Paraguay Economy
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Rescooped by Sahm Timon McGinnity from Paraguay, Bria Reynolds
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Currency and Exchange Rate

Paraguay has a market economy characterized by a large informal sector. Agriculture dominates the economy, but unequal land distribution has resulted in a large class of peasant farm laborers. A large portion of the population is uninvolved in the formal economy, instead existing as subsistence farmers. In recent years, the economy has grown as a result of increased agricultural exports, especially soybeans. Reforms in fiscal and monetary policy also have improved Paraguay’s economy. Inflation has dropped, and the currency has appreciated gradually. Nevertheless, urban unemployment and underemployment have been problems throughout Paraguay’s history. Paraguay has the economic advantages of a young population and vast hydroelectric power but has few very bad mineral resources, and political instability has undercut some of the economic advantages present. The government welcomes foreign investment.[4] Paraguay is a middle-income country that changed rapidly in the 1970s and 1980s as a result of hydroelectric development, agricultural colonization, construction, and cash crop exports. Nevertheless, the country's gross domestic product (GDP) in 1986 was approximately US$3.4 billion, or roughly US$1,000 per capita, ranking Paraguay only ahead of Bolivia among the Spanish-speaking countries of South America. Paraguay was the most agricultural economy of South America, and that sector influenced the performance of virtually every other sector of the economy.

Traditionally isolated and underpopulated, Paraguay was one of the last countries in Latin America to enjoy the region's rapid growth in the post-World War II period. Paraguay entered a phase of sustained economic growth in the late 1950s. Its economy grew at the fastest pace of all the Latin American countries during most of the 1970s as the Paraguayan-Brazilian project, the Itaipu Dam, the world's largest hydroelectric plant, was constructed. During that decade, cotton and soybeans came to dominate agriculture, mostly as a result of high export prices and agricultural colonization. Paraguay's economy also was characterized by a large underground sector, in which smuggling and contraband had become normal features by the 1970s.

The Paraguayan economic miracle of the 1970s came to a halt in 1982 because of the completion of construction at Itaipú, lower commodity prices for cotton and soybeans, and world recession. The economy recovered in 1984 and 1985, stagnated in 1986, and continued to expand in 1987 and 1988. Despite its rapid growth, the Paraguayan economy became increasingly dependent on soybeans and cotton for exports and overall economic dynamism. These two crops, however, remained subject to external price fluctuations and local weather conditions, both of which varied considerably.

Agriculture dominates Paraguay's entire economy. It has a market economy that is characterized by a large informal sector. The currency, (1Guarani PYG) equals 100 centimos. One American dollar equals PYG6155. Inflation fell drastically between 2003 and 2004. It fell from 14.2% to a 30 year low of 4.3%.


Via Bria Reynolds
Sahm Timon McGinnity's insight:

in the beginning, Paraguay was one of South Americas last countries to prosper from the post world war 2 expansion. It's political instability and isolated land causes the slow expansion that was expected. In 1970' they had a mini miracle as they completed the construction of Itaipú, which revolutionized their crop. It sent on to stimulate rapid growth in the 1980's and led to lowering the high inflation. 

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Paraguay paralyzed by national strike against president's privatization plan - Fox News

Paraguay paralyzed by national strike against president's privatization plan
Fox News
A general strike, the first in 20 years, has left the arterial thoroughfare Eusebio Ayala Avenue empty in Asuncion, Paraguay, Wednesday, March 26, 2014.
Sahm Timon McGinnity's insight:

The strike on the president in Paraguay has temporarily frozen the economy. Bus services, schools,  transportation and government operated places are currently at a standstill. The unions want Cartes to roll back a law enabling private companies to invest in government infrastructure in exchange for owning concessions and charging fees. 

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On Location video: The dark side of Paraguay’s agricultural boom

On Location video: The dark side of Paraguay’s agricultural boom | Paraguay Economy | Scoop.it
Agricultural output has boosted Paraguay’s economy, but some say the cost is too high.

Via PIRatE Lab
Sahm Timon McGinnity's insight:

Paraguay's economy holds soy as its largest export, but the government is pushing for diversification in the exports. People have been encouraged to produce cattle and export beef, but it has not been successful in the individual standpoint. People who have invested into cattle farming have taken serious deficits in the short run, and this industry will most likely fail without government subsidies in the long run. 

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PIRatE Lab's curator insight, March 11, 2013 10:58 AM

With the increasing need to boost food production globally, we must also be asking the hard questions about sustainability and justice of the efforts to produce that food...

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Paraguay poised to become fastest growing economy this year, 13% - MercoPress

Paraguay poised to become fastest growing economy this year, 13% - MercoPress | Paraguay Economy | Scoop.it
Paraguay poised to become fastest growing economy this year, 13% MercoPress Paraguay's economy expanded 14.8% in the first quarter compared with the same period last year, driven mainly by farming, cattle-ranching and construction activity, the...

Via Mateo Yankee
Sahm Timon McGinnity's insight:

Recent droughts caused Paraguay's number one export, wheat, to fall last year. In result, this year, the country is expected to grow as much as 13%, and this last quarter the GDP increased .8% alone. January this year was when the economy started turning towards the better, but they are worried that following this years boom, the economy will have a bust.

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populations and racial demographics

This article is about the demographic features of the population of Paraguay, including population density, ethnicity, education level, health of the populace, economic status, religious affiliations and other aspects of the population.

Paraguay's population is distributed unevenly throughout the country. The vast majority of the people live in the eastern region, most within 160 kilometres (99 mi) of Asunción, the capital and largest city faces Argentina to the south and west. The Gran Chaco, which accounts for about 60% of the territory, is home to less than 2% of the population. The Paraguay government encouraged massive settlement of the vast Gran Chaco.

Ethnically, culturally, and socially, Paraguay has one of the most homogeneous populations in South America. About 95% of the people are mestizo (mixed Spanish and Guaraní Indian descent. Little trace is left of the original Guaraní culture except the language, which is spoken by 90% of the population. About 75% of all Paraguayans also speak Spanish. Guaraní and Spanish are official languages.

Ethnically, culturally, and socially, Paraguay has one of the most homogeneous populations in South America. About 95% of the people are mestizo (mixed Spanish and Guaraní Indian descent. Little trace is left of the original Guaraní culture except the language, which is spoken by 90% of the population. About 75% of all Paraguayans also speak Spanish. Guaraní and Spanish are official languages. As of 2009 the population was estimated at 6.3 million.


Via London Bracayle Mooneyham
Sahm Timon McGinnity's insight:

The article helps better explains the demographics of Paraguay. Near the capital, it is population dense, with most of the country being unused. This reflects the countries inept ability to expand outward to utilize the whole country. One helpful factor in the nation is that they are culturally a homogeneous population. It is easier to expand and grow as a nation when the people are unified under one language, and bilingual nations hinder their expansion.

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Young Entrepreneurs of Paraguay « Bold & brilliant

Young Entrepreneurs of Paraguay « Bold & brilliant | Paraguay Economy | Scoop.it
The competition is part of my sector's Young Entrepreneurs of Paraguay initiative, the goal of which is to help youth to start businesses all around the country. As part of this initiative I taught a 3 month entrepreneurship class, ...

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Wärtsilä Entering the Paraguayan Maritime Market

Wärtsilä Entering the Paraguayan Maritime Market | Paraguay Economy | Scoop.it
(FINNBAY) – Turku, 13 April 2014. Finnish Wärtsilä decided to enter into the Paraguayan market through delivering of an integrated propulsion solution for new river vessel. The value of the deal was not disclosed by the company; however, the agreement is seen as valuable in transferring par... http://www.finnbay.com/finnish-wartsila-enters-paraguayan-maritime-market/
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Sahm Timon McGinnity's curator insight, April 28, 2014 1:07 PM

Finland created a mutual deal with he Paraguan president in order to stimulate trade. Finnish Wartsila entered he Paraguayan market with a new trading route that would increase infistruction and increase Paraguays exports. The new water trade routes were put in place in 2013 to stimulate the economy in years to come. 

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Wärtsilä Entering the Paraguayan Maritime Market

Wärtsilä Entering the Paraguayan Maritime Market | Paraguay Economy | Scoop.it

(FINNBAY) – Turku, 13 April 2014. Finnish Wärtsilä decided to enter into the Paraguayan market through delivering of an integrated propulsion solution for new river vessel. The value of the deal was not disclosed by the company; however, the agreement is seen as valuable in transferring par... http://www.finnbay.com/finnish-wartsila-enters-paraguayan-maritime-market/


Via FINNBAY, Sahm Timon McGinnity
Sahm Timon McGinnity's insight:

Finland created a mutual deal with he Paraguan president in order to stimulate trade. Finnish Wartsila entered he Paraguayan market with a new trading route that would increase infistruction and increase Paraguays exports. The new water trade routes were put in place in 2013 to stimulate the economy in years to come. 

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Paraguay to Emulate Bolivia With First Dollar Bond Sale

Paraguay to Emulate Bolivia With First Dollar Bond Sale | Paraguay Economy | Scoop.it
Paraguay, the only Latin American economy set to contract this year, plans to issue the first dollar bonds in its two-century history in the first quarter of 2013 to tap booming global demand for higher-yielding debt.

Via Mateo Yankee
Sahm Timon McGinnity's insight:

Paraguay had a recent impeachment of their president, and there is controversy of the affects it will have on the economy. Most prospects see the economy going on a rise. The central bank is selling $922 million in stocks at a .5% adjustable increase rate to the people. This is expected to combat the debt and erase it entirely. Besides bonds, they are putting more money at the same time into electricity and road development, which causes the uneasiness in the Paraguayan people.

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Paraguay central bank readies rate hikes as economy rebounds - Reuters

Paraguay central bank readies rate hikes as economy rebounds
Reuters
By Daniela Desantis.

Via Mateo Yankee
Sahm Timon McGinnity's insight:

With the sudden boom and high expectations that the economy has, inflation combats the GDP increase. Inflation is as high as 7.5%, which deceives the nominal GDP results. It is expected that the government will now try to implement a policy of lowering the interest rates. It is expected to influence the foreign exchange department and/or reserve requirements.

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Paraguay: first general strike in 20 years - World War 4 Report

Paraguay: first general strike in 20 years - World War 4 Report | Paraguay Economy | Scoop.it
Paraguay: first general strike in 20 years World War 4 Report The general strike was sponsored by a broad range of organizations, including the Classist Union Current (CSC), the Organization of Education Workers of Paraguay-National Union...

Via Mateo Yankee
Sahm Timon McGinnity's insight:

This was the first general strike in 20 years, aimed at President Horacio Manuel Cartes Jara. They are on strike against his economic policies such as demanding controls over the prices of staple products, an end to an agricultural system based on large estates and to raise minimum wage. Cartes successfully raised the minimum wage 10%, without consulting the other rulers, which is causing conflict within the government. These policies helped the economy with the wage rate, but shows the weakness of the countries economy as a whole.

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Agriculture/ crops in Paraguay

Throughout its history, agriculture in Paraguay has been the mainstay of the economy. This trend has continued today and in the late 1980s the agricultural sector generally accounted for 48 percent of the nation's employment, 23 percent of GDP, and 98 percent of export earnings.[1] The sector comprised a strong food and cash crop base, a large livestock subsector including cattle ranching and beef production, and a vibrant timber industry.

Growth in agriculture was very rapid from the early 1970s to the early 1980s, a period when cotton and soybean prices soared and cropland under cultivation expanded as a result of agricultural colonization.[1] Growth in agriculture slowed from an average of 7.5 percent annual growth in the 1970s to approximately 3.5 percent in the mid-to-late 1980s.[1] Agricultural output was routinely affected by weather conditions. Flooding in 1982 and 1983 and severe droughts in 1986 hurt not only agriculture, but, because of the key role of the sector, virtually every other sector of the economy as well.

In the aggregate, however, the advances experienced by the sector during the 1970s and 1980s did not reach many of the small farmers, who continued to use traditional farming methods and lived at a subsistence level. Despite the abundance of land, the distribution of the country's farmlands remained highly skewed, favoring large farms. Epitomizing the country's economic activity in general, the agricultural sector was consolidating its quick expansion over the two previous decades and only beginning to tap its potential in the late 1980s.[1]

some crops are: soybeans, oils, cotton, coffee, sugarcane, tobacco.. Lots of livestock mainly cows.  Growth in agriculture was very rapid from the early 1970s to the early 1980s, a period when cotton and soybean prices soared and cropland under cultivation expanded as a result of agricultural colonization. Growth in agriculture slowed from an average of 7.5 percent annual growth in the 1970s to approximately 3.5 percent in the mid-to-late 1980.  Agricultural output was routinely affected by weather conditions. Flooding in 1982 and 1983 and severe droughts in 1986 hurt not only agriculture, but, because of the key role of the sector, virtually every other sector of the economy as well.


Via London Bracayle Mooneyham
Sahm Timon McGinnity's insight:

This article summarizes that the basis of the economy in Paraguay is based on agriculture. 23% of the entire nation's GDP consisted of agricultural gains, and midst that, almost all of the exports consisted from the agricultural standpoint. In recent years, the extremes of the weather have hurt agriculture, and in effect brought down the other parts of the economy. Paraguay expanded their technology in the 1970's, but it did not spread rapidly enough to increase the PPT as much as expected. They still haven't moved out of an agricultural based economy.

 

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Paraguay paralyzed by national strike against president's privatization plan - Fox News

Paraguay paralyzed by national strike against president's privatization plan
Fox News
A general strike, the first in 20 years, has left the arterial thoroughfare Eusebio Ayala Avenue empty in Asuncion, Paraguay, Wednesday, March 26, 2014.
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Sahm Timon McGinnity's curator insight, April 28, 2014 12:43 PM

The strike on the president in Paraguay has temporarily frozen the economy. Bus services, schools,  transportation and government operated places are currently at a standstill. The unions want Cartes to roll back a law enabling private companies to invest in government infrastructure in exchange for owning concessions and charging fees.