ASSESSMENTS

Paraguay Exploits Its Industrial Advantages

Jan 31, 2018 | 09:00 GMT

Paraguay's lower cost of production has attracted manufacturers from Brazil and Argentina.

The lower costs of manufacturing in Paraguay have led some Argentinian and Brazilian companies to move operations there.

(LorenzoT81/iStock)

Highlights

Paraguay is taking advantage of its low production costs and geographical proximity to Argentina and Brazil to attract struggling low-end manufacturing companies from the regional giants.
Brazilian producers of textiles, auto parts and plastic goods will continue to flock to Paraguay to escape Brazil's high corporate tax rate.
Problems of scale and a possible South American trade deal with China could challenge Asuncion's viability as an industrial hub.

Paraguay's position as a buffer state between Argentina and Brazil means that it remains largely at the mercy of the governments in Brasilia and Buenos Aires on matters of trade. Now, however, it appears as if the government in Asuncion has found a way to make itself an industrial hub of Latin America's southern cone by encouraging companies from its large neighbors to ditch the comforts of home and set up shop in Paraguay....

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