Bill 1609 Will Be Good for Peru's Economy: an Open Letter

I find it shameful that an agent of our own national government would misuse his post to personally lobby on behalf of one corporate entity.

To:      Office of the Ambassador;            US Consulate Office, Lima, Peru;            Otto J. Reich, Assistant Secretary of State;            Bureau of Western Hemisphere Affairs;            Alejandro Toledo, President, Republic of Peru;            The people of Peru and their elected Congress;

As a US citizen and taxpayer, I am outraged by reports of the behavior and actions of our former ambassador to Peru, John R. Hamilton, in interfering with the passage of Bill 1609 by the Peruvian Legislature.

While I fully understand that Mr. Hamilton's duties as an ambassador representing our national interests in Peru certainly include economic and commercial interests, the position of our government can never be to represent the sole interests of one commercial entity over those of other US companies, many of whom, as it happens, would find economic benefit in the open market in commercial software that 1609 would create in Peru. Is it the duty of the US government to choose which US companies can and cannot be permitted to compete openly in a given marketplace or to discourage opportunities for politically nonfavored US companies in an arbitrary or potentially corrupt manner? We often hear about such activities occurring in countries that are neither democratic nor have open and free markets, so I find it shameful that an agent of our own national government would misuse his post to lobby personally on behalf of one corporate entity, especially one that has been convicted in our own courts of establishing an illegal monopoly.

That 1609 is a matter of internal policy for Peru and an expression of the people and their democratically elected representatives to maximize the value of software goods and services purchased through their national government also seems to be a matter for Peru to decide, without outward intimidation and threats to existing and future treaties between our nations. As with any democratic legislature, the congress of Peru has a fundamental duty to receive the most value for goods and services purchased when spending their taxpayers' money. In our own country this is done through FAR (Federal Acquisition Regulations). The goal of FAR is not to run an auction where the lowest bidder receives government contracts but to create conditions where the most value will be received at the lowest possible cost.

Similarly, 1609 hopes to create a situation where the most value can be gained from the Peruvian government's investment in software products and services. Passing 1609 would make it possible for Peruvians to develop and compete locally with new and innovative products in the international software marketplace on an equal basis, rather than merely consume and service products produced by others. Unlike the false claims made by Mr. Hamilton, rejecting 1609 will not in itself magically create 15,000 new jobs. After all, rejection of this bill only will continue the way by which Peru's government currently purchases software and, hence, effect no change at all. In rejecting 1609, there likely will be less jobs available, as the ever-increasing costs of proprietary licenses restrict money for other purposes.

It is clear that in addition to creating open markets, 1609 will help make Peru a true economic partner rather than a dependent nation in software technology. As such, it provides opportunities for Peru's entrepreneurs to produce products and services locally rather than forcing dependence on a monopoly. This will promote growth of a democratic culture and an expanded middle class in Peru. A bill like 1609 is likely to revitalize the commercial software marketplace and increase the value of software purchased by our own government; it should be emulated rather than discouraged.

My fondest hope is that Mr. Hamilton's replacement is better able to serve the needs of representing the goals and interests of our nation as a whole to Peru. In my own opinion, our deepest national interest should be in the long term goals of encouraging the continued growth of a civil democratic society and open markets, as this will provide the maximum commercial opportunities for ourselves as well as for the people of Peru. Laws like 1609 will help make this goal become possible, putting an end to colonial economics.

David Sugar218 Louis AveSomerset, NJ 08873

David Sugar is the GNU Bayonne Project maintainer.



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Peru and International Trade

Jim Klich's picture

Do not open up your country to International trade until you are ready. Do not compromise. I would work with the World Wildlife Fund to set up restrictions and parks before you open to trade. Doing this will put Peru first.

Re: Bill 1609 Will Be Good for Peru's Economy: an Open Letter

Anonymous's picture

How do we get in touch with Reich, Hamilton and accomplices?

Re: Bill 1609 Will Be Good for Peru's Economy: an Open Letter

Anonymous's picture

It's interesting that Microsoft favors free market as long that free market favors them because they are a monopoly. Other countries have come to associate Microsoft with American democracy although Microsoft is an aberration of an economic system, free enterprise. No wonder other countries resent the United States' way of life so much, being pushed around by Microsoft, who they perceive to represent America.

Re: Bill 1609 Will Be Good for Peru's Economy: an Open Letter

Anonymous's picture

Excellent Letter David:

It's the same old influence trade that this country has used, for the last fifty years, to impose it's wishes on the "weaker" democracies of the world. I find it ironic that our government makes so much of our democratic way while it wastes no time walking all over the democratic way and it's principles when they apply to another nation!

At the risk of sounding cynical, I wonder how much this "public servant" was paid for his services to Microsoft??


Re: Bill 1609 Will Be Good for Peru's Economy: an Open Letter

Anonymous's picture

It's just double-talk. Just like Microsoft uses the expression "free market" for its own monopolistic purposes, the American government uses the word "democracy" as a front for its anti-democratic activities.

Re: Bill 1609 Will Be Good for Peru's Economy: an Open Letter

Anonymous's picture

Is there any way to find out if he WAS paid?

Re: Bill 1609 Will Be Good for Peru's Economy: an Open Letter

Anonymous's picture

Well, I don't too much care for politics but I cannot seem to understand what the fuss is about. Anyone can still compete in Peru, and at the government level the only restriction is the software is open source. Who said anything about not letting someone join in? Microsoft could just as well make an open source version of whatever it is they're trying to push. I'm not sure that would be such a bad idea anyways. They're still allowed to compete, they just have to follow the rules set forth by the Peruvian legislator. Oh yeah, my goof, Microsoft following rules? Laff, that will be the day.

Re: Bill 1609 Will Be Good for Peru's Economy: an Open Letter

Anonymous's picture

Now, am I wrong in thinking that what really stinks in all this story is the fact that the US government, by mean of one of its representative, promote a company convicted of monopolistic behaviour?

Shouldn't this simple conviction (caused by the very US government starting the trial) be a sufficient motivator for instant and unconditionnal stop of any supportive action in favor of Microsoft by the US government?

Re: Bill 1609 Will Be Good for Peru's Economy: an Open Letter

Anonymous's picture

Yes, that's what I find amazing. The govt wouldn't employ people conviceted of stealing millions of dollars in their finance dept (if at all) so why do they use software written by a company that has been convicted of such a crime? Surely one of the best ways to keep a company like MS in line is to say that the govt. can't use products made by companies that have been convicted of illegal working practices.

Re: Bill 1609 Will Be Good for Peru's Economy: an Open Letter

Anonymous's picture

And "I find it shameful that" that Peruvian authorities succumbed to the ignorance and signed agreements without asking to other technological experts than MS and Apesoft (local association of MSAccess/Excel/Word applet "developers").

Re: Bill 1609 Will Be Good for Peru's Economy: an Open Letter

Anonymous's picture

Haha... You think they succumbed to ignorance... No way, pal... They succumbed to money: plenty of it, lots of it. Money for their campaigns, for them to buy a couple of new cars, for their children, for new suits, and for a bank account in Swittzerland.

I write from Argentina, so I pretty much know what I'm talking about. Ever heard of Carlos Menem?

Re: Bill 1609 Will Be Good for Peru's Economy: an Open Letter

Anonymous's picture

This is - in my opinion - is another proof of that the US government is working far away of what Americans citizens want this world to be.

Also, like these behaviours are providing an invaluable addition to the very long list of reasons (coming from such activities) the terrorists rely on to find their way in this world.

That because, every non American person in the world will find him self under the forces of such a very bad leader of his world and will think about doing what ever it is possible to fight the government of America (and Americans will be in his way) to make a better life for his children.

If Americans didn't wake up and find the harmful threats in their economy (Like Microsoft and like these Agents) then they are walking in the way of another world war (maybe national war) which will make a very bad, ugly life for the children of them (or themselves) and others.

Setting the local market free

Anonymous's picture

One thing which many of the opponents of 1609 skip lightly over is that any jobs sustained by Microsoft will be entirely subservient; what this means for Peru is that if 1609 is not passed, their government computing infrastructure will be controlled in an increasingly direct manner by a foreign and potentially hostile power.

I'll come back to that point below, because there is a more important economic aspect which continuously gets overlooked.

Here in Australia I can buy a reasonable new computer for less than AUD$1000 (USD$540, roughly 2 weeks' wages for an average Australian) and expect to ramp myself up to producing useable, saleable software in less than 6 months. If Microsoft totally own the market I'm writing into, I have to pay for development tools to suit their systems, so if I want to develop web-enabled database applications I'm looking at an extra AUD$2000-15,000 depending on what kind of database and what kind of web enabling, a three-to-sixteenfold barrier to market entry.

In Peru (and other South American countries), the computer would more likely cost the better part of a year's wages, and the software is more expensive in absolute terms than it is in Australia. The choices are limited to (and many South Americans have taken this option), (1) steal the software; or (2) emigrate; or (3) go back to herding alpacas while the rest of the world does everything electronically.

If 1609 is allowed to pass, Joe Alpaca Herd is at least given a set of standard, open interfaces to talk to, interfaces which can be dealt with by software which costs nothing and over which he has total control.

Microsoft has thoroughly proven that their open, standard interfaces aren't. For two recent examples, their Kerberos `standard' implementation broke interoperability with everyone else's, and Outlook 2002 `respects' the LDAP standard by bogging it down with ridiculous queries, a problem Microsoft seem singularly reluctant to fix since it drives users towards MS-Exchange.

Through ambassadorial interference on behalf of Microsoft, the US is endorsing extortionate pricing, is thereby encouraging stealing, and is suppressing the Peruvian skilled labour pool. Americans wonder why South Americans complain about imperialism and stuff; well, here's an example.

Now, back to the foreign control of government infrastructure. Microsoft's EULAs already require new installations to submit to unprecendented levels of remote control by Microsoft, and the much-heralded advent of Palladium, inevitable under `Licencing 6.0', will mean that Microsoft will have more control over individual computers than their users or administrators will.

Do you want your critical data passing through such a machine? Exactly the same level of control (the information was leaked through confessionals rather than LAN sniffers) was a prominent feature of the Dark Ages.

On top of that are the existing, less direct controls. `Licencing 6.0' in principle gives Microsoft the right to alter the software on your computer, and to remotely disable it.

Gaze into the crystal ball: next time your country wants to make an independent decision that the USA doesn't like, the US government has a little chat with Microsoft - a chat involving dark-clad men holding expensive pieces of metal if need be - and suddenly all of your computers refuse to operate. After a week of this, you have no economy.

The following is entirely wild speculation, but if Trey Gates was willing to take a risk, he might use the same power against the US government. The USS Yorktown's dead time was accidental, but could easily be deliberate. Have you noticed that Microsoft has total control of the US Navy's SmartShip computer implementation?

Quite aside from the risk of a half-mad Russian teenager with a joystick and too much time on his hands (or a more-or-less sane Iraqi security operative) finding out how to crack into and control a SmartShip, think about the risk of a ruthless middle-aged man pushing a button and making it so for all SmartShips at once, simultaneously shutting down communications and trade country-wide or world-wide. Who has the power then? The US Congress? The people? Ridiculous? If so today, how about in five years?

Back from wild speculation to what we know for sure, a country with any desire for true political or economic independence would be working as hard as it could to oust `black boxes' and in particular Microsoft's known-leaky software black boxes. What the Ambassador from Microsoft (sorry, the USA) has said to Peru is, `don't do that'. Has he the right?

Australia's politicians have pretty much sat on their hands about this kind of issue so far, while many of our neighbours (Singapore, Korea, Taiwan, Malaysia, India, China and so on, representing more than 2 billion people in all) have made positive declarations or moves toward Open Source in one way or another. When the dust settles from this SNAFU, I think they'll have a clear example of how politically suicidal it would be to declare on the side of large corporate interests, and more of their constituents will be rumbling about fence-sitters.

Regardless of the politics involved, it would be nice to see a South American country not get the short end of the stick, as they so often have.

Leon BrooksWestern Australia

Re: Hyprocrisy

Anonymous's picture

I just love the total hypocrisy of US citizens.

On one hand it's really evil how their own (ex)officials will try and support US companies in their economic domination.

On the other they will sit silently, and probably aren't even aware, that their own government is actively subsidising their farmers - consequently causing lots of pain to _many_ other countries - not just one.

Many of those countries are heavily reliant on agriculture as their primary income.

Extremely poor countries that have no other economy of note beyond agriculture. And are consequently unable to bootstrap themselves into a better future because the US excludes them from the US market thru artificially low prices.

And then US citizens wonder why nobody trusts the US????

Please take your irrelevant bleatings away, You're only reinforcing the negative sterotypes that the rest of the world has of you.

- S

Re: Hyprocrisy

Anonymous's picture

Your comments sound quite hostile. It must be that you are not a U.S. citizen. First Sorry about that. Second, we are not the only ones doing that. Let's see Airbus Industries that's not a government subsidiized Program? It's a shame that it's the only one I know of but I'm sure that there are many others in the Socialistic Nature of European Politics. Try to stick with the issue at hand. We can't solve all the worlds problems using a single soap box.

Re: Hyprocrisy

Anonymous's picture

Subsidies??? I've been around farmer's and farming for most of my life. Two thing's occured to me while reading all these comment's. No.1 I have yet to meet a rich farmer. No.2 Where the hell are all these "subsidies" going?

Re: Hyprocrisy

Anonymous's picture

Generally to huge conglomerates such as Archer-Daniels-Midland and their ilk ... research it a bit, the details will sicken you ... small farmers get very little benefit from the programs, it's basically "pork" spending going straight to "Big Agri-business".

Re: Hyprocrisy

Anonymous's picture

That is a ridiculous statement.

First, name a country that you would like to live in that does not protect the economic power of it's own citizens over that of another nation.

Second. Subsidising farmers makes sense for any nation. "Farmed" food, wheat, corn, poultry, etc are an absolute necessity for the US. If we allowed complete competition and allowed our own farmers to go under and the technology to become stale due to this competition then that would put the US in a position of complete dependence on 3rd world nations to produce adequate food supplies for our citizens. Please quote any respected economist of the last 100 years who says this is a good idea. Being able to maintain our own supply of staple goods even if the day to day costs is higher is sound economics.

The US made the mistake of becoming dependent on other countries for energy (oil). I can't imagine becoming dependent on a war infested 3rd world country that cannot protect itself from disease and famine for staple goods.

Re: Hyprocrisy

Anonymous's picture

1st. Australia for one.

2nd. There is an implication here that US farmers _must_ have subsidies or they will go under. Why is it that US farmers, in one of the most technologically advanced countries of the planet, would go under if everyone was playing off a level field???

3rd a 3rd world country that is disease ridden and in famine - ie hasn't enough food for it's own citizens, is , I would suggest, unlikely to be able to be in a position to make a noticable dent in US food imports.

4th This isn't just about 1st vs 3rd world, this is about subsidies vs non-subsidies across _all_ nations.

Free Trade is a moniker the US mouths but never follows.

Re: Hyprocrisy

Anonymous's picture

I know from experience how much harder it is for an American to get a job in Australia than it is for an Australian to get a job in the US. So, I consider that protecting the national economy of the citizens of Australia. Even if I am better at what I do, Australians have preference in jobs there (Subsidising the labor pool in my opinion). Of course, I think that law is good for Australia, but I guess you believe that Australia should open up its borders to the cheapest labor pool and bring them all in.

US Farmers cannot necessarily compete. Farm land and technology are expensive. In some nations, labor is so abundant that they can acutally do by hand more for less than US technology.

The statment was that the US does not allow countries whose only source of income for much of the economy is farming to compete fairly in US markets. Countries that have that problem are 3rd world. There are not any powerful nations whose greatest wealth is from farming. It is a comodity.

The US practices Free Trade as well as any nation. Not because everyone believes in being "fair", but because that is how capitalism works when the government does not interfere. We have huge numbers of goods that are imported here. Just about everything I buy says "Made in [Japan, Tawain, Hong Kong, India, Thailand, etc]" That goes for computers, cars, TVs, clothes and so on. It is more difficult to find something made in the US here than something made abroad and shipped.

The only industries that the US protects are those that could be devastating if contolled by another nation. I consider that good economics, not a forced barrier to free trade.

Re: Hyprocrisy

Anonymous's picture

Coming from Canada, I can say that I believe US policy agrees with you ... to a point. The only nations with which the USA has a true Free Trade policy with are Canada and Mexico. The countries that you state as examples of 'free trade' are essentially allowed to trade with the US because they are either the sole or main suppliers of the products in question. Do you know of a clothing manufacturer in the States? Electronics manufacturer?

Your example of cars is pretty poor. The vast majority of automobiles sold in the States are made there, in Mexico or in Canada under licence.

It is my contention that if the US a) had free trade agreements with these countries, and b) actually had local industries to compete with those country's industries, the official US policy on competition with them would be very, very different.

Free Trade with Canada and Mexico has been a litany of litigation - US companies suing their extra-national counterparts and using their greater economic influence to force the issue in the NAFTA dispute resolution process. Canada was forced to allow MMT laced gasoline into the country - against our own health laws - because a US company threatened to bankrupt the government of Ontario with a lawsuit. Several Mexican civic governments have been forced to take toxic waste 'dump sites' through successful legal action by a US toxic waste disposal firm. If the funds had been there to fight either of these moves, the dispute resolution process would likely have ruled in favour of both Canada and Mexico on health grounds (a loophole built into NAFTA). The funds weren't there, and sovereign laws were undermined or ignored in favour of US commercial profit - regardless of whether the laws protected the local populace from true health risks.

Entering a Free Trade agreement with the US is like playing Monopoly with a player who already has 80% of the money in the bank, 90% of the property and who has the right to change the rules whenever he wants.

Lots of fun for the winner, but everyone else gets bent over the table.

Re: Hyprocrisy

Anonymous's picture

With regards to other nations being the only supplier of certain goods being the reason for "free trade" of those goods. There were many clothes manufacturers in the US until the 1950's. Competition put them under. And as far as electronics goes, GE, RCA, Zenith were all powerfull electronics companies, until they could no longer compete with Japan. Free Trade has destroyed US companies, as it should.

But, I think there is some confusion between this and my original statement. I said that subsidising farmers makes sense for any nation and that the US does allow free trade. I did not say that large US companies play fair. The downside of a capitalist economy is that "He with the most capital wins".

Also, NAFTA never had anything to do with free trade. It had everthing to do with cheap labor.

Finally, my statment about car companies was right on. Honda and Toyota has crippled US car companies. Sure, US companies found ways to work with them for financial gain, but they could not stop it. Also, Japan does not allow the free trade of US cars their even though the US still allows the free trade of Japanese cars here.

Re: Hyprocrisy - failure

Anonymous's picture

There is a solid contigent of citizens who are against these subsidies, so your collectivist statement does not hold.

Given that, your post was vague; do you support the US gov's intervention or not? Since we subsidize farmers, we can't be against subsidizing Microsoft? Your post should have been in the tone of 'Finally, the US is thinking correctly, unlike what we do with agriculture.'

Lastly, you have made the false assumption that these agricultural communities are hurting because of our policies. Au contrair, look at the business climate of any of these countries, and you'll see alot more things wrong.

Ok, not lastly. The US's policy on agriculture actually *raises* prices in the US. It is the free/subsidized grain we give give abroad that is the potential problem. We both a) buy local products so as to prop up prices in the US, and b) subsidize the exportation of these foods via loans, tax breaks, and plain cash. We also strong arm developing nations to open up their markets to us.

These countries *say* that we are the cause of the problems; the little dictators sitting at the top have nothing to do with it... Sure..


Re: Hyprocrisy

Anonymous's picture

All of your comments are accurate, in my (American) opinion, but your "one hand/other hand" distinction makes no sense. America's upper-class always sees to its own interests, whether in government or business, public or private, agriculture or software. And they usually work in concert with the upper-class of the target country, who are usually not quite as wealthy or powerful but remain their allies.

Americans are generally blind to class issues due to their national mythology, but not always. The open software vendors in particular have a difficult balancing act in this regard. They want "free" software and they want their businesses at the same time. But American open-source advocates are not alone in this contradiction.

Re: Hyprocrisy

Anonymous's picture

Very true.

Unfortunately it should be pointed out that EU and Japan do the same thing. Its a vicious cycle. One does it the others follow and so on. Everyone's afraid to back down because if they do so first....the economic/political consequences would be painful.

Re: Bill 1609 Will Be Good for Peru's Economy: an Open Letter

Anonymous's picture

I stand behind every word that David has said here. Mr. Hamilton's comments are way out of line - and represent a very dangerous attitude in our system. That attitude is that money is good, greed is better, and the more of each, the better off the reciever is.

Let Peru make their own laws - we don't need to be dictating to them that they buy from companies that our government fiscally props up - err, sponsors - err, allows to exist (which one and to what degree depends on the day)...

Great work David - we should start a petition to let Peru that there is a body of us out there that agree with Bill 1609 applaud them for having taken the step to even try.

-Barry Fitzgerald

Re: Bill 1609 Will Be Good for Peru's Economy: an Open Letter

Anonymous's picture

Also it should be said that while the ambassador is protecting Microsoft's interests he is doing a disservice to Redhat and lycoris (Lindows?): who would presumably welcome sales, training and consultancy within Peru.

Re: Bill 1609 Will Be Good for Peru's Economy: an Open Letter

Anonymous's picture

Yeah, but if he is acting in favor of jobs and

just ignorant of how many are lost due to the

cost of Microsoft products, than he must only

be considering the fact that Microsoft provides

hundreds of thousands of jobs were Redhat only

provides a few thousand.

And I said that in only one sentence! W00T!


Re: Bill 1609 Will Be Good for Peru's Economy: an Open Letter

Anonymous's picture

But those employment figures are from the current era where Microsoft is a much bigger company. Bills like this will likely help FS companies thrive and the jobs they generate should be more in the future. Remember 95% of software written is in-house and open-source only helps these developers more by taking away the need for them to re-invent the wheel. So a few jobs are lost from the tiny proprietry software development segment, growth elsewhere in the software industry will mop them up, I'm sure, with the added bonus that the replacement jobs will be local rather than multinational.

Hear, hear!

Anonymous's picture

How do you moderate things up on this site?

small gripe

Anonymous's picture

My understanding is that Microsoft's conviction in US courts was for:

Attempting to leverage its monopoly with anti-competitive practices.

While the goal of those practices seems to have been to establish new monopolies, monopolies are not, in themselves, illegal. It is the anti-competitive practices on the part of a monopoly that are illegal. Note: Under US laws, anti-competitive practices are assumed to be ineffective when attempted by something other than a monopoly or a cartel.

thats about right

Anonymous's picture

I forgot to mention my name, I don't like

being anonomous.

I am Frapazoid, and may or may not create

a real account if this site interest me


thats about right

Anonymous's picture

Well, I'm pretty sure that is what he meant,

they were using anti-competitive practices..

To leverage the monopoly.

And it is true in most cases that most anti

competitive tactics will fail without monopoly

status. For example, the people who say it

would benefit Linux to ignore current standards

and form it's own are forgetting that Linux lacks

to monopoly power to do such a thing, and to

attempt to form it's own incompatable data

storage standards like that would result in

a loss of users. Microsoft doing the same thing

gains users.

I'm sure there are other anti-competitive tactics,

but few are effective unless you already have that

much power.

Re: Bill 1609 Will Be Good for Peru's Economy: an Open Letter

Anonymous's picture

Well said.

Otto Reich, it must be pointed out, has a rather sordid history of sponsoring latin american human rights abusers and terrorists, so he is no stranger to controversy. If condemnation from church and human rights groups can't get him to modify his behaviour, I doubt any number of letters from citizens will have much effect on this particular issue.

Re: Bill 1609 Will Be Good for Peru's Economy: an Open Letter

Anonymous's picture

Well said! I hope they listen!


Re: Bill 1609 Will Be Good for Peru's Economy: an Open Letter

Anonymous's picture

VERY well said.

However it is one thing to give the people one's honest opinion of the situation and another thing to determine what made Hamilton make his own misleading statements and deter others from doing similar things. It is my fervent hope that Mr. Hamilton made his statements out of ignorance rather than from being coerced or, worse, enticed into doing so. Would any "contributions" from Microsoft be on public record?


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