Paraguay is a lower-middle class country with a population of 6.6 million people. The population is mostly concentrated in the eastern region. In 2009, a third of the population was living below the poverty line and about 20 percent of the population was living in extreme poverty. Even though poverty in Paraguay has decreased in urban areas, rural poverty is still prevalent.
Over the years, the agriculture sector, which is where the country’s economic potential comes from, has been rapidly expanding. This is due to high international commodity prices and the demands of agricultural and livestock products.
The agricultural sector has increasingly been on the lands of large-scale commercial farming operations. However, about ninety percent of all holdings are still in the hands of small-scale family farmers. There are high levels of inequality in the country. This inequality is the main reason for the devastating poverty in Paraguay.
In the late ’90s, less than 10 percent of the population owned and controlled 75 percent of the land. This left most of the rural population without land and living in extreme poverty. Furthermore, 46.6 percent of all income went to the top 10 percent of the population.
To this day, poverty in rural areas is still at an all-time high. About half of the rural population is living in poverty, and women and indigenous people are affected the most. Some of the main causes of the prevalent poverty in Paraguay are the following:
• Piteous access to land, markets and financial services
• Deterioration of natural resources and loss of soil fertility
• Limited access to appropriate technologies and quality technical assistance
• Insufficient productive assets at the farm level
• Absence of essential public goods and services
• High levels of dependency on commercial agriculture and agribusiness
In 2013, Paraguay grew economically by 13 percent, however, most of the country did not experience the recorded growth. About thirty percent of the population was still living in poverty. In fact, Paraguay was at the bottom among the South American countries in decreasing poverty over the last decade.
However, advancements have been made as Paraguay is getting the help it needs to improve its poverty condition. The World Bank has approved a $100 million loan to help improve Paraguay’s social welfare programs and help the poor.
– Solansh Moya