By Publisher Lee Kyung-sik with Managing Editor Lee Kap-soo
The Republic of Paraguay is obviously one of the best target countries for the Korean businesses seeking to expand their business overseas.
The Korea Post media recently interviewed Ambassador Irineo Raul Silvero Silvagni of Paraguay in Seoul on the occasion of the National Day of the county in May 15 to find out what Paraguay has in store for Korea, especially the business companies wanting to expand their business.
|Ambassador Irineo Raul Silvero Silvagni of Paraguay gesticulates introducing the attractive business opportunities in Paraguay for the Korean businessmen.|
“The Paraguayan government encourages the Korean companies, known for their passion in work ethics, to aggressively explore the Paraguayan market. The Korean companies have a great advantage when they come to Paraguayan market because of many advantages,” said Ambassador Silvero Silvagni at a recent interview with which, established 33 years ago, now owns and operates 3 English and 2 Korean-language news media outlets .
Ambassador Silvero Silvagni said: “First, the Korean firms were involved in the Paraguayan market and have operational offices in Paraguay. Secondly, the Korean companies have a good reputation in Paraguay because they undertook infrastructure projects and other investments. Thirdly, Paraguay has a good image of Korean products and they are more advances technologically.”
|Ambassador Silvero Silvagni of Paraguay (left) is interviewed by Publisher-Chairman Lee Kyung-sik of media who shows the Korean-language newspaper and an English magazine published by The Korea Post media in addition to their Internet media.|
Ambassador Silvero Silvagni discussed a wide range of topics at the interview, which included the National Day of Paraguay, important developments scheduled between Korea and Paraguay and investment opportunities for the Korean companies in Paraguay—as well as an introduction to the Head of Government of Paraguay. Details of the interview follow:
Question: Congratulations on the National Day of your esteemed country. Please introduce in detail the National Day for our readers.
Answer: In the 207th Anniversary of the independence of the Republic of Paraguay, we remember the greatness of all national heroes who offered their sweat, blood and life to attain the freedom we are all enjoying now in our motherland. In effect, the insurrection in Paraguay against Spain was influenced by the doctrines proclaimed by the French Revolution.
|Ambassador Silvero Silvagni of Paraguay and Publisher-Chairman Lee Kyung-sik of The Korea Post media (second and third from right, respectively) with Reporters Kim Cheol-hoon (right), Ms. Sua Kim and Won Hwi (fourth and fifth from right)|
Paraguay already had their Revolt of the Comuneros years earlier (1717-1735), and its principles were identical with those of the French Revolution. In the period of 1810/1811, the Asuncion authorities rejected the proposal from Buenos Aires, to be part of the Argentinean nation. The Paraguayans fought against the Argentinean, defending their autonomy and freedom, in several battles, with a very weak support from the Governor of Spain.
This lack of action from the Spanish authorities, exasperated the Paraguayans, and on May 14, 1811, the Revolution broke out. However, the revolution ended on May 15, 1811, with the capitulation of the Spanish authorities, thanks to the actions carried out under the command of the Paraguayan heroes as Captain Pedro Juan Caballero, Captain Mauricio Jose Troche, Doctor Gaspar Rodriguez de Francia, Ignacio Iturbe, Fernando de la Mora and others. It is important to remember these facts very briefly, since we are commemorating the 207th Anniversary of the Independence of Paraguay.
At present, Paraguay has an active and leading role in the international community. Paraguay is working very hard at regional and global levels to strengthen the bilateral and multilateral relationships that will enable it to face the challenges of its own development, such as the reduction of poverty the employment creation, mainly for young people, and the technological development. The principles of the Paraguayan social system are based upon the rule of law, the respect for human rights and a political system founded on democracy.
His judicial stability and the respect to the foreign and national investments are also one of the cornerstones of the State's policy, carried out by President Horacio Cartes and his Government. In this context, we invite the Korean, Singaporean and other Asian countries' businessmen to visit Paraguay and evaluate many possibilities and opportunities we are offering in a favorable market environment for investor, with appropriate human and material resources for the development of business competitiveness on a global scale. In addition to its skilled-young labor and fertile land with abundant fresh water reserve, Paraguay is one of the biggest producers and exporters of food and renewable energy in the world.
In the other hand, Paraguay is in the process of diversifying its industrial sector and for this purpose, the Paraguayan Government invites the Korean companies to take advantage of investment opportunities in our country. Paraguay has a stable legal regime and it has signed international agreements, which promote investments, including a simplified and competitive tax system.
Its Maquila scheme allows the production of various goods, including auto parts, spare parts, electrical machines, computer ports and other items to be exported to the Mercosur’s market, mainly in Brazil and Argentina.
Q: What are the important developments scheduled between Korea and your country, including the possible visit of your Head of Government to Korea now that Korea has President Moon Jae-in as a relatively new President?
A: This year, on the occasion of the 56th Anniversary of the establishment of diplomatic relations between the Republic of Korea and Paraguay, our relationship has been developed considerably with more exchanges in various sectors. And Paraguay always has been supporting the Republic of Korea on international stage. The cooperation offered by the Korean government has significantly contributed to the economic and social development of Paraguay. Currently, there are more than 7, 000 Korean emigrants living in Paraguay, since 1965, contributing their efforts to our country.
Paraguay has a great potential as a production and logistics base for entry into the Brazilian and Argentine markets, because its tax system is simplified and one of the lowest level of taxes in the region, its production cost is lower compared to Argentina, Brazil and Uruguay, and many other benefits for foreign investors.
One example is THN, a Korean company established in Paraguay, an automobile parts company aimed at the Brazilian market that has built production bases in my country, due to its simplified labor management and low wages. The Paraguayan Government and companies would like to forge collaborative relationships such as strategic alliances, joint ventures, and technical cooperation with Korean companies.
Paraguay would like to work with the Republic of Korea in order to establish a Technology Innovation Center or a Trade Incubator in the Paraguayan territory that would be used by SMEs from Paraguay and Korea aiming to reach Brazilian, Argentina and Uruguay’s market.
Q: What are the areas in your country where you want Korean companies to invest and what are the areas where you wish your businessmen to invest in Korea?
A: The Paraguayan government encourages the Korean companies, known for their passion in work ethics, to aggressively explore the Paraguayan market.
The Korean companies have a great advantage when it comes to Paraguayan market because of the following:
Frist, the Korean firms were involved in the Paraguayan market and have operational offices in Paraguay. Secondly, the Korean companies have a good reputation in Paraguay because they undertook infrastructure projects and other investments.
Thirdly, Paraguay has a good image of Korean products and they are more advances technologically. Some of the Korean companies in Paraguay are: KBEC Korea, a waste treatment company. KBEC Korea started its operation in 2017, and the initial investment plan of Korean capital will be 36 million US dollars until the year 2021.
The Company plans to increase in investments in the country, with capital and new technologies in the field of waste treatment business. In addition, KBEC Korea will work in cooperation with municipalities and government of the Central Department, as well as with the Municipality of Ciudad del Este y Alto Paraná.
The KBEC investment is expected to create more than 100 new employees in the company. The company KBEC Korea has investments also in Vietnam, Sri Lanka and other countries in the field of waste management.
THN is another good example. With an initial investment of 10 million of the anticipated 40 million dollars, the auto parts factory “THN Paraguay SA”, begins its activities in Paraguay. The opening ceremony took place Friday, May 23, 2014 in Itauguá and presided by the Head of State of Paraguay, Horacio Cartes.
Hyundai-Kia group is the powerful Korean companies dedicated to the manufacture of electrical panels and wiring for vehicles of Hyundai-Kia.
The Asian firm “THN Corporation” of the Hyundai Group in Korea currently has nine plants around the world: four in the Republic of Korea, four in China and one in Brazil. In accordance with the precedents, only in Brazilian market have an annual turnover in order of 600 million dollars.
With regard to the installation of the complex, which head office finds in 23 kilometers from the Ruta II, in an area of 12 hectares, official bodies of Paraguay as the Ministry of Labor and National Service for Promotional Advancement (SNPP: Ministerio de Trabajo y el Servicio Nacional de Promoción Promocional) signed an inter institutional agreement for the training of staff to be required by the “maquiladora” (“twin plants”).
The entrepreneurs reported that the high-tech auto-parts manufacturing business will generate a great deal of manpower in Paraguay, estimated at around 3,000, once the facilities operate properly. According to the available information, it will begin with 1,000 all Paraguayan workers.
MOU with KIBUWA
The Embassy of Paraguay in South Korea signed a Memorandum of Understanding (MOU) with IT Business Women's Association (KIBUWA) on February 2016 for mutual cooperation between them in order to develop IT business area to promote foreign investment in this area.
Q: Please introduce your Head of Government in detail, including major achievements.
A: President Horacio Manuel Cartes Jara of the Republic of Parguay was born in 1956 in Asunción.
He embarked on a successful business career forming a conglomerate with interests in soft drinks, tobacco, meat production, football, finance and aviation. From 2001 until 2012 he was president of Club Libertad football club, and was the president of the national team department of the Paraguayan Football Association during the qualification for the 2010 FIFA World Cup.
He joined the centre-right Colorado Party in 2009, saying he wanted to counter the swing to the left in Latin American Politics. In 2013 he was elected President of Paraguay on a ticket to attract international investment, create jobs and modernize the country’s infrastructure and institutions.
Major achievements of his Government
Paraguay is transforming. This economic, social and institutional transformation is aimed at improving the quality of life of all the Paraguayans and foreigners living in my country. In the last decade, we have had an important economic growth, with an annual average of 5%.
The last year, Paraguay had one the best growth rate in the region. We have an orderly monetary policy, with low inflation and a stable currency, the Guaraní, with 75 years, the oldest currency in Latin America. We have a solid financial system, a tax system that encourages investment, a balanced government budget and a sustainable public debt, the second lowest in the region and the one with the lowest growth. Paraguay offers one of the highest returns to direct foreign investment in the region, in a context of free capital mobility.
We are the leading exporter of clean and renewable energy in the world, with several hydroelectric plants, among which we have Itaipu, one of the largest on the planet, which belongs to us in condominium with Brazil.
We are the fourth largest exporter of soybeans worldwide and the sixth largest meat exporter. Despite having no maritime coastline, our country has the third largest river barge fleet in the world, after China and the United States of America.
Paraguay enjoys good climate, fertile land and many other natural resources, with more than 90 rivers and one of the largest reserves of fresh water in the world, the Guaraní aquifer.
Besides these kindnesses of nature, it has a great demographic richness, where more than 66% of the population is less than 35 years old, which represents an enviable potential of human capital.
The Government of President Horacio Cartes undertook an extensive consultation process at the national level in 2013, to agree on the country vision in the medium term and determine the strategies and catalytic objectives that guide this process of national transformation. Thus was born the Paraguay 2030 National Development Plan, which guides our reform processes and the economic and social dialogues between the Government, the private sector and civil society.
The main purpose of the Government’s efforts is to build a competitive country, located among the most efficient food producers for the world, with thriving and innovative industries, oriented towards a knowledge economy and targeting a country with social development indexes in the range highest in South America, connected to the world, environmentally sustainable and inclusive. Paraguay is a democratic, supportive, efficient, transparent State that promotes equal opportunities for all.
Paraguayan Government is implementing policies to strengthen the human capital of the broad youth segment we have, with projects such as the National Program of Postgraduate Scholarships Abroad (BECAL Program) aimed at young Paraguayans who qualify to study at any of the 300 best universities in the world, as well as the Scholarship program for teachers to train in the best international centers.
We promote the effective connection between private companies, universities and research centers, in Science, Technology and Innovation Programs, to increase the productivity of our companies. Within the framework of deep economic transformations, and with the purpose of generating the necessary infrastructure for economic development, important laws that encourage Public-Private Partnerships, as well as guarantees for investments and Fiscal Responsibility, were approved in our Government.
The Government of Paraguay, in recent years, has had a presence in the international financial market, successfully placing treasury bonds, at very competitive rates, for the financing of public infrastructure works, which are steadily increasing in our country. The public investment in infrastructure has increased in the last 5 years, ensuring our productivity, competitiveness and sustained economic growth.
We are connecting social protection programs with those of economic inclusion, to deepen social transformations and benefit those who need it most, with comprehensive family support, so that the vulnerable population has good education, health, decent housing, water and sanitation.
The fight against poverty is essentially a preferential option for the poorest. The Government creates projects such as the “Sembrando Oportunidades” Program, a strategic tool for the eradication of poverty, which articulates dozens of state institutions, the private sector and civil society. It is reforming public management to provide, under participatory schemes, social services of higher quality and efficiency.
It is important, finally, to highlight the active role Paraguay is playing in international organizations, cooperating with development, environmental and peacekeeping objectives and respect for human rights.
Paraguay was the first country in Latin America to approve the Bali Protocol on Trade Facilitation, adopted within the framework of the World Trade Organization. Through MERCOSUR, Paraguay has maintained a firm position in favor of fulfilling the essential purposes of the Treaty of Asunción, which are economic-commercial, as well as an active external relationship, with other countries or blocks of countries. In this context, it is good to mention that during the first semester of 2018, during the Presidency Pro Tempore of Paraguay in MERCOSUR, the negotiation process between MERCOSUR and the Republic of KOREA Trade Agreement would be launched. This Trade Agreement would be an excellent platform in order to enhance the economic cooperation and strengthen business relation among companies of both sides.
I am convinced that in the construction of the country we want, the frontal fight against corruption is fundamental. In faithful commitment to end this scourge, we implement an ambitious program of transparency, under the principle of "public in public", which allows citizens to fully enjoy their right of access to public information. This process of transparency, in a context of absolute press freedom and active citizen participation, as a comptroller of public affairs, has positioned Paraguay as one of the countries with the greatest progress in the "Perception of Corruption Index 2015". Our efforts aim to improve the performance of our economy with social inclusion, transparency and equity, strengthen the general welfare of our people and definitely insert our country into the globalized world.
Paraguay, with the support of the Republic of Korea and many other countries, is part of the Development Center of the Organization for Economic Cooperation and Development (OECD). We have rapidly strengthened links with the Organization and its Members, with actions that are already being implemented, such as participation in several Working Groups, cooperation for detailed studies, as well as the analysis of a series of recommendations and instruments of the OECD.
Q: Please add whatever other details that we might have left out from our questionnaire.
A: Paraguay is a country with solid economic fundamentals reflected in high economic growth rates; relatively stable inflation; a strong government commitment for continued fiscal reforms, including a Fiscal Responsibility Law; and its ability to maintain macro-stability. It is also a small-sized open economy and business-friendly conditions have helped attract higher value-added foreign direct investment (FDI), especially from Brazil, Germany, Korea, Japan, Belgium and other countries.
As an export-oriented economy, it has generally maintained a small current account surplus that is expected to turn slightly negative in the medium term. Among its vulnerabilities are its still-weak but improving institutions, low educational level, and a large informal economy.
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