Paraguay is going through a tremendous process of transition towards development. In our eyes, it is attractive to examine a country that has experienced a growth of around 14% during 2013; projected to grow at rates of 4 or 5% annually through 2018; and moreover exhibiting an infrastructure gap that places it among one of the countries with the greatest deficiency in the world in that regard. It is worth mentioning as an example that only 5,500 km of roads are paved from a total of 32,000 km.

The sustained increase in production and industrial activity, mainly driven by the agricultural sector and the maquila industries, has found that lack of infrastructure to an obstacle which must be resolved urgently. Therefore, within the Infrastructure Sector, the Act for promotion of investment in public infrastructure sanctioned on October 2013 and ruled in April 2014, also known as the Law of Public Private Partnership or PPP, has been presented as the backbone for future growth. This Act has been without a doubt one of the most iconic political victories of the current administration. Additionally currently other additions such as the fiscal responsibility law and the law of investment protection are currently going through the legislative process.

This regulation on PPPs is one of the most complete and modern legislative pieces of our continent. Paraguay has captured the lessons learned from other countries, perhaps, from our point of view, with excessive care by regulating to the last detail which in immature frameworks could result even in a greater challenge. However, Paraguay has sent through the Law and its Implementing Decree, a message that will undoubtedly satisfy the requirements of world class investors and the financial system: transparency, competition, legal certainty and environmental sustainability, coupled with a strong commitment along with public sector securities with a reasonable risk-sharing proposal.

Official estimates predict quadruple the volume of investment in infrastructure in the coming years. For the period 2015-2018 the current administration predicts investments -solely in the infrastructure sector- of USD 1 billion per year, unprecedented situation in Paraguay.

How are they planning on reaching this prediction?

  • Founded in the structural advantages of Paraguay; including its strategic access to MERCOSUR, low labor costs, a predominantly young population (70% are less than 35 years), abundant power to lower energy costs in the region, hyper abundance of water, and absence of natural disasters, ethnic, military or guerrilla conflict.
  • Consolidating the positioning of Paraguay as a producer of food for the world (currently the 4th largest exporter of soybeans and 7th of beef).
  • Securing an attractive business environment; with total openness to private investment freedom without discrimination, freedom to import, export and foreign exchange, without restrictions on repatriation of capital, with a very low tax burden.
  • With a long-term vision that invokes, in the words of the President, the aspiration of an open country that is connected world, with high levels of development, environmentally sustainable, guarantor of public safety and private property, with women in strong leadership positions, with young entrepreneurs and trained to lead the country; and state that is solidary, equitable, transparent and no tolerance for corruption.