Trickle-down economics in one of South America’s poorest countries, Paraguay
Trickle-down economics in one of South America’s poorest countries, Paraguay
Thursday, December 26th 2013 - 07:43 UTC
The Economist has dedicated an article to the recently inaugurated Paraguayan president Horacio Cartes, and his attempts to improve the living conditions of the majority of a population which is poor in a country rich in agriculture and energy.
In October claims surfaced that Victor Bogado, a Paraguayan senator, had arranged two lucrative public jobs for his children’s nanny. A few weeks later 23 of his peers—a majority—voted against stripping him of the immunity from criminal proceedings that Paraguayan legislators enjoy.
Instead of going unnoticed in a country where political clientelism has long been the norm, the story sparked outrage. Restaurants, petrol stations and beauty salons in the capital, Asunción, put up signs naming the “23 shameless rats”, and barring them as customers. Two weeks later a senate committee overruled the vote for immunity.
The case of the “golden nanny” is part of a wider citizen revolt against political corruption. In October the Supreme Court ruled that Daniel Vargas, a radio host, had the right to know the names and salaries of municipal employees. Six years earlier listeners had asked him to investigate; he went to court after being stonewalled. Without public pressure the Supreme Court would never have dared to move against Congress, says his lawyer, Benjamín Fernández. Rather than obliging citizens to seek the information piecemeal, Paraguay’s new president, Horacio Cartes told public bodies to publish it, though many are dragging their feet.
Mr Cartes, a tobacco magnate, is a political neophyte who only joined the Colorado party in order to run for office in April’s general election. The Colorados held power for 60 years, 35 as a notoriously corrupt dictatorship, before losing in 2008 to Fernando Lugo, a former bishop whose left-Liberal alliance promised to redistribute land and cut poverty. In power Mr Lugo turned out to be weak and politically inept. After an unfairly abrupt, though constitutional, impeachment his Liberal vice-president, Federico Franco, replaced him in 2012. Lacking a strong internal candidate, the Colorados plumped for Mr Cartes.
Many assumed the new president would be his party’s puppet. Does his support for the anti-corruption fight show that the Colorados got more than they bargained for? On taking office in August, Mr Cartes named technically able outsiders to his cabinet and passed a fiscal-responsibility law limiting budget growth to 4% above inflation and the deficit to no more than 1.5% of GDP. Since most spending goes on wages, that will squeeze patronage.
More:
http://en.mercopress.com/2013/12/26/trickle-down-economics-in-one-of-south-america-s-poorest-countries-paraguay