Paraguay's Poverty RateParaguay is a small landlocked country in South America with a relatively sparse population of seven million. Unlike many of its quickly industrializing neighbors, Paraguay’s economy is still mostly dependent on the country’s abundant natural resources.

Paraguay’s efficient agricultural sector and strong energy production industry are the primary factors contributing to Paraguay’s continued economic growth. Today, the World Bank categorizes Paraguay as an upper middle-income country – an impressive feat, considering the country’s agricultural nature and lack of human resources.

Perhaps the most impressive feature of Paraguay is its poverty rate. Although the poverty rate as of 2015 was an alarming 22.2 percent, it is actually a mark of considerable improvement. Only 10 years ago, the rate was 41.2 percent – demonstrating that within 10 years Paraguay managed to cut its national poverty rate virtually in half.

Despite the country’s triumphs over poverty, Paraguay is still in a vulnerable situation. Because the economy of Paraguay is not sufficiently diverse, the country may suffer disproportionately from shocks to certain markets and commodities. As a result of the country’s great dependence on natural resources, natural disasters such as droughts can severely harm Paraguay’s economic growth and reduce the success of its anti-poverty measures.

In addition, Paraguay’s lack of infrastructure and weak taxation policies make it difficult for the government to provide services and resources to the population. Concerns over government transparency make it even more challenging for Paraguay to encourage sustainable growth. Thankfully, the government has taken steps to maintain economic growth and significantly diminish Paraguay’s poverty rate. Paraguay’s government now pushes to diversify the economy and attract foreign direct investment in the hopes of creating long-term prosperity.

Paraguay and the World Bank have agreed on a Country Partnership Strategy, which focuses on developing infrastructure and providing services to the country’s many rural areas. Some of the objectives delineated in the multi-part strategy include overhauling the taxation system and building roads.

Overall, Paraguay is a country that has largely succeeded in its battle to decrease extreme poverty, despite the odds. Even with a small population, poor infrastructure and a history of political instability, the country has managed to actively search for and implement solutions that have shown drastic results. With enough know-how, strategy and optimism, the government will surely be able to continue to bring the country of Paraguay closer to its goal of eradicating poverty altogether.

Isidro Rafael Santa Maria

Photo: Flickr

world bank
The World Bank Group has lauded Nepal for the nation’s incredible feat of nearly halving the number of people living below the poverty line in only seven years.

In 2003-2004, nearly 53 percent of Nepal’s population was living in poverty. By 2010-2011, that number had been lowered to a mere 25 percent. This advantageous situation allows the country to attain potential stability, giving Nepal the opportunity to create domestic and foreign investments.

Taking advantage of the economic status, the country now must aim for more sustained growth. With the help of the World Bank, which recently launched a two-pillar Country Partnership Strategy for Nepal, the country will focus on growth in hydroelectricity generation, improving connectivity in transportation, enhancing the business environment, increasing productivity of the agriculture segment and giving equal access to health care. Finance Minister Ram Sharan Mahat says that this excellent strategy should primarily focus on increasing economic growth, “To boost economic growth, we must increase investment as well as efficiency of investment,” Mahat stated.

The World Bank also acknowledges economic growth as an essential requirement for Nepal, so to further reduce poverty and increase shared wealth, Mahat stated that it is a necessary requirement to focus on economic growth as well as an improved political status.

The hope is to graduate Nepal from the current least-developed country status into a developing country by 2022. According to the National Planning Commission, Nepal’s economy has the potential to grow 8 percent annually to achieve this goal by 2012.

The World Bank will also provide long- and short-term support to reduce barriers in the business sector of the country, specifically in industries such as tourism and agriculture. The World Bank will attempt to address all economic risks that arise from the rapid expansion the country plans to see among the coming years.

— Elizabeth Malfaro

Sources: República, Ekantipur, The Himalayan Times
Photo: Wikipedia