Page 115 - Forbes - USA (February 2018)

PROMOTION
Paraguay

SOUTH AMERICA’S NEW EMERGING LEADER
With the lowest taxes in the region, and competitive labor and energy costs, Paraguay offers one of
South America’s highest returns on investment. These attractive conditions are driving the country’s largest
wave of foreign and domestic investment to date.

araguay today has a when comparing Paraguay with
new self-confidence. neighboring countries. Our young
Nestled between Brazil, people want to work, and they are
PArgentina and Bolivia, eager for opportunities. They are
this small landlocked country of also very efficient.”
almost 7 million is emerging as a That efficiency also applies
regional success story. to the Paraguayan government.
When a fall in global com- As one of Paraguay’s leading
modity export prices crippled businessmen, the president
neighboring economic giants brought to office an entrepre-
Brazil and Argentina, Paraguay’s neurial vision and a team of
stable macroeconomic frame- highly trained ministers to drive
work and prudent fiscal policies his ambitious agenda, reducing
helped it weather the storm to Paraguay President Horacio Cartes waste and heightening account-
maintain sustainable growth. ability in government.
Annual GDP growth for the International rating agencies have consistently “We targeted job creation and
past decade has averaged 4.8%, better economic conditions for all
driven by robust agricultural upgraded the country’s sovereign risk ratings; Paraguayans. But to do this, the
and hydroelectric power exports Paraguay should achieve Investment Grade in 2018. public sector has had to perform
and a rapidly expanding indus- its duties just as well as the pri-
trial base. By minimizing eco- vate sector. I believe that, in this
nomic volatility, the country has past decade, such as inflation tar- diversification of the country’s respect, we are in the forefront of
recently reduced poverty levels, geting and the creation of a Fiscal economic base beyond its tra- the region,” he says.
increased prosperity and become Advisory Council, Paraguay has ditional reliance on agricultural In a bid to reduce poverty,
a regional leader. cemented its country’s price index — mainly soy, meat and corn — Cartes also launched an unprec-
At the forefront of Paraguay’s and exchange rate stability and and electricity exports, boosting edented social housing pro-
transformation is President consolidated public debt as one of industrial activity to 9.5% of GDP gram, building over 20,000
Horacio Cartes, who took office the region’s lowest at 22% of GDP, in 2017. Until 2012, agriculture homes, with 10,000 more to be
in 2013, ushering in a new era according to the World Bank. contributed nearly one-quarter delivered by the end of his term.
of Paraguayan economic success. Investors are taking note. Inter- of GDP, with industry and con- “We have everything we need to
Throughout his five-year term, national rating agencies have con- struction representing just over house and feed our population.
which will end in August 2018, sistently upgraded the country’s 6%. Today, agribusiness gener- We have no excuse for poverty
Cartes and his team have mod- sovereign risk ratings, and Para- ates 15% of GDP, and industry here,” says Cartes.
ernized the economy and pushed guay should achieve Investment and construction have grown to The president has also boosted
Paraguay onto the world stage. Grade in 2018. The Brazil-based 20%, according to Finance Min- education with programs offering
At home, Cartes launched the think tank Getulio Vargas Foun- ister Lea Gimenez. scholarships for study and train-
country’s first National Develop- dation ranked Paraguay as the In addition, Cartes has built a ing abroad. “Sending our best
ment Plan for 2014-2030, focused Best Investment Climate in South regulatory framework to encour- students to study science and
on poverty reduction, social devel- America for 2016 and 2017, and age public-private partnerships technology in the leading uni-
opment, inclusive economic recent sovereign bonds issuances as a path to meeting the country’s versities in the world has been
growth and the insertion of Para- in 2017 were oversubscribed and infrastructure deficit, further stim- one of our best legacies,” he says.
guay into the global economy. His achieved near-investment grade ulating investment in the sector. “This has meant great change
administration has successfully spreads of 4.7%. “We are success- “Several aspects contribute to and remarkable improvements
legislated for greater government fully accessing international capital making Paraguay a very attrac- in our universities and the edu-
transparency and tighter fiscal markets and have major U.S. funds tive country,” he explains. “We cation of our population. When
responsibility in a serious bid to as our investors, which is an excel- have a lot of young people — these students enter the Para-
tackle public-sector corruption lent sign,” explains Cartes. more than 70% of our population guayan workforce, they’ll apply
and inefficiency. Along with other Key to the Cartes govern- is under 40 years old. We have their innovation to the nation’s
reforms implemented over the ment’s success has been the to take this into consideration products and processes.”
Economic Development 1