Contraband Is Big Business in Paraguay

Many are skeptical of Paraguay’s president-elect Nicanor Duarte Frutos’ promise to crackdown on the illegal production and trade of counterfeit products. Approximately one-fifth of the Paraguayan economy is fueled by unlawful cross-border trade with neighboring Argentina, Brazil, and Bolivia, from where the 'knock offs' – anything from fake Marlboro cigarettes to computer parts - are then rerouted to the US, Mexico, and the Caribbean. Major multinational corporations worldwide support the crackdown; as legal businesses, they lose billions of dollars in potential income to this illicit "gray market." However, despite pressure and promises, Paraguay is one of the poorest countries in Latin America, suffering from severe poverty, inflation, and diminishing foreign investments. Such internal economic problems may hinder a definitive crackdown. – YaleGlobal