The Republic of Paraguay ranked 150th with a score of 24 on the 2014 Transparency International Corruption Perceptions Index, which grades corruption on a scale of 0 (highly corrupt) to 100 (very clean). The Republic of Uruguay ranked 21st with a score of 79. It is thought-provoking that two similar nations display such a disparity, especially when one contrasts their almost identical resource endowments, histories, cultures, economies and governmental structures. It is pivotal that Paraguay seeks international assistance in order to procure a solution to its corruption problem, thus achieving economic development and lifting its people out of poverty.
The governments of Paraguay and Uruguay are structurally identical. Paraguay and Uruguay gained their independence in 1811 and 1828 respectively; after centuries under Spanish and Brazilian rule. Also, both nations recognize Spanish as their official language – Paraguay also considers Guaraní an official language – and soccer as an intimate part of their cultures. Impressively, these countries are endowed with similar resources – with the exception of petroleum and hydropower in Paraguay and gold and silver in Uruguay – such as wheat, beef, rice, soybeans, wool , timber, steel, cement and iron, to name a few. Fishing is also pivotal in both countries; the coastline of Uruguay is fishery-endowed, and despite the fact that Paraguay is landlocked, the country also boasts a great fishing industry due to its vast rivers.
Yet these similarities end when it comes to economic development and corruption, and by analyzing their relative resource endowments, it is evident that corruption is contributing to the status-quo in Paraguay. In the majority of cases, economic development and low corruption coincide as interdependent aspects of a nation (with exceptions such as China); however, when illicit activities within a government interfere, economic development can become contaminated. The absence of corruption has led Uruguay to win the Economist’s 2014 “country of the year” on democracy and Transparency International’s 2014 “country of year” for fighting corruption. In sum, these accomplishments represent some of the precursors that catapulted Uruguay into prosperity – other nations that have achieved these accomplishments are Denmark, New Zealand, and Sweden. Paraguay, on the other hand, was ranked 71st in democracy and 150th in the corruption index. Failing to provide welfare and security for its citizenry has helped Paraguay become the largest illicit market in the western hemisphere, centered in Ciudad Del Este.
Economic development is difficult to accomplish when corruption gets in the way. Subsequently, many cases can be cited where vast resource-endowed nations, such as Paraguay, have not been able to accomplish economic development due to high corruption, such as Nigeria, Venezuela, Libya, the DRC, Dominican Republic, Mexico, and Ukraine.
Former President Jose “Pepe” Mujica was partially responsible for the transition of Uruguay into a successful nation. He is also considered a champion for the poor due to his humility, humbleness, and austerity-oriented personality. In addition, Mujica supports respect for human rights; environmental preservation; the legalization of marijuana; abortion; and gay marriage. More importantly, Mujica has taken a strong stance against corruption. Uruguay ranked 28th in 2010 on the Corruption Perceptions Index, nonetheless, since Mujica became president, Uruguay has been ranked below 21st for five years in a row. Paraguay on the other hand, has maintained its status-quo as a corruption-stricken nation ranking 136th in 2008, 154th in 2009, 146th in 2010, and 150th in 2013. Uruguay in particular has made significant improvements with respect to corruption and economic development. On the other hand, Paraguay under President Horacio Cortez – whom was recently accused of graft and in 1989 was suspected of illegal currency dealings – has not experienced any improvements in the aforementioned categories.
In 2014, the Congress of Paraguay approved new legislation which intends to strengthen fiscal oversight. The state of Paraguay is attempting to modernize its financial administration. Therefore, this legislation generates a great opportunity for Paraguay to take a pristine, robust approach against corruption. The government of Paraguay should hire Mujica as a special adviser on corruption affairs, as some recent legislation is coincidentally similar to the institutional frameworks that set the stage for Mujica in Uruguay. Mujica has shown interest in helping countries in difficult situations (Colombia-FARC conflict); therefore, Mujica can lead a corruption initiative – under the Paraguayan government – based on his expertise, experience, and policies, integrated with the institutional reforms recently applied in Paraguay. Uruguay and Paraguay share similar governmental structures; therefore it would not be difficult to implement in Paraguay some of the policies that were successful in Uruguay.
Ground-breaking reforms must be adopted in order for Paraguay to significantly improve its corruption problem and achieve economic development. Mujica can play a pivotal role, working bilaterally with the Paraguayan government, in the implementation of a strategic solution to the critical problem of corruption in this nation.
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