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Significance
The controversial decision coincided with the start of a major international evaluation of Paraguay’s compliance with international guidelines on combatting illicit financial flows. SEPRELAD head Carlos Arregui has admitted that it is by no means certain that Paraguay will pass the Financial Action Task Force (FATF) exam.
Impacts
Failure to pass would mean a negative ‘country image’, involving a higher risk premium on government foreign borrowing costs.
A negative result would lead to reduced foreign investment inflows, something that the private sector is keen to avoid.
The Biden administration will step up pressure for greater Paraguayan vigour in combatting corruption.
Keywords:
Paraguay,
LA/C,
economy,
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politics,
social,
corruption,
crime,
finance,
government,
judicial,
legislation,
narcotics,
opposition,
party,
regulation,
tobacco,
debt,
foreign investment
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2021
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