Sunday, 4 March 2012

The Amazing Race 20, Episode 3

Buenos Aires (Argentina) - Asunción (Paraguay)

It took 20 seasons of the reality-TV show before The Amazing Race finally made it to Paraguay this week. That's par for the course: Paraguay is one of the South American countries (especially among those that are readily accessible from other more popular tourist destinations) least visited by foreign tourists.

Ironically, the first clue that sent the racers to Paraguay identified it as the "Corazón de América" (Heart of America). That makes some sense in terms of Paraguay's land-locked location in the middle of the South American continent, but not in terms of centrality to travellers' mental maps of the region's attractions.

Twenty years ago, when I started selling multi-stop airline tickets, Asunción's international airport actually was a well-known regional backpacker travel hub. At the time, Air Paraguay ("LAP" or "LAPSA") offered a regional South American air pass for about US$1,000 that included round-trip flights from Miami to Asunción as well as 30 days of unlimited flights back and forth between Asunción and any or all of the other cities in the region served by Air Paraguay. As long as your trip wasn't going to last more than 30 days, it was the cheapest way for a traveller from the US to get a glimpse of multiple cities and countries throughout the Southern Cone.

Most of the people who bought these tickets had little or no interest in visiting Paraguay, and there was a constant undertone of complaints at having to connect through the Asunción hub between each pair of other destinations, along with complaints about Air Paraguay's aging planes and poor service.

Air Paraguay went out of business in 1994-1995 -- one of the first national airlines to go bankrupt -- and since then Paraguay has faded from tourists' mental maps.

In a review of the latest edition of The Practical Nomad: How to Travel Around the World, my friend Wayne Bernhardson (who knows more about the countries of the Southern Cone than I'll ever know) told this story about my own visit to Paraguay:

I recall that, after renting our apartment in Buenos Aires, he and his companion Ruth Radetsky found plenty to see and do in muggy subtropical Posadas -- a city that foreign air travelers rarely even see and most overlanders visit only long enough to change buses for Iguazú Falls. To quote a phrase from the classic People's Guide to Mexico, "Wherever you go, there you are."

One of the things we found to do in Posadas, as it happens, was to take a day trip across the Paraná River to Encarnación, Paraguay. It's something I'd highly recommend, not so much because there's anything particular to say or do, but because visiting Paraguay -- even briefly and just to a border town -- gave me a better context for understanding its neighbors. (For the same reason that a day trip to Juarez or Tijuana is one of the most interesting things to do in El Paso or San Diego -- a recommendation that shocks some San Diegans who forget that the majority of the population of the trans-border San Diego-Tijuana metropolitan area is in Mexico.)

There's a difficult balance between seeing what makes a place or a culture unique, and seeing patterns of comparison and similarity. Both are important. Perhaps my perception is overly biased by having visited Paraguay as part of a trip on which I spent most of my time in Argentina, but I was impressed by the ways that Paraguay is to Argentina as Mexico is to the USA.

Argentina is one of the richest countries on the continent, and Paraguay one of the poorest. Argentina is in most respects a First World country, and Paraguay is a Third World country. Argentina is, as Wayne Bernhardson pointed out in a correction to my previous column about the race, more racially mixed than many Argentines would admit, but it's still predominantly a country of light-skinned people who think of themselves as European. Across the border, most Paraguayans, like most Mexicans, are mestizo. Spanish and Guaraní are both official languages in Paraguay, and many Paraguayans are bilingual, but I've read that more Paraguayans speak only Guaraní than speak only Spanish.

Like the USA and Mexico, Argentina and Paraguay have a long, relatively "porous" border, and a strained and co-dependent relationship, heavily colored by race, between their economies and populations. Argentina depends upon Paraguay and Bolivia for cheap laborers (maids, gardeners, ranch hands, low-level agricultural and construction workers, etc.) but treats them as second-class residents and fears that they might try to compete with Argentines for higher-wage jobs. Paraguay, like other full or partial "remittance economies" (the extreme case of which is the Philippines) resents having some of its more ambitious citizens leave the country rather than contributing to domestic development, even as the money they send "home" helps support the Paraguayans who've stayed behind. Argentines think of Paraguayans, when they think of them at all, as ignorant and uncultured, while Paraguayans think of Argentines as rich, racist, and arrogant.

Paraguay has a hotter and generally less comfortable climate, fewer natural resources, and generally less productive agricultural land than Argentina -- again mirroring the comparisons between Mexico and the USA.

Nobody has any accurate economic statistics about Paraguay, because so much of the country's economic activity is in the "informal" sector (non-cash and/or off-the-books activities, including subsistence agriculture and unreported remittances) and/or entirely illegal (smuggling, money laundering, and trading in drugs, weapons, and other contraband). There are some above-board agricultural exports from the relatively few large plantations and ranches that employ those landless laborers who haven't gone abroad in hope of higher wages. Most sources agree, however, that the largest share of Paraguay's foreign-currency income comes from smuggling, money laundering, and related illegal activities such as dealing in guns and drugs, followed by remittances from Paraguayan "guest-workers" in neighboring Argentina and Brazil.

There are micro-states elsewhere like Lichtenstein where smuggling is a pillar of the economy. But with the possible exception of Afghanistan, which also has revenue from opium-growing, I don't know if there is any other country as large as Paraguay that is so dependent on smuggling. (Feel free to suggest any others you know of in the comments.) Most of the smuggling is actually of fairly mundane goods, almost none of them actually produced in Paraguay, running the gamut from machine tools and industrial parts to automobiles, computers, appliances, and other consumer products.

The Paraguayan transit trade in smuggled goods is a by-product of high import duties collectively imposed by the Mercosur customs union. The intent is to encourage domestic and regional "import substitution" manufacturing industries. But it has proven cheaper for Brazilians and Argentines to have these sorts of imports smuggled in via Paraguay than to develop the ability to manufacture them domestically.

It works like this: Containers of, say, consumer electronics from China via Dubai or Panama are unloaded in Santos (Brazil) or Buenos Aires. No duty is charged at the port, since they are sealed and "in bond" for transit to, and consumption in, Paraguay. In Paraguay, officials are bribed (1) not to collect the import duty and (2) to sign off on new false paperwork certifying the content of the containers as being "Made in Paraguay". Once this is done, and as long as the officials stay bribed, the goods can be trucked back to Brazil or Argentina -- where, as supposed products of Paraguay moving between Mercosur member countries, they are exempt from duty under the terms of the Mercosur customs union. Illegal items are similarly brought into Paraguay under seal with false content descriptions, but then have to be brought across the borders from Paraguay into Brazil or Argentina clandestinely unless, as often happens, the guards at the official border crossings can be bribed to look the other way.

This results in gross distortions of Paraguayan economic statistics, since the relabeled and re-exported goods are shown as having been either, or both, produced and/or consumed in Paraguay when in fact they were really made in China (or wherever) and consumed in Brazil or Argentina. Official statistics show Paraguay as having grossly exaggerated consumption of luxury cars and many other consumer goods, and a manufacturing sector that in reality is largely nonexistent.

Even at a minor border crossing between provincial Argentine and Paraguayan cities, we saw chauffeured luxury cars full of dark-suited Chinese and Arab traders and their Paraguayan "fixers". But the undisputed center of the transit trade and the associated money-laundering is Ciudad del Este, the Paraguayan boomtown at the "triple border" with Foz do Igauçu (Brazil) and Puerto Iguazú (Argentina). A sort of Latin American Dubai, it might be the world's largest smugglers' bazaar, far exceeding even the infamous one I visited in Peshawar, Pakistan.

All of this is probably least visible where the racers were, in the capital of Asunción at the other end of the country, a much older city and, more importantly, the center of government and of the "formal" and legal Paraguayan economy, such as it is.

For cross-border tourists, Paraguay is seen as inexpensive, "colorful", and different. Argentines and Brazilians treat an excursion to Paraguay similarly to the way many Texans or Californians treat an excursion to a Mexican border town, with the added benefit for border-crossers of the ability to buy imported consumer goods at lower prices in the smugglers' bazaars and bring them home duty-free as long as they are within the personal exemption limits.

The risk of property crime is higher in Paraguay, as in any poor country, and many Argentines park their cars on the Argentine side of the border and take a bus or ferry if they go across to Paraguay for the day. Paraguay tends to sound scary, but I didn't get any sense that there's a particular risk of violent crime for ordinary tourists.

In general, US citizens require a visa to visit Paraguay. Visas aren't generally available at the border, but there are Paraguayan consulates in most of the major towns across from the Paraguayan borders. We got our visas for Paraguay in a day in Posadas. Don't try to cross without a visa: Many Paraguayan government officials including border guards are on the take, but as always I strongly advise tourists to leave bribery, like smuggling, to the professionals. Offering bribes to individuals on the spot is likely to get you in serious trouble.

As with foreign visitors to the USA who forget to check whether they have permission to re-enter the US before crossing to Niagara Falls (Canada), or Tijuana (Mexico), make sure you have another entry left on your Argentine or Brazilian visa before crossing to Paraguay, if you plan to come back. Getting stuck on the Paraguayan side of the border could be especially inconvenient if you've only gone for the day, and left your luggage behind in Brazil or Argentina.

Link | Posted by Edward on Sunday, 4 March 2012, 23:59 (11:59 PM) | TrackBack (0)
Comments

This was a fantastic column, Ed. Would love to read a book about the town at the triple border.

Posted by: Paul Karl Lukacs, 8 March 2012, 03:28 ( 3:28 AM)

I don't know of any books about Ciudad del Este, but you might enjoy this documentary video (in Spanish):

http://www.youtube.com/watch?v=yAhhITkI0gU

The scariest part of the video is in the last 5 minutes, which show a crossing of the Friendship Bridge between Brazil and Paraguay, as seen from the point of view of the pillion passenger on a motorcycle taxi!

Posted by: Edward Hasbrouck, 8 March 2012, 09:06 ( 9:06 AM)

Enjoyed your article much. Much agree with your statements and glad to see your positive opinion of my town (TJ) Tijuana. We always get a bad rap in the press. Good job. I much enjoyed Paraguay, looking forward to Peshawar some day. Good job.

Posted by: Julio Garcia, 9 March 2012, 08:19 ( 8:19 AM)
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