VZCZCXYZ0000
RR RUEHWEB

DE RUEHAC #0403/01 1381616
ZNR UUUUU ZZH
R 181616Z MAY 07
FM AMEMBASSY ASUNCION
TO RUEHC/SECSTATE WASHDC 5742
INFO RUCNMER/MERCOSUR COLLECTIVE
RUMIAAA/USCINCSO MIAMI FL//SCJ3/SCJ33/SCJ34/SOCSO LNO//
RHEHNSC/WHITE HOUSE NSC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAIIA/CIA WASHDC

UNCLAS ASUNCION 000403 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR WHA/BSC, INL/LP (JIM HIDES) 
EB/IFD/OIA 
STATE PASS TO USAID FOR LAC/AA 
STATE PASS TO USTR FOR LYANG 
NSC FOR SUE CRONIN 
TREASURY FOR OSIA MAUREEN WAFER 
TREASURY FOR OTA WARFIELD, VAN KOCH, MILLAR 
COMMERCE FOR ITA SARAH COOK 
SOUTHCOM FOR POLAD 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM PREL ECON PA
SUBJECT: PARAGUAY POLITICAL AND ECONOMIC UPDATE MAY 12-18, 
2007 
 
REF: ASUNCION 0383 
 
¶1. (U) SUMMARY: 
 
-- Building a Transparent Court 
-- Paraguay Attracting Call Centers 
-- Health Ministry Milk Program Under Scrutiny 
-- New Judges (Again) for Ycua Bolanos Panel 
-- MCC Director Visits Paraguay 
 
MCC DIRECTOR VISITS PARAGUAY 
 
¶2. (U) MCC Threshold Programs Director Maria Longi visited 
Paraguay last week to review progress under the GOP,s USD 35 
million MCA Threshold Program dedicated to fighting 
corruption and informality.  Longi conducted a wide range of 
meetings with top level GOP counterparts, private sector 
leaders, civil society representatives, and other key 
multilateral donor institutions.  The meetings gave Longi an 
on-the-ground look at program performance and outstanding 
challenges.  Apart from specific discussions on the ten 
Threshold program components, GOP reps stressed the 
country,s keen interest in qualifying for an MCA compact and 
a planned trip of Minister Carlos Walde and other GOP reps 
(week of June 11) to Washington to report on progress in 
addressing MCC indicators. 
 
HEALTH MINISTRY MILK PROGRAM UNDER SCRUTINY 
 
¶3. (U) The Controller General's investigative support unit 
audited the Ministry of Health's milk program for pregnant 
women and malnutritioned children and discovered 
irregularities.  The Health Ministry paid nearly 50 percent 
of the value of the contract (approximately USD 1 million) to 
JVL Meta SRL, the company that won the contract, without 
receiving any milk.  The case is still under investigation. 
(NOTE: The Controller General's investigative support unit is 
funded by USAID. END NOTE.) 
 
NEW JUDGES (AGAIN) FOR YCUA BOLANOS PANEL 
 
¶4. (U) German Torres, Blas Cabriza and Bibiana Benitez are 
the most recent set of judges selected to preside over the 
second Ycua Bolanos fire case May 13 (reftel).  Torres is set 
to be the President of the Court.  There has been no 
indication that any of them will recuse themselves.  (NOTE: 
More than 58 judges recused themselves, 3 of them just three 
weeks ago. END NOTE.) 
 
BUILDING A TRANSPARENT COURT 
 
¶5. (U) Alicia Puchetta, the President of Paraguay,s Supreme 
Court, and the USAID Director publicly launched a new service 
designed to provide citizens with greater access to clear and 
timely information regarding basic legal rights and public 
services.  The service will also help answer general 
questions on judicial operations and proceedings.  The Court, 
with USAID assistance, is now providing both on-site and 
call-in information services for citizens designed to 
demystify and make more transparent Paraguay,s opaque 
judicial system. 
 
PARAGUAY ATTRACTING CALL CENTERS 
 
¶6. (U) At least three companies have recently invested or 
announced future investments in call centers in Paraguay. 
Spanish company Bouncopy began operations in early 2007 and 
currently employees 70, with a goal of expanding to 750 
employees by the end of 2008.  According to local press 
reports, Spanish company Angel PC has also opened a call 
center with 300 employees, and the Minister of Industry and 
Commerce is courting Spanish firm Atento, which is also 
considering establishing a call center in Paraguay.  Most of 
the operations are established under Paraguay,s maquila law, 
which confers significant tax benefits.  (NOTE: The MCC 
Threshold Program has a component supporting the GOP,s 
 
 
efforts to attract maquila operators and thus create more 
legitimate employment. END NOTE.) 
CASON