Tue, Aug 20, 2013 - Page 9 News List

Paraguay’s new president Cartes out to woos foreign investment

By Michael Warren and Pedro Servin  /  AP, BUENOS AIRES and ASUNCION

Multimillionaire Horacio Cartes made a play for more foreign investment on Thursday last week as he assumed the presidency of impoverished Paraguay and tried to move past accusations about business dealings that have made him a target of US criminal investigations.

As his Cabinet chief, Cartes named a man with US ties, including degrees from major US universities and a top post at Coca-Cola Co in Paraguay. Juan Carlos Lopez Moreira Borgognon studied at Stanford and George Washington universities and also attended the American University in Paraguay.

“I’m not in politics to make a career of it or become wealthier,” the 57-year-old Cartes said in his inauguration speech, promising to strengthen Paraguay’s international relations and its commitment to human rights.

“I’m in politics to serve my people, make the future better for new generations and build up our identity as a free, independent and sovereign people,” he added.

Inaugural organizers said Cartes’ most important encounter at the swearing-in was not with fellow presidents, but with foreign executives he hopes will invest in the infrastructure of this country of 6.2 million, where 39 percent live in poverty.

Wearing a red-white-and-blue presidential sash, the tobacco magnate said he intends “to win every battle in the war we’re declaring today against poverty in Paraguay.”

The country is among the most unequal nations in South America.

Cartes, whose term runs through August 2018, built a family fortune with two dozen companies that dominate industries from banking to tobacco to soft drinks to soccer, making it difficult to make a move as president without generating complaints of conflicts of interest.

He is is a political neophyte who never voted for president before running for office, and often faced accusations that his wealth was fed by money laundering, cigarette smuggling and drug trafficking.

Paraguayan voters overlooked the allegations, focusing on hopes that the businessman from the dominant Colorado Party can help the country benefit more from soy profits that are projected to boost the economy by 10 percent this year.

Cartes won April’s election with 46 percent support by promising to create many more jobs. His elected predecessor, the sandal-wearing former bishop Fernando Lugo, was impeached and ousted by Congress last year.

Accusations involving Cartes became widely reported after WikiLeaks published a 2010 US Department of State cable that labeled him the head of a drug trafficking and money laundering operation.

He denied this in his only news conference with foreign media during the campaign.

“I wouldn’t want to be president if I had ties to drug traffickers,” he said. “Go to the courts and check. There’s nothing, not a single charge against me.”

Smuggling, corruption and tax evasion are endemic in Paraguay, and analysts believe it is difficult for executives not to come into some contact with criminals.

The corruption watchdog group Transparency International ranks Paraguay 150th out of 176 countries. The US Congressional Research Service in 2010 called corruption “a major impediment to consolidating democratic institutions” in the nation.

Cartes did spend 60 days in jail in 1986 during a currency fraud investigation. He was accused of making millions of dollars on a central bank loan obtained at a preferential exchange rate and then moving it through his money exchange business before buying farm equipment in the US. The case was dropped.

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