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Business Profile
Economy: Paraguay’s agriculture plays an important part in its economy, supplying a quarter of GNP and almost all the country’s export earnings. Production of Paraguay’s principal cash crops, cotton and soya, expanded rapidly during the late 1980s and continues to grow annually. Other crops such as sugar cane, maize and wheat are also grown on a commercial scale. Paraguay also has large timber reserves which feed the country’s rapidly expanding wood-based industries. Wood and soya oil are the main export products. The main manufacturing industries are textiles, chemicals, and the production of metal goods and machinery. Recently completed hydroelectric projects, undertaken as joint projects with Brazil and including the world’s largest hydroelectric dam at Itaipu, have made Paraguay self-sufficient in energy.
Although since the early 1990s Paraguay has implemented major economic reforms centred on liberalisation and deregulation of the public sector and large private monopolies, as required by its principal external creditors and donors, the economy has performed poorly in recent years. The main reason is persistently low commodity prices, exacerbated by large-scale corruption and structural weaknesses in the banking sector. External factors, notably the economic crises in Argentina and Brazil, have also played an important role. The economy is still in recession – growth is very low while high unemployment (officially 17 per cent but almost certainly much higher) has forced much of the workforce into the unregulated, ‘black’ parts of the economy. In July 2002, the IMF offered a US$200 million support package for the Paraguayan economy in exchange for the usual austerity measures. Paraguay is a member of the 11-strong Latin American Integration Association (Asociación Latinoamericana de Integración, ALADI), which seeks to promote free trade and economic development within Latin America, and under which Paraguay, alongside Bolivia, enjoys special tariff concessions. Paraguay is also a founding member to the Mercosur trade bloc of southern Latin American countries. Brazil is Paraguay’s largest trading partner, followed by the USA and Argentina.
Business: For formal occasions or business affairs men should wear lightweight suits and ties or a dinner jacket in the evening; women a lightweight two-piece suit or equivalent. Most business people are able to conduct a conversation in English, but a knowledge of Spanish will be useful. Appointments and normal business courtesies apply. Best time to visit is from May to September. Office hours: Mon-Fri 0800-1200 and 1430-1900, Sat 0800-1200.
Commercial Information: The following organisation can offer advice: Cámara y Bolsa de Comercio, Estrella 540, Asunción (tel: (21) 493 321; fax: (21) 440 817; e-mail: secretaria@ccparaguay.com.py; website: www.ccparaguay.com.py) or PROPARAGUAY (Trade & Investment Promotion Agency), Edificio Ayfra, 12th Floor, Asunció (tel: (21) 444 113 or 493 625; fax: (21) 493 862; website: www.proparaguay.gov.py) or British Paraguayan Chamber of Commerce, Gral Diaz 521, Edificio Internacional Faro, Second Floor, Oficina 2a, Asunción (tel/fax: (21) 498 274).
Copyright © 2003 Columbus Publishing Ltd.
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