With a national poverty rate of about 24% in 2018, according to World Bank data, increasing foreign aid to Paraguay is vital. Paraguay, a landlocked nation home to 7.13 million people in the heart of South America, has made significant strides to combat poverty, but not without help. Foreign aid is a staple in the country’s infrastructure development, humanitarian assistance and social welfare programs, all of which help to reduce poverty in Paraguay.
7 Facts About Foreign Aid to Paraguay
- Based on a poverty line of less than US$5.5 (2011 PPP) per day, foreign aid contributions helped Paraguay’s poverty rate fall to 15.8% in 2019, “less than half of what it was in 2003.” For instance, between 2003 and 2019, Paraguay received at least $13 million each year in U.S. foreign assistance, contributing to many projects designed to improve life for impoverished Paraguayans. One such project is the Paraguay Productivo, which targeted rural poverty by connecting smallholder farmers with “sustainable business opportunities” between 2009 and 2012. With projects like these, foreign aid to Paraguay contributed to a sharp decrease in poverty, improving the quality of life for millions of Paraguayans.
- Paraguay received more than $304 million for official development assistance (ODA) in 2020. This large sum of money contributes to hundreds of projects, including those for encouraging democracy, developing infrastructure and eradicating poverty. Projects like the Democracy and Governance Project (U.S.), Paraguay Productivo (U.S.) and the Project for Strengthening Primary Health Care System (Japan) contribute to economic growth and political stability, providing better resources and improving life for impoverished Paraguayans.
- The largest single donor to Paraguay is Japan, contributing more than $54 million in 2019 and 2020. The next highest donors of foreign aid to Paraguay are the European Union ($40.07 million), South Korea ($39.84 million), the Inter-American Development Bank ($38.36 million), the Green Climate Fund ($28.07 million), France ($22.44 million) and the United States ($21.52 million). Japan’s priorities in Paraguay are reducing disparities and promoting sustainable economic development, providing a framework for its aid. For instance, Japan’s Agricultural Sector Strengthening Project delivered resources to farmers, increasing their productivity and mitigating rural poverty.
- The sector receiving the most ODA is economic infrastructure and services, receiving 34% of foreign aid to Paraguay from 2019 to 2020. The next highest receiving sectors are social infrastructure and services (33%), health and population (17%) and education (5%). Paraguay Okakuaa, a U.S. project lasting from November 2015 to September 2021, developed economic infrastructure to prevent the exploitation of impoverished children, including the development of an electronic case management system to assist the government in executing labor laws.
- USAID, the U.S. agency orchestrating the country’s international development plans, leads several noteworthy projects that contribute to the fight against poverty, both directly and indirectly. The Democracy and Governance Project focuses on stemming corruption in the country, with an allotment of almost $4 million in 2018. The Higher Education Partnership received $3 million in 2019 to “strengthen the capacity of local higher education institutions (universities and training centers) to address gaps in the area of rule of law,” the USAID EducationLinks website says. USAID donated $4.9 million for COVID-19 assistance in 2022, bolstering the nation’s response to the pandemic.
- Some projects have a narrower focus on improving the well-being of Paraguayans, from improving health care to advancing access to food and water. For example, Japan and the Inter-American Development Bank loaned up to 9.13 million yen for water and sanitation improvements in Ciudad del Este, advancing water and sewage services in Paraguay’s “second largest metropolitan area.” Projects like this one focusing on water quality ensure the health, safety and security of the Paraguayans with the fewest resources.
- Foreign assistance does not always come from government sources, as many non-governmental organizations step up to combat poverty. Habitat for Humanity, for instance, served almost 3,500 Paraguayans in 2021 through “new constructions,” home repairs and “incremental building.” This organization contributes to improved living conditions, aiding vulnerable Paraguayans by building durable homes.
Eradicating global poverty is a group effort. As it stands, 8.6% of the world lives in extreme poverty and foreign aid works as a critical tool in the fight to end poverty. Through global action, poverty in Paraguay can diminish.
– Michael Cardamone