Paraguay's president highlights the economy in preparation for re-election campaign.
| Autor | Gaudin, Andres |
Given the meager achievements of the Paraguayan government's strategy to encourage foreign investment, President Horacio Cartes' administration has resumed efforts to show any economic improvement before the end of its mandate in August 2018. It needs to do so in order to validate Cartes' move into politics after a successful business career, and above all, to tackle a reelection campaign--if he manages to get the constitutional reform that would allow him to seek a second term (NotiSur, Dec. 9, 2016).
The Cartes administration closed 2016 with a diplomatic coup when--with help from right-leaning new governments in Argentina (elected democratically) and Brazil (via controversial use of a constitutional provision)--it achieved its ambitious goal of excluding Venezuela from the Mercado Comun del Sur (MERCOSUR) (NotiSur, Jan. 29, 2016, Sept. 9, 2016, Feb. 3, 2017). This was the first step toward allowing MERCOSUR to pursue an agreement with the Alianza del Paafico (Pacific Alliance) without having to deal with obstacles imposed by Venezuela.
Courting the US, Dubai, and Europe
In its search for capital in and beyond the region, Paraguay signed a framework agreement with the US during former President Barack Obama's last week in office to promote a positive investment climate and diversify bilateral trade of goods and services. Paraguay also awakened the interest of capitalists in the powerful Arab emirate of Dubai, although that has yet to bear any fruit. Then, using initiatives begun by neighboring Bolivia, it embraced the idea of building a binational railroad financed by Germany and Switzerland that, if realized, would connect South America's interior with a network of waterways that would give Paraguay access to Argentina's and Uruguay's maritime ports (NotiSur, Oct. 14, 2016). And on March 20-21, Paraguay will host the III Paraguay-Europe Investment Forum in Asuncion.
Since taking office in August 2013, Cartes has been able to perfect legislation that allows it to present the country, in the words of Minister of Industry and Commerce Gustavo Leite, as "America's factory." Speaking to a Spanish trade mission, Leite told visiting businessmen, "Come with your eyes closed; Paraguay can be the China of Latin America."
To reach that goal, the country offers a tempting franchise package that includes low taxes, fiscal benefits for investments that can go as far as total tax exemption, a law that fully regulates an export maquiladora regime, the...
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