FEC

“Maquila” is highly appreciated by most investors

—- How would you describe the features of Paraguay to the Japanese People?

When we talk about Paraguay, Japanese People think at first about the Japanese immigration started in 1936. Its colonies in Paraguay, with more than 10.000 members, became a touristic spot for many young and old generations of Japanese. The Paraguayan Harp and the “Ñanduti” (Spider Web in Guarani language), a traditional Paraguayan embroidered lace, are both, surprisingly, other cultural aspects well-known in Japan.

—- Last year marked 100 years of diplomatic relations between Japan and Paraguay. How do you overview the development of our bilateral relations?

The 100th Anniversary of Diplomatic Relations (November 17th 1919) is a very important milestone for Paraguay and Japan. In its beginnings, the exchange was modest but soon it grew steadily with the implementation of migration and development programs, representing today the cornerstone of our long-standing friendship. Today´s subjects are trade, investments and cooperation in the international sphere the keywords of our relations. Our friendship continually grew to become the strong alliance we have today, with joint ideals of Democracy and Free Trade, contributing together in the stability of the world.

—- As Ambassador to Japan, what areas would you like to focus for enhancing the bilateral ties?

Paraguay is a great producer of food in the world and, therefore, we see in our commercial and economic cooperation a wide range of possibilities. The list of products exported to Japan is still limited, but we are currently making an effort to build up new capacities to fulfill the criteria of a very high demanding market, as it is the one of Japan. We would like to see more of Paraguayan products in Japan, like fruit juice and Beef. Promoting our country as an interesting destination for Japanese investments is another target. Being part of MERCOSUR, Paraguay became an important Hub for Japanese companies serving this market. Important companies like the shipyard company Tsuneishi Shipbuilding Co.Ltd. or companies in the automotive sector (Fujikura, Yazaki, Sumitomo-Wiring-Systems) settled down in Paraguay, taking advantage of the conditions we offer for foreign investments.

—- Would you tell us the recent development of Paraguay´s Economy? What opportunities can Japanese Companies expect from investing in Paraguay?

Although last year´s low performance of the economy, due to weather condition, Paraguay has one of the greatest projected economic growth in Latin America between 2014 and 2020, according to IMF. Its macroeconomic discipline (fiscal deficit limit set at 1.5% of GDP) and a low public debt level put Paraguay among the most stable economy in Latin America and with one of the best environments for doing business (Getulio Vargas Foundation). For this 2020, Paraguay´s economy was expected to return to the path of growth with a rate of around 4,0% according to the expectations of our Central Bank and other International Financial Organizations. Unfortunately, the COVID-19 pandemic will obliterate the bulk of the progress achieved. Nevertheless, our economy is expected to shrink 2,5%, avoiding a worst-case scenario, due to its economic stability and an expected high increase in the primary sector. Despite the difficult economic situation caused by this pandemic, we see for the future big potentials for Japanese investment in Paraguay. A wide range of incentives awaits foreign companies to settle down in Paraguay. The instrument of “Maquila” (outsourcing), which allows to produce goods in Paraguay designated for export is highly appreciated by most investors.

—- How is Paraguay dealing with COVID-19?

Paraguay was the first Latin American country to decree an early quarantine, resulting in the region’s lowest number of infected and deceased people, without collapsing the health system.

  (Interview by Shu Tamaru, FEC Counsellor)