Paraguay wants to be a China for Brazil, minister says
Paraguay wants to replace as many imports of Chinese products as possible in Brazil, taking advantage of low labor costs and rising productivity. This strategy is part of the new Paraguayan government’s plan. The president, who took office on August 15 for a five-year term, has chosen Carlos Fernández Valdovinos as his chief architect and implementer of economic policy.A graduate in economics from the Federal University of Paraná, where he became fluent in Portuguese, Mr. Valdovinos worked at the World Bank and the International Monetary Fund (IMF) before serving as president of the Central Bank of Paraguay from 2013 to 2018. In 2017, he was named the best central banker by the British magazine The Banker.After serving as Finance minister, Mr. Valdovinos combined offices and is now the Economy and Finance minister, being in charge of both the national government accounting and the economic planning of the administration.A graduate from the University of Chicago, where he received his Ph.D. in the late 1990s, the Paraguayan minister presents himself as a free-market enthusiast, suggesting that its larger neighbors — Brazil and Argentina — should lower their import taxes to help tackle smuggling practices at the borders. But he advocates that all trade strategy be worked out within Mercosur, unlike Uruguay, which has sought autonomy to strike bilateral deals with the rest of the world."For us, it’s all within Mercosur. Nothing outside," said Mr. Valdovinos. On this issue, this positioning brings the new Paraguayan government closer to the speech of Brazilian President Luiz Inácio Lula da Silva.Despite the more liberal economic line that contrasts with most of Mr. Lula’s close allies, Mr. Valdovinos points out that the relationship will be guided by pragmatism and that the Paraguayan side’s desire to strengthen business with the Brazilian business community is more important than ideologies. According to Mr. Valdovinos, the friendly attitude is beneficial for both sides, but especially for Paraguay, which today has Brazil as its largest trading partner.In addition, 50 years after the construction of the Itaipu binational power plant and the full payment of the debt, the two countries are about to begin formal negotiations on the price Brazil will pay for Paraguay’s unused energy surplus. In a peaceful tone, Mr. Valdovinos does not hide that a hike would be welcome to accelerate Paraguay’s social and economic development but ponders that his...
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