Paraguay: IMF Overview

By Jessica Woodroffe and Mark Ellis-Jones, from the World Development Movement Report, 28 September 2000

In last year's annual review of Paraguay's economic programme and performance, the IMF expresses its disappointment at the Government's lacklustre performance resulting from the failure to implement needed structural reforms. They offer the following advice: Directors underscored the importance of sequencing structural reforms appropriately while proceeding with the necessary changes in the civil service and the social security system. They also expressed concern over the high level of the minimum wage vis-a-vis Paraguay's major trading partners, and noted that the rigidities embodied in present labour market arrangements would become more evident as the economy opened itself to world trade. Directors therefore urged the authorities to proceed with the necessary labour reforms.

28 September 1999

In an address to the IMF and World Bank, Federico Antonio Zayas Chirife, Governor of the Bank for Paraguay, states how we [Paraguay] wish to reaffirm here today that the Paraguayan people are committed to defending our Republic's democracy and its institutions and are willing to undertake a successful structural transformation of our society and national economy.

June 2000

Protesters clash with police in demonstrations against 'non-negotiable' IMF reforms. Protesters call a 48-hour general strike against the Government's plans to privatise its telephone, water and railroad companies. In Asuncion, over 20 people are injured and five arrested as riot police attack them with truncheons. In a linked protest in the east district, 300 protesters are dispersed with water canons while two buses are set on fire at the bus terminal. Nearly half of the capital's shops are closed and residents are transported in military vehicles as protesters block public transport routes. A presidential spokesperson says that the policies were 'non-negotiable' because the Government needs to meet IMF targets to access up to $400 million in loans from the World Bank.