Brazil & Southern Cone - February 2011 (ISSN 1741-4431)

The finance minister, Dionisio Borda, has called on congress to assist in cutting the G$42.8bn (US$9.31bn) budget for 2011. The budget deficit was initially estimated at 0.8% of GDP. but congress pushed it up to 2.5% of GDP, or G$1.81bn (US$392m).  Borda said that nearly half of the deficit increase was due to the creation by congress of 5,800 new government jobs. These jobs are unfunded by the current budget, so their wages and benefits will have to be met centrally. Paraguay already has 200,000 civil servants. The extra jobs mandated for this year are mostly in the judicial system (2,468). Congress gets another 371 staff on its payroll and the government another 519. The electoral authority, the Tribunal Superior de Justicia Electoral (TSJE), is taking on another 1,000 staff. The cost of the extra judicial employees is US$118m in wages alone for this year, according to the treasury. The money for this is coming from reserves which come mostly from transfers from the bi-national hydro-electric dams, Itaipú and Yacyretá. Borda said the executive would cut spending by between 3.2% and 19% and would expect similar cuts by congress and the judiciary. Borda said he would send congress a bill in March to increase taxes on beef and soya bean exports to help balance the books.

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