Brazil & Southern Cone - August 2011 (ISSN 1741-4431)

The trade and industry ministry reported that the country had received over US$1bn in private sector investment in the past three years (i.e. since President Fernando Lugo came to power on 15 August 2008). Most of the money has gone into free trade zones. The ministry said that 314 private projects operating under Law 60/90 had received investment of G$4 trillion (US$1bn). These investments had, the ministry said, created 7,600 jobs and contributed total export revenues of US$300m. One of the most successful industries has been motorcycle assembly. This has attracted investment of US$133m and the creation of 9,366 new jobs, according to the ministry.

Arguably, Lugo’s big economic failure has been his inability to get a proposal to levy personal income tax through congress and into law. His predecessor Nicanor Duarte (2003-2008) also tried and failed to get such a law passed.

Paraguay is now the world’’ fourth biggest soya exporter and the fifth biggest soya grower.  The country’s beef exports have also done well, until running into problems in Russia this month. On 8 August Russia banned two Paraguayan companies from shipping beef into its market because of salmonella in a couple of containers shipped in November 2010. Russia has been Paraguay’s fastest growing beef market. Paraguay is the world eighth biggest beef exporter and the 16th biggest beef producer.

Poverty: Between 2008 and 2009 poverty fell from 37.9% to 35.1 % of the population, while extreme poverty fell from 19% to 18.8%.

Inflation: Annual inflation was 8.7% in July.