LatinFinance - July/August 2014 - Paraguay Supplement - 4

PARAGUAY | President interview
Paraguay's President Horacio Cartes says he wants to bring people out of poverty and into
the official workforce - rather than raising taxes

The reform imperative
H

oracio Manuel Cartes Jara will complete one year
in office in August 2014, having won Paraguay's
presidential election in April of the previous year.
Cartes is a relative newcomer to politics - he had never
voted before joining the traditional Colorado party five years
ago.
The 58-year-old former businessman managed to become
one of the wealthiest people in his country thanks to various
interests in banking, tobacco, meat and soft drinks, although he
has officially severed links with all his former companies. He also
controlled the Liberdad soccer club.
Cartes grew up in his native Asunción, Paraguay's capital
city, and studied engineering in the US before returning to work
with his father, who imported Cessna aircrafts to the South
American country.
Cartes is both a conservative in politics and a liberal in
economics. But he is also a modernizer within the Colorado
party, which has dominated Paraguayan politics for decades,
including the 35-year dictatorship of Alfredo Stroessner
(1954-1989).
Since Cartes assumed power, he has vowed to implement a
structural reform agenda and he has asked his government of
mostly young technocrats to help attract foreign investment in
order to modernize his country's deficient infrastructure.
He sat down with LatinFinance in the presidential residence,
"Mburuvicha Róga", which means the "boss' house" in the
indigenous Guarani language.
LF: You once said that Paraguay is at the heart of South
America, but the heart is not beating. After nearly a year in
office, is the heart of Paraguay beating again?
HC: Indeed so. I was referring to the geographic situation
of Paraguay, right in the middle, at the same distance from
the main capital cities, such as São Paulo, Buenos Aires,
Montevideo. All of them can be reached within an hour and a
half.
But the disadvantage of not having access to the sea can only
be mitigated through infrastructure. This is what we have been
working on, because people are discovering Paraguay. Its main
attraction is its low cost for doing business.
The cost of Paraguay puts us in a privileged position. The
cost of energy, an accessible work force; a high proportion of
young people (three out of four Paraguayans are aged below 35)
and we also boast ample job opportunities.

4 L ATINFINA NCE.COM - July/August 2014

LF:  You have embarked on an ambitious reform
agenda. What is your assessment of the reform process,
and the implementation of these reforms? 
HC: Congress has approved some very important pieces of
legislation, including laws on public-private partnerships and
fiscal responsibility. We can look forward to the future with
more tranquillity and serenity as, now, there are limits to public
expenditures. In this country, there is also something that
everybody is looking for: things are predictable, people know
what to expect; there is less uncertainty.
The country also has other attractions that are not well
known. We enjoy monetary stability, which is very important.
Paraguay is the only country in the region that has not changed
its currency, or devalued strongly, in more than 70 years.
A good job has also been done on the fiscal policy front:
this does not mean increasing tax all the time. We have
been very careful not to have high tax rates, in order to be a
competitive country.
Instead, we would rather increase the number of tax payers.
The country always has to remain attractive, an interesting
place to set up a production base.  If you compare us to other
countries, you'll see that it is very attractive to set up production
facilities in Paraguay.
LF: Isn't it necessary to increase tax when the country
has such a low tax haul?
HC: I would like to see my country with a policy of no tax
increases for many, many years. I would rather see more people
paying tax, than only the same people always having to pay
more and more tax.
What you guarantee with a low tax rate is that you can
remain competitive. We cannot forget that we are a landlocked

"I WOULD LIKE TO SEE MY COUNTRY
WITH A POLICY OF NO TAX INCREASES
FOR MANY, MANY YEARS. I WOULD
RATHER SEE MORE PEOPLE PAYING
TAX, THAN ONLY THE SAME PEOPLE
ALWAYS HAVING TO PAY MORE AND
MORE TAX"


http://www.LATINFINANCE.COM

Table of Contents for the Digital Edition of LatinFinance - July/August 2014 - Paraguay Supplement

Contents
LatinFinance - July/August 2014 - Paraguay Supplement - Cover1
LatinFinance - July/August 2014 - Paraguay Supplement - Cover2
LatinFinance - July/August 2014 - Paraguay Supplement - Contents
LatinFinance - July/August 2014 - Paraguay Supplement - 2
LatinFinance - July/August 2014 - Paraguay Supplement - 3
LatinFinance - July/August 2014 - Paraguay Supplement - 4
LatinFinance - July/August 2014 - Paraguay Supplement - 5
LatinFinance - July/August 2014 - Paraguay Supplement - 6
LatinFinance - July/August 2014 - Paraguay Supplement - 7
LatinFinance - July/August 2014 - Paraguay Supplement - 8
LatinFinance - July/August 2014 - Paraguay Supplement - 9
LatinFinance - July/August 2014 - Paraguay Supplement - 10
LatinFinance - July/August 2014 - Paraguay Supplement - 11
LatinFinance - July/August 2014 - Paraguay Supplement - 12
LatinFinance - July/August 2014 - Paraguay Supplement - 13
LatinFinance - July/August 2014 - Paraguay Supplement - 14
LatinFinance - July/August 2014 - Paraguay Supplement - 15
LatinFinance - July/August 2014 - Paraguay Supplement - 16
LatinFinance - July/August 2014 - Paraguay Supplement - Cover3
LatinFinance - July/August 2014 - Paraguay Supplement - Cover4
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