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"The Regulations Are Absurd"



(p. A6) CIUDAD del ESTE, Paraguay--This remote South American country, long known for contraband traffickers and a 35-year dictatorship, is now becoming something else: a manufacturing hub.

Paraguay has attracted scores of foreign factories since 2013, as predominantly Brazilian companies respond to new incentives by flocking to this gritty border city to make everything from toys to motor scooters for export.

Koumei SA, a family-run Brazilian light-fixtures company, is typical. Its owners moved the plant and about 150 jobs here last year, saying they were fed up with Brazil's high taxes and complicated labor rules.

"It's just easier here," said Seijii Abe, who directs the company with his father.


. . .


Brazil ranked 123rd out of 190 in the World Bank's 2017 survey on ease of doing business, right behind Uganda and Egypt. Companies there say they are bedeviled by rules that smother entrepreneurial impetus. They point to labor regulations that make hiring and firing difficult, high energy bills, a legal system that encourages employee lawsuits and taxes of up to 35% on imported goods.

"The regulations are absurd," said João Carlos Komuchena, owner of Kompar SA, a company which makes small plastic bottles used for packing soy sauce and other products that moved to Paraguay from Brazil last year. "We need to wake up in Brazil; there is a lot of prejudice against business."



For the full story, see:

Jeffrey T. Lewis. "Businesses Flee Brazil Rules for Paraguay." The Wall Street Journal (Mon., Aug. 28, 2017): A6.

(Note: ellipsis added.)

(Note: the online version of the story has the date Aug. 26, 2017, and has the title "Brazil's Woes Multiply as Manufacturers Move to Paraguay.")






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