1709386601 Santiago Pena Milei seeks to replicate Paraguays economic model

Santiago Peña: “Milei seeks to replicate Paraguay’s economic model”

The President of Paraguay, Santiago Peña (Asunción, 45 years old), who celebrates the anniversary of his election victory next month and was previously finance minister, belongs to the conservative Colorado Party, the political force that has historically dominated the life of Paraguay and the South American Country “70 years”, except for very short periods. However, his role model is the white club Real Madrid and especially its president Florentino Pérez, with whom he was recently in Madrid during his stay. “I am convinced that Paraguay has a great destiny. I want Paraguayans to stop thinking that disaster has struck the country or that it is the landlocked island they said it was [el escritor] Augusto Roa Bastos. Paraguay's problem is mental Mediterraneanness, not physical,” he explains with passion in an interview that took place this Thursday at Casa América, the same passion with which he says he is learning Guaraní. An economist by training, Peña visited Spain, where he met with the king and President Pedro Sánchez in search of investments.

Questions. What does Paraguay offer for Spanish investments?

Answer. First, reconnect with our roots. I talk a lot about the resurgence of a giant and that forces us to look at history. This year marks the 500th anniversary of the arrival of Alejo García, a Portuguese who came with a mandate from the Spanish crown. But it was only later, in 1537, that the colony was founded in Asunción; and they went there because the Guaraní were there, a friendly people who were going through a process of miscegenation like nowhere else. Paraguay's great history is linked to Spain, but that history was broken, and we believe that these 35 years of democracy – because this is not just a comparison with [la dictadura de Alfredo] Stroessner―, the longest period in our history, have brought enormous benefits. We have what the world needs: water, land and young people. And most importantly: a people who dream of a better future. We want to integrate into the world and be a global player; Europe offers many opportunities and Spain is the gateway to Europe.

Q He is the youngest president of the Paraguayan democracy. During his election campaign, he promised to put the country on the world map and create more than half a million jobs. What are you most satisfied with?

R. Not only did I win by the largest margin in history, I also won without having to resort to populist discourse, either from the right or the left. I received a majority in both houses of Congress, and that is of enormous value in the Latin American context. I have been working from day one on an agenda that brings change, with six or seven very important pieces of legislation, some of which have been stalled for 30 years, such as the creation of a pensions regulator. We have serious problems in social security and have strengthened the organizations so that revenues increase by 30% in a country with 3% inflation.

Q But there are about two million Paraguayans who have emigrated, almost a third of the population; It is estimated that 60% of the labor market is informal…

R. That's right and that requires labor reforms. That is the goal: to create 500,000 jobs that are integrated into social security. Paraguay today has the strongest macroeconomic scenario in Latin America, last year we grew by almost 5%, inflation and interest rates are falling. Standard & Poor's has improved Paraguay's risk rating after ten years. We reduced the price of fuel produced through a public company four times, which was a huge relief in very vulnerable sectors; We are reducing the price of domestic gas and increasing the transfer program [de efectivo] conditioned on families in situations of extreme poverty.

Q. And in the area of ​​security?

R. I have launched a very ambitious agenda on two main issues: organized crime and micro-drug trafficking. We worked with the United States and Brazil to dismantle a criminal gang dedicated to arms trafficking. We dismantled drug transport groups and internal crime in Paraguay and took control of Tacumbú prison, one of the ten most dangerous in the world. I refuse to live in a country where those of us who follow the law are afraid of those who don't.

Q. Paraguayan economist Fernando Masi says Paraguay's raw materials are full of cocaine because the country has become a drug distribution center. What are you going to do?

R. That's what we've done these months. We began to control better, hence the tax and customs reform. There is a long way to go, but we are on the right path.

    Santiago Peña, during the interview at Casa América in Madrid. Santiago Peña, during the interview at Casa América in Madrid. Samuel Sanchez

Q Although he presents himself as a generational change, opposition voices accuse him of being a dolphin of Horacio Cartes, his mentor and former president between 2013 and 2018, sanctioned by the United States for money laundering and whose finance minister he was also younger, as well as director of the Banco Basa of the Cartes Group.

R. When I left the ministry, I worked in the private sector, at Banco Basa, which does not belong to Mr. Cartes, he has no shares. It belongs to his sister, as it is a family business founded by his father, who, after his retirement, handed over his daughter's financial business and the agricultural and livestock operations to his son. The United States' allegations against Cartes are their responsibility, not mine. He is President of the Colorado Party by popular vote, I was elected President of the Republic by popular vote. I do not accept that they are trying to pass on their responsibilities to me. I'm not his defense attorney, he has his lawyers. My election campaign was not financed by Cartes either.

Q He expressed his condolences to Argentine President Javier Milei, also an economist.

R. I have a close relationship with him as president, just like I do with Gabriel Boric or Lula da Silva.

Q Not so with Nicolás Maduro.

R. Venezuela is further away from us, but we have reopened the embassy in Caracas, which is an important step, and we hope that there will be free elections and that the opposition Corina Machado can take part in them.

Q His economic model is similar to Milei's; Less government, less taxes…

R. In reality, he wants to do what we have done, which is to have an economy with low inflation, low public debt and high investment. Milei is trying to replicate the Paraguayan model.

Q. Paraguay is one of twelve countries that has relations with Taiwan rather than mainland China. Will you maintain this policy?

R. Yes, China is welcome in Paraguay. In fact, Beijing is Paraguay's most important partner, but as a sovereign country we have the freedom to choose with whom we maintain relationships. There are no restrictions on cooperation with Beijing. China has problems with countries recognizing Taiwan. It's a deep, long-term relationship that won't change.

Q He is pessimistic that the Mercosur-EU agreement will be ratified this year.

R. I think that the conditions for this do not exist in Europe, as it is not yet time to make such an important decision. But we will continue to integrate globally. We have a trade agreement with Singapore, we are close to doing the same with the United Arab Emirates, and we believe Mercosur is the most dynamic space in the world now and in the future.

    The President of Paraguay, Santiago Peña, on Thursday at Casa América in Madrid. The President of Paraguay, Santiago Peña, on Thursday at Casa América in Madrid. Samuel Sanchez

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