A Flourishing Economy in the Heart of South America
• As seen from Asunción A Conversation with Dr. Blas Oddone, Commerce Attaché at the Embassy of
Paraguay, Washington, D.C.
COHA: What are Paraguay’s advantages in terms of economic growth?
A: Paraguay’s economy grew at almost 7 percent annually until the world financial crisis in 2008, when the country’s gross domestic product (GDP) slipped somewhat. Nonetheless, it is expected to utperform the projections this year and show steady growth. The country’s extensive and relatively inexpensive
arable land has been only moderately utilized, and as a result, the agricultural sector holds considerable potential. In addition, the country has a friendly business environment. For example, the number of procedures required to start an average business in the country is less than half of what is required in Argentina and Brazil. Paraguay also has an extremely favorable tax regime for business, with the corporate income tax pegged at an average of 10 percent. However, the International Monetary Fund (IMF) Mission Director based in Asunción points out that Paraguay is a country featuring major tax evasion, and reforming the tax system is a critical step for achieving economic stability. The land-locked country still suffers from high levels of poverty in some regions and districts. The government has
targeted poverty reduction as a principle priority, and has named improvement of the education system, judicial reform, and urban crime reduction as other must do initiatives.
COHA: What are the major opportunities for growth in Paraguay?
A: Paraguay has a number of competitive advantages to its credit. It is known for cattle-raising, and
is also a major exporter of agricultural products. In 2009, it was the world’s fifth largest soy bean and sesame seed exporter. Paraguay is the sixth largest exporter of Yerba Mate in the world, and the ninth largest for boneless meat exports. The country produces the world’s highest surplus of electricity per
capita. Paraguay is also the world’s fifth largest per capita producer of renewable energy, much of which comes from hydroelectric sources. Importantly, Paraguay also has one of the youngest populations in the Americas, with 73 percent of citizens under the age of 34, indicating a low dependency ratio down the line. Finally, in a country risk study, Paraguay was ranked ninth among all Latin American countries.
The study integrated several indicators including economic performance, political risk and the degree of access to bank finance and capital markets. Furthermore, Paraguay has the second lowest debt rate in Latin America. The Guarani/Spanish-speaking nation of Paraguay ranks ahead of Brazil and Argentina
in the World Bank’s 2011 “Starting a Business” indicator. As the Minister of Commerce and Industry, the
Hon. Francisco Rivas Almada said: “We want to bring talent back to Paraguay; we want investors and the experience they gained in developed countries; we want them to use it in our country.”
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On April 1, the Belizean Minister of Tourism, Manuel Heredia, together with
Diane Haylock of the Institute of Culture and History, and George Thompson
from the Institute of Archeology, signed an agreement to maintain, preserve and
improve the conditions of the Marco Gonzalez National Park. This tourist destination
is located in the southern part of the country, approximately four miles
from the city of San Pedro. With this agreement, the Marco Gonzalez National
Park will be accorded the same standard of maintenance as other parks in the
region. The government will also award USD 20,000 for the construction of a
bridge which will make the park more accessible. The Marco Gonzalez Natural
Park includes one of the largest ancient ruins in the Ambergris Caye area. It surrounds
an area of about 800 yards by 200 yards and contains over 60 different
ruins. According to Dr. Salvatore Mazzullo of Wichita State University, the ruins
date back over 2,000 years and were constructed during the post-classic era.
Many experts consider the Marco Gonzalez Ruins to be one of the oldest archeological
sites in the nation. The presence of large numbers of artifacts located
beneath the surface indicates that the area may have been significantly larger
centuries ago. With the signing of this agreement, Dean Barrow’s government
has shown that national parks, and in particular archeological sites, are important
to the current administration, as they are vital to the preservation of Belizean
Research Associate Peter Tase
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The Pentagon is known to believe that the
Ejército del Pueblo Paraguayo (EPP), presents a growing threat to Paraguayan se-curity, especially in the northwestern department of Concepción.
Founded in March 2008, the EPP is a self-proclaimed Marxist group whose violent actions aim to drive out the political oligar-chy currently ruling in Paraguay. Prompted by an attack against a police post that resulted in the deaths of two officers, the Para-guayan special security forces on high alert have recently begun offensive actions to confront and fight the EPP in the city of Horqueta.
With a group of around one hundred fifty elite guards from Para-guay‘s National Police headquarters, forces have been stationed in various parts of the region. Furthermore, the armed forces are currently aiding the police with intelligence and logistical support. According to Vice President Federico Franco, the
government ―will give only war to the EPP‖until the insurgency group is eradicated. Horacio Galeano Perrone, the director gen-eral of the National Defense Postgraduate School, vowed that the military forces would continue to collaborate with police in the area, even though a state of emergency in Concepció had not been declared. Perrone stated, ―What I can assure you is that the operations are more accurate than ever. Intelligence is work-ing around the clock and embodies a high spirit of patriotism.‖
A proposal to declare a state of emergency in the department of Concepció has been reviewed by the lower chamber of Para-guayan Congress. President Fernando Lugo approved it October 10, 2011, stating, ―this is a government that does not close the eyes and ears to the real problems of the country.‖
This analysis was prepared by COHA Research Fellow Peter Tase
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On March 8, 2011 the state-owned Oil Production Company of Bolivia, Ya-cimientos Petrolíferos Fiscales Bolivianos, (YPFB) and the Organization of Ibero-American States (OEI) signed an agreement to increase the quality of educa-tion, research, and cultural training for YPFB workers. YPFB is currently one of the largest state-run oil companies dedicated to petroleum exploration in the Bolivian Andes, and is now planning to invest USD 160,000 in several education projects to revive this lagging sector. In order to move forward with this initia-tive, YPFB has decided to join forces with OEI, which already possesses a wealth of experience in education and cultural programs.
After signing the agreement with OEI representatives, the president of YPFB, Carlos Villegas, emphasized that the “Bolivian economy is based on natural, renewable, and non-renewable resources. The oil production and research company of Bolivia is the most important governmental company in the nation, and we think that it is a priority for its production to promote the deep re-search and understanding of our oil reserves. Essentially, information and re-search is the most important factor for the development of this company and for a country such as Bolivia.” This organization will be equipped with various cultural centers that will promote a unique model on education, raise aware-ness of the state-run company and plan cultural events for its employees. The core mission of this new project is to promote continuing education within the petroleum industry. The national oil corporation of Bolivia will preserve its long tradition as one of the major entities contributing to the national economy. The OEI and Bolivia look to strengthen relations through expanded education and cultural projects coordinated between them, including holding photo exhibi-tions, promoting the positive economic impact of YPFB and bring Bolivia’s ties closer with the OEI community.
Research Associate Peter Tase
(Read more…)


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