Former Paraguayan finance minister a Fulbright Scholar at ISU

October 26 2007

Dionisio Borda likens his role in the Indiana State University economics classroom as that of a coach.

“I have played the game,” said the former Paraguayan finance minister. “I can tell you what it looks like in the field.”

Borda, who is a Fulbright Scholar in Residence at ISU this semester, served as the South American country’s minister of finance and head of the economic team from 2003 to 2005 as the country teetered on economic ruin. The country was crippled by a long-term recession, a rapid inflation growth and high fiscal deficits.

“We couldn’t pay our debt,” he said. “Government employees started getting their salaries late. Those who were retired were delayed one month to get their salary.”

Donald Richards, ISU economics professor, said it was a plus to have Borda, with whom he co-teaches Latin American Political Economy, because he is not just another professor who deals in the realm of theory.

“He was a practicing policy maker who labored under very difficult political circumstances in his native Paraguay to help guide his country's economic future,” Richards said. “He has insights that most American students will never get from an American professor who hasn't had that same experience.” Paraguayan government officials called in Borda to pull the country from the edge of economic collapse. Through a three-pronged attack, Borda said the gross domestic product (GDP) began growing from 0 percent to 4 percent. Inflation fell from 10 percent to 2.7 percent and the fiscal deficit lessened from negative 3 percent of the GDP to 1.6 percent.

He then wanted to work on the underlying problems by moving the country toward sustainable and equitable economic growth, reducing poverty and inequality and adding accountability to reduce corruption.

“We solved this big problem in the beginning,” he said. “Then we started the path to attack the long-run alternative and they don’t care. When I see there is not any more political will there, I left the office.”

Borda continues to serve as director of the Center for Economic Policy Studies, a think tank that he founded in 1990. As a Fulbright Scholar in Residence, Borda has spent the semester lecturing, but a larger role of the scholars is to open doors to the world for students.

Guillermo Contreras Castro, a junior economics major from Panama, appreciates the co-teaching by Borda and Richards in the Latin American political economy class.

“As a Latin American teacher he is more convincing because of his personal experience, but Dr. Richards also gives us a great and extensive background,” he said. “Dr. Borda and Dr. Richards are a good combination for this class because both have been researching the Latin American economy for the past decades.”

Also, if he has trouble understanding an idea in English, Castro said Borda explains it to him in Spanish.

Castro, who intends to work in Panama, said the class inspires him that success can occur in less developed countries.

“They explain the issues that have passed all along the economy of Latin American countries and how they as an economist can provide helpful remedies for the future of those countries,” he said.

In the class, the professors discuss what has happened economically for the past three decades in Latin America with the oil bust, debt crises and recovery.

“I have a sense of reality about policies that is a help here,” Borda said.

Borda also spends time at ISU researching future growth and development in Paraguay. From that research, he sees several things that worry him, such as a growing gap between the upper income class and those living below the poverty. Thirty-seven percent of the population lives below the poverty line, he said. The country also has a 12 percent unemployment rate and a 17 percent underemployment rate.

“Poor people don’t have a voice at all,” he said. “Poor people don’t have a social security net. If you are poor and unemployed, you don’t get help from anybody. The safety net is very weak.”

That poverty is causing people to leave the country to find work in places like Spain, Chile and Italy. Those who leave send money back to their family members. That money, remittance, is now the fourth largest source of the country’s income behind soybeans, meat and cotton.

“The assistance is affecting the base of the nation. It pushes so many people outside of the nation,” he said. “What happens to the children who get money to eat, but don’t get care'”

It is a problem, Borda said, that doesn’t just affect Paraguay, but all of Latin America.

As he puts together a proposal, Borda said he has received help from others in the economics department.

“People are very generous in the economic department,” he said. “The economic department is a quite healthy intellectual environment. They are very open and there is a sense of community. I feel at home.”


Contact: Dionisio Borda, Fulbright Scholar in Residence, at (812) 237-7975 or at

Writer: Jennifer Sicking, assistant director of media relations, Indiana State University, (812) 237-7972 or


CUTLINE: Dionisio Borda, fomer minister of finance in Paraguay, talks to students during a Latin American poltical economy class at Indiana State University. Guillermo Castro, a junior from Panama, listens.

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Story Highlights

Dionisio Borda, who is a Fulbright Scholar in Residence at ISU this semester, served as the South American country's minister of finance and head of the economic team from 2003 to 2005 as the country teetered on economic ruin.

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