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Aug 22, 2004
Paraguay Chips Away at Empire of Corruption
By Mary Milliken
ASUNCIÓN, Paraguay (Reuters) - They are a new breed of public servants in Paraguay, plucked from the private sector by a president who needs to crack down on the endemic corruption that has emptied his state's coffers.
They do not mince words when they talk about corruption and they don't stoop to political pressure. They do need bodyguards around the clock.
And they do appear to be making progress as President Nicanor Duarte Frutos marks his first year in government. The opposition, the Roman Catholic Church, diplomats and watchdog groups all agree, although they do have their reservations.
“We are seeing the foundations for change, but we are not yet seeing change,” said Bishop Oscar Paez Garcete, who heads the Church's social and political arm. “Corruption is really in our bones.”
The watchdog group Transparency International ranks Paraguay as the fourth-most corrupt country of the 133 nations it tracks. In Latin America, it is only surpassed by Haiti and is a regional center for smuggling, from cars to weapons.
At the helm of the anti-corruption crusade is Finance Minister Dionisio Borda, a U.S.-trained economist who vows to get “every Paraguayan on the computer and cross reference them” in a database.
His achievements go from the simple -- making government employees wear identification badges -- to the complex, like a complete overhaul in the tax code so Paraguay's 5.6 million people pay income tax for the first time.
Borda said he has “carte blanche from the president.” He appointed his own team and his office buzzes with young economists educated abroad who pull out their Power Point presentations to show how Paraguay has improved this year.
Down the street in colonial Asunción is his customs director, Margarita Diaz de Vivar, who claims to run “the biggest nest of corruption in Paraguay.”
“Corruption destroyed everything here, from the economic, ethic and moral point of view,” said Diaz de Vivar, a lively 61-year-old with a long career in the private sector.
In customs, one of the most significant moves was to tell a corp of inspectors to stay home from work. The “middlemen” were suspected of skimming money at every turn in the customs labyrinth.
HALF A CENTURY OF CORRUPTION
Duarte Frutos took over a state in August 2003 that could not pay salaries and pensions, never mind its debts. Its citizens had the same per capita income as 25 years ago.
That was the result of a half-century of government by his own brethren. The Colorado Party has ruled Paraguay for the last 57 years -- longer than any party in the world -- amid the rise of a notorious empire of corruption.
Many blame the 1954-89 military rule of Alfredo Stroessner, who “ruled the state like a ranch foreman, granting favors to the mid-level guys in turn for their loyalty,” in the words of opposition senator Jose Morinigo.
Paraguay is a place where the last president was caught driving a BMW stolen in Brazil, a driver's license can be bought on the street and smuggling is the biggest industry.
Not surprisingly, corruption is believed to have played a part in the tragic supermarket fire on Aug. 1 that killed at least 400 people.
“Instead of establishing safety mechanisms, there are bribes, those who bribe and those who are bribed, and both are so disastrous for this country,” Duarte Frutos said.
But not only are Paraguayans seeking an end to corruption's hold on this landlocked nation. The United States has fingered Paraguay's border with Brazil and Argentina -- the so-called tri-border -- as a hotbed of money laundering and funding for Islamic fundamentalists.
At the center of suspicions is Ciudad del Este, a honeycomb of smuggling and piracy that moves billions of dollars annually outside the legal channels of the music, tobacco and electronic industries.
'JUST A PATCH ON A RIP?'
While most recognize the advances against corruption in the government's first year, skeptics still abound.
“It is just a patch on a rip,” said Alejandro Nissen, a former state prosecutor renowned for his anti-corruption cases.
Nissen says the economic elite and the politically powerful will continue to get in the way of justice. When he tried to nail the last president and his wife for driving stolen cars, he found the documents were so well forged that he couldn't press his case. He later was pushed out of the prosecutors' office.
The judicial system is considered the third pillar of Paraguay's corruption along with the customs and tax departments. And if Duarte Frutos is not successful in reforming the courts, analysts fear his technocratic team's efforts will go down the drain.
“If impunity continues we will have a very big boomerang because we will reach a level of cynicism that could be very dangerous,” said Pilar Callizo, director of Transparency International's Paraguay branch.
[Source: Reuters - Sun Aug 22, 2004 10:49 AM ET]
Posted by David Pryor in Paraguay | Permalink
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