Asunción, Paraguay – Asunción, the capital of Paraguay, has been assessed as lagging in economic and quality of life sectors in a recently released international report, highlighting the significant gap between it and other major cities in Latin America. According to the 'Global Cities Index 2025' published by Oxford Economics, Asunción ranked 468th out of 1,000 evaluated cities. While the report did not include a specific in-depth analysis of Asunción, the publicly available data clearly demonstrates that Asunción falls short in various aspects compared to its regional competitors.

 
Detailed Analysis of Asunción's Indicators: Only the Environment Sector Shows Relative Strength

Oxford Economics' 'Global Cities Index 2025' compares and evaluates 1,000 cities worldwide across five dimensions: Economy, Human Capital, Quality of Life, Environment, and Governance. In this extensive ranking, Asunción displayed specific data for each category but failed to make it into the top 50 cities globally.

In detail, Asunción ranked 533rd in the Economy sector, 337th in Human Capital, 631st in Quality of Life, and 617th in Governance. It showed a relatively better performance in the Environment sector, ranking 283rd, but this figure is insufficient to significantly boost the city's overall competitiveness. The comparatively good performance in the environment sector can be interpreted as a reflection of Paraguay's rich natural environment and lower levels of industrialization. Paraguay, whose name means "water of the Guaraní," is abundant in rivers and wetlands, and its capital, Asunción, being situated along the Paraguay River, boasts relatively more green spaces and lower air pollution levels, which are advantages.

 
Gap with Major Latin American Cities

The report pointed out that Asunción shows a clear disadvantage when compared to other major cities in Latin America.

Santiago (Chile): Chile's capital, Santiago, ranked 160th overall and demonstrated overwhelming performance, especially in the Human Capital sector, where it ranked 33rd globally. The report attributes this to Santiago's excellent educational infrastructure, the presence of numerous universities, and its ability to attract qualified talent. Chile is one of the most stable economies in South America, actively investing in education and maintaining high standards in research and development.

Buenos Aires (Argentina): Argentina's capital, Buenos Aires, secured an overall rank of 192nd. This city showed outstanding performance in the Quality of Life and Environment sectors, complementing its Human Capital ranking (127th). Furthermore, Buenos Aires boasts a massive economic scale with a city GDP exceeding $250 billion and a population of over 15 million, playing a crucial role as an investment hub in Latin America. Buenos Aires is also famous for its cultural diversity, rich artistic and historical heritage, and vibrant nightlife, which seem to have positively influenced its Quality of Life indicator.

São Paulo (Brazil), Lima (Peru), Bogotá (Colombia): These cities also ranked higher than Asunción. Brazil's São Paulo, with an overall rank of 303rd, notably entered the top 100 worldwide in the Human Capital sector, attributed to its vast university network and concentration of numerous businesses. As South America's largest economic hub, São Paulo attracts diverse talent as a center for finance, commerce, and industry, and is also a culturally vibrant city. The report analyzed that Lima (296th) and Bogotá (300th) have contributed to strengthening their regional status through rapid population growth and urban infrastructure development. These cities have recently been attempting to improve their quality of life through urban regeneration efforts, including improvements to public transportation systems and residential environments.

Medellín (Colombia), Curitiba (Brazil): Even mid-sized cities like Medellín in Colombia and Curitiba in Brazil were found to surpass Asunción in terms of governance, urban innovation, and sustainable mobility. Medellín has shed its past negative image and was even designated as the 'Most Innovative City of the Year' for its innovative urban planning and social programs. Curitiba is recognized as a global model for its leading public transportation system and eco-friendly urban policies.

 
Asunción's Immediate Challenges: Urgent Need for Economic Diversification and Infrastructure Improvement

The problems of Asunción that can be inferred from the report's indicators are as follows:

Human Capital: Asunción's Human Capital score suggests some progress in terms of education and training, but it still falls far short of regional standards. While Paraguay's education system fundamentally provides free compulsory education, there are many criticisms that the quality of public education still needs improvement. Strengthening the capacity of higher education institutions and fostering skilled labor is particularly urgent.

Economy: The low score in the Economy sector indicates Asunción's insufficient integration into global value chains and a relatively small and undiversified domestic market. Paraguay has an agriculture-centric economic structure, and its capital, Asunción, is also evaluated as having a weak industrial base. Efforts are needed to attract foreign direct investment and cultivate service industries and high-tech industries to diversify the economic structure.

Quality of Life & Governance: The poor results in Quality of Life and Governance indicators suggest deficiencies in Asunción's urban infrastructure, public services, public transportation system, and institutional efficiency. Asunción faces severe fundamental urban infrastructure problems such as traffic congestion, aging roads, and inadequate drainage facilities, and the quality of public services like water supply and electricity also needs improvement. Furthermore, a high level of government corruption and inefficient administration act as major factors hindering investment attraction and lowering citizens' quality of life.

 
Challenges for Paraguay's Future

Oxford Economics concluded in this report that cities that successfully integrate economic development, human capital, quality of life, and institutional stability achieve high rankings. While other cities in Latin America are establishing themselves as centers of development, Paraguay faces the significant challenge of transforming its capital, Asunción, into a driving force for national change.

For Asunción to grow into an internationally competitive city, multifaceted efforts are required. First, it must secure future competitiveness through education system reform and investment in human capital. Strengthening vocational training programs and fostering talent needed in industrial fields through linkages between universities and businesses are crucial. Second, policy support for economic diversification is necessary. Reducing reliance on agriculture and fostering high-value-added industries such as manufacturing, IT, and tourism are essential to create jobs and attract investment. Third, urban infrastructure improvement is a critical element for enhancing citizens' quality of life and facilitating economic activities. Long-term investments, such as renovating aging facilities, expanding public transportation systems, and introducing smart city technologies, must be made. Fourth, governance improvement is one of the most urgent tasks. Building a transparent and efficient administrative system and eradicating corruption are necessary to restore the confidence of domestic and international investors. This will be the foundation for the stability and development of society as a whole.

This report soberly presented the reality facing Asunción, but at the same time, it provided a clear direction for urban development. It is hoped that the Paraguayan government and civil society will work closely together to overcome these challenges and that Asunción can grow into a truly major city in South America.

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