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Paraguay Country Report

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Risk Level

Low
Moderate
Elevated
High
Very High
Severe
Extreme

Overview

Executive Summary

The Mario Abdo Benítez government is relatively stable and pro-business in orientation. It has continued policies highly favourable for the private sector that were implemented under the previous Cartes administration, including low taxation and openness to FDI. Abdo Benítez, a supporter of agribusiness, faces significant social and security challenges, including the occupation of large farms by landless peasants and terrorist attacks by the guerrilla Ejército del Pueblo Paraguayo (EPP). However, such threats are insufficient to threaten government survival. The government lacks a majority in Congress, where the opposition made significant inroads in the 2018 election. The two main opposition forces – Guasú Front (Frente Guasú: FG) and the Liberal Party (PLRA) – together with other smaller parties hold sufficient votes to block government bills. Although Horatio Cartes, who remains influential, and Abdo Benítez both belong to the ruling Colorado Party (Partido Colorado: PC), the two are bitter rivals. An abortive effort by Cartes to change the constitution to permit his re-election has spilt the party: government instability risks are likely to be exacerbated as Cartes retains his ambition to seek re-election in 2023. Growth is expected to reach 4.4% for 2018 before decelerating to 4.10% in 2019. Growth will be supported by agriculture and domestic demand, with services and manufacturing performing well. Key risks stem from the economic recession in Argentina – an important trading partner for Paraguay. However, indications of recovery in Brazil, another important trading partner and source of foreign direct investment, should offset that. Inflation remains comfortably within its target range; inflation remained at approximately 4% through 2018. Paraguay's external and public debt positions are robust, reducing currency risks. However, economic vulnerabilities from heavy reliance on the agriculture sector and high exposure to environmental factors such as El Niño and La Niña effects remain. In the recent past these have caused sudden sharp declines in economic output. © 2018, IHS Markit Inc. All rights reserved. Reproduction in whole or in part without permission is prohibited.
Last update: December 1, 2018

Operational Outlook

The business environment is undermined by weak political and legal institutions as well as endemic corruption. This is compounded by inadequate infrastructure, particularly telecommunications, and highway connectivity which remain one of the least efficient in the region as well air transportation. Paraguay ranked overall 95 out of 140 countries for in the 2018 Global Competitiveness Report released by the World Economic Forum. Its best score was on market liberalisation and macroeconomic stability, where it was ranked 68 and 74 respectively. However, on institutional strength and infrastructure it fared poorly at 112 and 101 respectively.

Last update: December 28, 2018

Terrorism

High

The small guerrilla group Ejército del Pueblo Paraguayo (EPP) poses the main terrorist threat; it operate in the northeastern departments of Concepción and San Pedro. The EPP, sporadically attacks security forces and landowners; with cattle ranching and soybean producers facing arson attacks and kidnapping. The former Cartes government's promised to dislodge the EPP but without much success; such task will fall to the newly elect government of Mario Abdo Benítez. The number of police and civilians killed by the EPP under former President Cartes exceeded that of his predecessors. The EPP threat is likely to remain highly localised, posing limited threat to major business assets.

Last update: December 8, 2018

War Risks

Paraguay's growing economic integration with Brazil and Argentina, together with its membership of the Mercosur economic bloc, has helped the country to foster good relations with its neighbours. Despite some sources of potential friction with Brazil over smuggling (drugs, weapons, and contraband), these are highly unlikely to lead to military confrontation. Brazil has instead deepened its intelligence co-operation with Paraguay to tackle the significant involvement of Brazilian gangs in drug trafficking along their common border. Internally Paraguay is trying to contain the expansion of Ejército del Pueblo Paraguayo guerrillas, a small rebel outfit whose operations are localised to two northern provinces.

Last update: December 11, 2018

Social Stability

Elevated

Demands for land reform constitute the main source of unrest in Paraguay. Successive governments' failure to implement land reform has been at the centre of the most disruptive protests in recent years. The umbrella National Peasants' Confederation (Federación Nacional Campesina: FNC) has been the leading force, vowing to escalate land takeovers to press for the acceleration of settlements. The departments with the largest number of land occupations are Alto Paraguay, Caaguazú, Caazapá, Guairá, and Itapúa. More recently, social movements have launched protests against the high levels of corruption in the country.

Last update: December 8, 2018

Health Risk

Severe

Vaccines required to enter the country

Yellow fever: A yellow fever vaccination certificate is required for travelers arriving from countries with risk of yellow fever transmission. A single dose of YF vaccine is sufficient to confer sustained life-long immunity against the disease; it should be taken ten days in advance to be fully effective.

Vaccines recommended for all travelers

Routine vaccinations: Consult your doctor to ensure all routine vaccinations - such as for diphtheria, tetanus, polio, tuberculosis, influenza, measles, mumps, pertussis, rubella, varicella, etc. - are up to date (include booster shots if necessary).

Vaccines recommended for most travelers

Hepatitis A: The vaccine is given in two doses, six months apart, and is nearly 100 percent effective. The WHO recommends the vaccine be integrated into national routine immunization schedules for children aged one year or older.

Typhoid fever: The typhoid fever vaccine can be administered via injection (administered in one dose) or orally (four doses). The vaccine is only 50-80 percent effective, so travelers to areas with a risk of exposure to typhoid fever, a bacterial disease, should also take hygienic precautions (e.g. drink only bottled water, avoid undercooked foods, wash hands regularly, etc.). Children can be given the shot beginning at two years of age (six for the oral vaccine).

Vaccines recommended for some travelers

Hepatitis B: The WHO recommends that all infants receive their first dose of vaccine as soon as possible after birth, preferably within 24 hours. The birth dose should be followed by two or three doses to complete the primary series. Routine booster doses are not routinely recommended for any age group.

Rabies: The rabies vaccination is typically only recommended for travel to remote areas and if the traveler will be at high risk of exposure (e.g. undertaking activities that will bring them into contact with dogs, cats, bats, or other mammals). The vaccination is administered in three doses over a three-to-four week period. Post exposure prophylaxis is also available and should be administered as soon as possible following contact with an animal suspected of being infected (e.g. bites and scratches).

Yellow fever: A yellow fever vaccination certificate is generally recommended for travelers visiting areas outside the capital Asunción. 

Last update: April 5, 2019

Natural Risks

Very high

Flooding is relatively common in the country, especially along its main river (the Paraguay River) and in the capital region, in large part due to inefficient drainage systems. Flooding in Asunción in late 2015/early 2016 forced tens of thousands of people to flee their homes.

Last update: April 5, 2019

Transportation

Moderate

Ground transportation is often hazardous due to the poor quality of roads and highways and the often-risky driving habits of locals. Many streets flood and/or become impassable during the rainy season (November-April). It is best to avoid driving on tertiary roads at night.

Foreign visitors should also be aware that tourist infrastructure (hotels, restaurants), while decent in the capital, may be significantly less developed - even nonexistent - in other areas.

The country's electrical infrastructure is outdated and in need of upgrading. As such, power outages are relatively common, including in the capital, particularly on hot summer days when increased use of air conditioner units puts a major strain on the electrical network. 

Last update: April 5, 2019

Practical Information

Climate

Paraguay's climate is hot and humid. Summers (January to March) are very hot (with temperatures reaching 40°C and sometimes even 50°C); winter temperatures, much more pleasant, can fluctuate wildly (between 5°C and 25°C in a single day). Humidity levels are high throughout the year, unpleasant in the winter as well as in the summer. The rainy season, which extends from October until April, often sees torrential rains and floods. Autumn and spring are pleasant.

Useful Numbers

Country Code: +595
Police, Ambulance: 911
Fire Dept.: 131

Electricity

Voltage: 220 V ~ 50 Hz

Outlets:

Last update: April 5, 2019