Paraguay's finance minister brings youth to the table

“I’d been away for 15 years. I did not want to come back,” says Paraguayan finance minister Lea Giménez. “But Paraguay has finally woken up and things are happening, and it’s really encouraging.”

Ms Giménez joined her country’s Ministry of Finance in 2016 as economic vice-minister, having covered various roles at the World Bank. When, in mid-2017, then finance minister Santiago Peña announced his candidacy in the forthcoming presidential elections, she took over, becoming the first woman to run the ministry, and, at 36 years of age, like her predecessor one of the younger professionals who are bringing about change in the country.

“Finally I see young people, people who are well prepared to run public institutions,” says Ms Giménez. As with Mr Peña, she is determined to push ahead with reforms, improve transparency and cut the government’s fat.

Ms Giménez highlights the implementation of a more effective and open system to control public spending, and gives the example of fuel usage. While only a couple of years ago, paving a road would have cost tax payers Gs9m ($1593) per kilometre just in fuel, it now costs Gs2m. All it took was the introduction of a fuel card to be used to pay for petrol in connection to any government activities, and which is a by-product of the transparency law introduced in 2014, aiming to improve accountability within the public sector. The total fuel savings have so far amounted to $23m, and come in addition to other savings elsewhere in the administration, from $23m in travel expenditure savings to $8m in catering costs savings.

“I always wonder what this country would have been if we had implemented this structural change in 1989, when the dictatorship of Stroessner ended,” says Ms Giménez. Alfredo Stroessner’s dictatorship was one of the most repressive and longest in Latin America’s history.

Bright spot

After years of economic struggle, Paraguay is now catching up. It remains one of the few bright spots in a generally lacklustre region, boasting gross domestic product (GDP) growth set to reach 4.2% for 2017, according to the finance ministry. One of the country’s major achievements, says Ms Giménez, is having managed to detach its economic fate from its much larger neighbours and trade partners Brazil and Argentina, which have both suffered in recent years.

“In the past, when Brazil and Argentina did poorly, we did very poorly,” she says. “Now they’re doing very badly and we’re doing extremely well, in relative terms, in a region that is struggling.”

But more needs to be done, and one of Ms Giménez’s top priorities is education, improving the quality of teaching and preparing young Paraguayans for the new jobs the changing economy will need and offer.

“We’ve had very difficult but important talks with teachers,” she says. “We’re asking for sacrifices on both sides: we’re going to increase salaries by 83% over the next four years [and] this will be a huge weight on our budget. But we’re asking all of them to change, to commit to getting training, which the government will provide, and to being evaluated, something that has never happened before.”

The government is also involving the private sector and representatives of the local communities in the discussion to identify which skills are missing.

Changing priorities 

As the Paraguayan economy reduces its dependency on agriculture, and construction becomes more relevant, the skills that young people will need will also change.

Until 2012, agriculture contributed nearly one-quarter of GDP, with industry and construction representing just over 6%. Now agri-businesses generate 15% of GDP and industry and construction about 20%. 

The first public-private partnership projects are also beginning to surface, such as the expansion and upgrade of 143 kilometres of roads between San Lorenzo and Ypacarai. However, these initiatives have been running into great opposition and have stalled, says Ms Giménez.

“What’s happening is that this is a country run by very few people,” she says. “Those people are still here but now financial investors are coming in, there is competition, and this is changing the landscape. Some people don’t like that change because it’s taking away [what they feel are] their profits.”

But the path for Paraguay’s future is now clear, she adds, and is unlikely to change. “Over the past four years, we’ve made changes to redirect resources to priority areas, these are social programmes and infrastructure,” she says. “I think that, irrespective of who will be the next president, it’s pretty clear that [these must remain] priorities.”