Identifier
Created
Classification
Origin
05ASUNCION1400
2005-11-11 11:56:00
UNCLASSIFIED
Embassy Asuncion
Cable title:  

PARAGUAY: SURVEY RESULTS SEND MIXED MESSAGE ON

Tags:  PGOV KCOR ECON PINR PA 
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UNCLAS SECTION 01 OF 03 ASUNCION 001400 

SIPDIS

STATE FOR WHA/BSC
DEPT PASS TO USAID LAC/AA
NSC FOR SUE CRONIN
SOUTHCOM FOR POLAD

E.O. 12958: N/A
TAGS: PGOV KCOR ECON PINR PA
SUBJECT: PARAGUAY: SURVEY RESULTS SEND MIXED MESSAGE ON
CORRUPTION

UNCLAS SECTION 01 OF 03 ASUNCION 001400

SIPDIS

STATE FOR WHA/BSC
DEPT PASS TO USAID LAC/AA
NSC FOR SUE CRONIN
SOUTHCOM FOR POLAD

E.O. 12958: N/A
TAGS: PGOV KCOR ECON PINR PA
SUBJECT: PARAGUAY: SURVEY RESULTS SEND MIXED MESSAGE ON
CORRUPTION


1. SUMMARY: The results of three recent polls send a mixed
message on corruption in Paraguay. In mid-October,
Transparency International's Corruption Perceptions Index
showed Paraguay improved but still placed 144 out of the 159
countries surveyed. Separately, in late September 2005, a
survey by Paraguay's Steering Committee for a National System
of Integrity (CISNI) indicated that large-scale corruption
remains a serious problem and the GOP is doing too little to
combat it. Government officials reacted strongly to both
surveys, claiming poor methodology and inaccuracy. Meanwhile,
Paraguay's performance in a World Bank Institute Survey and
the Millennium Challenge Corporation's control of corruption
indicator reflected significant improvements. Both time and
sustained performance are required to significantly improve
perceptions on corruption. END SUMMARY.

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Transparency Poll Indicates Improvement in Fighting Corruption
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2. In October, Transparency International (TI) released the
results of its annual corruption perceptions index (CPI),
where in 2005 Paraguay places 144 out of the 159 countries
included in the survey with a CPI score of 2.1 out of ten
total points. Paraguay tied with the Democratic Republic of
Congo, Kenya, Pakistan, Somalia, Sudan, and Tajikistan and
ranked just ahead of Angola, Equatorial Guinea, Nigeria, and
Haiti. According to the poll, Paraguay's record in combating
corruption has risen in the last two years, signaling some
improvement during Duarte's presidency. However, the rate of
improvement has slowed in 2005. Last year, Paraguay scored
1.9 out of ten total points and in 2003 received a CPI score
of 1.6.

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While CISNI Survey Reflects Serious Concerns about Corruption
-------------- --------------


3. In a separate poll released in late September 2005, the
Steering Committee for a National System of Integrity (CISNI)
published results that paint a rather negative picture with
regard to the public's perception of corruption in Paraguay:

-- almost half (47 percent) of those polled believe that

large-scale corruption (including political party and
governmental corruption and the payment of large bribes) has
increased since last year (21 percent believe the levels of
corruption are the same as in 2004);

-- political parties in Paraguay are perceived to be the most
corrupt public institution, followed closely by the Customs
Directorate, the Paraguayan Congress, and the Supreme Court.

-- 23.6 percent of those polled reported that they perceived
the Customs Directorate as the most corrupt Central
Government institution in the country. Over 67 percent of
those interviewed admitted that a member of the Customs
Directorate had solicited them for a bribe within the past
year;

-- more than 80 percent acknowledged that with a bribe, they
knew they would receive better customer service at public
institutions, such as Customs;

-- over 58 percent of the respondents believe that crimes of
corruption will continue to grow in the future;

-- 74 percent of those polled who had experienced corruption
decided not to report it; of those deciding not to report the
corruption, 56 percent said that the reason was because no
investigation or punishment would occur;

-- reflecting progress in 2005, 15 percent more people
admitted to knowing how to report corrupt acts than those
polled in the same 1999 survey;

-- 80 percent of business owners polled believe that
corruption is the primary obstacle to economic growth and
development in Paraguay.

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Reactions to Polls
--------------


4. In statements to the press, the head of Transparency
Paraguay, Pilar Calizo noted that political will to fight
corruption and impunity is lacking in Paraguay. Several
prominent Senators, however, were very critical of the TI
poll. During a public briefing with a U.S. expert on money
laundering, Sen. Espinola, the leader of the Liberal Party's
bench in the Senate, took the opportunity to discuss the poll
and reject its findings. Paraguay is no more corrupt than
neighbors Argentina and Brazil, he said. Rather, it is
weaker politically, making it an easy target for unfounded
claims. Sen. Pedrozo, the Colorado President of the Finance
Committee, similarly challenged the TI poll, blaming the
U.S., among others, for reinforcing Paraguay's image as a den
of corruption. Clearly, both Senators felt defensive about
the poll's findings and responded by attacking its
legitimacy.


5. Mercedes Argana, Executive Director of CISNI, told POLOFF
that many within the GOP reacted strongly to the survey's
results by questioning the methodology of the polling. The
Customs Directorate filed a complaint with CISNI stating that
the survey misrepresented their organization, and indicated
that the survey did not take into account the results of many
changes within the Directorate in the past few months.
According to Argana, members of the Supreme Court disputed
their ranking as a highly corrupt organization, stating that
many Paraguayans cannot differentiate between the Supreme
Court and other judicial offices, and pointed out that many
may confuse slow judicial proceedings with corruption.
However, CISNI also received compliments on its survey from
the academic community that noted the need for increased
academic studies on the effects of corruption and the
mechanisms needed to combat it. University officials also
acknowledged to Argana that a disconnect existed between
local academic institutions, corruption research and current
events in Paraguay.


7. Note: CISNI is a public-private partnership organization.
Its board members include members of the Duarte
Administration, including the Ministry of Foreign Affairs, as
well as the private sector and several Non-Governmental
Organizations. The study was funded by a grant from the
Inter-American Development Bank and with technical assistance
from the World Bank Institute (WBI). The GOP Census Office
conducted the poll from November 2004- January 2005. The
survey included interviews with 2,810 people, of whom 1,559
are users of public services, 986 are workers within the
public sector and 265 are business owners in Paraguay. The
margin of error for the survey is 2 percent with 95 percent
confidence. This is the second time this survey was
completed; the first survey was completed in 1999. END NOTE.

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Changing Attitudes Will Require Time and Sustained Performance
-------------- --------------


8. Corruption has long been an endemic problem in Paraguay.
As such, changing the public's perception of the government's
commitment will require time and a record of sustained
performance. It is worth noting that Paraguay was one of
only four countries in Latin America and the Caribbean to
improve in all four WBI governance indicators, including
control of corruption, comparing 2004 to 2002. The
Millennium Challenge Corporation (MCC) corruption control of
corruption indicator similarly showed that Paraguay had
improved from the 8th percentile (2004) to the 29th
percentile (2005). Notwithstanding the political constraints
within which the administration has to operate, the following
initiatives reflect an effort to advance reform (Note: The
success of several of these initiatives will ride on
effective implementation and sustained political will which
is often a sticking point. End Note.):

-- an increase in tax and customs revenue;

-- the announcement of a new tax regime to encourage
formalization of the economy in Ciudad del Este;

-- plans to implement a whistleblower program in the Finance
Ministry and in the Supreme Court;

-- implementation of a reform of the selection process for
judges, prosecutors, and public defenders by the Judicial
Council;

-- a confrontation of illegal deforestation, undocumented
persons and machinery, and the illegal export of logging
along the Paraguayan/Brazilian border, known as Operation
Sovereignty;

-- a Millennium Challenge Account Threshold Country Plan that
proposes far reaching and politically difficult
anti-corruption reforms.


9. Comment: Clearly the GOP has a long way to go towards
changing the public's perception of its commitment to combat
corruption. The TI survey reflects a positive trend --
albeit from a low baseline; the CISNI survey raises serious
questions whether the public believes the government is
committed and/or capable of producing a positive improvement.
Part of the problem lies with the political establishment,
which benefits from the current corrupt system of spoils and
casts blame at the surveys for Paraguay's poor rating. The
WBI Survey and MCC reflect progress over the course of the
Duarte administration. Some noteworthy initiatives have been
undertaken; others are under consideration. Nevertheless, it
is hard to overestimate the ability of corrupt individuals to
find ways around reform efforts. Ultimately the crux of
changing attitudes and performance will come down to ending
the culture of impunity that prevails for those in power who
break rules. Even with determined and effective political
leadership, such cultural change is certain to be a long-term
endeavor. End Comment.
JOHNSON