Wednesday, November 11, 2026
News and Views from the Global South
BRAZIL-MERCOSUR: The Smugglers Will Still Roam
Mario Osava
- Brazil’s new measures to contain contraband arriving from Paraguay is likely to have little effect on the illegal border activity that feeds Brazil’s hugh informal market.
That’s the judgement of those familiar with the “sacolero” phenomenon in which hundreds of thousands of Brazilians regularly travel to the Paraguayan border town of Ciudad del Este to purchase products that they then sell all over Brazil at a high profit but below the price of legally traded goods.
“I can’t stop, this is how I support myself,” said Paulo de Oliveira, who has made the trip every 15 days for the past five years to buy ball-point pens, toys, radios, school satchels, and eventually more expensive goods like electronic products.
Each trip takes him two days. The bus trip to and from Belo Horizonte, capital of central Minas Gerais state, and the Brazilian border town of Foz de Iguazu, across the Friendship Bridge from Ciudad del Este, takes him 20 to 24 hours each way with enough hours left over to make his purchases.
Taking a comfortable bus with sleeper seats costs 170 dollars. Adding food, total expenses per trip reach around 270 dollars, an “investment” he will more than recover when he resells the goods he acquired in Ciudad del Este.
He usually purchases 1,500 dollars worth of goods in Paraguay and expects to sell them at a 60 percent markup on average. De Oliveira says he prefers to buy small toys and school supplies because he can sell these for up to three times their purchase price.
A former bank employee, De Oliveira regards the government’s imposition of new limitations on Paraguayan purchases as “a joke”. No-one respected the earlier quota. And people are even less likely to do so now. Last Thursday, the government reduced the purchasing limit from 250 dollars to 150 dollars per person.
Forced to take an early retirement at age 48 as one of the 200,000 employees that the Brazilian banking system has discharged since 1990, De Oliveira found a way to keep up his standard of living by joining the army of “sacoleros” who supply thousands of “Paraguayan markets” located all over Brazil.
“I live better now, partly because I love to travel,” the former banker declared, noting that the products manufactured in China, Hong Kong, Taiwan and South Korea that he acquires in Paraguay bring him more income than the partial retirement pension he receives.
He says that the tighter customs controls that the Brazilian authorities have imposed in recent days and have promised to intensify will not stop this trade because it is impossible inspect all of the 40,000 people who cross Friendship Bridge each Saturday and Wednesday, the preferred buying days for the “sacoleros.”
Aluizio Palmar, environmental secretary for Foz de Iguazu and a resident of the city for more than 15 years, is also skeptical about control, noting that Paraguayan cotton and soy bean exports also cross the bridge, as do Paraguayan imports arriving in Brazilian ports.
The new governmental regulations are a response to “strong pressure” from the Brazilian electronics and toy industries to reduce Paraguayan contraband competition, but the social implications of stopping the trade must also be taken into account, Palmer said.
The environmental secretary said that more than 20,000 Brazilians from Foz de Iguazu are employed in trade with Ciudad del Este. To this number must be added some 20,000 local smugglers (called “oranges”) who help carry the sacolero’s purchases across the border, earning 10 dollars to 20 dollars per trip.
Shutting down this activity would add 40,000 people to the 15,000 already unemployed in Foz de Iguazu (with a total population of 250,000) and bring economic and social chaos to the city, Palmer warned.
The Brazilian measures are worrying the merchants, hotelkeepers and others who live off tourism and the “sacolero” trade, both in Foz de Iguazu and Ciudad del Este. The Paraguayan government has also showed concern, sending a delegation to Brasilia to urge their withdrawal.
But the decision to reduce the purchasing quota for overland tourists from 250 dollars to 150 dollars was reached jointly by the Southern Common Market (Mercosur) countries: Argentina, Brazil, Paraguay and Uruguay.
Brazilian revenue officials estimate that 4.8 billion dollars per year evades foreign exchange controls through this “ant smuggling” from Ciudad del Este.
To this must be added a portion of the seven billion dollars in annual Paraguayan imports through the Brazilian ports of Santos and Pranagua, some of which are believed to be diverted to the Brazilian market.
The Brazilian government now wants to renegotiate the 1941 and 1956 agreements that conceded these porous import enclaves to Paraguay. Some 12 billion dollars may be at stake – one and half times Paraguay’s Gross Domestic Product and two percent that of Brazil’s.
The illegal trade that was tolerated in the past has now run up against the Brazilian government’s efforts to balance its foreign and domestic accounts.
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BRAZIL-MERCOSUR: The Smugglers Will Still Roam
Mario Osava
- Brazil’s new measures to contain contraband arriving from Paraguay is likely to have little effect on the illegal border activity that feeds Brazil’s hugh informal market.
(more…)
Print
|
