The Chilean newspaper El Mercurio published an article highlighting the factors that attract businessmen from that country to invest in sectors such as real estate, forestry, energy, finance and infrastructure.

In its article published at the beginning of January, El Mercurio echoed the words given by President Santiago Peña to El Mundo, where he highlighted the figures that arouse the interest of Chilean investors regarding the business climate. “Paraguay has the youngest population in Latin America, with an average age of 26, and a per capita income of US$ 6.500, which is still low. If I press the button, I will be able to see the growth of the economy, which is a very important factor for the economy.” fast forward And I imagine Paraguay in 10 or 15 years, what do I see? I see a Paraguay that is a member of the Organization for Economic Cooperation and Development (OECD), I see a country with a per capita income of US$ 20.000.”

These figures support the president's optimism and reflect the potential of our country. In 2024, Paraguay finished as the country with the highest economic growth in South America (excluding Guyana), according to preliminary projections from the International Monetary Fund, thus ranking first in the region for the second consecutive year. For this year, growth of 3,8% is expected, only surpassed by Argentina (5%).

In addition, the milestone of investment grade achieved in July of last year is mentioned, thus becoming the seventh country in the region with this rating granted by Moody's, whose representatives pointed out that "it reflects our expectations that economic growth will remain robust, supported by public and private investment in key infrastructure projects."

The Chilean influence in Paraguay

El Mercurio also reviews the collaboration between Chile and Paraguay as part of economic growth. The replication of the Chilean regulatory framework for the construction of public infrastructure, the relationship between the Minister of Public Works, Claudia Centurión, and the director of Strategic Projects of the portfolio, Amilcar Guillén, with Carlos Cruz, former minister of the branch in the government of Ricardo Lagos, in addition to the training of the aforementioned MOPC authorities at the Pontifical Catholic University of Chile, are some of the keys to success according to the Chilean media.

The businessmen who bet on Paraguay for the development of investment projects are also mentioned, among them Laurence Golborne, who in 2017 promoted a first cycle through the company Tavamay 1, structured as an investment fund, developing businesses for USD 10 million after seven years in sectors such as real estate and led to the creation of Tavamay 2, which tripled the capital of its predecessor and expanded to other sectors.

Golborne, who was Minister of Mining in the first government of Sebastián Piñera, attributed the success of this project to the fact that our country “has quite clear pro-market economic policies, with a very significant opening to foreign investment,” and added that political stability has also been key to ratifying the confidence of companies in this approach. Rodrigo Hinzpeter, president of the Chile-Paraguay Business Council of Sofofa (Sociedad de Fomento Fabril), also highlights that “the changes have been very minor in terms of the governing political party and, in general, whoever president has governed has maintained the fundamental elements of a market economy.”

Both countries agree that Paraguay's tax structure is attractive for companies, since the corporate income tax is 10%, almost two and a half times less than the 27% in Chile. In 2005, both countries signed an agreement to avoid double taxation, which led to the enactment of a law in 2006, which according to Golborne makes Paraguayan rates favour the financial planning of companies, since in the short term they pay less taxes.

Successful projects and future opportunities

Success stories of other Chilean players in Paraguay are also cited, such as the Solari family, which operates in the real estate sector through the company Urban Domus; and the companies Embotelladora Andina and Compañía de Cervecerías Unidas (CCU), which compete in the beverage market. Enex is owned by the Luksic group of Chile, and Crystal Lagoons has 18 real estate projects in cities such as San Bernardino, Pedro Juan Caballero, Hernandarias and Luque.

Looking to the future, Hinzpeter believes that Chilean investors should be interested in the agricultural, livestock and forestry sectors, since these are sectors in which our country has comparative advantages, such as the availability of water and sunlight, which facilitate faster tree growth. In this regard, the article highlights the partnership between Echeverría Izquierdo, a Chilean construction and real estate development company, and Paracel, for the construction of a cellulose plant in the country.

For his part, Golborne cites the energy sector as one of those with the greatest potential in the country, using an example: “Paraguay consumes 100% of its energy from renewable sources, and also has a huge surplus that is currently sold to Brazil. This surplus could perfectly be diverted, with the appropriate investments, to the local market.” In this regard, President Santiago Peña himself made a comparison in his interview with El Mundo, stating that “Paraguay is the small Qatar of sustainable energy, but a great unknown for many countries.”

 

Source: El Mercurio newspaper

Illustrative photo: Wikimedia Commons