Paraguay: Public investment as a counter-cyclical tool to face the crisis

In the face of the economic crisis, Paraguayan authorities have raised allocation of resources and execution of public investments. If all resources allocated to public investment in the 2009 budget were totally executed, the estimated impact created would amount to 16,000 additional jobs throughout the year. This estimate does not include execution of additional funds from international fi nancial cooperation organizations or bi-national power plants, utilization of which requires approval by Parliament. To this should be added the effect of a number of measures designed to increase the use of labour rather than machinery in public investments, via improved access to public contracts for micro and small enterprises and introduction of a routine road-maintenance system. Beyond the current economic crisis, these efforts mean signifi cant improvements in the economic policy of the nation, even though their short-term effect on employment may be modest or diffi cult to measure. In this context, introduction of a system to measure the impact of public investment on employment becomes especially important.