Oviedo’s situation is quite surprising...

Nicanor Duarte and Oviedo are almost neck to neck according to the last poll conducted in February. Both are around 25% of vote preferences, the only difference is Oviedo has been exiled since 1999, raising a big question as to what would happen in the red party board of command if he returned. Of course this will not have an answer yet as we must remember that Oviedo bears a sentence to ten years in prison ratified by the Supreme court in Paraguay.

How would you describe the stance of the Liberal Party in this context? Because it does not seem to be standing firm right now.

It is badly placed and I believe that the great failure is the Liberal Party. It is the country’s second important party, over 100 years old and none of its leading figures appears with over 4% of vote preferences in the latest polls, including Vice President Julio Cesar Franco. The problem with the PLRA is it has failed to achieve two things: first, it failed to produce luring leaderships for a broad citizenship. Second, it failed to forge alliances with social sectors, neither did it capture non-liberal citizens. The party is closed in itself, in its internal logic but does not go beyond its borders. Paradoxically, the major opposition party fails to grow against a highly discredited government as is Gonzalez Macchi’s. According to a survey by sociologist José Nicolás Morinigo conducted in Asunción and Greater Asunción –where 40% of the Paraguayan people are gathered- only one out of 10 Paraguayans trust in this administration.

How does Paraguay live the Argentine crisis?

The crisis has certainly hit the headlines. It is closely followed first because there are thousands of Paraguayans working in Argentina sending remittances to the country and the last estimate shows that those remittances amount to 100 million dollars a year. Second, the Paraguayan currency has also depreciated fast losing 35% in the last year. Third, the question of the Mercosur. Paraguay is closely linked to Argentina and Brazil and when these two countries are stumbling the Paraguayan economy is deeply affected. For six years the GDP has grown less than the population, unemployment and underemployment combined comprise 40%, in the past 3 years poverty went from 31 to 33% at national level and 42% at rural level, many businesses are closing down and sale plummeted because the minimum wage diminished 20% in the past year affected by inflation and the guarani depreciation.

Are there any studies about the impact on foreign trade?

The Paraguayan foreign trade is quite atypical within the Mercosur. Of our exports, two months of the natural exports (one sixth) are reexports because Paraguay is a country of triangulation, that is to say, we import electronic products and reexport, that is twice our exports. Besides, Paraguay was the country that benefited the least in terms of exports growth since the Mercosur was created, we have virtually not had an exports promotion policy.

It is important to consider that our major problems such as soy and cotton go beyond the Mercosur and are also products with little value added. Paraguay, on the one hand, which had a small industry of around 16 or 17% of the GDP rose to 13% to 14%. To this we must add the issue of illegality: it was reported that 104 million virgin compact discs arrived in Paraguay and then fake copies are made here and illegally reexported to the Brazilian market. Unfortunately, we do not have a defined exports policy neither towards the Mercosur nor towards outside.

Can we say the Argentine crisis is affecting Paraguay from the trade point of view?

From the trade point of view, our foreign trade is not developed and apart from Brazil and Argentina we have right now a stronger relationship with Brazil.

Would government be seeking a bridge credit right now arguing that the Argentine crisis could affect Paraguay?

Yes, they are trying to reach a stand-by agreement with 50 million dollars to strengthen our reserves. It is to prevent any difficult situation, to have a ‘mattress’, because we should consider that Paraguay has been in recession for six years.