** Paraguayan economics








Paraguay: Economy



Figure 1.--Here we see a Paraguayan boy at a garbage dump site. We are not sure if he is picking items out of the dump or draging items to dump, but ptbably dragging itens he has collected. If so, we ae amazed by thequantity of items that he thinks may be of value. The boy is adding a little income to help support the family. A great deal of the Paraguayan economy is informal activities like this. This images explains why mothers in Latin America would entrust young children children to coyotes (smugglers) on dangerous trips by themselves to get into the United States.

It is notable that both land-locked South American countries are very poor. Latin American socialists argue that the region has been expoloited by the Unites States and other industrialized countries. Both Paraguay and Bolivia as a result of being land locked have more limited international commerce than the coastal countries. This would mean that they should be the lease exploited, yet they are both deperately poor. Paraguayan percaputa uncome approaces about $7,000 dollars annualy, low by even South American standards, but somewhat higher than Bolivia when percapita income is loser to $6,000 annually (2012) The country has some important economic advtages. The most important is abundant freshwater, a critical natural resource thtt many countries are habing increaing problems with. Paraguay benefits from countless streams that form the river network of the River Plate Basin. The Guarani Aquifer, believed to be one of the largest reserves of fresh water on earth and extends across the entire country. Even so, agriculture production is affected by periodic droughts. The Guarani and Paraguay River not only provide water for africulkture, but bountiful quantities of inexpensive clean hydro-electric power. The country has a market economy and like many Latin American cuntries, there is a substantial informal sector, which includes the re-export of imported consumer goods to neighboring countries, inckuding Brazil Uruguay, and Argentina. Many urban residents make a living by operating microenterprises or working as street vendors. In rural areas, a large percentage of the population work as farmers, many on a subsistence basis. The substantial size of the informal sectormakes national economic statistics educated guesses at best. We note varying estimates of Paraguayan economy. One source claims that "real income has stagnated at 1980 levels." The World Bank gives a more optimistic assessment stressing the modernization of the agricultural export sector and rising commodity prices. Paraguay is an especially important soy exporter. Beef and other agricultural producsare important. Soy and beef now constitute 50 percent of expoorts. The country was hit by a drought in 2008 and then the severe world-wide recesessioin in 2009. Growth has been highly volitile since 2009 with some very good years, affected by Government stimulus packages. Although volitile, growth in recent years has aberaged anout 5 percent. Drought and foot-and mouth disease impaired 2012 results. Economists list political uncertainty, corruption, lack of needed structural reform, and poor infrastructure as important limiting factors. The World Bank reports important advances in health care and public education.






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Created: 9:17 AM 7/22/2014
Last updated: 9:17 AM 7/22/2014