Paraguay Policy Seen Unchanged by Elections

No changes are expected in the Paraguayan economy after the presidential elections held Sunday. “Our base scenario is that, regardless of who wins, there will not be changes in economic policies,” Gabriel Torres, an analyst at Moody’s told LatinFinance Friday. “If the opposition wins, it’ll be something very positive for the country, since it would demonstrate that politics don’t depend on one party,” Torres says. The Colorado party has been in power for 61 years, more than any other political party in the world. “Paraguay could use a [Vicente] Fox”, the analyst states, “a president of another party that maintains public policies.” Polls show a consistent lead for ex-Catholic bishop Fernando Lugo, who proclaims himself independent. Trailing behind are Blanca Olevar from the ruling party and former general Lino Oviedo. In his campaign, Lugo has vowed to increase the rate that Brazil pays for electricity out of the Itaipu dam, one of the biggest in the world, which provides 20% of Brazil’s electrical needs. Moody’s recently upgraded Paraguay to B3 based on improvements in the economy, underpinned by soy and relatively good economic policies. “Paraguay has almost no taxes for exports, and practically are no taxes for the agricultural sector,” Torres says. Paraguay plans to return to international debt markets in 2009 and is currently implementing measures to improve the rating and overall fiscal scenario.