Senator Gustavo Leite, of Honor Colorado — a movement within the Colorado Party led by former President Horacio Cartes — estimates that Paraguay could recover up to US$400 million a year by cutting spending he considers unnecessary. The plan includes shrinking the public administration, reviewing subsidies and taking measures against corruption. The characterization of the doctors’ mobilization as a national strike and the dates August 24–28, 2026, require additional confirmation.
The plan calls for an “incentivized voluntary retirement” program for up to 100,000 employees, merging or closing redundant institutions and freezing new hiring. Leite says that 15,219 positions were added in the 2025 National General Budget alone. By his calculation, the departure of 100,000 public employees would equal 30% of the payroll, while health and education, as well as security, the judiciary and oversight bodies, would be protected through exceptions.
The proposal does not detail in the released material how the incentives would be financed or which agencies would be merged or closed. Leite argues that the reorganization could take place without layoffs, through participation in the program or by transferring employees to an “employee bank.” The estimated US$400 million saving is a political projection by the senator, not an amount validated by the executive branch or an independent audit.
Among other measures, Leite advocates reducing per diem payments and state advertising, improving subsidy traceability, approving a single law for energy projects and studying the privatization of electricity generation. He also cites border tourism and exploitation of Chaco gas as alternatives for expanding economic activity. Leite maintains his opposition to creating or raising taxes and says the state should concentrate resources on health and education.
Leite’s diagnosis combines fiscal adjustment with precariousness in the labor market. By his calculations, 62.4% of employed people — more than 2 million people — earn less than the legal minimum wage of G. 3,044,000. He also estimates a shortfall of 1.45 million to 2.18 million formal jobs, with sufficient income and social protection, in a workforce of 3.4 million. These figures are Leite’s estimates and do not replace an official analysis of the social impact of cuts to the public workforce.
Doctors are demanding pay increases, job stability, supplies, medicines and better working conditions. They also report that pay per position fell from about 2.8 minimum wages in 2012 to 1.5 minimum wages. Health Minister Teresa Barán declared the negotiations over for lack of funds. Leite criticized the way Santiago Peña’s government handled the issue and called for greater participation by the executive branch, naming Chief of Cabinet Javier Giménez among those absent from the talks — a claim requiring additional confirmation.
The senator says Paraguay has “run out of money” and advocates harsher punishment for corrupt officials. Implementing the plan would depend on executive decisions, legal changes and negotiations with public employees and unions. Voluntary retirement, incentives, agency mergers and protected sectors could also limit or delay the projected savings, especially if two-thirds of the public workforce is concentrated in education and health, as Leite claims.