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Renewed Support for Paraguay's Economic and Social Agenda

May 27, 2009

World Bank

  • US$500 million in assistance to be provided over five years as part of strategic partnership with Paraguay.
  • It will support economic growth, poverty reduction and improved institutional framework.

“Poverty and ignorance don’t kill you, but they make life very difficult,” said Fulvia Brizuela in Guarani, the country’s indigenous language, as she moves her factory-worn hands up and down as if she were weaving her dreams of a better future.
“We need more education, job training and opportunities,” added the textile-mill worker and mother of six children, three of whom have emigrated to Spain to seek work.
Fulvia’s remarks illustrate two of the country’s greatest challenges: poor education and pervasive poverty.  Almost 60 percent of Paraguayan workers have only a primary education or less, and in 2007 19.4 percent of Paraguayan households lived in extreme poverty.
A major challenge for Fernando Lugo, Paraguay’s new president who took office in August, 2008, has been to improve economic and social development indicators in a sustainable manner.

A Fresh Partnership

To aid these efforts, the World Bank approved a new Country Partnership Strategy for 2009-2013, which will support the country’s economic and social goals, focusing on poverty reduction and promoting equitable economic growth.
The Strategy has three main components: Governance, Economic Growth and Poverty Reduction. The Bank will focus its partnership efforts in these areas with a budget of US$500 million.
“It is important to share and strengthen the vision of transforming the country into a more equitable and thriving society,” said Pedro Alba, World Bank director for Argentina, Chile, Paraguay and Uruguay. “We are increasing our project portfolio and strengthening our presence at the local level,” he added.
The new country partnership strategy “is a huge support for the Economic Reactivation Plan to help protect and create employment and fund social safety nets, with an emphasis on protecting the most vulnerable segments of the Paraguayan population,” said Dionisio Borda, Paraguay’s finance minister.
This new plan will renew the World Bank’s commitment to Paraguay, which currently totals US$308.5 million and includes six investment operations for community development projects, education, infrastructure, rural development and public sector support


" This operation will make an effective contribution to the Government’s Economic Reactivation Plan. "

Rossana Polastri

World Bank representative in Paraguay

Support for Economic Recovery

Meanwhile, the Bank also approved a US$100 million Public Sector Development Policy Loan (DPL) to support the government’s fiscal policies and public sector reforms.
“This operation will make an effective contribution to the Government’s Economic Reactivation Plan and will be instrumental in safeguarding the progress made in social policies,” said Rossana Polastri, World Bank representative in Paraguay. “Paraguay is a wonderful country where people are really committed to being part of a transformation that improves living conditions for all,” she added.

Through the new partnership strategy and the first DPL, the Bank seeks to help the government assist Paraguayans like Fulvia and thousands of others who hope that this new era will bring the conditions and opportunities needed to build a better future for their children.
“We need all the help we can get. We are a poor country and we cannot make it alone, so it is very important for institutions like the World Bank to support Paraguay. I hope we can manage this contribution honestly so that it gets to the places that really need it,” Fulvia said.