Paraguay - Economic memorandum

Report No. 2461-PA ILE COPY Economic Memorandum on Paraguay May 1979 9)a( fD/M' Latin America and the Caribbean Region Country Programs Department II RETM"uINTOLAs &cG FOR OFFICIAL USE ONLY INF-ORIAIOREmTR Document of the World Bank This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS Currency Unit = Guarani (t) US$1.00 = Z 126 0 1.00 = US$0.008  FOR OFFICIAL USE ONLY This report was written by Messrs. Manmohan Agarwal and Hugo Zea-Barriga based on the findings of an economic mission that visited Paraguay in October/November 1978, and included in addition Mr. Alfredo Gutierrez and Ms. Dolores Velasco. This document has a restricted distribution and may be used by recipients only in the performance of their ofcial duties. Its contents may not otherwise be disclosed without World Bank authorization.   Table of Contents Page No. MAP COUNTRY DATA SUMMARY AND CONCLUSIONS ....................... i-v I. RECENT ECONOMIC PERFORMANCE A. Background ........................................ I - Physical Endowment ............................. I - Human Resources ................................ 3 B. Growth of Output and Income ....................... 4 C. Wages and Employment .............................. 6 D. Balance of Payments ............................... 7 E. Monetary Policy ................................... 10 F. Fiscal Policy and Public Finances .... ............. 12 - Public Sector Investment ....................... 14 II. SECTORAL PROSPECTS AND POLICIES - Agriculture ......................................... 18 - Industry . ............................................ 23 III. GROWTH PROSPECTS - Growth and Investment ............. .. ................ 27 - Public Investment Program ........... .. .............. 28 - Balance of Payments and External Capital Requirements ... 36 ANNEX - INTERNATIONAL TRADE STATISTICS STATISTICAL APPENDIX   a 0 L I o waPt s esC 0 ti 0t0; a xt0 t Xr 6.'C H A C O S i2 $ HA - 0 * N ; x \ /LrT ( O T o _fL EU;EI b A onda ~ ~ _ ! g X 5 ; : 55 TT$CA '-I T-: I \~~~~~~~~~~~~~~- R E St I D EN T E H AY E t / htnsos.s:C PA. RAGPRA UYUAY; ;0 S i~~~~~~~~IW11 I ilI I f 'A ft + ~ ~~~~~ 8AI AIPONT6NS> 9; FFCSht 0T ILTIW)A BOA4DARICS CA ZAPAS r >, e S _ _ = _P R E S I D E N T E X H A Y E 5 ' / v7 >\ i 0I T A P= 10~~~~~~~~~~~~~~~~~~~~~~~~~~~6 ~~~~~~~PARAGUAY 27-S |CONC W & A RGECN TI> D '9J- \OMEIL5L A L s? f s2' g S? oR' ss '?'SIDENTE' HAYES '0   Page 1 of 2 pages COUNTRY DATA - PARAGUAY AREA 2/ POPULATION DENSITY 406,752 kmit' 2.7 million (mid-1977) 6.6per km-/ Rate of Growth: 2.7% (from 1962 to 1972) 15.9per k2$'/of arable land POPULATION CHARACTERISTICS 1970 HEALTH 1970 Average Birth Rate (per 1,000) 39.8 Population per physician 2,190 Average Death Rate (ner 1 000) 8.9 Population per hospital bed 610 Infant Mortality (per 1,000 live births) 84.0 INCOME DISTRIBUTION 1970 DISTRIBUTION OF LAND OWNERSHIP % of national income, highest quintile 62 % owned by top 10% of owners lowest quintile 4 7 owned by smallest 107. of owners ACCESS TO PIPED WATER 1972 ACCESS TO ELECTRICITY 1973 7. of population - urban 24 % of population - urban 20 - rural 3 - rural NUTRITION 1970 EDUCATION 1970 Calorie intake as % of requirements 119 Adult literacy rate 7% 81 Per capita protein intake 73 Primary school enrollment % 107 1/ GNP PER CAPITA in 1977 : JS$760 GROSS NATIONAL PRODUCT IN 1977 ANNUAL RATE OF GROWTH (7.. constant prices) US $ Mln. 7. 1965-70 1970-75 1977 GNP at Market Prices 2,092.2 100.0 4.0 6.6 11.8 Gross Domestic Investment 516.4 24.7 3.9 22.0 22.8 Gross National Saving 263.0 12.6 2.9 15.4 26.9 Current Account Balance -231.1 11.1 Exports of Goods, NFS 332.5 15.9 1.8 7.0 16.3 Imports of Goods, NFS 451.5 21.6 2.7 15.2 24.8 OUTPUT, LABOR FORCE AND PRODUCTIVITY IN 1975 Value Added Labor Forc2/ V. A. Per Worker uS $Mln. 7. Mln. % US $ % Agriculture 557.8 39.1 0.411 51.2 1,357.2 76.3 Industry 285.5 20.0 0.119 14.8 2,399.2 134.9 Services 577.3 40.5 0.263 32.9 2,195.0 123.4 Unallocated 5.4 0.4 0.009 1.1 .__ Total/Average 1,426.0 100.0 0.802 100.0 1,778.0 100.0 GOVERNMENT FINANCE Filip Sector Central Government ( Mln.) %. of GDp (