What is there in southern Paraguay that is attracting investments like a magnet? According to the Vice Ministry of MSMEs, in 2023, almost 367,000 economic units had been formalized in Paraguay, of which 88% are microenterprises. Although most companies are located in the Central department, with a concentration of almost 32% of the total, microbusinesses in Southern Paraguay are migrating to the south: in Itapúa, nearly 8%, and Alto Paraná, a surprising 13.5%. While their formalization is promoted, they have support programs and internationalization possibilities from installing SBDCs with support from Taiwan and the United States.
Data and Economic Characteristics of Southern Paraguay
Southern Paraguay is the region made up of the departments of Ñeembucú, Misiones, Alto Paraná and Itapúa. Full of history and nature, they house cultural and economic attractions, along with the integration of the different communities that populated Paraguay. These departments are located within the natural limits of the Paraná River, along with the Argentine Republic, except Alto Paraná, which also borders Brazil. Companies highly appreciate this strategic location. For example, 48% of the maquiladora industries are in Alto Paraná. This is a regime that encourages investments and exports through foreign direct investment.
In Itapúa is the city of Encarnación, its capital. Profiled as a vital university center, 80% of the students residing in the city are foreigners. In addition, companies related to gastronomy and tourism are developing greatly here. Misiones and Ñeembucú specialize in agricultural production, giving rise to many microenterprises related to food.
Microenterprises, the economic engine of Southern Paraguay
If we analyze the micro-business concentration in Southern Paraguay, we will see that the department with the highest percentage of these companies is Alto Paraná. Itapúa follows while Misiones has 1.7% and Ñeembucú 1.1%. So why are microbusinesses considered the economic engine of Southern Paraguay? On the one hand, due to the high proportion of microenterprises compared to other unit sizes economic. On the other hand, due to the activities they carry out. Furthermore, these data must be related to the population density of each department. Let’s examine this:
Number of microbusinesses in Southern Paraguay compared to other business models
- Itapúa has the third highest population density in the country, with 35.8 inhabitants per square kilometer, further driving economic activity. Of the total population, 88% are microenterprises in Southern Paraguay, compared to 10% small and 2% medium-sized companies.
- Misiones: microenterprises represent 93%, small businesses represent 6%, and medium-sized businesses represent 1%. The population density is 12.9 h/Km2.
- Alto Paraná: 84% microenterprises, 12% small and 4% medium-sized companies. Population density is also one of the highest: 53.5 h/Km2.
- Ñeembucú: Microenterprises account for 91% of the total, small enterprises account for 7%, and medium-sized businesses account for 2%. The population density is low: 7.3h/Km2. Furthermore, as is known, MSMEs constitute the majority of the Paraguayan business environment. They generate over 60% of the total goods and services and employ 66% of the total workers.
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Support programs for microbusinesses in Itapúa
Itapúa is a kind of magnet for investments in microbusinesses in Southern Paraguay. Most of the support programs are based in this department. For example, they include:
- CAE Services. These are support centers for entrepreneurs. They provide information and resources, support for formalization, links with markets, business training, and access to financing.
- SBDC headquarters. The SBDCs (Small Businesses Development Centers) are development centers for small businesses. Itapúa already has two of these centers. The Ministry of Industry and Commerce promotes them and has financing from the United States and Taiwan. The model is based on a methodology that allows the growth of MSMEs in an efficient, sustainable, and large-scale manner. Currently, 28 of these centers are in 24 countries, promoting formalization and increased sales.
- Seed capital. It is a program to strengthen business capabilities and competitiveness for microenterprises in the department of Itapúa in Southern Paraguay. 100 companies are selected to receive training in strengthening and formalization, development of an investment plan, and seed capital of up to 3 million Paraguayan guaraníes in tools and machinery.
The surge of microbusinesses in Southern Paraguay, particularly in departments like Itapúa and Alto Paraná, underscores a thriving economic landscape driven by local entrepreneurship and strategic support programs. With a significant portion of these businesses concentrated in gastronomy, tourism, and agriculture sectors, these regions capitalize on their natural and cultural assets. The proliferation of microenterprises enhances economic diversity and contributes substantially to employment and regional development. Itapúa, in particular, stands out as a hub for educational and business opportunities, attracting local and international students and investors alike. Supported by initiatives like SBDCs and seed capital programs, these microenterprises are poised for sustained growth and internationalization, buoyed by favorable investment climates and geographic advantages. As Southern Paraguay continues to harness its economic potential through micro-business innovation and development, it sets a compelling example of how local entrepreneurship can drive broader economic prosperity and social cohesion.
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