsoever of criticizing His Excellency or the government."

The official hesitated.

Honestly, it was a question he had never considered.

Until now, the news in this country had been State Broadcasting and nothing else, and State Broadcasting had, in practice, represented only the government's position.

A private newspaper coming into existence meant a voice the government did not control coming into existence.

The official thought for a moment, then answered.

"That isn't for me to judge. But His Excellency has instructed us to encourage private enterprise, and a press company is a business, if you want to call it one."

Nicolas snorted out a laugh.

"That's good enough for me."

Nicolas stepped out of the consultation room.

He walked down the corridor, thinking.

He wanted to tell the stories he had never been able to tell at State Broadcasting.

Articles praising His Excellency's achievements would of course have to be written, but he wanted to carry the story of the market vendor, the fisherman's day, the voice of the factory worker, and the events unfolding all across San Marcos.

'Libertad Daily.'

Nicolas murmured the name of the newspaper he was going to found.

*****

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