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Paraguay

In 2012, Paraguay’s government introduced the MERCOSUR (FOCEM) system in order to stimulate the economy and job growth through a partnership with both Brazil and Argentina.

The mineral industry of Paraguay produces about 25% of the country’s gross domestic product (GDP) and employs about 31% of the labor force. Production of cement, iron ore, and steel occurs commonly throughout Paraguay’s industrial sector. The growth of the industry was further fueled by the maquila industry, with large industrial complexes located in the eastern part of the country. Paraguay put in place many incentives aimed to attract industries to the country. One of them is the so-called “Maquila law” by which companies can relocate to Paraguay, enjoying minimal tax rates.

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Paraguay Export Treemap

In the pharmaceutical industry, Paraguayan companies now meet 70% of domestic consumption and have begun to export drugs. Paraguay is quickly supplanting foreign suppliers in meeting the country’s drug needs. Strong growth also is evident in the production of edible oils, garments, organic sugar, meat processing, and steel.

In 2003 manufacturing made up 13.6% of the GDP, and the sector employed about 11% of the working population in 2000. Paraguay’s primary manufacturing focus is on food and beverages. Wood products, paper products, hides and furs, and non-metallic mineral products also contribute to manufacturing totals.

Transportation:

Paraguay’s transportation system ranges from adequate to poor, largely depending on the region of the country. The country has a network of roads, railroads, rivers, and airports, but significant infrastructure and regulation improvements are needed.

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National Routes in Paraguay

Estimates vary on the total extent of Paraguay’s road system, from more than 60,000 kilometers (37,000 mi) to less than 30,000 kilometers (19,000 mi). The discrepancies seem to be the result of differing standards regarding what constitutes a road. Thousands of kilometers of unpaved rural roads exist. Paraguay has about 15,000 kilometers (9,300 mi) of paved, major feeder roads. The core network connects Asunción, Encarnación, and Ciudad del Este. The Trans-Chaco highway is only partially finished, the paved portion ending at Mariscal Estigarribia. Bolivia’s portion of the highway, in contrast, is entirely paved. For trade purposes, the paved highways from Ciudad del Este to the Brazilian port of Paranaguá are particularly important. Additionally, the roads connecting Paraguay to Buenos Aires are adequate.

The government owns the country’s sole railroad company, including a 438-kilometre (272 mi) line from Asunción to Encarnación. Currently, only a small section of the line is open. It is used for tourist traffic.

Paraguay has 3,100 kilometers (1,900 mi) of inland waterways. The Paraguay and Paraná are the country’s two main rivers. The Paraguay River, with headwaters at Mato Grosso, Brazil, flows southward, converging with the Paraná in southwestern Paraguay, and then flowing to the Río de la Plata estuary in Argentina, the entrance for the great majority of ships servicing Paraguay’s ports.

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Rio de la Plata Drainage System

Villeta, located south of Asunción, serves as Paraguay’s primary port. Asunción, long the country’s only modern port, Encarnación, and San Antonio serve as the country’s other major ports.

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