Washington, January 22nd, 2019 – The World Bank Group (WBG) Board of Executive Directors endorsed today the new Country Partnership Framework for Paraguay, establishing the lending and technical assistance program for 2018-2023. The strategy supports the country’s efforts to promote sustainable growth and institutional strengthening, while supporting investments in human capital, and advancing the fight against corruption.
“The World Bank Group strategy for Paraguay will help underpin the Government’s vision for education, health and social protection; to strengthen human capital and the government agenda to improve its efficiency. Paraguay seeks strategic allies to help us establish a development agenda for innovation that addresses the challenges of a globalized world; and that is why our partnership with the Bank is so important,” said Benigno López, Minister of the Treasury of Paraguay.
The new WBG strategy is aligned with the government program Paraguay de la Gente 2018-2023 (Paraguay for the People) whose main objectives are to strengthen the rule of law, invest in people to promote growth, and improve competitiveness.
“Paraguay faces the challenge of maintaining high growth rates to end poverty and promote shared prosperity, while keeping natural resources as the basis for national competitiveness and making sure that the poorest sectors of the population actively participate to this inclusive growth. Effective management of natural capital, economic diversification, and investment in youth to realize the promise of the country’s demographic dividend, are key priorities for the Country Partnership,” said Jesko Hentschel, World Bank Director for Paraguay, Argentina and Uruguay.
The Country Partnership identifies three main themes for the WBG engagement: promote accountable institutions and improve business climate; reduce volatility, strengthen management of natural capital and the rural economy; and strengthen human capital. The Partnership will include specific support for the National Customs Directorate to improve the efficiency of control mechanisms and streamline imports and exports, and for the National Public Acquisitions Directorate to improve the efficiency of public spending. It will also include initiatives aimed at improving the business environment, reducing the time and costs associated with starting a business, and facilitating access to credit, which will primarily benefit small-scale entrepreneurs.
The Partnership will promote market access and protection from climate-related events for small-scale producers, universal access to primary healthcare for the most vulnerable, and improved public spending for social development. It will also promote equal access to education and better learning for Paraguayan students. For these efforts to be financially sustainable, a more equitable fiscal policy will be promoted.
The International Finance Corporation (IFC), the private sector arm of the WBG, “will provide financial products and advisory services focused on infrastructure and logistics to improve physical and digital connectivity, competitiveness in the agro-industrial sector and financial inclusion through increased access to finance for small and medium sized enterprises,” said David Tinel, IFC Regional Manager for Argentina, Chile, Paraguay and Uruguay.
In its dialogue with Paraguay, the WBG provides technical and financial assistance to inform decision-making. The technical assistance will help carry out analytical studies for the country on sources of growth, public expenditures or natural resource management. Financial support during the 2018-2023 period is expected to reach up to US$1 billion in lending for the public sector through the International Bank for Reconstruction and Development (IBRD) and for the private sector through the IFC. The Multilateral Investment Guarantee Agency (MIGA) will also have an active role during the implementation of the strategy with the goal of promoting a greater level of foreign direct investment.
Currently, the World Bank public sector portfolio consists of three loans for a total of US$301 million for infrastructure and rural development. IFC’s portfolio amounts to US$195 million in projects for the financial and manufacturing sectors, as well as agriculture and energy, which includes US$34 million for mobilization.