The Paraguayan government introduced a plan to eliminate border smuggling. This supports local industries, enhances tax collection, and prevents money laundering.
Economist Víctor Benítez told local media the initiative addresses local industrialists’ and producers’ concerns.
The administration announced the plan shortly after Santiago Peña took office.
Interior Minister Enrique Riera emphasized targeting large-scale smuggling operations. These operations constitute 80% of the issue.
Strengthening border control efforts is the first step. This is to seize goods imported illegally.
Benítez noted that Peña is under pressure from Paraguayan industrialists, also, garment manufacturers, and horticulturists.
This is due to neighbors’ clothes, beverages, and food influx.
Benítez said the smuggling issue is partly because of the expensive Paraguayan currency. It depreciates faster than the Argentine and Brazilian currencies.
He emphasized the need for real solutions. He also highlighted unemployment as a significant smuggling side effect.
Benítez acknowledged the plan aims to raise the investment grade. It also aims to send positive signals to international financial markets.
He noted that Standard & Poor’s and Moody’s consider Paraguay as having relative macroeconomic stability. But it has legal insecurity, partly due to smuggling.
Government data shows Paraguay’s informal economy generates US$21.2 billion annually. This is half of the country’s GDP.
Benítez expressed confidence in President Peña’s ability to address cross-border crime challenges.
The plan involves a coordinated strategy among various sectors.
These include the DNIT, the Ministry of Interior, the Ministry of Defense, and the Ministry of Industry and Commerce.