e- fil reportn - world bank · restricted r*3u e-fil reportn o. wh-107b tittt itt-%a this report...

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RESTRICTED R*3u E- ReportN o. WH-107b fIL TITTT ITT-%A This report was prepared for use within the Bank and the Association. It maeuy .. e p ulshaeU olus iUy. II bU quuiCU Us repreuning Ieir Views. The Bank and the Association accept no responsibility for the accuracy or Lcompleteness OTIe coOTs OT me report. TkT,TT1nXT A T'T/TT A T A TT/ TrflT TXT T-,,- T/-I'rT/ %X T I x T1 ThTe r I IN I ZN\INi-i- JI1U DI-IU±NA C%JN.U~AJN I KUk. I IU.IN AiI) DtI Vtj2UVV1tI.N I IN ITKNATIUNAL 1)EVELUMENT AbUCIATION CURRENT ECONOMIC POSITION AlTJT DRlCDTr"T'C- OF PARAGUAY July 24, 1961 Department of Operations Western Hemisphere Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized

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Page 1: E- fIL ReportN - World Bank · RESTRICTED R*3u E-fIL ReportN o. WH-107b TITTT ITT-%A This report was prepared for use within the Bank and the Association. It maeuy .. e p ulshaeU

RESTRICTEDR*3u E-

ReportN o. WH-107bfIL TITTT ITT-%A

This report was prepared for use within the Bank and the Association. Itmaeuy .. e p ulshaeU olus iUy. II bU quuiCU Us repreuning Ieir Views.

The Bank and the Association accept no responsibility for the accuracy orLcompleteness OTIe coOTs OT me report.

TkT,TT1nXT A T'T/TT A T A TT/ TrflT TXT T-,,- T/-I'rT/ %X T I x T1 ThTe rI IN I ZN\INi-i- JI1U DI-IU±NA C%JN.U~AJN I KUk. I IU.IN AiI) DtI Vtj2UVV1tI.N I

IN ITKNATIUNAL 1)EVELUMENT AbUCIATION

CURRENT ECONOMIC POSITION

AlTJT DRlCDTr"T'C-

OF PARAGUAY

July 24, 1961

Department of OperationsWestern Hemisphere

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Page 2: E- fIL ReportN - World Bank · RESTRICTED R*3u E-fIL ReportN o. WH-107b TITTT ITT-%A This report was prepared for use within the Bank and the Association. It maeuy .. e p ulshaeU

CURRENCY EQUIVALENTS

Unit = Guarani ( )Tr d 1 - 1-l

= US $0. 0080 1,000 = US $7. 940 1,000,000 = US $7, 936. 50

Page 3: E- fIL ReportN - World Bank · RESTRICTED R*3u E-fIL ReportN o. WH-107b TITTT ITT-%A This report was prepared for use within the Bank and the Association. It maeuy .. e p ulshaeU

TABLE OF CONTENTS

Pag No.

PA.qTn nATA

B.TC Aiture....................................

S iARY eD CONCLUSIONS...................... -i

T ):At Vt1nTTAJT)S.. .nasr a rower.. ......................... o

TT DV~fr"0\TrP L13tTTnV1'0 7iVIMItT nDTPM",MT)Q

F. TranorU.Lul .Lu .... Lu..-L . ................ 4B. Agriculture c......................... 4

n T- - z

U. Uverstock .......... s.......... UD. Forestry . ........................ 8

E. industry and Power ...................... 1F. Transport.................................8G. Public Finances ............... 9H. Government Development Efforts............10I. Money and Prices .......... 11J. External Economic Relations ............. 12

III. PROSPECTS AND CREDITWORTHINESS

A. Government Development Plans ....... 13B. Financing Public Investment ............. 14C. Private Sector Outlook .................. 15D. Balance of Payments and Growth Outlook .. 16E. Creditworthiness ........................ 19

CHARTS Following Page No.

Supply and Use of Resources - 1960 .......... 4Agricultural Production Indexes ............. 5Agricultural & Forestry Production Indexes .. 6Industrial Production Indexes (2) ........... 8Government Revenues and Expenditures ........ 10Money Supply, Cost of Living, etc. .......... 11External Trade and Trade Balances ........... 12Balance of Payments on Current Account ...... 12External Public Debt .......... ........ 19

APPENDIX IPublic Investments Projects Under Considera-

tion .................. .... 20

STATISTICAL APPENDIX ............................ Appendix 2

Page 4: E- fIL ReportN - World Bank · RESTRICTED R*3u E-fIL ReportN o. WH-107b TITTT ITT-%A This report was prepared for use within the Bank and the Association. It maeuy .. e p ulshaeU

B l V l A

-8 R A Z l LIAI

C~~ A y

conepe 4

._. H .. .A N q T,

PARAGUAY " A A G A Y

5Qag 150AucMILES LcCag*,

-N e -s.. -... Internatioal Bo~døty ePARAG 11,A R

NaD.O d.s al CA

e o*po,tmentms c4pItal •

OIb o,Cityson n e

____I *!* x ~1.D-C

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BASIC DATA

Area: 157,000 square miles

Population Estimate, 1960: 1.8 million

Gross National Product, 1960:(annroximatelv) 22 billion auaranies

Tne-nP nPr hPAd (annrox-) USA TOO

(Trn- National Tnvestment (e.stimntd): ! (f GNP.

Trv+.nl 7 L

Of which: Public Investment 3.8

External Resources 1.5

Budget Execution, 1960: In millions /

Expenditures 3,32

Deficit 33

Money Supply: 3,000 million

Balance of Payments, 1960:kuoous aIU cervlces)

Exports US$ 36.2 millon equivalentImports US$ 42.7 million equivalent

Trade Balance US$ -6. million equivalentNet Invisibles US$ -6.4 million equivalentBalance on Current Account US$ -12.9 million equivalent

External Public Debt Outstanding:(June 30, 1960) US$ 25 million equivalent

Foreign Exchange Reserves of theCentral Bank (net): In millions of USj equivalent

(December 1960)

Gold + 0.09Foreign Exchange + 0.37

(excluding bilateral agreements)Bilateral Agreement Balances - o.4o

Total + 0.06

Page 6: E- fIL ReportN - World Bank · RESTRICTED R*3u E-fIL ReportN o. WH-107b TITTT ITT-%A This report was prepared for use within the Bank and the Association. It maeuy .. e p ulshaeU

SUMMARY AND CONCLUSIONS

1. Paraguay is one of the most underdeveloped countries inLatin America. Because of its physical isolation and turbulentpolitical history, it has been virtually bypassed by the mainstreamof economic development. Many parts of the country are virtuallyunexplored; transport is still in the "river and trail" stage; poweravailabilities are limited and industry is of the most rudimentarycharacter. Even agriculture, livestock, and lumbering, the mainstaysof the Paraguayan economy, remain in a primitive stage, largely un-touched by the salutary contributions of modern scientific techniquesand know-how. As a result, the income per head is the equivalent ofapproxima ely US@ 100 and is among the lowest in Latin America.

2. In recent years, with the help of I.M.F., Paraguayanauthorities have restrained the galloping inflation to which theeconomy was subjected in the post-World War II period and with theassistance of the Bank and other external resources, undertook toestablish a minimum of basic facilities essential for economic growth.Although many achievements can be pointed to, particularly in thetransport sector, the low level of domestic savings has hampered thedevelopment process and has limited tne rate of growth of output tothat of the population, allowing for no increase in real income perhead. ParaLuavan resources, particularly in agriculture. livestock,and forestry can provide a much higher income for the population,but this will reouire a substantially higher level of investment andof external capital inflows than has been the case in the recent past.This investment must he undertaken on the basis of sound Peonomincriteria and within the context of government policy fostering a mar-k3t. Innamy if it i sn to attanqrnhhtentilonr tmtribatin

growth which would permit a relatively modest increment in income perhand of- nv htween 2 anc 2nn annually it will be necessary to

raise substantially the recent level of investment. While there arelimitnt.ion con +.hp inrYtpt.n t.n whinh invnqtm.rnPnt. nn hp in ar quicklya substantial increase in resources available for investment is

reure.Graerefrts. ton increase= doesti,czntrincr naen eocsar

but most resources for the public sector will have to come from abroad.

4. The outstanding external public debt of Paraguay repayable

end of 1.960. (This amount does not include drawings on IMF of US$ 2,4Ii .- L.JL . U 1 ~j. V a. LI U.1 %V iJ . 1 .) ) o xrepayaa ~ 4.~~ o lle LU L .. O.U L.J

or dollars.) The interest and principal payments on debts repayableS.Lm oeg ean .2 emilioni9 6 Thute y 4 rfitLet .Lhe l LEI 7UL Llu

at almost US:") 3.2 million in 1962. Thereafter they are scheduled to

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decline to less than USP 2 million in 1965. These service paymentsrepresenit around 10/0 ofL estiatedU forigexuageerin[gs LI 1961and in 1962 and decline to between 55 and 6% by 1965.

5. These debt service requirements, although by no means ex-cessive on the surface, are quite burdensome for Paraguay. The bal-ance of payments is already in a deficit position and no immediateprospects for improvement are in sight. The difficulties inherentin increasing exports are great because of the inelasticities of out-put of some products and the market limitations for others. Compres-sion of imports is equally difficult unless all efforts at economicgrowth are abandoned. Should exchange receipts unexpectedly decline,foreign exchange reserves are too low to provide an emergency cushion.The burden of the debt service (including debt repayable in guaranies)is even more severe on public finances, since it consumes fully 50%of public savings and is equivalent to some 15% of budget revenues.Lastly, the debt service absorbs as much as 25% of gross nationalsavings.

6. In order to attain a higher level of investment activityand achieve a rate of growth sufficient to raise her present low in-come per head, Paraguay will have to rely on large-scale inflow ofexternal capital. At the present stage of Paraguay's developmentmost of this external capital should be acquired on a very long-termbasis. Uhile prospects for short-term growth in income and exportsare not unfavorable the policy changes required to capitalize on theseonnortunities are still in process and results have not yet provideda test of effectiveness. In any case, Paraguay's present economicstructure and low npr canita incomp wreatlv limit the volume of -ublicsavings available for financing domestic investment and debt service.In tahein ccmt nceas an eprtsiculal e ntAl Paragain s pes inachiieving some increase in exports, external obligations imposing as Yiri cng 'i burdemn i n thea n, nar ter-m shou iiI l beo sevenrel IimTited.

Page 8: E- fIL ReportN - World Bank · RESTRICTED R*3u E-fIL ReportN o. WH-107b TITTT ITT-%A This report was prepared for use within the Bank and the Association. It maeuy .. e p ulshaeU

I. BACKGROUND

1. Paraguay, one of the two landlocked countries of SouthAmp-riran_ iq largep in a-reapnd srrmqll in pouain I~ N ~ of17,000 square miles -- somewhat bigger than Japan -- Paraguay ranksnir-nh _nriongr T.n+Jr i Amn"v' r'n ,-r n+i- , i i ,, .1 l

seventeenth in terms of its population of 1.8 million. The land ly-in ,ra.

4 ni 4br V v,n,.,r A.nv -vA 1- -~vr .- 4-1, 4- -,4-4-__I. A,

i,, -4 of ~, the ~ P- -m Ri e an. l luvol CLO± V11 U JliU.%uU _L0 V i.L UUCL_LJL.

uninhabited; and even most of Eastern Paraguay is sparsely populated-UI U UJ X V 0 Uilu UCLV-UCX. k,LVI-J,-0 MDU1'LUII Lllii I e 7UP v0±

the country's inhabitants are concentrated and population density is-LW~ U-LV L H..1-Y --- L LI.

c. xuTe known natural resources of raguay cont almostexclusively of grazing and agricultural lands and of forests. WesternPFaraguay (Chaco) iis sULuite PImri[d-Lly forL _lvestockQr grazing withll Itopportunities for crop cultivation because of periodic droughts andflooding. Wnit the exception of the area around Asunclon, the plainsof the Alto Parana River, and some land north of Concepcion (requiringdrainage), most of the rest of Fastern Paraguay is also suitable pri-marily for livestock grazing, with only scattered areas being suitablefor crop cultivation (see soil map below), Since the soils eitherhave little moisture retaining capacity or are impervious, water con-trol by means of sound farming practices and tnrough land improvementsis essential. While climatic conditions in Paraguay are suitable fora wide variety of crops, allowing a highly diversified agriculture,the sharp fluctuations in temperatures, winds and rainfall place aheavy premium on the adoption of sound farm management practices ifhigh and stable yields are to be maintained and Paraguayan agricul-tural products are to be competitive in international markets. Fullyhalf of Paraguay's 1,0.7 million hectares are covered by natural forests,containing some of the finest hardwoods. Paraguayan rivers, of whichthere are many, are rich in a variety of edible fish and some of theriver rapids are potential sources of hydroelectric power.

3. The Paraguayan economy is predominantly agricultural andmost of the population depends on farming, cattle raising, lumbering,fishing and hunting for a livelihood. The bulk of agricultural pro-duction (particularly mandioca, corn, beans, sweet potatoes, rice,sugar cane and cotton) is for domestic consumption and is largelycarried on in small units employing antiquated implements and tech-niques. Only the production of rice and wheat is mechanized on asignificant scale. Vegetable oils, yerba mate, fruits, and tobaccoare produced for the domestic market as well as for export.

4. Livestock raising constitutes Paraguay's major single in-dustry, there being between 5 million and 6 million head of cattle forthe 1.8 million inhabitants. The high ratio of cattle to populationis. however. somewhat misleading: quality is very poor; pastures havefrequently been neglected; foot-and-mouth disease is endemic; parasitesand other diseases are common. As a result. the animal slaughter ratio

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FArTFRN PAR ,IAG'Y

SOIL CLASSIFICATIONCaa er•"""• 0 50 100 150 200 Km

PEDRO iuAN CABALLERO

~ . Compiled from "A Reconnaissonce Soil1 and Land Classification of Poraguay",

S1954.

Existing Roads

Rouds underconstructon

Dopch)

yOOSAN PEDRO

PT-:

EL E

ILLA ~E

ASuNCN

0.,pena er

-s

opc

,J?PILA~R _o nnc

- ear ogr. r,,iur a or.d

R-C ON ooe ,nenen .

Poture ln contoinngIfCR RIENTES ...

Lond unsuitqble forFgriculture

FEBRUARY 1959 IBRO-558

Page 10: E- fIL ReportN - World Bank · RESTRICTED R*3u E-fIL ReportN o. WH-107b TITTT ITT-%A This report was prepared for use within the Bank and the Association. It maeuy .. e p ulshaeU

- 2 -

is low and the dressed carnaqq weight of animals is ntftory

Although the per capita consumption of )ib kilograms of beef in Para-CPayi hich_ epneialy in rolt+Ann +.t incone_ +.ho n+.n. Onrl M

ports of the livestock industry are much below their potential.

5. Wjith half of Paraguay covered by natural forests, lumbering

of coal or petroleum, wood has served as the traditional source of heatar -m.Pr Th- e -forests"a als sup- a4 asic a cons tuc. Lin mate 4 La.l for

domestic use and. for export. Much of forest exploitation is primitiveand inefficient * It consists of a 111igl SUCI U 111111r 01 11veD

species of which only perfectly shaped, developed and healthy speci-men a e se-L J U ui±Y f'.I tu nkur~ Js re-c-redU lul't'li. Zzi U l CVIultl.l

Paraguay yield, on the average, one first class exportable log for everyn.. r' i-4.2-L l.t4. 1 1-- .C' - - n _-

C. leouares anm ito finb ueen eUu±niaUeu unia m. o± M1 reUu IL raIU5 'I re-quired, on the average, for every sawlog destined for export. Althoughraraguayari Iresus conain some of the finest natural hardwoods obtain-able, attempts thus far to realize fully their value by establishingan efficient modern processing industry nave not met with success andthe bulk of the logs are floated down the river to Argentina as Para-guay s major export commodity.

6. Manufacturing is still a relatively minor activity in Fara-guay. Its development has been hindered by the limited size of thedomestic market both in terms of population and incomes, by the short-age of entrepreneurial talent, by the preference of the business com-munity to engage in trade and commerce and to invest a large part ofits savings in real estate or abroad. The uncertainties of Fovernmentpolicies toward the business community have also retarded the growthof industry. Most manufacturing plants are small and do little morethan process domestic raw materials -- foods, fibers, wood and tobaccointo simple consumer goods for the small domestic market. There are,however, a number of plants of sizeable proportions, employing in ex-cess of 500 persons each which, combined, produce about L0Z of the totalvalue of manufactured output. This group includes two meat packing andcanning plants, two textile factories and four plants that manufacturequebracho extract, Most of this production, as well as some of theoutput of sugar mills, vegetable oil plants and a yerba mill, isdestined for export.

7. Electric power development in Paraguay has been very limitedand the country ranks sixteenth among the 20 Latin American Republicsin installed watts per capita. The total installed capacity is esti-mated at under 30,000 kw. and the generation of electricity is about80 million kwh., of which about four-fifths is in the city of Asun-cion. Only one-eighth of the Population has electricity in the homeand most of these people live in and near Asuncion. Public power forindustrial olants is available only in Asuncion; in all other communt-ties industrial enterprises must depend upon their own power-generatingunits. All pemr nlants are thermal installations. denendent nrimaily

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on firewood or fuel oil, and to a lesser extent on bagasse, coconut and oiceshlls±. Power cot ar high, reputedl atJL~1 betweenIUU U ad 10J cents US

per kwh. A promising hydro power site at the Acaray-Monday Rivers iscurrently being studied.

8. Paraguay is landlocked and access to the ocean is throughBuenos Aires -- a distance of about 1,000 miles from Asuncion -- overthe Paraguay and Parana Rivers. However, these two rivers, as welas the lower sections of the Alto Parana River, are among the bestunimproved rivers in the world for navigation. Moreover, inland trans-portation is facilitated by the fact that some parts of the countryare penetrated by navigable rivers.

9. The economic development of Paraguay has been negligibleduring the past century. The reasons are to be found in political andeconomic history since 185. The war of the Triple Alliance (1865-70)was particularly exhausting for Paraguay and not until the 1940's didthe Paraguayan population recover its pre-l 8 6 5 level. International anddomestic conflicts also took a heavy toll during the present century asexemplified by the war with Bolivia over the Chaco territory in the '30'sand the devastating civil war of 1947.

10. More recently, during the decade following the civil war of1947, Paraguay experienced one of the most acute inflations in LatinAmerica. This situation was brought about by a futile attempt tostimulate economic development through monetary expansion. Faced withhyperinflation and stagnation, the public authorities resorted to avariety of regulatory measures, indLuding price controls, subsidies,multiple exchange rates, etc.. in an ill-fated effort to mitirate theconsequences of their inflationary economic policies. But theoppressive character of these regulatory measures damnened initiative.eliminated incentives to save and invest, and adversely affected theprospects of economic growth ecogniz.ing +he shor+.cmings of thisapproach, the Paraguayan authorities put an end to hyperinflationwith the aid of MF. relaxed a number of onoressive controls, andembarked upon a program of public investments. Although some vestedinterests opnose removal of the remaining onnressive controls, it isbecoming widely recognized that poverty can better be eliminated bystimulating inceased noduction ra+ther +.han by regulat.ing thedistribution of a shrinking national output. Paraguay's naturalresources can snpporta much higher standard of living for her people.An effective and sustained application of the new policies may beepnecdt. ride the much needed sti ant to P ecnicdevelopment.

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Pv-A,i,+I nn onA T+ ~& Tn--

=10. UeU LL _L.4 p..,j. CJ...'.4 ±aU J-Ll4C..

or output during the past 3 years. The gross national product of Para-,a nsI±i a' th I aw~ I~ vel -L CLUUUV U rLC ,k\JQ%1 ILL.La.J-UIl UJ. ctlypl U.&-L

mately USA 100 per capita, and is among the lowest in Latin America.I UIC ULO-LU I Z I _Lt:11UCLU_LU11 VJ.L t- U11:,U u J-J-U. -L1dlLcLu,LUc Utfu -L11 -L7) ( , c"Iu

the financial stabilization program launched with the aid of ITF, re-SuLLted :Ln Wt;,e e: lJ!imination ofL niumeroIUs stiflin UcontrLsj, LiZ5P_i1-Q conl-

fidence in the future of the economy and stimulated investment activities,particularly in the all-important meat sector. There are several reasonswhy these salutary developments have thus far had a very limited impacton production and national income growTn Production of staple agri-cultural and forest commodities was impeded by bad weather, insect in-festation, inadequate credit facilities and adverse export demand. Thelatter was particularly severe in the case of lumber and quebracho.The continuance of oppressive government controls prevented growth ofthe livestock industry. The increased public investments were uncoor-dinated, frequently diffused and undertaken without regard to priority.On balance, the past 3 years may be regarded as a period of transitionfrom stifling controls to a market economy in which productive invest-ments increased and laid some basis for future economic growth. Thetransition is still in process and in the case of the vital livestockand meat industry it has only been initiated.

B. Agriculture

12. Agriculture is the source of livelihood for the majorityof the population. With so much good land and so few people, thelow living standard in Paraguay is due to the poor use made of theland. Indeed, the popular description of Paraguay as "a landwithout people and a people without land" appears quite appropriate.There are approximately 150,000 holdings on 16.8 million hectares.Nearly 95% of these holdings occupy only about 6% of this area androughly 70/ of all the holdings are under 10 hectares, with anaverage unit size of 3.8 hectares. At the opposite extreme, 7,700holdings, or only 5% of all the holdings, occupy 94% of the totalarea with an average unit size of roughly 2,000 hectares. This groupprobably includes all the larger cattle ranches (500 head or more)which number under 1,000. About 80,000, or almost 55o of all holdings,are concentrated on 500,000 hectares in the four departments adjoiningAsuncion. and three-quarters of all the holdings in these departmentsare under 7.5 hectares.

13. The anomaly of vast empty spaces in a land of 40.7 millionbpntares. while more than half of the rural holdings are concentratedaround Asuncion in an area of 500,000 hectares, is rendered even moreinconrnon by thp fact that 60% of all the holdings in the country,

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CAPAlIAV

SUPPLY AND USE OF RESOURCES - 1960(PERCENT OF GROSS NATIONAL PRODUCT AT MARKET PRICES)

SUPPLY USE

PUBLICN S i CONSUMPTION

AGRICULTURE, HUNTING, 6 %AND FISbHING ......

26.4%

LIVESTOCKI 7.' i%T

GROSS

MANUFACTURING, NATIONAL PRIVATECONSTUCTION, PRODUCT + CONSUMPTIONAND POWER I 83.9%

172°/o 1OO 0 TOTALAVAIL-

1ABILITIES127.5 %

0D TRANSPORT ANDCOMMUNICATIONS 1. 5%

HOUSING ANDPERSNALSERV!CES

31.5%SFINANCED BYL DONESTIC

___GROS~ SVINGS 45%/7.4.5

MPnO-r nr .FINANCED BYIMPORT OF

GOODS AND SERVICES EXPORTS OF CAPITAL 3.0%r,>7 C;01- rInn ^in cto* ,lce

24.50%

.. . . . .

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and 68% within the four departments adjacent to Asuncion, are held bysquatters. These squatters are largely impoverished subsistencefarners.. emploving most primitive farming techniques and exhaustingthe very soil on which they depend for a livelihood. Few of them,or for that matter of the other farmers. have knowledee of modernfarming techniques And even these few have neither the facilitiesnor thp incentive to invest in imorovements because of the uncertaintyof their tenure, whether by ownership or lease. In the circumstances,nrnrit. institutionq rn find few creditworthy farm.rq uanable ofproviding the necessary security, and research stations and extensionqprvices an make little handway with the intro,"untion of imnravedpractices. The adverse effect of the prevailing land tenuresituation has hen vividly deamnntrateri clring the pa+. 14 vr

when the harvested area increased by less than 1% per annum, ascompared T-ith an ar-t1u1al grwhin popuio+.rn nf~ )+ra 91 n r 9 -r"7-The full potential of Paraguayts agriculture will be realized only

They must also help in the "opening up" and settling new rich farmingareas -L.11 Uil t-,CLOU UY) L'ULLLU.Lilr Lq7U%AK7, J. UC.LAD, kAuVU.LUP-1r~i, d.t--UU m~il%A4

sound farm credit facilities; and make available to the farmers the

±14. ~111tj UUUU.L ULLUVaUtLj t .Ltd :j iIiUU d, JU,UJ L~U

and the annually harvested area is reported at less than 400,000nectares. The principal crop is corn uiicuf accountu Lor a-unosuone-third of the harvested acreage., Mandioca, rice, sweet potatoes,beans, wheat, potatoes, peanuts and alfalfa account for an additionalthird. The bulk of the remaining acreage is accounted for by cotton,sugar cane, and tobacco. Only rice and wheat are predominantlyproduced on large holdings with the aid of machinery. All the othercrops are produced on small holdings with a primitive technology.Cotton, tobacco, peanuts and sugar cane largely serve as cash cropsfor the small farmers. Practically all the food and food crops areconsumed domestically, although rice and small quantities of cornhave been exported. Only the industrial crops -- cotton, sugar cane andpeanuts -- play an important role among Paraguayan exports. Theoutput of the two staple foodstuffs -- corn and mandioca -- whilefluctuating from year to year, has on the whole been increasing atapproximately the same rate as the population (see Appendix Table 0).Wheat growing, which is regarded by experts as uneconomical inParaguay, received official encouragement by means of a subsidy andoutput increased tenfold during the past three years. Similarly,pro6uction and export of sugar has been increasing. On the otherhand, production of cotton has dropped severely in recent years onaccount of bad weather and pest infestation, and exports have beenadversely affected.

15. Information on yields is far from reliable but it isclear that performance has been poor. There has not been a singlemajor crop with an appreciable sustained improvement in yields overthe past decade. Moreover, there are a number of apparent troublespots. Chief among them is cotton which is important to the domestic

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DADAr 0AV

PRINCIPAL AGRICULTURAL PRODUCTION INDEXES(1953 = 100)

150 1 150

lCOTTON 1 MANDIOCA

1007 -100 l

60 N1 )

1\ RICE \ 1150

40rii

S 30U N 100

L 80

SlUGAR CANE TOBACCO0lb

150 i _ A_l___

60

150r-11

100 SWEET POTATOES80 -6,0

'53 '54 '55 '56 '57 '58 '59 '60 '53 '54 '55 '56 '57 58 '59 '60(Est.) (Est.)

OBRD -ES 1831

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textile industry and an important export. Yields rer hectare anearto have been cut in half during the decade of the 1950ts. Whileunfavorable weather conditions combined with a narticularly severepest infestation may explain a sharp decline in a given year, thedownward trend in viplds apnears to bn uncomfortablv cnnsistpnt andsuggests a more fundamental problem such as soil exhaustion or use ofin-nnrnri.nP qod Yiplrlq of noin. hivp nlqo hpn nonr Althnllahof lesser importance, it is worthy of attention since Paraguay has

C. Lixrn Q +.,:) ck

16. Cattle is the most imoran --. m of 1--esock inP--guajr

Although official statistics report the cattle population at 3.7

actual figure is believed to be somewhere between 5 million and 6I'll 4-1,I 1- 4--L - -,~ Ut± ffId A OAiL A)4L.41.JL L)1,OJ 4J-.. 4 . LLIU

head, or about 4 hectares per head. Here most ranches are large,carry-Ing, UJ-lad U-0.L ), =GOLdU 111CLLl- 4. LLtz 01 ±0±10UL-UL-L U4.-utU, 11-LGLL.L

resistant to disease, parasites and drought. Animals are marketedwhen three years old, after being driven up to 3u Km. In tne Unaco,foot-and-mouth disease is endemic; there is a shortage of freshwater; mesquite infests increasing areas; and animals tend to becomewild and difficult to handle. On the other hand, natural pasturesare better than in Eastern Paraguay and there are no importantmineral deficiencies in the soil.

17. About 3 million head are located on some 6 million hectaresin Eastern Paraguay, or about 2 hectares per head. In EasternParaguay most ranches carry below 5,000 head. Natural pastureconditions are less favorable and there are important mineraldeficiencies in the soil; parasites and diseases are more common;foot-and-mouth disease is endemic. Animals are marketed at fouryears. Mo:t cattle are driven to market but truck transport isincreasing.

18. The cattle industry has been subjected to stifling govern-ment controls and as a result its growth has been much below potential.The government has exercised a virtual monopoly over the industry byacquiring control of the Corporacion Paraguay de Carnes (COPACAR),which was organized in 194 as a cattlemen's cooperative organization.Through COPACAR, the government has been regulating cattle deliveries,fixing prices of cattle and meat, and establishing export quotas formeat. With a view to assuring an adequate supply of meat for theurban population and for the armed forces, the government has requiredeach rancher to deliver his quota of animals to COPACAR at prices itfixed. These prices were until recently generally low for politicalreasons (as late as 1959 they ranged between 0 6.45 and 0 8.40 perkilo liveweight, depending on location and class of animal) and nopremium was Daid for auality. These wholesale price ceilingsprevailed for the domestic market as well as for the exporters, as againstan average price of 0 10 to 0 12 per kilo required by the producer to

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DADA11I ]AV

PRINCIPAL AGRICULTURAL AND FORESTRY PRODUCTION INDEXES(i953 = o0)

100 r i--i li^- l1200

8l 150

60

1501-- 00FOTA OES - 80

l 00 -- 6080 - 50

60 2-00

200- _1501PEANUTS

150 - i

100z, 180

800 13

600 1200

SAWN LUMBER

400C--

300- 100

1 k~x'~ 30200ý_ aool- ~ 11-1 60

53 '54 '55 '56 '57 '58 '59 '660,_0 (Est-)

100.

\ /å

53 '54 '55 '56 '57 '58 '59 '60(Est.)

IBRD-ES 1832

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'7

make cattle raising profitable. As a result, the ranchers lackedinetv to_4- -- 4mpov their herds4-, - ~--1-4A.---deteriorated to a very low level, meat consumption was promoted atUe expense of exports, and exports suffered a drastic reducULoU

in the early 1950's.

19. In the past three years these policies have been modifiedthrough more flexible administration. Enforcement of capriciousgovernment regulations was considerably relaxed and a limited degreeof freedom to market their animals was given to the cattlemen.COPACAR, to be sure, did not relinquish its powers to requisitioncattle and establish retail ceiling prices on meat, but these powerswere being used less repressively and in a more benign manner. As aresult, meat deliveries to COPACAR stores were curtailed, the "outside"market was amply supplied, the price for meat edged up to a morerealistic level, the financial returns to the cattlemen improvedconsiderably and a noticeable improvement in the quality of meats fordomestic consumption took place.

20. The effects of the relaxation of controls is difficult todemonstrate statistically although the record indicates betterperformance. Exports have clearly increased, and there are indicationsthat domestic consumption has declined while the number of animalsslaughtered has increased. Official statistics show some decline incattle population but informed opinion suagests that the cattlepopulation may in fact have changed very little.

21. The relaxation of government policies toward the livestockinbu-trv was fin0lv fnrmai.n in n rafft law which envisqPPq thereorganization of COPACAR in the course of 1961. The draft declares

m 1t fh.li.ivp +.hP pmn.nIP +.Pbi.qhmpn+.nf n fp f -mnrkp.+ inlivestock and meat and promises to give the cattlemen a somewhatgreater voice in the rulnningy of the, affairs of theM "nw COPAC AAlthough the new COPACAR would continue to exercise the powers to

movement of cattle and establish export quotas for meat, thena++1nmen r1-rav .n anA +p-- Trh +vie + +h-r non 1ira .r 4+1 +h- "wi.

institution once it is reorganized and would then be willing to

livestock industry. The retail price ceilings on meat establishedv)y the governmenu or ne 19u sason are roughly equivalenu U Uneprevailing free market prices. They are expected to yield at leastan additional US$ 11 million to the industry this year and appearto confirm the cattlemen's feelings that they should be able tocontinue receiving a reasonable return on their investments providingonly the new COPACAR is brought into existence and permitted by thepolitical authorities to work toward the establishment of a freemarket.

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D. Forestry

22. Half of the country is covered by natural forests andforest products are one of Paraguay's major resources. These productsinclude sawlogs. quebracho, yerba mate, tuna oil, essential oils. etc.Although most of this production is primarily for export, lumber andsawn wood arp used domestically in the construction industry. ingenerating power and for heating purposes. Yerba mate, the nationalbeveraen also servps as an imnortant exnort- Practically no nropresshas been registered in increasing the output of forest products duringthe nat several years. The nitting of Inr dronned sharnly, in the lasttwo years, mainly because of the shrinkage in demand on the part of theArgentinle constrcto inds-.7 P-n37,.n nf nmob-inh

better and rose from 112,000 tons in 1958 to 130,000 tons in 1959, butdropped to 110,000 tonsin16. ,ci+n,.

attributable to the severe competition offered by African-grown wattlebark . TIo inres tokpae nteotpto ssnilolsadtnoil production was adversely affected by a decline in export demand.

' J Sj ' kI d. U -LJ.L KCLQK-LO \-III U;~~I.~~J.L 4.UJ. tJQU j-'LV UV

during the past three years has ranged from poor to unsatisfactory.

E. In6ustry and Power

23. The stagnation in the dominant agricultural sector during thepast several years n1au repercuZjSons on te rest of Ut eoUoUmy. Ile el.LeUUon industrial production were particularly depressing during 1960, whenthe inue, roppeu several points as comparea wii the preceding yearand fell below the 1958 level. The cotton ginning industry wasparticularly hard hit because of the recent poor cotton harvests, Thefood products industries, especially flour milling, registered someimprovennt as a result of expanded acreages and output of wheat,but this increase and the somewhat smaller increases in bakery productsand in "pasta" production appear to have been at least in part offsetby a drop in rice milling. The canning of meat and the processing ofother animal products for export have fared rather well during thepast 3 years as a result of the government's somewhat less restrictivepolicies, but the overall volume of activities of the slaughter houseshas actually been declining as the reported drop in volume of slaughter-ing for the domestic market more than offset the rise in exports. Thebuilding materials industry showed some improvement. Production ofelectric: power increased from 76 million kwh to 81 million kwh between1958 and 1960, or at an annual rate of approximately 6f.

F. Transport

24. Transport in Paraguay has until recently relied almostexclusively on its highly navigable rivers and on a railroad whichconnects Asuncion with Encarnacion on the Argentine border. Highwaytransport has developed only since World War II, after completion of theprincipal roads in the area south and east of Asuncion where about 90%of the population lives. Only during the last several years have newprincipal penetration roads been undertaken -- one to the east from

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PARAGUAY

INDUSTRIAL PRODUCTION INDEXES(1953= 100)

inn~ ;>nn

MEAT-FRESH 1150(FOR DOMESTIC CONSUMPTION)

60 ' BREAD PRODUCTS1500

MEAT-CANNED(FOR EXPORT)

1300

'n L____________________ SUGAR200

600 /15~ Tt 50

300 M-r-r21PROCESSED RICE 9

5010

l 00

a 5200J

ANIMAL PRODUCTS/_ __._ _

WTHR IMA N MEAT

100 l_____l_z_l

9 NOOULS

200r-

150Y MATE 1 5 0

l VCIDMA KAATr

WHEAT FLOUR1001 1 00

'53 '54 '55 '56 '57 '58 '59 '60 '53 '54 '55 '56 '57 '58 '59 '60(Est.) (Est.)

IBRD-ES 1833

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PAPAG lAY

INDl.STRIAL PRODuCTION INDF

(1953=00)

oo CIGARETTES

80 (30

50 0

400UTON Fi t.RS

40 I/ \ / 300

15011COTTON YARNS 200

1200looK-~115

80POTADCMN

601 V1 0

150 F -

COTTON TEXTILES BRICKS

800 X50

60 luv

150r- 1 tELECTRICITY 1

2d 1,00

10_ 150

80 ~ _ _ _ _ _ _ _ _ _

TANN ING EXTRACT601 1 1 100

'53 '54 '55 '56 '57 '58 '59 '60 '53 '54 '55 '56 '57 '58 '59 '60(Est.) (Est.)

IBRD-ES 1834

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Col. Oviedo to Puerto Stroessner which connects with the new bridge toBrazil across the Parana River, and another from Asuncion to Filadelfiain the Gran Chaco. In addition to these major new undertakings, a partof the main road from Asuncion to Encarnacion has been further improved,reconstruction of the road from Concepcion to Pedro Juan Caballero onthe Brazilian border has been begun and a few local roads have beenbuilt to connect isolated areas with the nearest river Dort or mainhighway. More recently, a concentrated effort has been launched tobuild a coordinated system of feeder roads from the main new Brazilianhighway (in the vicinity of Puerto Stroessner) which run to the AcarayRiver on one side and to the Monday River on the other side. Thesefeeder roads are being built with the labor of the settlers who havebeen allotted homestads in thp. vininity nf Puerto Stro.qnAr_ Thisprogram, if properly executed, is potentially of great significancebecause_q# it is beoing carriedl out in an Irea believed- tor cntanin somek-of the best agricultural lands in Paraguay.

25. The Paraguay Central Railway between Asuncion and Encarnacionhas 1ee- loi i rts W ecnom3 imp rte n recn yer hr1v cc 4 anu t1-n

competition from the highways. The British company which owned andorated ne .r airad ",+ 41 1-, + 1~-vIIc ,r+,v.,.nkn,e 0-r Co.t-; ,-A

financial losses, and has left the railroad to be operated by thegmenet, A Bn - 1-Jo -on,, A-A -; -10CO 4.-- 4- 4-t.

4 -

necessary to rehabilitate the railroad was not warranted. On theOI. LICU. Iiad,U. NJ I vviuh cert ai 11"ILUJtJ. LUCL_L AtZ;,,t,1%ALUUL.Lt,- _L.U li"6±~11 U e)

possible to continue operations until the several points the railwaynow serves are conneUceu wit tue v1nuiutL-..nuarnacIn Iniway adU tnelatter is converted into an all-weather road.

26. Paraguayan authorities have also been very active in recentyears in reorganizing the entire structure of tneIr riVer snipping.The Flota Mercante del Estado, a wholly-owxned government corporation,has acquired 28 large, modern river ships -- 21 from Spain and 7 fromJapan. The chief motivation behind this large-scale acquisition ofships was the strong desire to reduce Paraguayan dependence on Argentinebottoms and the establishment of a 50-50 ratio between Paraguay andArgentina in the handling of river traffic from Buenos Aires. ITeacquisition of all these new ships has intensified the pressures toexpand port facilities at Asuncion.

G. Public Finances

27. The public sector in Paraguay encompasses in addition to thebudgets of the central government and of local authorities, a widevariety of state economic enterprises and activities, The latter includethe fields of telecommunications, transport, electric power, waterworks,selected industries, agricultural credit, etc. Because private sectorsavings have been very low and with few notable exceptions have not beenemployed in developmental investments (in part due to political insta-bility and repressive government policies), economic developmentaspirations of the country have had to depend in large measure on public:investments. This dependence on public sector savings, combined with

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- 10 -

the need to strike a proper balance between public revenues and expendi-tures as an indispensable condition for the maintenance of monetary andprice stability. has made sound manaLement of oublic finances anessential basic condition for stimulating economic growth.

28. The central government budget amounts to approximately 15%of- g7rossc nationnal p-rodute *. Pir1ca+. -'ro-rniac rn-A nrnn-ri~lqr r%neic.r%tz

duties, on excise and sales taxes, and on real estate taxes. Budget

ment rather than for economic development purposes. The military and

expenditures. An additional minimum of at least 35o is for theope at U.±JI i u 1 ' .4ULm;4 SV~± JI1U.L UkjLJ UQ*CL U .J U"K:;.1 .LIL 1LLAr ,,./, SA .'

may be considered as contributing more directly to economic and socialLL .UJI 1 U , UiLM- VV1,-.;VJ1Jt:_L1iLL18 U L LJ. ± I ULVL U.LU± dI 1% lCLVile

Development investments, in the strict sense, in agriculture, transport,etc., accouno tor approximately only Ib ow vuuge expeuures or Leszthan 1% of gross national product. Even this low level was only madepossible through the utlization of foreign aid.

29. The central government budget has remained fairly stable inreal terms during the past several years. The cash deficit was reducedfrom 9 129 millions in l9( to 9 33 millions in 1960. Thus, the cashdeficit of the Treasury was reduced to only about 1% of budgetexpenditures.

3D. Because of the great pressure for public investments andfailure of the budget to achieve any appreciable savings over ordinary"housekeeping" expenditures, the burden of public investment was shiftedupon the state economic enterprises. Since this burden greatly exceededtheir investment resources, including foreign aid made available to them,the deficits of the state economic enterprises have continued to loomlarge and they have exerted inflationary pressures on the economy,The overall Central Bank financing of the government sector amounted to0 238 millions in 1960, or to nearly 10% of the money supply.

H. Government Development Efforts

31. The development efforts of the government during the pastseveral years were severely limited by the extremely low level of publicsavings in relation to the investment requirements of the economy,especially for the "opening up" and settling of vast expanses of virtu-ally uninhabited territory. Even these limited efforts were seriouslyhandicapped by the scarcity of technical and administrative resourcesand by the absence of sound economic priorities to serve as a guide todevelopment investments. In spite of these limiting factors, and withthe aid of external financial and technical assistance, a respectablenumber of projects have been carried out in recent years.

32. The bulk of public investments during the past 3 years wasconcentrated in the fields of transportation and public health. Almostone-half of average annual investment expenditures of 1 837 millions

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ADACI IAVI mi M.L M

GOVERNMENT REVENUES AND EXPENDITURESBILLIONS OF GUARANIES)

0 I 2 3 4

195.NDIRCT TAXFq .NON-TAY RFVFNUFS

REVENUES

EXPENDITURESFsxxx?&AAAAA AAAAAAAAA4,, EC ONOMIC

I DEVELOPMENT

1959 1SOCIAL DEVELOPMENT

REVENUES

EXPENDITURES

1960 (Prov)PFVFNll IFRqT-

E

SEND

TURES

IBRD-ESDTR IBRD-ES1835

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during 1958-60 went into the construction and improvement of highwaysanu an[ aUU±UUL11CL _L,/,) LU1 L I Wit- UrchcaSe (.L .L±Vt:U bliLipbo An_.ie- /o U.i.

investment expenditures during these years went into the construction ofthe Corposana waterworks for suncion. The only oner signfiUcant pUbiseinvestment in this period was made in electric power and accounted forroughly Wo of the total. The remaining lox of public investments werescattered among various sectors, with agriculture receiving only about2%. About two-fifths of the above investments were financed through thecentral government budget and the remainder through the state economicenterprises. horeover, 4U0% of the total investment was financed byfunds from external agencies. Thus ICA, DIF, and P.L. [80 funds helpedfinance a large part of highway construction, the Brazilian Governmentfinanced the new road to Puerto Stroessner and the Export-Import Bankfinanced the Asuncion Waterworks.

33. Besides the foregoing public investment activities, the gov-ernment also sought to encourage economic growth through extension ofagricultural credit by the state bank -- El Banco del Paraguay. Agri-cultural credits granted during 1958-60 amounted to about V 200 millionannually, or less than 5% of gross value of agricultural output as com-pared with normal agricultural credit requirements of 30%. To raiseadditional capital for agriculture the government imposed a 5% surchargeon imports beginning January 1. 1961. These funds are to be utilizedfor the capitalization of the new state bank to be known as the NationalDevelopment Bank. Paraguavan authorities have requested the Inter-American Development Bank to assist in the establishment of the neworganization.

3Lh. Government development efforts in general and public invest-ment activities in particular have suffered greatly from the lack ofproner coordination. The Cabinet Committee for Economic Affairs --Equipo Economico-- which is charged with the formulation of economicnolicies and with reviewing economir develonment antivities- includinppublic investments, has no technical staff which could either competent-ly prepare or obiectively evaluate investment Dronosals. Similar gaosexist in the individual ministries and state economic enterpriseswhere the investment nronosals are exnected to originate__ The serions-ness of this situation and the dispersion or even waste in public devel-onnp+ j . j1 nirTi +.a.-Q wp v n n+Prl rmn-. h-ir -n Pnlan m-qszin i Q Tri

line with the mission's recommendation, the government has obtainedthrough the United TafTins anecononmist who, witi h T+he aid of availhle

technical talent, will coordinate public investments and help establish

the economic development of Paraguay.

I. Money and Prices

35. During the past three years Paraguay has been carrying outa monetary stabilization program with the aid of Dn.I Prior to theadoption of this program Paraguay had experienced one of the mostacute inflations on the continent: the cost of living increased on anaverage by 50% annually during the decade 1947-56. This inflation was

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PARAr.II AY

MUNtY bUVVLY, UU I Ur- LIVING, ANU WHULESALL PRICL(INDEX, 1953= 100)

350 350

WMULESALEPRICES

MONEY SUPPLY * ** . .

2501 ...... -...... 0

200 1200NCOST OF LIVING

150 1150

100__ _ __ _ _ 100

1957 1958 1959 1960

IBRD-ES 1836

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mainly caused by the financing of lare cnvPrnmPnt difinit. nnrlsive credit expansion to the private sector. Since 1957 the cost ofl ivinr m inP.r q.q -Irn +.hp n~v-rc, h-i -anmII -, P I an~ t +. AnfF i-ni

of the Central Government have been greatly reduced and while CentralPnnik ITrprlit, +n i-3-i an-(TPrnr)pn+. nc!cv as T*., n I !Q +Al 1 1nrinc

too rapidly, monetary expansion has been greatly curtailed. The moneysuppnlyt a-c.i!31 1-% n-! onrl 'hir ol m W rlii" " 3In yearsnn

same time that domestic production stagnated.

J. External Economic Relations

316. Paraguayan foreign trade during the last 3 years reflects both

The value of export proceeds has been largely, except in the case ofmeat, determined by variaions in extUernal uemanu anU price for rara-guayan products. The level of imports, on the other hand, has beensustained by the continued monetary expansion and a fairly rigaiselling rate for foreign exchange. The failure to increase domesticoutput, which would permit an elimination of some imports and an in-crease in exports, combined with a deterioration in the terms of trade,also contributed to continued trade deficits and led to the virtuallycomplete exhaustion of gold and foreign exchange reserves of the country.

37. The total annual value of Paraguayan exports in recent years hasbeen fluctuating around the US, 35 million mark, as the prices andvolume of various commodities had risen or fallen. This figure repre-sents around 20% of ,ross national product. The main Paraguayan ex-ports, which account for more than 70% of the total export value, arelumber, meat, quebracho, cotton fibers, and vegetable oils. All ofthese exports have experienced substantial decreases in volume andvalue during the past 3 years, while meat exports increased.

38. Until 1958 lumber was the most important Paraguayan exportand provided about one-third of Paraguay's export earnings. However,lumber exports are completely dependent on the Argentine market, andthe drop in construction activity there in recent years resulted ina drop of lumber exports from US$ 9.8 million in 1958 to US4@ 4 millionin 1960. Earnings from exports of cotton fibers, quebracho and vege-table oils,, which together amounted to USA 6 million in 1958, declinedto US$ 3.5 million in 1960. The drop in cotton export earnings re-sulted from a crop failure in Paraguay accompanied by a decline inworld market price. Quebracho export earnings were adversely affectedby competition of South African wattle bark and by the growing substi-tution of plastics for leather in world markets. Only yerba mate ex-ports appear to have kept their position and have stabilized at aboutUS$ 1.6 million. Exports of meat registered steady progress and havebecome Paraguay's leading foreign exchange earner, rising from US" 3.7

million in 1957 to a peak of US$ 9.8 million in 1959. This substantialincrease in meat exports has been made possible by the more lenientgovernment policies with respect to prices and export quotas.

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DADACi lAY

TOTIAL EXTERNAL TRADE(MILLiONS OF U. S. DOLLARS)

50 550IMPORTS (f.o.b.)

4 0 -( (f.0o.b.)---- 40

33o

2020

l n1 W-- _-*.. -E/e : A .*.- n i

1958 1959 1960 (Est.)

TRADE BALANCES WITH SELECTED AREAS(MILLIONS OF U. S. DOLLARS)

+8 + 8YEARLY

.AARGENTINA+6 ... 6

,,.oUNITED STATES

*..'' WE T ERNEUROPE

1 -2 2

-

REST OF WORLD

G 1

9T15 1996IBD E 8

11IRD - ES 13

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r%lA fl1 A ^'l i M~/

BALANCE OF PAYMENTS ON CURRENT ACCOUNT(MIl lnNS OF U. . DOL ARS)

0 lO 20 30 40 50 60

9 rXPR T (.) NVlSleS

rPrIPTCZ

PAYM ENTS"-IMVPORTS (fo.b .)rvSBE

1959 1N VI Z5IbLt.b

RECEIPTS

PAYMENTS

1960(Est.)

RECEIPTS

PAYMENTS

GOLD AND FOREIGN EXCHANGE HOLD!NGS OF THE CENTRAL BANK(MILLIONS OF U.S. DOLLARS)

8 r- - -llil 8END OF YEAR

TOTAL

4 4

FOREIGN EXCHANGE HOLDINGS

OGOLD......

0 O1955 1956 1957 1958 1959 1960

IBRD-ES 1838

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r.L_UrUc;yLYCA L y jUZ)J t't t 1)Jlp~ 4C M.L.L-LLU11 L11 -L.7) kU YY~j4tU UU

bbi$ 36 million in 1959, only to rise again to US, 42 million in 1960.I.he c ompostion 01 ±port s has not changed ar,pre cia bly dAurL_ingthsyears. Consumption goods, including foodstuffs, textiles and pharma-ceuticals, accouneu Lor rougnly one-utiiru o recorueu imports. Unlytextiles registered a sharp drop due to investments in the domesticindustry and the improvement of local products. Investment goods,including agricultural implements, machinery, equipment, metal manu-factures and ships, have also attained a one-third mark of total im-ports. Vehicles, fuels and lubricants constituted about 23o of imports.

40. The balance of payments position of Paraguay has been pre-carious during the past 3 years, all available foreign exchange reserveswere drawn down and payments arrears appeared in the course of 1960.The cumulative deficit on current account amounting to almost US$ 30million was financed by the inflow of long-term foreign capital, offi-cial and private, in the amount of US" 2h million and the utilizationof gold and foreign exchange reserves of the Central Bank and the com-mercial banks to the extent of about USP 5 million.

Li. Since August 1957 when Paraguay entered into a standby agree-ment with the IE, an exchange system relatively free of restrictionshas been maintained and during the last 2 years the exchange rate forthe guarani was stable in the free market at 122 per US'. until December1960 when it moved up to 0 126. However, this apparent stability wasonly made possible through the intervention of the Central Bank in thefree market, and in the face of the repeatedly adverse trade balances,led to the virtual exhaustion of all of the country's gold and conver-tible exchange reserves.

III. PROSPE'TS AiD CREDITWOATHINESS

A. Government Development Plans

02. The ParaRuavan government does not have a development pro-gram nor a well integrated investment budget. As described in Appendix 1,it does have under consideration a number of projects particularly inthe fields of transport, agricultural credit, electric power, industry,education and the social services.

)A It would annear reasonable to assume that at best only afraction of these projects will actually be carried out in the nextseveral Pr. hpnniie of the shortage of financial resources (seenext section) and the limitations imposed by the administrative, tech-nical and sncial anrntive acnnity r of Paraguay for develonment in-vestments.

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44. Many of the "projects" are only in the idea stage and uponmore detailed examination are likely to prove either iMpractical orof such low priority as not to warrant proceeding with them much fur-ther. On the other hand, the projects already under way are likelyto be continued, resources permitting. In this category fall the high-way projects, the establishment of the National Development instituteto reorganize credit facilities on the basis of the new law promulgatedin January 1961, modernization of the A.N.D.E. power company, and thecolonization scheme in the vicinity of Puerto Stroessner.

. On the whole, the continuation and completion of the projectsunder way appears to be justified. This certainly applies to the high-ways which, while not always originally chosen on the basis of the highesteconomic priority, have helped "open up" and penetrate new lands andshould in the long run make a significant contribution to economicdevelopment. The same is true of the reorganization of credit facilitie3,especially for agriculture, if the new as well as the old lands are tocontribute to growth in output. However, the mere provision of addi-tional agricultural credit through reorganized facilities might, withoutproper technical guidance and supervision of the farmer, yield littlebenefit to tne economy; with the necessary guidance, the provision ofagricultural credit could, by permitting of greater and more efficientproduction, have a considerable impact on the economy. The inadequacyof available information makes it difficult to evaluate the proposalsin the power field. As for the new projects envisaged, some expansionof the port of Asuncion's ability to handle cargo appears to be justified.On the other hand. the pronosed COPACAR project to build a slaughterhouse with refrigeration facilities and a packing plant appears to beover-ambitions, The eristing three private packing plants, two of whichhave recently been modernized and expanded, already have over-capacityin relation to the current export quota for meat and addit.ional invest-ment in this field appears to be totally unjustified. In summing upthis e appraial, .

1 ~ it is rlnnecssryto -sl reitSeat that+ theC contl+ribut~ion ofl

the public investment plans to the future economic development ofParauay will depend much less an their overll manitudes than on thedegree to which they are tested on the basis of sound economic criteriaand are properly integrate and executed.r in- tU co~-nnectl4iosn, cnn

tinued reorientation of government policy in the direction of fostering

B. Financing Public investment

46o. Th e t h problem of financing publkic netetithe next several years may be found in the previous discussion ofpublic finances (see !I-H). As was pointed out there, the savingsof the public sector are very low. During 1958-60, average annualpublic investment amounted to roughly between 30 and SO of grossnational product. Moreover, almost half of this investment relied

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nn the inflow of external resoirc._ Domestic qnvincre n- +h0 nblic

sector were in the order of magnitude of 2% of gross national productn~f riAll f-11 nra_hn1 f P r'-nrnmw ,.r r% tor I !n .ie of

the limited domestic resources available to step up investment, the

P a a u Y an a u h r t e-pt i u st a t O t b e r to v a i o us fin a n -cial agencies for assistance in the amount of approximately US" 75

social projects.

7 It appears reasonable to assume that only a part of these

course of the next few years, given the status of project investiga-tions and the many problems that muSt be resolved in Urder to carry

forward a program of the magnitude contemplated by the authorities.Even the l11mieu aLU UnaU Lti lely to be made aval1alue will requirefor its effective utilization some commitment of local financial re-sources. 1.n v'ew o o ne fnanc±a± pruem waco L U1 lace3 WineParaguayan monetary authorities it would be unwise to rely upon con-tinued recourse to the Central Bank for raising the domestic finance.The Paraguayan government has a commitment to the International Mone-tary Fund to avoid recourse to the Central Bank for financing the 1>yolbudget. It would be unfortunate if the state economic enterprisescontinued to rely upon Central Bank financing in carrying out theinvestment program. If Paraguay is to make a substantial contribu-tion from non-inflationary sources to the financing of public invest-ment it will be necessary to reduce the current expenditures of thegovernment or to increase budget revenues and receipts of the stateenterprises. while prospects for any substantial increase in publicsavings nay be limited in the short-tern, particularly so long assecurity expenditures are naintained at :resent levels, Para:uayr,ust rake greater efforts to finance investne-t from doestic sources.Only ;ith such efforts is it reasonable to exoect that the necessaryexternal finance ill be forthcorling.

C. Private Sector Outlook

48. It is somewhat hazardous to evaluate the outlook of theprivate sector because so much depends on government policies towardit. The all-important livestock industry after years of oppressionand stagnation is currently giving the ranchers an adequate returnon their capital and is providing the necessary incentives for in-vestment in expansion of livestock herds and meat output, but whetherthis will take place will depend very largely on the anticipationsof the ranchers regarding future government policies. The two largeforeign-owned meat packing houses -- International Products Corpora-tion and Liebigts -- have made very substantial investments in recentyears in the rehabilitation and modernization of their factories andranches. With these investments the companies are equipped to greatlyincrease their exports of canned meats. If government policies en-courage the ranchers to make the necessary investments in pastureimprovement, watering tanks, proper fencing, stockades, etc., reli-

lib qirpn, rennrb that a q05 increase in livestock herds would be

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possible over the next 5 years. In addition, a considerable improve-ment in the existing ferds would result with a corresponing iC-eaSein weight and a decline in disease and mortality rate. The ranchersestimate their investment requirements at US 20 million for the next

5 years.

49. The future development of the private sector will alsogreatly depend on the success with which the new National DevelopmentInstitute is adinistered. Although most Paraguayan agriculture isof a subsistence character, the cash crops of the small farmers andthe scattered commercial fanning enterprises could readily expand out-put, providing only they are extended a,propriate credit facilitiesand proper technical assistance is made available to them. An effi-ciently operated private industrial development bank, the establish-ment of which has for some time been under consideration, could alsoassist the growth of the private sector. The only substantialdirect foreign private investment currently in progress is theGuarani Ranch recently acquired by some Texas interests. It coversan area of aoroximately 2 million hectares in the Chaco. or roughly

5% of the total land area of the country and a D.L.F. loan has beenrequested to develop livestock and farming. particularly riceproduction, on this property.

D. Balance of Payments and Growth Outlook

50. The difficulties experienced by Paraguay in her balance ofpanymeMntsc driingr the past+ seve-%rral yeaspy,. weI beP1 xpece ocniuduring the next several years. In the past 3 years execution of a

exerted pressures on in.ports while exoorts remained sta-nant because

in world markets for Par.guay1s expor-s. Unless meat exports are fur-ther proMoted by more 1 -1 'mn1 poI-;4ci it+ is A -P- +-f~lt to , nann c ni

over-all expansion in exports over the next 5 years.,

51. Lumber, which until recently was the leading export productand brought in between LJD$ 10 IILLi--on arid uiq$ 126 mil-liLon in1 Lurt:_inexchange, has dropped to US$ 5 million. Being an essential commodityand one in ample supply in Paraguay, it could be regarded as a potential-ly strong export. However, because of its bulky character and hightransportation costs, it is almost wholly dependent on the Argentinebuilding cycle. Because of Argentinian monetary stabilization, thevolume of construction has declined. moreover, as a result of a perma-nent shift of demand in Argentina toward cheaper substitutes, it is un-likely that Paraguayan lumber exports will regain their previous posi-tion of prominence. Thus while some revival of lumber exports in thenear future is likely, it would be unrealistic to expect them to return

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to the high levels reached seveal years ao- As in the fce of limber-the outlook for exports of quebracho extract or tannin is non-too-ennournaing- nnly vernl vvPr1 rn q 7n rrts of +.qnnin Pir in e-votQQof US.§ 6 million in foreign exchange, but more recently the proceedshaVe dronT-PIA ET9- Pressuresq areM liklyN ton rt+inuea nnbtand prices of tannin because of the increasing competition of SouthAfric-.An t,Tle bark=andl the19 g rowing subT)JAitin ofP hides by plastics.Among all the forestry exports, only those of yerba mate have been in-

probably maintain. Exports of essential oils have been stable at

the outlcok for the combined forestry exports is somewhere in the order

with US( l1.5 million in 1960.

52. The outlook for agricultural products is only slightly moreencouuragiu_ Uo. ov n uuu ± er W1puuv UliLy b 1veraL yearS ago exceeueuUS 5 million dropped to US" 300,000 in 1960 as a result of bad weather,insect infestation and inappropriate seed varieties. Some improvementin this situation may be looked for because of the good acceptance ofraraguayan cotton in European markets, but given the overall woridcotton market outlook, it is doubtful that Paraguay can look forwardto exports in excess of US' 2. million to US' 3 million. The exportprospects for oil seeds, tobacco and sugar appear to be such as to re-tain their 1960 position of US" 3 million or at best rise to US" 4million. Exports of fruits, particularly grapefruit, have some possi-bilities but their realization will require considerable investmentsin production and marketing. With these, they may arise from a levelof US§ 200,000 in 1960 to USd 1 million. Thus exports of agriculturalproducts may be expected to fluctuate between USe 6 million and US$ 8million over the next several years.

53. Livestock products -- chiefly canned beef but also includinghides -- have become Paraguay's major exports, partly because of declinein other exports but largely due to a liberalization of government poli-cies. These increases, however, are a mixed blessing since the viewprevails in informed quarters that they were achieved at the expense ofover-slaughtering. The consensus of informed opinion is that Paraguaycould greatly increase exports of livestock products without detrimentto the herds, providing only the government removed the remainingstifling controls on the industry. According to expert opinion, herdscould be increased by 50% in 5 years and exports of meat could thensafely be doubled. Indeed, given the present structure of Paraguayanexports and.the world market outlook for them, it is difficult to seewhere Paraguay can achieve over the next several years greater oppor-tunities for earning the necessary foreign exchange than by encouragingits livestock industry. Without this encouragement, the earnings in1960 of US 9.3 million are not likely to be surpassed in the near future.

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C1. Th abOve discusSion of export prl opec. U ts"'nt t4~1ne backrou,d

of recent export earnings has a built-in downward bias of considerableproorio because it i It base on cutomsI Ulat'ad rather thIar o JI U1 I- _LiL

exchange receipts. In order to encourage hard-to-sell exports, under-invoicing for customs purposes Was permitted in 1960 aal ad a rUdULU tLexports which according to exchange receipts were roughly US! 36 millionwere, according to customs data, only U3,; 27 million. Taken at US3 mILLiofl,exports were at about the same level in 1960 as during the preceding severalyears. judging on the basis of the foregoing analysis of export prospec's,this is the level at which they are likely to remain unless the livestockindustry is encouraged to develop its great potentialities.

55, Continuation of the existing development activities, or evena possible slight increase in these, is likely to be accompanied by somemonetary expansion with corresponding upward pressures on imports. 'ithexports remaining at current levels or even expanding moderately, it willnot be easy to achieve any substantial increase in real income or containbalance of payments pressures. A continued inflow of foreign assistancewill be necessary.

56. The overall growth prospects of the Paraguayan economy aresomewhat uncertain. To be sure, the performance during the recent pastleaves very little ground for optimism. Even after full allowance is madefor the inadequacies of the national income statistics, there is no roomfor any other interpretation than that income per head has at best remainedstationary. The possibility of this situation perpetuating itself, althoughnot very comforting, cannot be ruled out. However, the circumstancesoffering some encouragement for the future must not be overlooked either.,Substantial public and private investments have been carried out inrecent years and at least some of them should contribute in time toincreased productivity and output of the economy. Furthermore, it seemsreasonable to exnect that even if only a nortion of Paraguav's recentrequests for external aid are satisfied, they should also contribute toth Annnomin arowth fP the cntn+.ry Howover, judging y npa YtrIpr onn

the growth process is not likely to be spectacular. In recent yearsnublic investment.nf EPTPPn I' Pnd il was nrnhably matchea by n nimilarvolume of private investments, making gross national investment approximately7. of gross national product. with +.hic 1 -rsl f invr tmen innme grew

at most in line with population increase or at roughly 2.5% annually.' lr~,c " --- - - - -"i U, - -c +m v4- +t VILWUl I&O 1V=V1M

greater inflow of external resources and larger domestic savings, no

in investment orientation. More emphasis will have to be placed onchoosingr inemea- nts wich1- are dir-ctly cruct--u4an

and productivity within a reasonable time period. Sound expansion ofthe liVStc J- ndu tr -d o a se-1U C^ -- 4-4 _-P - -114.agu . 1Ud d

lumber products would definitely deserve the highest priority consideration,Even -in vue Aieu of sovu-a- uve-lU OdtAb LL±VCOUHIHU UUl1

more into consolidating the gains from earlier efforts rather than in thelaunching of LOng mAturing new ventures; i.e., feeder roads in preferenceto new penetration roads.

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E. Creditworthiness

57. The physical isolation of Paraguay and its turbulent poli-tical histowr how un,+41 weann+1 r lef4+ +ho I'(umP+ VTnT v4-+nol nm+ 1 h

by the dynamic forces of economic development which swept over some of

As a result of these retarding factors, Paraguay has remained one ofLAM, 111VOU, L U - -Ik j j}jvU dL U U ZIU Ut;-L.V.P4k JJ U VLILi-.tO -LU dL,L iIiL.La

With the exception of a small area around Asuncion, the country isvery sparsely populatied and mandy areas: rema.Ln practicua.lly UIunexlored .

. During the recent past, raraguayan auoritiUes U e Vegunto provide some of the basic facilities necessary to stimulate anadequate rate Of economic growth. AlTAough a measure of progress hasbeen achieved it has been grossly inadequate and national income hasbarely kept up with population growth. if Paraguay is to attain arate of growth which would permit a relatively modest increment inincome per head of, say, between 2% and 2F% annually, it will benecessary to raise substantially the recent level of investment. Atbest only a portion of the increased resources can come from higherdomestic savings for some years to come and most resources will haveto originate abroad.

59. The outstanding external public debt of Paraguay repayablein foreign exchange was the equivalent of US8.$ 23 million as of the endof 1960. (This amount does not include drawings on INF of US$ 2.4million.) The interest and principal payments on debts repayable inforeign exchange are estimated at about US$ 4 million in 1961 andat almost US$ 3.2 million in 1962. Thereafter they are scheduledto decline to less than US$ 2 million in 1965 (see Table 2). Theseservice payments represent around 10% of estimated foreign exchangeearnings in 1961 and in 1962 and decline to between 5% and 6% by1965. These debt service requirements. although by no meansexcessive on the surface, are quite burdensome for Paraguay. Theburden is both on the balance of payments and even more so on thesavings of the public sector. The balance of payments is alreadyin a deficit position and no immediate prospects for improvement arein sight. The difficulties inherent in increasing exports are greatbecause of the inelasticities of output of some products and the marketlimitations for others. Compression of imports is equally difficultunless all efforts at economic growth are abandoned. Should foreignexchange receipts unexpectedly decline, foreign exchange reserves aretoo low to provide an emergency cushion. The burden of the debtservice (including debt repayable in guaranies) is even more severeon nublic finances. since it consumes fully 50/. of nublin savina

and is equivalent to some 15% of budget revenues. Lastly, the debtcrvie arhaorhf g muh suf ficen of' gross n hir pnl savi nisn.

6-,n If Paracrinvayicz ton enmbrk-l nn eandedar invxsm+rit ativtity to+achieve a rate of growth sufficient to raise her present low income

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PARAGUAY

TOTAL EXTERNAL PUBLiC DEBT OUTSTANDiNG PLUS UISBUl - rSE

(MILLIONS OF U. S. DOLLAR EQUIVALENTS)

AS OF JUNE 30, 1960

OTHER GOVERNMENTS 1 Lf120 1

SUPPLIERS /U/S///0////R/ //AND OTHER %< OENET~PRiVATEtu NIZ~c

6rn 'r 'l 2 'i 3 'r4 '5 '66 'C7 'C6 '9 '7 '77 '7 ' 7 '74

INTEREST AND AMORTIZATION PAYMENTS (ON ABOVE DEBT)(MILLIONS OF U. S. DOLLAR EQUIVALENTS)

3 13TOTAL

TOTAL... SERnvi..CE AS PrcNT,m OF 1960 FREjciGN~EXCH ANGE EARNINGS (ON ABOVE DEBT)

jQ04 10O/

1 1SC

8%k.tf- 8%/

% 6 1 -%

14% 1%____- O

'60 '6I '62 '63 '64 '65 '66 '67 '68 '69 '70 '71 '72 '73 "74

lBRD- ES 1839

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per head, she will have to rely on large-scale inflow of external

this external capital should be acquired on a very long-term basis.T.n-Z'e pru - _~ I-- ~jiv- gvv _L --' ------ dexors arenounfavorable the policy changes required to capitalize on theseopportunities are still in process and results nave not yet provideda test of effectiveness. In any case, Paraguay's present economicstructure and low per capita income greatly limit the volume of publicsavings available for financing domestic investment and debt service.In these circumstances and particularly until Paraguay succeeds inachieving some increase in exports, external obligations imposing aservicing burden in the near term should be severely limited.

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APP71'TDIX I

PUFL I V"'ST1MNTS PROJ7CTS UDR JOCSIDERATION

1. The projects under consideration include the continuationand completion of some projects currently under way and which werediscussed in section II - H. as well as the launching of a number ofnew projects.

2. The transport sector which loomed so large in public invest-ments inrinv thp pat feq veArs nntinues tn l.ay its clim to nubiIlninvestment resources. The novernment plans call for the completion ofthe navina of the Brazil road from nni - Ovian tn Puerto Stroessner onthe Parana River; reconstruction of the highway from Pedro Juan Caballeroon2v the~ nr ty'heyrn 10order - f Pa - 1~ -ayl~ T.Ti +.In 'R-rn,7i I +.n' +.Ii nn(-eY+ nfv' ( '.nnoa+.i r

on the Paragliay River; completion of the Trans Chaco road between Asun-cion,'v _and Filwe f

2- a; additioAns~ to +,I--~ fnrlnv' y.n'rl, 1-n-n- +1 n A^ nr )

Monday Rivers in the vicinity of Puerto Stroessner; and the paving of theroa fro Par ao- ri4C. . 111LC4 to4 T.1~1 i +2 11 41 -,~'n 4. U"n +In- T- 1 -'-

River in order to ma"'e an all-weather road from Asuncion to Fncarnacionon-the A r7etne bordr.A 2 TUhe o-nl", -nr-t-I , - --- ;-- -, -, ---

in the transport field is the expansion of Asuncion port facilities toUt; Ui1 IiLLLY-p lu c4J 1.LV Ud U~ L 4 1) _'11~ CL11U_ VC:LJCLL1, CL15

the acquisition of a floating dry dock for repairing these boats.

3. Paraguayan authorities propose to ameliorate the prevailing-I 1*1,:. P.:. 2. _4'-1 - l._3uns auis f a uory (oudiUuUi IA! in Wn_ A. eU J_L cLLk UL_L IULU cL1U UU

create facilities for the provision of long-term financing to stimulateeconomic development. Basing their approaurl uU urete prulems Un areport by the Stanford Research Institute, they envisage the transforma-IuLn th1ne vankqru staue-ownd B anoU vel FaagUay iliuu CL 'JCU±U11C.LDevelopment Institute with three financially separate and semi-autonomousUeparUmentse. Oe of these will perform nrmal co LUmercial banking func-tions, including the making of sound crop loans; the second will extendlong-term development investment loans to both agriculture and industry;and the third whose objective is to uplift the subsistence farmer willgrant small supervised "loans" not based on creditworthiness and whichwill have to be subsidized by the government. As mentioned in section1I - H above, some funds for the new bank have been assured by the ear-marking for its use of a 5% surcharge on imports beginning January 1, 1961.Moreover, the Paraguayan monetary authorities are working with the Inter-American Development Bank with the view of obtaining technical assistanceto establish the new Development Bank, securing experienced managementpersonnel from abroad and receiving financial help from I.A.D.B.

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In the field of electric power, the Paraguayan authoritieshave very ambitious plans. They propose to build a 60,000 kw hydroplant on the Monday River and 300 kms. of transmission lines to Asun-cion. The preliminary technical report prepared by Brazilian techni-cians was handed to President Stroessner by ex-Fresident Kubitschekon the occasion of the inauguration of the new bridge (January 27, 1961)which Brazil built across the Parana River to connect with Paraguay atPuerto Stroessner. Paraguay has requested the Inter-American Develop-ment Bank to extend financial assistance for this project. In addition,plans call for the construction of a new distribution network for thestate-owned power company -- A.N.D.E. -- as part of its modernization

program.

5. Government investment plans in the industrial field cover awide range, including modernization of the sugar mills and the estab-lishment of two edible oil refineries as well as small plants for theprocessing of agricultural and livestock products- Much more adv.ncdin its preparation and therefore much more likely to be carried out isthe nrnient nf the rnvernmPnt-nntrnllPd meat mnnonnly -- CFACAR --

to establish a slaughterhouse with a refrigeration plant, and possiblyaln intliinu a ment ncking plant. Meotiations are curently pro-

ceeding with French suppliers and their successful termination is hopedfor b- CPAAAR by the end of +his yoe- T-e+1- pl-n -11 for aAAA;tional investment in the government-owned cement plant at Valle-Mi to

imp ov -- _; ans costsUQ

6 44Wth a view to taking advantage of the Bogota Fund forso-;a-ldevelopment, Paraguayan authorities propose to undertake the construction

0± II1 V.Ltals, p, UU_L_L LVCLL Ui I LA-,1 U%-, 0 , 0 - LJLU.L 0, Lk.AJ-1:;1U IIUUL±_lr rAi, UU

inaugurate a planned program of land reform. More immediate are the

settlement scheme (see p. 15) in the vicinity of Puerto Stroessner.I1I .1-s U1~ in"'e h es'UL_ri_ uUl"'shimetb of 1,UVVU larmII uitsL~, _Ll duitUion *.o

the 1t00 already founded, to extend over an agricultural area totallingsome 7U,000 nectares. Financial assistance for the acquisiLtion ofland-clearing machinery, sawmill equipment and other tools to facili-Uame Uia l. pe1 t Bank. UiL jJ u L VtZtL;11 14 U U LI-Viu Ul1t ±11vt -

American Development Bank.

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STATISTICAL APPENDIX

I. EXTERNAL DEBT

1. Summary of External Public Debt Outstanding as ofJune 30, 1960

2. Estimated Contractual Service Payments on ExternalPublic Debt Outstanding as of June 30, 1960

II. GROSS NATIONAL PRODUCT

3. Gross National Product, 1953-60 (in current prices)4. Gross National Product. 19q -60 (1953 prices)

5. Gross National Product, 1953-60 (1953 100)6- Gros National Prodnct, 19q1-60 (Percentage Distribution)

TTT- ArTr.TTT.TTME T.nrF!TTrIT ANoD FORRTRY

Pr dit ^ -~r~v MnA^"~ ~v Aff~vj%,,il +iiv-n1 one V%vac+.-rir PT-nArl,+.c7. and ' - --*%.hjL&.Sf

1950-608. Prducton IndiceS of H4aj or Agricultural -and Forestry

Products, 1951-60 (1950 - 100)

(weighted by 1950 prices)I r% T1U L .or rop, JUown Area an 14U -L1~ 1 1noA

11. Livestock Numbers and Animal Products, 1952-60

IV. INDUSTRY AND FOUER

12. Industrial Production, 1952-6013. Index of industrial Production, 1952-60 (152 prices)

V. PULI FIubN 'ANCES

14. Budget Revenues and Expenditures, 1952-00

15. Government Finances, 1957-60 (cash basis)16. Public Investments, 1958-6017. Requested External Aid for Public Investments

VI. MONEY AND PRICES

18. Composition of Money Supply, 1952-6019. Cost of Living, Wholesale Prices and Money Supply,

1957-6020. Operations of the Central Bank, 1957-6021. Credits Extended by the Bank of Paraguay, 1957-6022. Credits Extended by the Private Banks, 1957-60

VII. FOREIGN TRADE AND PAYNENTS

23. Exports - Ouantity and Value, 1957-6024. Imports by Commodity Groups, 1957-6025. Trade with Selected Areas, 1957-6026. Balance of Payments, 1958-6027. Net Exchange Reserves of Central Bank, 1955-60

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m L 1 - pp Dp DA r,TTAV _ 'T?TL- iA V f l , '/T'MD-lA T DTTTT TO T ('1TPP QT PF TT-T1\Tf' DI'Di VADTT TM

FOREIGN CURRENCIES AS OF DECE-iBER 31, 1960

(In thousands of U.S. dollar equivalents)

r1SULmdXabUU UUUU UUULLaliuu1rg

December 31, 1960item Outstanding

including Undisbursedundisbursed

TOTAL, EiXTERNxAiL P'UBICj± DEBT 2_,674 2, 097

IBRD loan 2,051 -

U.S. Government loans 10 301 979Export-Import Bank 9,00058Development Loan Fund 1,297 571

Loans from other governments 7,079 1,118

Suppliers' credits and other privately-nlnced debt 3.24 -

TRTD - 7.nnomir St.nff

April 11, 1961

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Table 1-b: PARAGUAY - EXTEl'NAL PUBLIC DEBT OUTSTA1DING REPAYABLE IN FOEIGNCURRENCIES AS OF DECEBER 31, 1960 /a

(In thousands of U.S. dollar eauivalents)

Page 1Estimated debt outstanding

December 31. 1960Item Outstanding

including Undisbursedundisbursed

TOTAL EXTERNAL PUBLIC DEBT /22,674 2097

TBRD loan 2,051UI-J -C , J_ *d.JCLLUUMJ' 14 /JU

1951-1964 /e 2,051

U.S. Government loans 10301 979J!AJUL1IJUrU DaLM _7

$8,250,000 to Rep. of Paraguay 5%,1954-84 8,250 408

$1,120,000 to Rep.of Paraguay 4 5/85,1955-1965 754 -

Development Loan Fund 1,297 571

U.S. dollar portion of q0uu,U to Rep.of Paraguay 3;'o, 1958-1974 /d 1,297 571

Loans from other governments 7,079 1,118Cr, 87,932,87 Govt. of Brazil to Rep, of

Paraguay 4%, 1956-1978 /e 429 -4 1,368,000,000 Export-import Bank of Japan

to Rep. of Paraguay 6%, 1960-1969 L 3,803 962$b07,567 Banco Exterior de Espana to Rep.

of Paraguay 61%, 1959-1961 /g 230 -$1,975,067 Banco Exterior de Espana to Rep.

of Paraguay, 1959-1962 L 987 -$1,630,266 Banco Exterior de Espana to Rep,

of Paraguay 612%, 1959-1968 / 1,630 156

Suppliers' credits and other privately-placed debt 3,243 -

.LoanIs reporteduiiuViUa-L-y LU~

300,000 Aeroplani Caproni di Milano toRep, of Paraguay 4%, 1959 300

$27,227 Massey Harris Ferguson Ltd. toRep. of Paraguay 5%, 1955-1961 3 -

$251,128 Caterpillar Tractor Co, to Rep.of Paraguay 5%, 1955-1961 25 -

$2.725.000 Chase Manhattan Bank to AsuncionPort Concession Corp. 5%, 1941-1966 1,113 -

E200.000 Acauisition by Govt. of Paraguayof formerly British-owned railway,1960-1970 / 560 -

See footnotes at end of table.

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Table 1-b: PFRAGUAY - EXTERIAL PUBLIC DEBT OUTSTANDING REPAYABLE 1I FOREIGNCURRENCIES AS OF DECE14BER 31, 1960 /a (CONT.)

(In thousands of U.S. dollar equivalents)

Page 2Estimated debt outstanding

December 31, 1960Item Outstanding

including Undisbursedundisbursed

mr.mt, TmVMTnTAT n=nT '(a nonm A- /onm 1±UiL DAil1R rUDib. ULJDL u UUvis]Supplierst credits and other privately-

paced debt (Cont.)

P[iscellaneous suppliers' credits to theCentral Govt. of Paraguay 681

'D ______ - _* IT 0 A 11 e 7.

Repayable in deutsche marks 31Ltkepayabla in N Therl.ands __ gr?~ 7

Miscellnneous sunplierst credits to auto-

nomous agencies of the Rep.of Paraguay 561

Repayable in US. dollars 22-Repayable in deutsche marks 337

Exchange rates: The following exchange rates were used:

Y 1 $0,0027778

/a All debts listed are payable in U.S. dollars except those footnoted,/ Does not include $1,000,000 DLF loan to Rep.of Paraguay 31%, which has not yet

been signed.A portion of this loan ('153,000 or DM 612,000) is repayable in deutsche marks,

Id This loan is repayable in thirty semi-annual installments. The first eighteenare to be paid in guaranies and the last twelve in U.S. dollars, Only theestimated U.S. dollar portion is shown on this table.

/e Payable in cruzeiros.Payable in yen.

,'g Currency of payment uncertain./h Payable in pounds sterling.

IBRD - Economic StaffApril 11, 1961

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- n - _c G nA nA tITTA" M'TI.fl1TT T 'DETMfT «rrl NT1CM 1T1nP VIAUTL TIKT Tnifl A T 11TLYDL1JPV M7MlTT

Table 1.-c: RIUAUU. - EXERA UVD U DE,T REPYB.LEI ICUJAI Jék CURICY VT-

STA.DIN0 DECEIBER 31., 1960 WITH IIAJOR REP0iGED ADDITIONS JA15UARY 1,1961 T- APRIL -1 1,6

(In thousands of U.S. dollar equivalents)

Estimated debt outstanding -ajor reported¢em¢eem¢ ¡ additions

Item Outstanding January 1 -

undisbursed April 11, 1961

TOTAL 5,323 520 3,000U, CZ 7'1TTAU(Z nl fl.TTATUM~TPQ ~

U.S DOLA- OR GUAIANIES 3,y5 N20 -U.S. Government loans 3A056 520

$2,250,000 ICA to Rep.ofParaguay 3 or )K,1957-83/ 2,056 -

$1,000,000 ICA to Rep.ofParaguay 3 or )%,1957(20 years) /a 1,000 520

GUARANIES 2 267 - 39000U.S. Government loans 21--

$1,000,000 DLF to Rep. ofå.Paraguay 3j 1.95(2 years) 90 -1

Portion of $ý2,500,000 DLF to Rep.of-r -- 3^,19-0 " b 1178 - -.

01Vuaguay JI i9yL7U-(4 JU2 .L>jp -L

BrazilianGoverment loan 119 - -

Crý 12,321,902 portion ofCr'1; 112,254,777 Govt. ofBrazil to Rep.of Paraguay4%, 1956-1976 119 -

Loans from internat organizations - - 3,000

$3,000,000 Inter-American Devel-opmcnt Bank to Banco Nacionalde Fomento 5N%, 1961-1971 - - 3,000

or in Paraguayan guaranies at Paraguay's option; interest on the outstandingbalance is calculated at 3 if the payment is in U.S. dollars, at 4% if paidin guaranies.

Ii. -c lL2. --- ----- u . ~ . .~m

ib ThLis luan lis r-epayau.Le in uthrty bemi-annual itnstallments. Te first eighteeninstallments are to be paid in guaranies and the last twelve in U.S, dollars.Only the estimated guarani portion is shown in this tabie.

IBRD - Economic StaffApril 11, 1961

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Table 1-d: PARAGUAY - NET PURCHASES FROM INTERNATIONAL MONETARY FUND

(In thousands of U.S. dollar equivalents)

T41e A - J.

74y

avyAvnp 4urnu.L .n Uno uJ &cuLuny cyLJ .Lyu. s4,y(u

Otand-by from &y not yet urawn *>UU

IBRD - Economic StaffApril 11, 1961

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Table 2: PA3UÉY - ESThLkTED CONTRACTUjL SLRVICE 'YENTS ON EXTERNAL PU-BLIC DEBT CUTSTiNDING INCLUDINGUNDISBUREID FAYABLE IN FOREIGN CURRI¯NCIES AS OF DECE ER 31, 1960 _a

(In thousands of U.S. dollar equivalents)

___ Page i

Total debt IBRD loan -U.S, Government loansBotal

eear t d Fayments during year etout-- Paynents during year st ondi Payments dluring year

plus unr- In- plus un-- unorti- In- plus un- Arorti- In-disbursed zation terest Total disbursed zation terest Total disbursed zation terest TotalJanuary l January -L January 1

1961 22,674 3,232 780 4,112 2,051 480 84 564 10,301 334 443 7?1962 19,485 2,249 906 3,155 1,571 501 63 564 9,967 356 427 7831963 17,236 1,908 807 2,715 1,070 524 41 5 9,611 373 410 7831964 15,328 1,784 713 2,497 546 546 18 564 9,238 392 391 7831965 13,544 1,262 626 1,888 8,84,6 316 372 6881966 12,282 1,194 557 1,751 8,530 235 359 5941967 11,088 1,214 489 1,703 8,295 247 347 5941968 9,874 1,295 443 1,738 8,048 358 357 7151969 8,579 1,074 394 1,468 7,690 475 361 8361970 7,505 577 349 926 7,215 495 340 8351971 6,928 543 327 870 6,720 517 319 8361972 6,385 566 302 868 6,203 540 295 8351973 5,819 590 277 867 5,663 564 271 8351974 5,229 494 252 746 5,099 468 247 7151975 4,735 388 236 624 4,631 362 232 594

jee footnotes at end of table.

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Table 2: .F ÅRiGUAY - ESTIiv.ATEE CONTRACTUAL SERVICE FAYiENTS ON EXTERNAL PUBLIC DEBT OUTSTANDING IN,LUDINGUNDISBUR3ED PAYABLE IN FOREIGN CLRRENCIES A.S OF DECE 3ER 31, 1960 _a (CONT.)

(In thousands of U.S. dollar equivalents)

.... Page 2U.S. Government loans _ _ _

xport-Import Bank DevelopTent Loan Fund -Loan from oh governmDebt out- Payments during yer Debt out- Payments durinu year Pye dt-Year standing Payments-during-year-standing standing Payments during yearplus un- .morti- In- plus ur- , plus un- iunrti- In-disbursed ati- In- Total disbursed Cor- In- Total disbursed TotalJanuary 1 zation terest January 1 zation terest. January zation terest

1961 9,004 334 443 777 1,297 - - - 7,079 1,421 165 1,5s61962 8,670 356 427 783 1,297 - - 5,658 636 351 9871963 8, 314 373 410 783 1, 2:97 - - - 5,022 632 310 9421964 7,941 392 391 783 1,297 - - - 4,390 636 268 9041965 7,549 316 372 688 1,297 - - - 3,754 742 225 9671966 7,233 235 359 594 1,297 - - - 3,012 747 177 9241967 6,998 247 347 594 1,297 - - - 2,265 747 129 8761968 6,751 260 334 594 1,297 98 23 121 1,518 741 81 8221969 6,491 273 321 594 1,199 202 40 242 777 543 33 5761970 6,218 287 307 594 997 208 33 241 234 26 9 351971 5,931 301 293 594 789 216 26 ::42 208 26 8 341972 5,630 317 277 594 573 223 18 241 182 26 7 331973 5,313 333 :261 594 350 231 10 241 156 26 6 321974 4,980 349 245 594 119 119 2 121 130 26 5 311975 4,631 362 232 594 - - - - 104 26 4 30See footnotes at end of table.

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Table 2: PARAGUAY - ESTIN4ATED CONTRACTUAL SERVICE PAYi 7ENTS ON EXTERNAL PUBLIC DEBT OUTSTANDING INCLUDINGUNDI3BURSED FAYABLE IN FOREIGN CURRENCIES AS OF DECEMEER 31, 1960 a (CONT.)

(In thousands of U.S. dollar equivalents)

Fege_Suppliers' credits and other privately-

placed debt/Debt out-

Year standing Payments during yearplus un- -- - -- - -- a Inc]ludes service on all debt listed in thedisbursed Amorti- In- Total Table 1--b prepared on Ppril 11, 1961.Januar 1 zation terest

Janury zaion eret / Service payments on loans included in this1961 3,243 997 88 1,085 categor that are repayable in deutsche marks1962 2,289 756 65 821 and Netherlands guilders are calculated at the1963 1,533 379 46 425 new par values established in March 19611964 1,154 210 36 246 (DII 1 = $0.25; C.1 $0.276243). The amount1965 944 204 29 233 Outstanding January 1, 1961 for these loans1966 740 212 21 233 is calculated at the old par value used in1967 528 220 13 233 the Table 1.-b.L968 308 196 5 2011969 112 56 - 561970 56 56 - 56

a1971 - I - IBe D - Economic StaffT9al 2 April 11, 1961

:1973

1L975

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Table 3 GROSS NATIONAL PRODUCT, 1953-1960

(In '000 of wiaranies at cur reni=Lices)(1953=100)

Sector 1953 1954 1955 1956 195? 1958 1959 1960

Agriculture 2,304,237 2,720,784 3,306,968 4,051,458 4,729,170 5,061,811 5,303,316 5,749,255

Livestock 968,639 1,270,333 1,413,191 1,700,046 2,818,041 3,502,172 3,725,734 3,764.384

Forestry 242,460 288,362 367,709 566,489 469,243 374,551 378,645 442,432

Hunting and Fishing 18,000 19,980 33,300 28,885 58,499 64,563 89,18Y 67,415

Manufacturing 1,166,669 1,456,552 1,823,990 2,328,440 2,906,48 3,212,611 3,343,077 3,379,538

Construction 64,270 77,896 99,876 122,627 220,963 324,127 241,164 269,088

Eletricity 19,538 19,066 26,369 45,558 59,741 66,236 89,652 102,852

Commerce 1,601,392 1,987,007 2,424,572 3,090,045 3664,865 4,048,702 3,990,572 4,212,847

Transportation 136,979 173,087 206,784 276,822 248,497 275,176 279,280 314,811

Comiunications 11,044 13,305 16,361 23,517 20,035 22,184 22,517 25,382

Finance 47,468 59,126 72,291 91,595 253,475 261,947 319,629 394,957

Private Services 227,776 277,236 346,717 496,137 525,562 563,791 628,538 710,095

Government 173,034 213,594 281,943 353,812 695,073 749,132 846,534 938,490

Housing 51,416 6692632 832474 ,02_8,311 1A 342 14 57.732 1.6

TOTAL 7,535,922 9,245,960 11,252,545 14,203,742 17,884,011 19,840,481 20,715,579 22,009,989

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Table 4 GROSS NATIONAL 7RODUCT, 1953-1960

(In '000 of guaranies at 1953 r.rices)

Se,tor 1953 1954 1955 1956 1957 1958 1959 1960

Agriculture 2,304,237 2,267,320 2,234,438 2,250,810 2,262,761 2,290,412 2,200,546 2,161,374

T.ivestock 968,639 1,058,611 954,859 944,470 1,348,345 1,584,693 1,545,948 1,415,182

Forestry 242,460 240,302 248,452 314,716 224,518 169,480 157.1114 166,328

Hunting and Fishing 18,000 16,650 22,500 16,047 27,990 29,214 37,008 25,344

Nanufacturing 1,166,669 1,214,793 1,232,426 1,293,578 1,390,669 1,453,670 1,387,169 1,270,503

Construction 64,270 64,913 67,484 68,126 105,724 146,664 100,068 101,161

Electricity 19,538 15,888 17,817 25,310 28,584 29,971 37,200 38,666

Comrierce 1,601,392 1,655,839 1,638,224 1,716,692 1,753,524 1,831,992 1,655,839 1,583,777

Transportation 136,979 144,239 139,719 153,790 118,898 124,514 115,884 118,350

Communications 11,044 11,088 11,055 13,065 9,586 10,038 9,343 9,542

Finance 47,468 49,272 48,845 50,886 121,280 118,528 132,626 148,480

Private Services 227,776 231,030 2314,268 275,632 251,465 255,109 260,804 266,953

Government 173,034 177,995 190,502 196,562 332,571 338,974 351,259 352,816

Housing 554,416 558,027 -562,482 571,284 581,028 __594,334 - 604,868 61956

TOTAL 7,535,972 7,704,967 7,603 071 7.890.968 8,556,943 8,977,593 8,595,676 8,274,432

(--continued).f

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Table h (continued) - 2 -

/1 The contribution of livestock to the gross national product is greatlyunderstated because of the ceiling prices; conversely the relative roleof the other sectors is overstated. Both total gross national productand per capita Froduct would iiave been perhaps as much as 25% more ifmeat prices had been free.

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Table 5 GROSS NATIONAL PRODUCT, 1953-1960

(1953 = 100)

Sector 1953 1954 1955 1956 1957 1958 1959 1960

Agriculture 100.0 98.h 97.0 97.7 98.2 99. 955 93.8

Lviescknn n 9nn 98v.6 97. R 39.4 .6. 19 Q 6.4

iuning& fshig 10. 92. (15. 89.1~ 155.5 162. 20. lh.

~LIJV J. 77@ _L"jc. e -LC7 U ~7c_u U7 7 U14.U 0u*~

lUL L L Ål,,- -L 4 - Ll .1C .7 <C> L 1'C)4' LýV;gIn ,n- n r Qn .- i l r'r nn' -i".- nI n,r ø i

a c n0 0 .I 0 r . n nr5 n o . n .2 2 .6 nn9, n - ~ 08 .luurLi _L"V.U ±L4.U -LU,.) IØ 1L. 1140 LIU'1Uy

uonstructio0n11 1U.U 1UL.U 0I5.U 1U4-4 104.5 2 0.2 155.7 157.4

Electricity I0u.0 01.3 91.2 2.5 146.3 153.4 190.4 197.9

Commierce 100.0 103.4 102.3 107.2 109.5 114.4 103.4 98.9

Transportation 100.0 105.3 102.0 112.3 86.8 90.9 84.6 86.4

Communications 100.0 100.4 100.1 118.3 86.8 90.9 84.6 86.h

Finance 100.0 103.8 102.9 107.2 255.5 249.7 279.4 312.8

Private services 100.0 101.4 102.9 121.0 110,4 112.0 114.5 117.2

/o /0 /0 /9uovernment 100.0 102.9 110.1 113.6 192.2'-- 195.9't- 203.0'-203.9'

Hcusing 100.0 100.7 101.5 103.0 104.8 107.2 109.1 11.1

TOTAL 100.0 102.0 101.0 105.0 114.0 119.0 11.0 210.0

/1 These inereases are explainable by partial decontrol of meatprices, the changing proportions between domestic consumptionand exports in favor of the latter, and to a lesser extent bylarger physical volume.

/2 This growth is attributable in large ineasure to the recentinvestment efforts, largely financed with external resources.

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Table 6 GROSS NATIOIJAL PRODUCT, 1953-1960

(Percentage Distribution)

Sector 1953 1954 1955 1956 1957 1958 1959 1960

Livestock 12.9 13.7 12.7 12.0 !5.8 17.7 18.0 1.7.1

Forestry 3.2 3.1 3.2 4.o 2.7 1.9 1.0 2.0

Hunting & fishing 0.2 0.2 0.3 0.2 0.3 0.3 o.4 03

ianufacturing 15.5 15.8 16.2 16.4 16.3 16.2 16.1 15.5

Construction 0.9 0.8 0.9 0.9 1.2 1.6 1.3 1.,2

Electricity 0.3 0.2 0.2 0.3 0.3 0.3 0.4 0.5

Commerce 21.2 21.6 21.6 21.8 20.5 20.4 19. 19.1

Transportation 1.8 1.9 1.8 1.9 1.4 1.4 1.3 1.4

Communications 0.1 0.1 0.1 0.2 0.1 0.1 0.1 0.1

.Pinance 0.6 0.6 0.6 0.6 1.4 1.3 1.5 1.8

Private services 3.0 3.0 3.1 3.5 2.9 2.8 3.0 3.2

Government 2.3 2.3 2.5 2.5 3.9 3.8 h.1 h.3

Housing 7.4 7.2 7.4 7.2 6.8 6.6 7.0 7.4

TOTAL 100 0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

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Table 7 FRODUCTION OF E7AJOR ÄGRICUTURAL AND FORESTRY PRODUCTS, 1950-1960

(In '000's of Tons)

Comnodity 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960(Estimated)

Cotton 43 35 53 38 41 39 35 33 33 27 14

Sugar Cane 388 389 423 342 319 305 380 490 550 584 609

Corn 105 103 126 107 .110 101 120 130 130 125 143

lMandioca 870 1,353 899 990 950 940 950 973 996 1,005 979

nice 18 19 16 16 20 18 19 23 20 16 15

Tobacco 5 9 9 9 7 10 6 5 5 7 10

Sweet Fotatoes 81 99 120 79 76 75 75 75 75 72 72

Beans 16 42 16 23 18 18 18 18 18 17 18

Potatoes 2 4 4 4 4 3 3 3 4 4 4

Peanuts 11 14 11 8 10 10 10 11 11 9 9

Wheat 1 1 1 2 1 2 2 6 12 14 15

Logs 204 192 128 151 157 162 229 171 196 82 111

Quebracho 102 136 104 122 101 151 99 110 112 130 110

Sawi Lumber 28 26 19 19 14 14 17 18 31 30 26

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Table 8 PRODUCTION INDICES OF MAJOR AGRICULTURAL AND FORESTRY PRODUCTS, 1951-1960

(1950=10)

Corrnodity 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960(Estimated)

Cotton 81.4 123.3 88.4 95.3 90.7 81.4 76.7 76.7 62.8 32.6

Sugar Cane 100.3 109.0 88.1 82.2 78.6 97.9 126.3 141.8 150.5 157.0

Corn 98.1 120.0 101.9 104.8 96.2 114.3 123.8 123.8 119.0 136.2

Mandioca 155.5 103.3 113.8 109.2 108.0 109.2 111.8 114.5 115.5 112.5

Rice 105.6 88.9 -8.9 111.1 100.0 105.6 127.8 111.1 88.9 83.3

Tobacco 180.0 180.0 180.0 140.0 200.0 120.0 100.0 100.0 140.0 200.0

Sweet Fotatoes 122.2 148.1 97.5 93.8 92.6 92.6 92.6 92.6 88.9 88.9

Beans 262.5 100.0 143.8 112.5 112.5 112.5 112.5 112.5 106.3 112.5

Fotatoes 2:00.0 200.0 200.0 200.0 L50.0 150.0 150.0 200.0 200.0 200.0

Pearuts 127.3 100.0 72.7 90.9 9C.9 90.9 100.0 100.0 81.8 81.8

Wheat 100.0 100,.0 200.0 100.0 200.0 200.0 600.0 1200.0 1400.0 1500.0

Logs 94.1 62.7 74.0 77.0 79.4 112.3 83.8 96.1 40.2 54.4

Quebracho 133.3 102.0 119.6 99.0 148.(0 97.1 107.8 109.8 127.5 107.8

Sawn Lumber 92.9 67.9 67.9 50.0 50.0 60.7 64.3 110.7 107.1 92.9

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Table 9 INDEX OF ACRICULTURAL FRODUCTION, 1950-1960

(Volume weighted by 1950 rices)

Commodity 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960(Z imated

Cotton 11.2 9.1 13.8 9.9 10.7 10.2 9.1 8.9 8.6 7.0 3.6

Sugar Cane 4.3 4.3 4.7 3.8 3.5 3.4 4.2 5.4 6.0 6.5 6.7

Corn 11.5 11.3 13.8 11.7 12.0 11.1 13.1 14.2 14.2 13.7 15.7

Mandioca 30.8 47.9 31.8 35.0 33.6 33.3 33.6 34.4 35.3 35.6 34.7

Rice 3.3 3.5 2.9 2.9 3.7 3.3 3.5 4.2 3.7 2.9 2.7

Tobacco 1.5 2.7 2.7 2.7 2.1 3.0 1.8 1.5 1.5 2.1 3.0

Sweet Potatoes 5.0 6.1 7.4 4.9 4.7 4.6 4.6 4.6 4.6 4.4 4.4

Beans 2.0 5.3 2.0 2.9 2.3 2.3 2.3 2.3 2.3 2.1 2.3

Potatoes 0.5 1.0 1.0 1.0 1.0 0.8 0.8 0.8 1.0 1.0 1.0

Peanuts 1.6 2.0 1.6 1.2 1.5 1.5 1.5 1.6 1.6 1.3 1.3

Wheat 0.1 0.1 0.1 0.2 0.1 0.2 0.2 0.6 1.2 1.4 1.5

Logs 16.8 15.8 10.5 12.4 12.9 13.3 18.9 14.0 16.1 6.8 9.1

Quebracho 7.6 10.1 7.7 9.0 7.5 11.3 7.4 8.2 8.3 9.7 8.2

Sawn Lumber 3.8 3.5 2.6 2.6 1.9 1.9 2.3 2.4 4.2 4.0 5

100.0 122.7 102.6 100.2 97.5 100.2 103.3 103.1 108.6 98.5 97.7

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Table 10 YAJOR CROPS, SON APEA AND YIELD, 1952-1960

(Sown Area in thousands of hectares;

Yield in metric tongRe- hectare)

Cotton Suvar Cane Corn _-andioca RLce TobaccoArea Yield Area Yield Area Yield Area Yield Area Yield Area Yield

1952 66.0 0.80 13.0 32.5 96.0 1.3 60.o 15.0 9.0 1.F 7.1 1.21953 45.0 0.84 13.2 25.9 82.3 1.3 62.0 16.0 7.4 2.2 8.4 1.01954 50.5 0.81 13.8 23.2 83.7 1.3 59.3 16.0 8.6 2.4 7.0 1.0955 49.7 0.79 13.0 23.4 84.0 1.2 60.6 15.5 9.9 1.8 9.5 1.1

1956 48.5 0.73 14.0 27.1 92.3 1.3 61.5 15.4 9.0 2.1 5.5 1.01957 50.0 0.65 18.0 27.2 100.0 1.3 64.0 15.2 10.0 2.3 5.0 1.01958 58.0 0.57 19.3 28.5 105.0 1.2 66.0 15.1 8.0 2.5 4.5 1.01959 66.0 0.40 20.5 28.5 98.0 1.3 67.0 15.0 7.0 2.3 7.2 1.01960 1 40.0 0.35 21.0 29.0 110.0 1.3 67.5 14.5 7.0 2.2 9.5 1.0

Sweet Potatoes --- Beans Potatoes Peanuts Wheat Alfalfa_Area Yield Area Yield Area Yield Area Yield Area Yield Area Yield

1952 7.8 9.6 19.7 0.84 0.5 7.2 13.8 0.82 1.0 0.6 1.8 5.21953 7.5 10.1 20.5 0.85 1.2 3.6 10.9 0.91 2.1 0.8 2.3 3.81954 7.7 9.9 21.1 0.86 0.5 7.8 11.1 0.89 2.0 0.5 2.2 5.31955 7.6 9.8 21.9 0.72 0.5 5.8 10.7 0.89 2.0 0.8 2.2 5.21956 7.6 9.9 22.7 0.81 0.6 5.3 10.6 0.89 3.8 0.7 2.3 5.21957 7.7 9.7 22.5 0.80 0.8 4.0 12.0 0.90 8.5 0.7 3.5 5,01958 7.7 9.7 22.4 0.81 0.9 4.0 11.9 0.88 15.0 0.8 3.5 5.01959 7.5 9.5 21.5 0.81 1.0 3.7 10.5 0.86 20.0 0.7 3.5 5.3196011 7.6 9.5 22.0 0.90 1.1 3.6 10.0 0.85 15.0 0.7 3.5 5.2

/1 Preliminary.

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Table 11 LIV.ESTOCK NUffiiBEF " AND ANITAL IFLODUCTS, 1952-1960

P R 0 D .U C T IO N

(In thousands of netric tons) (million litres) (millirns)No. of Animals Fresh MEat Canned Other AnimalCattle Slaughtered for domnestic Meat for Products for

.ear ('000) ('000) consumption export export Cheese Milk Eggs

1952 4132 436 70 3 11 3.1 119.9 20.0

1953 4337 547 86 1 16 3.3 121.9 20.0

1954 4336 517 76 3 15 3.4 122.0 19.2

1955 4008 500 72 9 16 3.3 121.2 19.0

1956 4095 507 76 8 15 3.3 125.2 19.1

1957 3929 521 74 8 16 3.3 126.2 19.1

1958 3703 612 74 9 22 3.6 128.2 19.3

1959 3666 618 68 12 19 2.9 127.2 19.6

1960 3689 60o.L 64L1 l i L 1 6/1- 1.6L 63 .6L 8.2

I Estimate.

/2 6 monthsl data.

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Table 12 INDUSTRIAL PRODUCTION, 1952-1960

(In '000's of tons, except where otherwise indicated)

Commodity 1952 1953 1954 1955 1956 1957 1958 1959 1960(Estimated)

Meat - fresh (fordomestic consumption) 70 86 78 72 76 74 74 68 64

Meat - canned (for export) 3 1 3 9 B B 9 12 11

Animal Products - other than meat(primarily for export) 11 16 15 16 15 16 22 19 16

Theat Flour 45 33 5? 49 48 59 52 63 62

Bread Products 33 35 61 44 44 57 58 58 61

Sugar 21 13 16 13 19 29 35 32 33Processed Rice 9 9 13 12 12 13 14 11 10

Noodles 6 7 13 9 9 11 12 12 13

Yerba Mate 11 12 13 14 14 15 13 15 16

Cotton Fibers 17 12 13 13 12 11 11 9 5Cotton Yarns 2 3 2 2 2 3 3 3 3Cotton Textiles 3 3 2 2 2 2 3 3 3Tanning Extract 28 32 26 39 26 30 29 30 30

Cigarettes ('000 pkgs.) 34 33 32 31 30 31 29 30 30

Portland Cement 4 3 7 12 14 12 7 13 14

Bricks (millions) 37 40 48 51 56 57 59 60 62

Ejeotricity (million KH) 38 40 45 51 55 59 76 81 81

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Table 13 INDEX OF INDUSTRIAL PRODUCTION, 1952-1960

(Volune weighted by 1952 crices)

Commodity 1952 1953 1954 1955 1956 1957 1958 1959 1960(Estirmated)

DMeat - fresh (for domesticconsumption) 16.6 20.4 18.5 17.1 18.0 17.5 17.5 16.1 15.2

teat - canned (for export) 3.3 1.1 3.3 9.9 8.8 8.8 9.9 13.2 12.1

Animal Products -- other than meat(primarily for export) 4.2 5.1 5.4 7.5 6.9 7.2 9.3 9.3 8.1

ý.heat Flour 9.8 7.2 12.6 10.7 10.4 1:2.8 11.3 13.7 13.5Bread Products 6.9 7.3 12.7 9.2 9.2 11.9 12.1 12.1 12.73 ugar 5.2 3.2 4.0 3.2 4.7 7.2 8.7 7.9 8.2Erocessed Rice 2.7 2.7 3.9 3.6 3.6 3.9 4.2 3.3 3.0Noodles 1.5 1.8 3.3 2.3 2.3 :2.8 3.0 3.0 3.3Yerba Mate 3.3 3.6 3.9 4.2 4.2 4.5 3.9 4.5 4.8

Cotton Fibers 18.6 13.1 14.2 14.2 13.1 12.0 12.0 9.8 5.5Cotton Yarns 1.8 2.7 1.8 1.8 1.8 2.7 2.7 2.7 2.7Cotton Textiles 8.2 8.2 5.5 5.5 5.5 5.5 8.2 8.2 8.2Tanning Extract 5.2 5.9 4.8 7.2 4.8 ,5.6 5.4 5.6 5.6

Cigarettes 5.6 5.4 5.2 5.1 4.9 5.1 4.8 4.9 4.9Portland Cement 0.5 0.4 o.9 1.5 1.8 1.5 0.9 1.6 1.6Bricks 1.2 1.3 1.6 1.7 1.8 1.8 1.9 1.9 2.0Electricity 7 _.4 6 .4 1.2 8.8 1l.8 11.l

TOTAL 100.0 95.1 108.0 111.9 109.6 119.2 126.6 129.3 122.9

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Table 14 BUDGET REVENUES AND EXI ENDITURES, 1952-1960

(In millions of guaranies)REVENUES

Item 1952 1953 1954 1955 1956 1957 1958 1959 1960

Customs duties 49.4 147.6 202.7 234.3 24I8.7 379.2 52.9 600.0 624.2Internal tax 61.2 139.4 209.1 292.0 450.5 440.0 477.7 507.6 501.2Alcohol tax - - . - 97.2 91.1 137.2 132.4Income tax 46.3 70.9 98.8 150.4 207.2 243.7 283.0 300.4 300.3Real Estate tax 5.3 21.9 35.8 38.5 40.2 63.4 107.2 117.2 156.8Postal fees 1.1 1.9 13.0 4.1 2.9 7.3 16.5 13.1 16.4Pension funds 9.6 13.3 18.1 29.7 52.8 60.7 7?.5 81.5 81.9Consular fees 0.5 1.2 2.0 2.1 4.6 7.2 7.2 15.2 122.1Sales taxes .- -- .- -- 153.6 232.5 239.0 307.9Export taxes - - -- - - 598.3 261.1 215.3Extraordinary collections - -- -- -- 169.0 41.3 - -Miscellaneous fees 36.8 36.7 64.0 106.1 216.7 184.5 148.4 91.4 _126

TOTAL 214.3 432.9 633.5 857.2 1,223.6 1,805.8 2,609.6 2,363.7 2,637.1

EXFENDITURES

Executive Offices (President) 0.7 1.1 1L.9 4.4 6.1 5.1 14.0 13.5 16.1Government Departments

Interior 29.9 61.9 83.7 106.3 160.9 182.0 221.0 253.2 282.1Foreign Relations 4.6 5.3 13.5 20.1 53.9 44.4 94.9 114.2 118.5Finance 11.3 20.2 32.3 44.8 67.6 84.8 110.5 82.0 89.1Education 28.8 49.2 79.3 125.3 176.3 247.8 323.0 379.3 405.9Agriculture & Livestock 5.4 7.7 11.5 16.3 24.9 53.1 61.1 65.4 67.8Pvolic Viorks 11.9 17.8 33.9 45.1 25.9 40.9 49.4 51.0 52.8National Defense 73.7 137.0 211.4 258.8 390.2 454.0 582.1 584.9 616.6Public Hea.th 7.8 14.2 16.1 36.1 59.5 91.6 119.3 140.3 138.9Justice and Labor 1.0 1.5 2.3 3.3 8.3 20.4 22.2 21.1 21.5Industry & Cmmerce 1.2 4.5 3.2 4.4 5.7 7.3 8.5 9.2 9.4Without Portftclio -- - -- - - 1.1 1.4 1.3 1.5

Public Debt 32.6 53.7 92.8 85.8 67.2 184.4 197.5 200.1 103.8Judiciary -- -- 10.2 17.9 22.9 32.9 40.8 44.6 45.5Hous-, of Representatives 4.8 8.4 2.4 4.5 62 9.8 14.6 9,8 14.9Other Obligations _- ._-- ---- 2ä4 3.0 6 .P

TOTAL 213.7 322.5 594-5 7713.1 1,216.8 1,708.4 2,230.7 2,312.9 2,451.2

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Table 15 GOVERNMNT FINANCES, 197-1960Cash Basis

(In millions of guaranies)

1957 1958 1959 196)

Revenues:Budgetary 1,636.8 2,507.7 2,358.3 2,586.8Special Laws 698.3 -322.9 3o.6 732,0

Total 2,335.1 2,830.6 2,756.9 3,3188

Expenditures:Budgetary - current year 1,707.5 2,230.7 2,312.9 2,451.4Budgetary - past years 163.4 264.5 189.2 166.9

Sub-total 1,870.9 2,495.2 2,502.1 2,618.3 )

Extra - budgetary 214.2 235.8 4.5 53.0Special Laws 661.4 339,2 h18.5 684.0

Total - authorized expenditures 2,746.5 3,070.2 2,921.1 3,355.3

Less: ) )Redemption of long-term debt ) ) 220 36.6Change in departmental balances and ) )

check floats ) 282.4 ) -5604 7Lh -33.

Total - cash expenditures 2,46.1 3,126.6 2,824.3 3,352.1

Cash deficit (-) or surpius -129M0 -296,0 -67,4 -33.3

Financing:Ncn-bank sources -- 27.1 -- --Central Bank: ) )Long-term loans ) ) - -22.0 -366Short-term loans 29.3 45.3 1030 8f9Trangfers i f rfmnits 5' 5oa4Change in gcvernmaent1 deposits

(increase)-1O 1L -19,.___4

Total 29r 296,o 6S74 3303

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Table 16 PUBLIC INVFESTMENTS, 1958-1960

(In thousands of current guaranies)

Per- :Per- Per- Total Per-

Sector 1958 centage 1959 centage 1960 centage (1958-1960) centage

Agriculture and Livestock 6,023 0.7 28,809 3.7 21,256 2.5 56,088 2,2

Transportation 438,713 50.3 425,516 54.7 776,320 90.0 1,640,549 65.3

Industry 10,143 1.2 8,286 1.1 16,209 1.9 34,638 1.4

Power 25,480 3.0 73,850 9.5 -- -- 99,330 4.0

Education 16,090 1.8 13,535 1.7 9,856 11 39,481 lh

Public Health 370,935 42.6 222,365 28.6 28,160 3.3 621,46o 24.7

hiscellaneous 3,735 0.4 5,108 0.7 10,669 1.2 19,512 0.8

TOTAL 871,119 100.0 777,469 100.0 862,470 100.0 2,511:058 100.0

of which:

(a) Financed withdomestic resources 524,677 60.2 607,112 78.1 371,642 43.1 1,503,431 59.9

(b) Financed withforeign resources 346,442 39.8 170,357 21.9 490,828 56.9 1,007,627 40.1

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Table 7 REQUESTS FOR EX~TRNAL AIDJ FORt PUBIC INVESTMENTSW

(in millions of US dollars)

Sector Amount Proposed Source of Financing

Agriculture andLivestock 20.0

10.0 IBRD9.0 IADB and DLF1.0 n.a.

Transportation 16.7

10.0 IBRD6.0 IADB0.7 n.a.

Industry h.7 IADB and DLF

Power 21.5 IADB and DLF

Health, Education,Housing. etc. 8.1 Bogota Fund

Miscellanens TWO IADB

TOTAT. 7ON

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Table 18 COMPOSITION 0F THE MONEY SUPPLY, 195:2-1960

(In millions of guaranies)

Notes and D e i a n d D e o s i t s Total Money plyEnd of: Coins in Off icial Private Including Excluding

possession Central Bank of Other Total Total official officialof public Bank Paraguay Banks private 'Deposits deposits deposits

/3+ 47 /+| 1+67 /7-27

1952 344 39 91 147 238 277 621 582

1953 459 146 157 246 403 549 1,008 862

1954 617 164 187 266 453 617 1,234 1,070

1955 817 218 251 358 609 827 1,6hh 1,h26

1956 i,100 288 290 551 8,i 1,129 2,229 1,91

1957 1,225 456 271 Sol 772 1,228 2,453 1,997

1958 1,h1h 291 257 713 970 1,261 2,675 2,38h

1959 1,583 252 240 787 1,027 1,279 2,862 2,610

1960 1,6h0 331 190 839 1,029 1,360 3,000 2,669

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Table 19 COST OF LIVING, WHOLESALE PRICES AND MONEY SUPPLY, 1957-1960

(1953 = 100)

1957 1958 1959 1960

Cost of Living

Index 201 209 226 259

Percent Increase in Period 15 4 9 14

Wholesale Prices

Index 222 238 296 317

Percent Increase in Period 16 7 24 7

Money Supply (including official deposits)

Index 243.4 265.4 283.9 297-6

Percent Increase in Period 10.0 9.2 7.0 h.B

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Table 20 OPERATIOMS OF THE CENTRAL BANK, 1957- 19650

(T", -- P 4 ~ ~

Change during perio/l Balance onOan? 1onH 10a loAn Dec. 29,

1960/1

Foreign Exchange SectorGold and foreign exchange (net)/2 17-? 77.3 -36l7 -369.8 6.8IMF position (net) -275.1 -82.5 199.3 200,0 -289.5

Total (net) -257.9 -5.2 -164.4 -342.8 -296.3

Exchange Losses and SurchargesExchange losses and import subsidies 155.1 198.3 9.7 0.5 0.5Export and import surcharges -- -92.5 -58.0 -- --

Banking SectorCredit to banks 101.2 -4.1 25.3 25.6 1,790.1Bankers' deposits with Central Bank -21,2 -67.5 52.2 -53.9 -360.2Foreign currency claims on bank (net) 1.0 -58.1 19.5 4.1 74.1

Net credit to banks 121.0 -129.7 97.0 -24.2 1,504.0

Government SectorCredit to Ministry of Finance 164.5 49.6 79.9 22.3 729.8Transfers to Ministry of Finance 114.9 92.4 5.4 50.4 --Government deposits -150.3 123.2 -19.2 -39.4 -168.9

Net credit to Central Government 129.1 265.2 66.1 33.3 560.9

Credit to autonomous agencies 91.9 -2.0 94.1 214.9 633.1Depoits ofP au+.ntonomou anciesJ3c -10. n3. 52. C -- 10.6A -'75.5

Net credit to autonomous agencies 81.0 51.4 146.3 204.3 557.6

Net credit to government sector 210.1 316.6 212.4 237.6 1,118.5

Other Assets and LiabilitiesA- - -- a~C In n n- r'~/a,uvaluu Ullpurt depos its U~ .0 --. 44£.J £01I4.0 -_)C '-LC

Prepayment for imports -31.7 -185.3 201.9 5.4 -75CapitaL accounts 2 1.1 po.2 9.9 25.o -.

Other accounts (net) -,-63.9 -193J1/

Total -100.8 -122.3 69.7 171.3 -607.1

Currency Issue (increase -) -127.3 -165.2 -166,4 -42.4-1,719.6

/1 Plus sign equals increase in assets or decrease in liabilities;minus sign equals decrease in assets or increase in liabilities.

/2 Adjusted to current exchange rates.

/3 Includes exchange revaluation losses.

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Table 21 CREDITS EXTENDED BY THE BANK OF PARAGUAY, 1957-1960

(In 000's of guaranies)

SocialYear Farming Livestock Industry Commerce jonstruction Development Miscellaneous Total

Amounts Extended Each Year

1957 280,006 71,410 414,592 280,:L57 8,719 2,758 70,249 1,127,891

1958 204,o400 59,900 224,500 146,800 15,4o, 3,294 79,400 733,694

1959 178,400 43,500 100,700 36,200 6,800 4,600 70,600 440,800

1960 81,100 27,100 78,000 27,700 6,40o 500 56,100 276,900

Year-end Totals Outstanding

1957 513,151 206,176 795,350 135,140 37,64 12,481 132,202 1,832,364

1958 549,300 180,200 705,100 122,0oo 52,144 13,718 107,300 1,729,762

1959 590,1400 167,900 640,700 l09,700 55,800 14,400 i06,loo 1,685,0oc

1960 566,900 157,000 528,700 95,700 55,Mo 13,300 236,900 1,653,900

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Table 22 GREDITS EXTENDED BY THE PRIVTE BANKS, 1957-1960

(In millions of guaranies)

Year Farming Livestock industry Commerce Construction Misc. Ttal

Amounts Extended Each Year

1957 19.7 125.9 600.3 491.3 - 11.8 1,252.0

1958 19.1 161.2 695.3 465.6 - 15.8 1,357.0

1959 26.6 171.8 783.6 778.1 0.3 56.7 1,3817.1

1960 23.3 249.5 902.1 962.3 - 35.3 2,172.5

Year-end Totals Outstanding

1957 11.0 86.4 223.6 92.9 - 10.3 424.1

1958 15.0 103.8 317.3 110.7 - 11.9 558.7

1959 12.5 103.9 400.5 276.8 - 23.7 817.4

1960 10.8 128.9 436.8 319.5 - 25.5 921.5

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Table 23 EXPORTS -- QUANTITY AND VALUE, 1957-1960

Qianti.r Value

1957 1958 1959 1960 1957 1958 1959 1960(In thousands o ton- ) (TIn mlo -f U .S drs

.agricultural products 24.3 267 55.7 224.6 9.u 1 *0 C) u .4otton fiber ,9 ~~2 ~II 1.2 . 3.7 2.1 0.3

Oil seeds 6.5 5.4 6.7 5.f 2.2 1.5 1.7 1.!Tobacco 2.8 2.5 2.h 6.1 1.0 0.7 .6 iL.5Fruits 5.B 5.2 hJb 6.& 0-h 0.3 0.2 0.Sugar -- 5.2 15.5 1.5/ -- o.6 1.0 KI.1

Livestock 16.h 28.5 31.9 26.9 5.3 10.1 13.2 9.3

Beef 8.6 18.6 19.3 17.9 3.7 ö.l 9.6 7.1Hides 7.8 9.9 12.6 9.0 1.6 2.0 3.6 2.2

7orestry 22B.9 250.5 135.8 210.7 14.6 14.4 9.3 10.6Lumber 195.8 217.3 98.1 1626 9.4 9.7 h.1 5,2Mate 3.6 5.6 8.3 14.4 0.7 1.2 1.6 2.6,Essential oils 0.3 0.2 0.3 2.6/, 1.3 0.8 lO 0.9Lý-Tannin 29.5 27.6 29.h 33.5 4.5 3.5 3.6 3.0

Iiiclasified 17.0 36.0 32.8 38.82 3.6 2.0 2.1 2.7

TOTAL 316.6 341.7 236.2 299.0 32.9 34.1 31.2 27.0

/1 Based on customns data.

/2 January-November annual rate.

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Table 2h IM4PORTS BY COKHODITY GROUPS. 1957-60 1

(In millions of U.S. dollars)

1957 1958 1959 1960L2

Consumption Goods 14.0 12.1 10.5 11.0Wheat T & hOther food and beverages 3.7 2.1 2.0 2.0Textiles and manufactures 3.5 3.9 2.2 2.5Chemicals and pharmaceuticals 1.6 1.5 1.3 1.3Paner. cardboard 0-7 0.6 0.6 0.8

oiel and Lubricants 2.4 1.1 ?.9 1 I

Vphicl qnd Anrnsorie- 3.3 3.7 '40 3.8

Tnvestment .o2 10ds AOQ 11.9

Agricultural Implements 0.7Tron and stEel 1.7 3.2 1 7 1.0

Other metals 1.0 1.4 1.0 1.3.1isflLl~ .SJ s) - - o '. 2 2. * 1.4.

Ships -- -- -- 2.1

Unclassified 2.3 2.9 2.9 2.93

TOTAL 27.3 32.6 26.2 32.2

/1 Based on customs data.

/9 Rtc+i mni"a 'hon rn .Tni-nr-NrnvPmPm A+.n-

/3 Includes imports of river boats for :,:2.1 million.

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Table 25 EXTERNAL TRADE AITH SELECTED AREAS, 1957-1960

(In thousands of dollars)

1957 1o5 1oo oAn

United StatesExportsL, f... 8,271 8,290J 10A,28722

Imports 6,465 5,899 5,298 7,631alance +1,uuu - ouy A,uy - 59u

Western EuropeExports 10,930 9,501 8,975 7,611Imports 7,400 9,02 7,809 10,506Balance +3,530 + L19 +1,166 -2,885

ArgentinaExports, f.o.b. 10,912 13,218 6,439 7,651Imports 10,476 7,188 7,417 7,480Balance + 436 +6,030 - 978 + 171

Rest of WorldExports 2,785 3,193 5,495 4,488Imports 3,020 7,423 5,670 6,561Balance - 235 -4,220 - 175 -2,073

TotalExports, f.o.b. 32,898 3,102 31,196 26,977Imports 27,361 32,592 26,19h 32,238Balance +5,537 +1,510 +5,002 -5,261

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Table 26 BALANCE OF PAYIENTS, 1958-1960O1

(In millions of U.S. dollars)

.L7;) 17;

A. Goods, Services and Private Donations -12.7 - 4.2 -12.9Exports, _.U./., 35.0 o.7 _302Imports, f.o.b.74 -32.2 -25.7 -31.8Unrecorded importsLZ - 9.9 -10.1 -10.9Services and Private Donations - 5.6 - 5.1 - 6.4

B. Long-term Capital and Official Donations 8.2 7.3 8.4Private Capital (excluding suppliers! credits) 5.U 2.d 2.Suppliers' Credits, net - - 0.2Official Donations 2.0 1.1 2.5Official Loans Received 2.1 4.b 3.7Repayments of Official Loans - 1.2 - 1.2 - 1.1Other Official Capital 0.3 0.2 0.3

C. Short-term Capital (excluding group F) 1.8 - 3.8 1.hTrade Credits 3.9 - 2.3 0.2Deferred Payments - - 1.5Other -2.1 - 1.5 -0.3

D. Net Errors and Omissions 1.9 - 1.6 -

E. Total (A through D) - 0M8 - 2.3 - 3.1

F. Monetary Movement 0,8 2.3 3e1Net IMF .osition 0.7 - 1. - 0.2Payments Agreements, net - 2.4 6.8 0.5Central Bank, Net Convertible Exchange 1.5 - 3.0 2.4Commercial Banks, net 1.0 0.3 O0hMonetary Gold - -

/1 No sign indicates credit; a minus sign indicates debit.

/3 Exchange record data.

,4 Customs data, plus parcel post, less diplomatic imports; in 1960 thisincludes the importation of river boats for P2.1 million.

/5 Adjustments for border trade, contraband and underinvoicing due toraoru" U[uUVa_luabUlI.

Page 75: E- fIL ReportN - World Bank · RESTRICTED R*3u E-fIL ReportN o. WH-107b TITTT ITT-%A This report was prepared for use within the Bank and the Association. It maeuy .. e p ulshaeU

Table 27 NET EXCANGE RESERVES OF CENTRAIL BANK, 1955-1960

(End of' Year Figures)

Convertible Bilateral Account Balances Total Net IF Net ReserveYear Gold Exchange Argentin Oth___er Tota Holdings Position Position2.

n t h o u s a n d s o f U.S,, d o L1 a r s )l(illions US.)

1955 190 649 3,,54 -394 2,660 3,h99 380 3.88

1956 181 942 4,494 1,593 6,087 7,210 -1,120 6.09

1957 136 1,399 1,839 2,673 4,512 6,oh7 -3,620 2.h3

1958 86 -317 5,629 1,354 6,98.3 6,752 -4,370 2.38

1959 108 23,745 122 14 136 2,989 -2,560 0.43

1960 95 372 13 -413 -hoo 67 -2,375 -2.31

/1 These figures are net of the IMF position.