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Recent trends

Paraguay has made progress in some development indicators in the last decades. The net secondary enrolment rate remains below the 74.4% average of Latin America and the Caribbean (LAC) at 64.9%. However, the country has improved its infant mortality rate (18 per 1 000 live births) and life expectancy at birth (73.1 years). Moreover, the share of the population living on less than USD 5.5 a day (2011 PPP) decreased from 35% to 20.1% between 2005-16. The share of the vulnerable population – those living on USD 5.5-13 a day (2011 PPP) – has remained stable, at around 39.3%, over the same period.

Paraguay’s gross domestic product (GDP) per capita increased by almost one-and-a-half times between 1990 and 2017. However, labour productivity, calculated in terms of GDP per person employed (constant 2011 PPP), remains 22.4% of the OECD level. Moreover, the share of people in vulnerable employment remains high, at 39.2%. Similarly, the maternal mortality ratio of 132 per 100 000 live births is high relative to the LAC average of 74.4. Concurrently, confidence in institutions is low.

National strategies and international co-operation for development

The National Development Plan “Paraguay 2030” is built around three strategic axes: reduction of poverty and social development, inclusive economic growth and adequate insertion of Paraguay into the world. These axes are translated into 12 strategies with strong links to Sustainable Development Goal (SDG) 1 (end poverty in all its forms) and SDG 4 (quality education) (ECLAC, 2018). These strategies are interconnected with four cross-cutting issues: equality of opportunities, efficient and transparent public management, territorial organisation and environmental sustainability.

The “Inclusive economic growth” axis focuses on employment and social security, regionalisation and productive diversification, competitiveness, innovation and valorisation of environmental capital. It foresees incentives for the creation of value chains and clusters to improve competitiveness, as well as the increase in the productivity of family farming in departments such as San Pedro, Concepción, Canindeyú, Caazapá and Caaguazú. In addition to this, the Ministry of Industry and Trade has developed two key plans, the Industrial Development Plan and the National Plan of Micro, Small and Medium Enterprises (MSMEs).

The plan also includes “Poverty reduction and social development” in its first axis. This groups the themes of equitable social development, quality social services, participative local development, and adequate and sustainable households. This axis comprises projects such as the incorporation of productive technologies and techniques for strengthening agriculture; improvement in use of rural space with schemes of access to productive land and training; and strengthening municipal social capital around public-private councils that lead local strategic planning.

In terms of public financing capacities, Paraguay’s total tax revenues were 17.5% of GDP in 2016 (vs. 22.7% in LAC and 34.3% in the OECD). In 2018, the country launched a pilot project to test its new integrated national e-invoicing system (SIFEN in Spanish), although full details are not yet available. Paraguay is a recent signatory of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters.

International co-operation in Paraguay is changing. Since the country reached higher middle-income status, it has played a dual role as both recipient and donor of co-operation. Thus, Paraguay aims to join new South-South and Triangular Co-operation forums, such as the Global Partnership for Effective Development Co-operation. In so doing, it wishes to support initiatives in areas where it has solid experience, such as agriculture and livestock farming, tourism and human rights. Paraguay’s international co-operation projects must be in line with the goals set in the National Development Plan. Priority will be given to promotion of decent and inclusive employment; education for employability; and social security, with an emphasis on vulnerable groups.

For traditional non-reimbursable international co-operation, Paraguay’s main partners in terms of financial volume are the Andalusian Agency for International Development Co-operation, the European Union, the Food and Agriculture Organization of the United Nations, the Inter-American Development Bank, the International Labour Organization, the Spanish Agency for International Development Co-operation, Chinese Taipei and the United Nations Development Programme. Among stand-out projects is the Rural Employment Office (Oficina de Empleo Rural in Spanish), created with the support of the Spanish Agency for International Development Co-operation. The project foresees an interconnected web of rural employment centres to co-ordinate areas with low demand for workers with areas that have high demand.