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country_report_2022_PRY.pdf - BTI 2022 Country Report...

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BTI 2022 Country ReportParaguay
This report is part of theBertelsmann Stiftung’s Transformation Index (BTI) 2022. It coversthe period from February 1, 2019 to January 31, 2021. The BTI assesses the transformationtoward democracy and a market economy as well as the quality of governance in 137 countries.More on the BTI at.Please cite as follows: Bertelsmann Stiftung, BTI 2022 Country Report — Paraguay. Gütersloh:Bertelsmann Stiftung, 2022.This work is licensed under aCreative Commons Attribution 4.0 International License.ContactBertelsmann StiftungCarl-Bertelsmann-Strasse 25633111 GüterslohGermanySabine DonnerPhone+49 5241 81 81501[email protected]Hauke HartmannPhone+49 5241 81 81389[email protected]Claudia HärterichPhone+49 5241 81 81263[email protected]Sabine SteinkampPhone+49 5241 81 81507[email protected]
BTI 2022 | Paraguay3Key IndicatorsPopulationM7.1HDI0.728GDP p.c., PPP$13013Pop. growth1% p.a.1.2HDI rank of 189103Gini Index45.7Life expectancyyears74.3UN Education Index0.638Poverty3%4.5Urban population%62.2Gender inequality20.446Aid per capita$18.4Sources (as of December 2021): The World Bank, World Development Indicators 2021 | UNDP, Human DevelopmentReport 2020. Footnotes: (1) Average annual growth rate. (2) Gender Inequality Index (GII). (3) Percentage ofpopulation living on less than $3.20 a day at 2011 international prices.Executive SummaryIn April 2018, the Colorado Party again won the presidential election. The new president, MarioAbdo Benítez, assumed the presidency in August 2018. He belongs to the more conservative wingof the Colorado Party. He was therefore not expected to introduce fundamental reforms tomodernize the state and confront social inequality. President Abdo’s party does not have a majorityin the Senate (only in the House of Representatives) and is split into two factions, one of whichsupports former President Cartes.In his first year in office, President Abdo managed to push through a small reform to simplify thetax system but did not raise the very low taxes in Paraguay. The president plans to renegotiate atreaty with Brazil over the binational hydropower plant Itaipú, which expires in 2023. A secretagreement negotiated in 2019 that established the operating conditions of Itaipú until 2023 causedpublic protests when it came to light. It was rejected by a majority in Congress because itrepresented additional costs for Paraguay. Only Brazil’s willingness to annul the agreement andthe resignation of some of those responsible for the negotiations saved President Abdo from animpeachment in August 2019. In an opinion poll, almost 70% rated his work during his first yearin office as bad or very bad.In 2019, the Paraguayan economy stagnated as a result of lower agricultural yields due to adverseweather, and lower energy production in its hydropower plants. The government reacted to theeconomic slump by making the fiscal stability requirements more flexible and by taking on moreforeign debt through issuing sovereign bonds. The COVID-19 pandemic caught the Paraguayaneconomy in a moment of economic recovery. The economic slump was less pronounced, asagriculture, Paraguay’s main export sector, was less affected by the economic impact of thepandemic. The government also tried to mitigate the economic consequences of the pandemic byincreasing social assistance benefits. Lower government revenues were compensated for through

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Poverty, President of the United States, Paraguay

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