The new World Bank report, “Paraguay: Strategies to Boost Inclusive Growth and Poverty Reduction,” recognizes the country’s advances in improving the well-being of its population. The poverty rate has reduced significantly, from 51.4% in 2003 to 24.7% in 2022, thanks to inclusive economic growth and effective social programs.
However, the report also notes that in recent years, the pace of poverty reduction has slowed. Moreover, significant challenges persist in terms of inequality and vulnerability to external shocks, underscoring the need for strategic actions to maintain and accelerate the progress achieved.
To address these challenges, the report presents four key recommendations:
Invest in human capital: Improving educational quality and equitable access to education are fundamental for Paraguay's future. Prioritizing early education, addressing educational disparities in rural and indigenous communities, and aligning training with labor market demands are crucial steps to develop a skilled and competitive workforce
Create quality jobs: Increasing productivity and creating quality employment are essential to improve incomes and reduce vulnerability. This involves supporting MSMEs, fostering innovation, and attracting investments in strategic sectors that can generate jobs with better wages and benefits
Strengthen the fiscal system: Improve the progressivity of the tax system and increase the tax base to finance key social investments. Simultaneously, expanding and improving the targeting of social protection programs can help reduce vulnerability and promote economic mobility.
Increase climate resilience: Given Paraguay's vulnerability to extreme weather events, it is essential to invest in climate-resilient infrastructure, develop early warning systems, and support adaptation in key sectors such as agriculture.
The report also highlights the importance of addressing persistent inequalities, especially those related to gender, geographic location, and ethnicity, to achieve inclusive development.
