Paraguay registers a vertiginous increase in public debt so far in the period of Mario Abdo Benítez. Currently in the legislative circuit there are several projects in process to be approved, others will be presented shortly and some that have already received the ok. The trend exposes the country to an unstoppable and dangerous increase in public debt.
The Chamber of Senators received an avalanche of requests from the Executive Power for the approval of millionaire loans for various projects, which mostly consist of new debts for infrastructure works.
Since the current government took office and if the requests are approved, the country would accumulate a debt of some US$ 5,600 million, a figure that represents an increase of 70% in relation to the balance recorded at the end of the previous administration’s fiscal year.
According to the List of Pending Loans of the Upper House, there are 11 messages from the Executive Power for various projects, among which are the concession for private exploitation, investments for energy efficiency, a meteorological system, improvement of the health service, empowerment of of the agricultural sector, construction of more routes, among others.
The list shows that the Executive is asking Congress to approve the disbursement of US$12 million for the improvement of the building infrastructure and connectivity of the Paraguayan Jesuit route; US$300 million from the Andean Development Corporation (CAF) to comply with road companies; US$ 30 million for investments in the agricultural sector; more than US$ 350 million for the improvement and paving of Route PY 15, and US$ 100 million for the paving of the Puerto Indio route – Superhighway junction – department of Alto Paraná.
Adding these infrastructure projects and the other agreements of the current administration, the Executive Power requests from the Legislature the sum of US$ 942 million, an amount that could be approved in the Senate during this 2022. Some of these projects have opinions from the commissions , but others do not yet have the go-ahead for confirmation.
TWO PROJECTS ALREADY RECEIVED OK
In the ordinary session on Thursday, the Upper House has already approved the US$ 354 million to cover the improvement and paving of the Py 15 route and the US$ 100 million dollars for the paving of the Puerto Indio – Empalme Supercarretera, Alto Parana.
Both projects were approved in general and in particular and now go to the Chamber of Deputies, which must also give its endorsement so that the MOPC can have that budget line.
THE LOANS THAT ARE BEING NEGOTIATED
In addition to the above, the economist Pablo Herken indicates that there are currently loans already signed with the banking entities for a value of US$ 420 million and that they will be sent to Congress soon; others that are in the subscription process for an amount of US$ 483 million; and other loans for a value of US$ 585 million that already have authorization from the Executive to the Treasury to start the negotiation and go through the subscription process and then refer to Parliament for approval.
Thus, they add up to almost US$ 2,500 million in loans, between the agreements and projects that have already entered the legislative circuit, those that will enter and those that are still under negotiation.
In addition, there are current loans that have already been approved and are currently being executed, of which there are still 2,600 million dollars to be disbursed, according to Herken.
In this way, when making the sum, it is obtained that the debt package to be carried out and authorized amounts to the notorious figure of a little more than US$ 5,000 million.
INDEBTEDNESS IN THE MARITO ERA
Paraguay closed last year with a debt of US$ 13,631 million. In that fiscal year, which was characterized as being practically calm, the increase was US$ 1,418 million, that is, 12%.
So far in the government of Mario Abdo Benítez, there are already US$ 5,600 million in debt. This implies an increase of 70% with respect to the balance that existed at the end of the previous government year.
With these figures in view, it is worrying that Paraguay is entering a debt corridor for any purpose, due to the fact that local funds are not enough, with the collection of taxes, to face future projects.
If all the US$942 million are approved in the Senate in 2022, the economist Pablo Herken estimates that for the next two years, between 2023 and part of 2024, the US$5.6 billion would easily come to fruition. All this shows that the rhythm is to continue asking for more and more loans. And Herken asks to have Argentina as an example, so as not to start a process of constant indebtedness and thus avoid entering a crossroads in the lean years when the debt must be paid off.
