ASUNCIÓN, Paraguay – The World Bank (WB) has announced an additional $1 billion (approximately ₲7.3 trillion Paraguayan Guarani) in support to stimulate private sector investment in Paraguay. This funding complements the $1 billion already allocated by the Inter-American Development Bank (BID Invest) for Paraguayan businesses, creating a total investment incentive fund of $2 billion. These resources will primarily target the strengthening of infrastructure, education, and energy sectors.
Historic Visit and Announcement
World Bank President Ajay Banga officially announced the plan during a recent visit to Paraguay. This visit marks only the second time a World Bank President has visited the country, the first being Robert McNamara in 1976, making it a significant event in Paraguayan history. During his stay, President Banga toured the new building of Paraguay's Ministry of Economy and Finance and experienced local culture by tasting tereré, a traditional beverage. He also held a meeting with Paraguayan President Santiago Peña at the López Palace (Palacio de López).
Following the meeting, President Banga stated in a press interview, "The World Bank is building a partnership with Paraguay that goes beyond simply lending funds or capital cooperation; we are providing international best practices and technical knowledge." He added, "Paraguay, with its strong macroeconomy and investment-grade status, is ready to move towards the future. The top priority for the government and us is job creation for young people."
Activating the Private Sector and Creating Jobs
Banga, an Indian-American businessman, emphasized that "quality jobs are created in the private sector" and that "the government must create an environment where private companies can grow." He added that to achieve this, the government needs to improve infrastructure, such as bridges, roads, and healthcare, as well as the legal and regulatory framework to support the prosperity of the private sector.
Notably, the funds will be distributed not only to large corporations but also to small farmers, SMEs, and micro-enterprises. President Banga stated, "Our goal is to help them create jobs and provide decent working conditions."
20-Year Long-Term Plan and Priority Sectors
The World Bank will manage these funds under a 20-year long-term plan, with infrastructure and energy sectors as the top priorities for support. President Banga explained, "We are currently reviewing the types of energy that can be developed in Paraguay, and even renewable energy options like small modular reactors are being discussed." Cooperation plans for early education support and job creation are also included.
Additionally, the World Bank plans to provide non-financial cooperation, such as insurance guarantees and dispute resolution, in addition to economic support. This is expected to help Paraguayan private sector businesses become more competitive in the international market.
Growing Together with the Paraguayan Economy
Paraguay has recently gained attention for its stable economic growth and credit rating upgrades. The World Bank's support appears to be aimed at leveraging this economic foundation to promote sustainable development. President Banga expressed optimism, stating, "Our collaboration with the Paraguayan government goes beyond simple financial assistance; it will lead to long-term economic growth and an improvement in the quality of life for the people."
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