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NACLA American Review Report

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NACLA American Review Report

Summary of the Article

This author presents some of the challenges brought by COVID-19 and some of the

suggested reforms to counter them in Paraguay. Further, the article criticizes the reforms and

considers them as unattainable and unrealistic. The pandemic has negatively affected the world,

forcing most states to deduce various ways, including increasing spending to curb the infiltration

of the disease. Paraguay is among nations impacted by the COVID-19. Currently, it has reported

206 positive cases and 8 deaths. Though the number of infections and deaths is lower than in

other nations, the ailment has raised economic and governance issues. Most Paraguayans are

dissatisfied with how the government displays the highest levels of economic injustices during

the pandemic.

The author mentions increased citizen vocal protests for Paraguayans have pushed the

state to initiate a strategic campaign doped as "state reforms." This is an attempt to try to resolve

the structural and economic problems witnessed in the country. Transparency International cited

corruption and underfunding as significant issues facing Paraguay. The COVID-19 pandemic

only aggravated the existing challenges. Salaries are a going concern, the increased

unsustainability of sizeable public sector employees, and nepotism issues occasioned by the

countrywide lockdown.

The government has failed to provide its citizens with essential commodities. The report

has revealed that most employees (breadwinners) in different economies face economic

challenges since their respective employers cannot sustain their needs during the lockdown

period. The health service condition is another sector that the Paraguayan government has
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neglected. Pan American Health Organization listed Paraguay as one of the countries with

vulnerable health care systems in northern America.

Lastly, the country has a large external loan and misuses public funds. Currently,

Paraguay has increased its accumulated debt by $1.6b. The country took in amidst to combat the

emergency crisis as was approved by the State Government. Previous legislation has tried to

restructure the house spending but lacked congress's support. Increased selfishness of the

congress and the high-earning employees of Itaipu Dam have led to controversies with the

Paraguayan president.

The article mentions that on 30 March, the government yielded to the citizens' demand

and initiated "state reforms." According to the finance minister, the new reforms would reduce

the number of public employees and ensure better utilization of public money. The first blow by

"state reforms" was limiting the earnings of public sector employees who earn more than the

president does. This initiative would spread to executive branches and lower houses for approval.

Nevertheless, this reform is seen as vague and insignificant to warrant any praises. Marcello

Lachi stated that reducing wages on public employees is just a "red herring" that would improve

the state's functioning. To Lachi, the number of public employees only constitutes 10%. This

number is significantly low compared to other countries.

Furthermore, 10% are in health care or education; hence, there is no need to cut their

salaries. To combat the medical issue, the government requires an additional $ 1billion increase.

Realistically speaking, this is hard considering the current lockdown situation. Corruption is a

pandemic in Paraguay. The high inequality between the poor and the rich and the increased

unfair taxation deem this country extremely corrupt. More tax is generally collected from the

middle and lower class compared to the upper-class community. Organization of Economic Co-
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operation and Development Paraguay is the second-lowest tax collecting country in Latin

America. Secondly, Proper soya exports and the lift in minimal cigarettes, alcohol, and fast food

taxes, both of which are dominated by the economic and political establishment, will be enough

to have taxpayer funds to finance the health sector adequately. Such reforms will also reduce

health care spending on the usage of the above items for illnesses. A reasonable personal income

tax would have a more significant tax load and fund for the organizations. For instance, 4 of

Paraguay's wealthiest citizens charged no federal income tax in 2019. Opposition political

alliance with Fernando has proposed tax reforms meant to balance the imbalances. According to

their report, an effective management team is in place to manage the $1.6 billion for the corona

crisis.

This article does a good job as far as the analysis of the COVID-19 situation in Paraguay

is concerned. It captures some of the most critical issues, such as challenges, proposed reforms,

and expected impact. The arrival of the coronavirus has been seen as a revelation of both

political, structural, and economic issues facing the Paraguayan population. I believe that the

ultimate solution lies with the Paraguay government, as the author has noted. The stated state

reforms can safely save the country's economy and relations by reaching a consensus on social

benefits.

Other additional challenges are increased health issues, misuse of public funds,

exaggerated pays to the rich, poor taxation system, and lack of essential elements. As the people

air out their dissatisfaction with the government's current operations, the government is deducing

unrealistic modes of resolving public complaints. It is the rule of the current Paraguay state to

ensure that the people's basic needs are met, more specifically at these dire times. Their health

issues should be improved to give the country a fighting chance in the case of a corona outbreak.
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References

William, C. (2020, April 23). “COVID-19 Drives Unlikely Changes in Paraguay”. As Paraguay

fights off a global pandemic, the government is debating—perhaps misplaced—reform.

2020. Online

[Link]