Paraguay Opens Up to Unregulated Foreign Investment

July 31, 2012

After the impeachment of the center-left Catholic Bishop Fernando Lugo from the presidency last month, Federico Franco, the new president of Paraguay, has taken some vast and controversial measures to open the country up to unregulated foreign investment. According to the Inter Press Service News Agency:

Franco named Jaime Ayala, the president of an agrochemical company, to head the National Service for Plant and Seed Quality and Health (SENAVE). Ayala immediately included Bollgard in the national registry of commercial plant varieties (RNCC), which had rejected the genetically modified cotton a few weeks earlier on the grounds that the company had not met the requisites.

The appointment of Ayala to the SENAVE position carries with it an air of political corruption. Technically, the approval was illegal because paraguayan health ministries have not disclosed their opinion on the matter. In addition, the Franco administration has pushed for the building of an aluminum plant (which could produce harmful environmental effects), stating that “the factory would generate some 4,000 direct jobs.” ISP reports that “in December,” however, the “then minister of public works Cecilio Pérez Bordón said the plant would only need 1,250 workers.” These kinds of disparities are troubling, especially given that Franco was not elected to the presidency by the people of Paraguay. Despite this, ISP affirms that “analysts say Franco took over an economy that was in good shape. And now investment projects, donations and other initiatives for a combined total of at least 500 million dollars that were blocked during the Lugo administration have been approved.” It is unclear what the future has in store for Paraguay.