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PARAGUAY
“Poverty, inequality and inequity are pampered daughters of corruption”
Gustavo Torres
12/11/2015
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Public funding for health, education and social development are diverted into private accounts.

For a while now, corruption has contaminated a large sector of Paraguayan society and its institutions, putting the country in an inglorious position in the list of countries with low government transparency. According to the Transparency International (TI) Corruption Perception Index 2014, Paraguay ranks 150 of 175 countries —with a score of 24 in a scale that ranges form 0 (high corruption) to 100 (low corruption)—, and third among the most corrupt countries in Latin America and the Caribbean, only surpassing Haiti and Venezuela.

Since 1995, TI has published indicators about the implementation of justice, the level of crime and criminality, and impunity in the public sector, characterizing corruption as the abuse of entrusted power for personal and sectorial benefit.

“The most notorious antecedent of institutionalized corruption in Paraguay was developed during the long period of the dictatorship of General Alfredo Stroessner (1954-1989),” says  Andrew Nickson, professor at the University of Birmingham, UK, and scholar of the Stroessner dictatorship and the Paraguayan economy, to Latinamerica Press.

“The combination of an open economy, an extremely weak state and the existence of two neighboring countries — Argentina and Brazil — that were subject to a strategy of industrialization by import substitution allowed, since the 50s, the emergence of corrupt practices related to foreign trade: smuggling of all kinds,” said Nickson, adding that Stroessner tolerated these practices, which were called “the price of peace,” a control mechanisms to assure the loyalty of public employees and the civilian and military elite to the regime by enabling them increase their meager wages through illegal incomes, without affecting the state budget.

“The growth of public companies during the last years of the Stroessner era was accompanied by high levels of corruption,” said Nickson, author of the book La Guerra Fría y el Paraguay (The Cold War and Paraguay). “The activities related to illegal trade, which originally focused on alcohol, cigarettes and electronic goods, diversified in the 90s to include stolen vehicles and weapons as well as drug trafficking and money laundering. The active involvement of civil servants has been crucial for continuing all these unlawful activities.”

Under those circumstances, by the end of the 1990s the public sector was characterized by an extremely high level of institutionalized corruption, and by 2003, Paraguay was ranked 129 among 133 countries in the Corruption Perception Index.

Simultaneous actions
For political analyst and professor, Benjamín Fernández Bogado, “public corruption, along with a voracious private sector, has ruined a couple of generations in the country. And that has to do with public works that the State contracts out and the purchase of services of more than US$6 billion a year.”

“The country lagged behind in terms of education, health and social development due to the kleptocracy that was generated,” Fernández Bogado told Latinamerica Press. “It generated a parasitic class that has shaped a form of success that spread as a desirable quality amongst many Paraguayans, turning the state into a weak institution, subordinate to corruption.”

“In the last 50 years, the country received enough money to implement the sewage system nationwide three times over, and today we only have 10 percentage coverage, poor road development, schools in disrepair, and a business class accustomed to tenders and contracts with the state,” he added.

Regarding the implications of corruption in the increase of poverty, Fernández Bogado argues that “the country could have had a more effective state to reduce the consequences of corruption, but because its main concern is not to serve the people but to use the model for  its own benefit, it ended up hurting society as a whole.”

As for a proposal of how to deal with corruption and achieve sustainable results, Fernández Bogado recommends creating a rule of law that works.

“Several actions must be taken simultaneously. Severe punishments for corrupt individuals to deter committing acts of this kind, a better and more educated society, one that is aware that corruption kills and impoverishes; and finally, a new economic model that emphasizes the most open and transparent competition. We have a new law since 2015, Law 5282 for access to public information and transparency of the state, which I’m sure will be a win-win mechanism,” he says. “In Paraguay if you commit a crime you have a 5 percent chance of prosecution and 1 percent chance of conviction. The economics of crime pay very well in a country that has more than 70,000 arrest warrants unfulfilled.”

Finally, Fernández Bogado believes that “an independent, healthy and credible judiciary is a necessary step in the fight against corruption.”

Ethics in tatters
This year was marred by massive demonstrations, mostly student-led. One of the events that triggered the protests was the embezzlement in the National Fund for Public Investment and Development (FONACIDE), which is used by municipalities to fund educational infrastructure. It is suspected that these resources are diverted to private accounts and embezzled during construction, in many cases leading to the use of poor quality materials that caused the collapse of several newly built classrooms, endangering the welfare of the school community. Such was the case of the collapse of a classroom in a public school in the city of Lambaré, near the district capital, Asunción, on Sept. 30. The classroom collapsed while class was in progress, injuring the teacher and his students.

The authorities of the National University of Asunción (UNA), the oldest university in the country, are being investigated for nepotism, administrative offense and embezzlement, among other crimes, following complaints from students. In September, the Attorney General’s Office initiated proceedings against more than 50 people, including university rector Froilán Peralta, who after being jailed for two months in Tacumbú prison, the maximum security penitentiary in the country, was given an alternative measure to prison with a multi-million bail. In addition to the rector, the case involves most of faculties and their subsidiaries, as well as the Clinical Hospital, under the School of Medicine.

In addition to the rector, the case involves most of the faculties and their subsidiaries, as well as the Hospital de Clínicas, a teaching hospital under the Faculty of Medicine.

The Supreme Court of Electoral Justice (TSJE) is also involved in allegations of corruption with the so-called “planilleros” (payrollers). These are individuals who are hired by a public institution to collect their salaries but do not attend their workplaces because of their good relationship with senior officials or politicians in positions of power, who grant discriminatory and discretionary benefits in the public service in return for electoral support.

Dismissing the claims, Maria Elena Wapenka, TSJE minister, said that the corruption scandals in the Electoral Justice are part of a structure of previous administrations, dating from about 20 years.

Another one of the most striking cases involves the directorate of transparency itself, the Comptroller General of the Republic (CGR). In May, the press revealed that Liz Paola Duarte Meza, Comptroller Óscar Rubén Velázquez Gadea’s private secretary, received a millionaire wage, even higher than that of a minister, for supposedly working more than 24 hours a day. During August and September, the case — which also involved directors and officers of the institution, and was covered up by Deputy Comptroller Nancy Torreblanca — made the headlines of the major newspapers in the country, which led to the Comptroller’s resignation before an imminent removal from office.

The Executive, Legislative and Judicial branches, the Police, the Armed Forces and local governments are also no strangers to corruption. Crimes that are widespread include embezzlement, bribes, nepotism and rigged concessions with the private sector that is allied with the political power.

In this regard, philosopher and researcher at the National University of Asunción José Manuel Silvero, reaffirms that ethics and politics are fundamental to democratic life.

“If they are diluted because of corruption, they go awry in their full sense. And corruption has this quality, of distorting processes, concepts and fundamentals. In the private sector, corruption is just as virulent and harmful. Although they are two different spheres, public and private, the damage is equally terrible. Corruption undermines trust,” said Silvero to Latinamerica Press.

Finally, Silvero believes that “poverty, inequality and inequity are pampered daughters of corruption.”
“The effects of corruption threaten present and future,” he concludes.
— Latinamerica Press.


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Students at the National University of Asunción protest widespread corruption in the university. (Photo: Lidia Benítez)
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