Paraguay

This chapter focuses on key aspects related to the well-being of citizens in Paraguay. It analyses the country’s performance in terms of poverty and of inequality between people. While poverty has fallen significantly in the past ten years, inequality is persistently high. The chapter goes on to analyse key mechanisms to address inequality in the short and medium terms: employment and labour markets, education and the social protection system.

Paraguay has made considerable progress in reducing poverty and improving living conditions. To bolster its achievements and further advance social development, the country must create a comprehensive social protection system that can improve living conditions for the most vulnerable people, foster everyone’s inclusion in the country’s economic development and provide vital risk-management tools for the whole population. This implies facing the challenges of coverage, funding and governance throughout the social protection system and in each of its facets, especially the pension system. This chapter presents the main conclusions from the Multi-dimensional Review of Paraguay on social protection and puts forward a more specific action plan for pension reform.

Strong institutions are essential to creating wealth and maintaining peace, order and security. In turn, good governance is fundamental to the legitimacy of institutions and to delivering high-quality goods and services to people. This chapter investigates aspects associated with good governance. It starts by analysing features of the Paraguayan democracy and the rule of law. It then looks at the public-sector integrity framework and existing strategies to fight corruption, followed by an assessment of the strategies to promote openness, which include transparency, citizen participation and accountability. Later, it describes the co-ordination mechanisms between different government institutions and levels. Subsequently it looks at the satisfaction with public services by socio-economic groups and if these differences could signal the lack of a differentiated response towards vulnerable groups. It ends by arguing that a solid basis of high-quality official statistics is required to support policy making and enhance transparency in Paraguay.

This chapter describes how Paraguay’s network of partnerships with external and domestic entities generates financing to support its development agenda. It examines public finances and the scope to increase the resources available for the public sector, focusing on the potential to improve the performance of Paraguay’s public finance framework, including how to recalibrate expenditure towards areas that offer greater developmental returns, such as infrastructure, while maintaining fiscal sustainability. The chapter then examines the availability of resources for private-sector firms, through foreign direct investment (FDI) and financing from the domestic financial system, and the potential for a more effective domestic banking system. The focus throughout is on the resources that are, or could be, available for development activities, rather than how those financing flows have been used.