Paraguay targets investment boost: FinMin
Paraguays new government hopes to secure foreign capital through a radical economic overhaul, its finance minister says
||Paraguay's new finance minister Germán
(left) takes over from former finance
Paraguay's finance minister
Germán Rojas has laid out the government's ambitious
plans to revamp the country's agriculture-dependent economy and
secure fresh foreign capital, in one of his first interviews
since taking office last month.
The country, which debuted in the
international bond markets in January, intends to "position
itself as an investment destination", Rojas
Paraguay is set to be Latin
America's fastest-growing economy this year, with GDP projected
to increase 13% from 2012. That follows a contraction of 1.2%
The country's economic performance
is deeply dependent on agricultural exports, driving sharp
swings in growth. The new government, which took power in
August, hopes to change that.
"The president has the firm
intention to generate a greater diversification of the
economy," Rojas said. "The required business environment is
being set up to attract industrial investment."
Horacio Cartes, Paraguay's new
president, began an investment drive as soon as he was
inaugurated, hosting a breakfast with 350 business leaders to
outline his vision for the country.
Paraguay sold its first
international bond in January this year, grabbing an
opportunity for rare credits to tap dollar debt markets. The
bond "put Paraguay on the financial map,"
Roland Holst, acting governor of the central bank, told
The sovereign hopes to repeat the
feat in 2014, although Holst says the execution plan will have
to adapt according to conditions, as rates rise amid the US
Federal Reserve's expected wind-down of its quantitative easing
Proceeds from a second bond issue
will finance Paraguay's infrastructure improvement plan.
Developing a sovereign curve will
also help local companies tap dollar bond markets by providing
a pricing benchmark.
Already a handful of companies
have come to market. Telefónica Celular del Paraguay
(Tigo), the country's biggest mobile operator, priced a $300
million 2022 non-call five year bond in its debut transaction
in December. It was the first non-bank international issuer
from Paraguay, and drew $4 billion in orders, including from US
high-yield accounts and dedicated emerging market buyers.
That deal also followed Banco
Continental Paraguay's $200 million bond in June last year and
BBVA Paraguay's $100 million deal in 2011.