The Minister of Economy and Finance, Carlos Fernández Valdovinos, said that the productive and industrial diversification of Paraguay’s economic development is one of the keys for the country to reach the levels of development it projects and at the same time be able to drastically reduce persistent levels of poverty.
In his presentation on Paraguay and the investment grade recently achieved, at MacroWeek2024 organised by the Peterson Institute, Minister Fernández cited the keys that allowed Paraguay to experience notable macroeconomic growth in the last two decades, while mentioning the challenges that exist for the future.
“Twenty years ago, Paraguay was practically in default, and ten years ago, Paraguay did not exist in international markets,” said the minister, marking the starting point of Paraguay’s current development.
He said that macro stability was fundamentally the key to success, along with the construction of institutionality.
In this regard, he mentioned the measures adopted to ensure monetary and banking stability, in addition to the adoption by law of a responsible fiscal policy.
As for future challenges, the minister said that “the key to the future is a strong and diversified economy” with the main objective of “improving people’s quality of life.”
What matters is the people, and while the country has improved the social conditions of its population during this period, it is still unacceptable that there is nearly 20% poverty in a country that produces food for 100 million people, said the minister.
In this regard, he said that the Government’s objective is to promote productive diversity, doing new things to stimulate the development of more sectors of Paraguayan society.
“Last week, for the first time, we exported carrots to Argentina and this week we are exporting onions. We are doing new things to boost our growth,” said the minister as an example.
He also highlighted that the push for maquila has allowed Paraguay to enter the Brazilian market through a sector that is now responsible for 10% of the country’s total exports.
“If we continue on this path, maquila will be the largest export item. We will continue to be good in the areas in which we export now, but we will diversify our economy,” he added.
He also referred to the investment attraction policy promoted by the Government, mainly in sectors other than agriculture. At this point, he mentioned the decision to promote the participation of the private sector in the generation of sustainable energy beyond hydroelectric sources.
Finally, he stated that another of the keys to Paraguay’s development is its own people, which is why the Government is investing in crucial sectors such as health and education, in addition to security and social protection, through the resources allocated in the annual budget.
“We will not be satisfied until we see these poverty figures drop to single digits,” the minister said.
International relations helping Paraguay’s economic development
Regarding Paraguay’s policy of ties with the world, the minister indicated that the country wants to have commercial relations with all countries, and when asked specifically about China, he said: “We have no problems trading with China, but they should not try to condition our diplomatic relations.”
He also said that Mercosur has been positive for Paraguay and that the country is enthusiastic about advancing free trade agreements with other regions and countries through Mercosur.
